x Abu Dhabi, UAEFriday 19 January 2018

Egypt's broadband plan delayed

Arab Spring economies: Political upheaval and proposed changes to Egypt's telecoms sector have delayed the $2.4 billion national broadband plan.

Political uncertainty and proposed changes to the telecommunications sector have delayed Egypt's US$2.4 billion (Dh8.8bn) plan to expand the country's broadband network.

Headed by the National Telecommunications Regulatory Authority (NTRA), the national broadband plan is intended to increase broadband penetration across Egypt and provide 11,000 jobs every year. It was officially launched in July.

Handy Mahmoud, who was appointed the communications minister in August, has proposed unifying the telecoms licences between the three mobile operators and the state-owned fixed line operator Telecom Egypt (TE) to enable all four to offer both internet and mobile services.

"The NTRA is working with all mobile operators to build a business model for the national broadband infrastructure," said Mr Mahmoud.

TE now owns and operates the broadband infrastructure of the country. As part of the plan, it is changing the main copper lines to fibre optics cables, which is expected to take three and a half years to complete. Changes to TE's board have also held back negotiations. Akil Beshir stepped down this month after 12 years as chairman, replaced by Omar El Sheikh, the former director of public relations at Vodafone Egypt.

As a result of these changes, the initial aim of ensuring 2 megabits of internet connectivity to 90 per cent of the population by 2015 has been pushed to 2016 at the earliest.

The 10-year plan, which is to be both privately and publicly funded, was proposed last November as part of the country's development strategy, but continues to face many challenges.

"The infrastructure is the main challenge. How we will have a common infrastructure without spending a huge amount of money is a challenge because [a] fibre optics network is expensive," said Mr Mahmoud.

By 2021, the country is hoping to deliver 25 megabits of internet connectivity to 75 per cent of the population and fourth-generation mobile broadband services to 90 per cent of the population, but it is unclear whether these aims will be met. Egypt's information communications and technology sector has been one of the most promising over the past few years, posting growth of 7 to 9 per cent even in the tumultuous period of 2011.

Last year, the country broke the 100 per cent mobile penetration mark, and now has about 116 million mobile subscribers, pushing the penetration rate up to 115 per cent.

"The internet is not the same success story, only 30 per cent are using the internet. There is a great opportunity for growth, especially after the revolution," said Mr Mahmoud.

According to the World Bank, for every 10 per cent penetration in broadband, GDP increases by 1.38 per cent.