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The X generation
Published in Al-Ahram Weekly on 09 - 02 - 2006

If anyone doubts that Cairo ICT has come of age they should visit the 10th round of the information and communications technology exhibition, writes Niveen Wahish
Under the slogan "the X Generation" Cairo ICT 2006 brings together the leading names in the business, including Etisalat, Flag Telecom, Mobinil, MTC, Orascom Telecom, Telecom Egypt, Telecom Italia, Vodafone, Alcatel, Cisco, Ericsson, Huwei, Siemens, HP, Canon, Microsoft, SAP, Sun Microsystems and Xerox. Even the government was showing off its e-projects through the Ministry of Administrative Development, showcasing the technologically upgraded services offered by the National Postal Authority. Indeed, it was the government that made most of the running at the event despite the huge presence of international and local private sector companies.
Minister of Communications and Information Technology Tarek Kamel used the venue to make several major announcements, including the National Telecommunications Regulatory Authority's (NTRA) timetable for bids for Egypt's third mobile operating licence.
With the announcement that the bidding process will begin by 15 February the government laid to rest the long debate on whether or not the Egyptian market could absorb a third mobile operator. In 2003 NTRA thought not. So why the change of heart? At Cairo ICT Kamel explained that the changed assessment has come on the back of economic developments. In 2003, he said, the pound was being floated, the economy was in a sorry state, 3G technology was still young and costly and the war against Iraq was waiting to happen. The mobile market, he continued, has recently shown potential for growth. Penetration has reached 20 per cent and there are hopes the figure can increase to 30 per cent and more in the coming years. Within such an environment a third operator seen as important in regulating competition and avoiding a market duopoly between MobiNil and Vodafone.
Talk of a third mobile network has inevitably pushed Telecom Egypt (TE), which recently expressed interest in bidding for the license, into the limelight. The announcement took many by surprise, given that TE gave up its own mobile operating license when it acquired a 25.5 per cent stake in Vodafone Egypt in 2003. At the time Akil Beshir, chairman of TE, said forming a partnership with Vodafone was a better option than setting up a third network, and part of the deal was that TE agreed not to set up a GSM network until 2007.
Aly Salama, TE's vice chairman for financial and commercial affairs, told Al-Ahram Weekly that in the event of TE winning the bid it will sell its 25.5 per holding in Vodafone-Egypt to existing shareholders and not on the stock market.
The decision of TE to bid for the third license, says Sana Soliman, TE vice chairman for follow up and technical affairs, should not come as a surprise.
"TE has never said that it would not bid," she said, adding that the company was capable of taking on the license technically and financially, though it will most probably apply as part of a consortium.
Kamel has hinted strongly that in assessing bids the government may well favour consortiums with a local partner. Already a number of companies have announced their intention to enter the race, including Kuwaiti MTC, Emirates-based Etisalat, which announced on Sunday it would be working in partnership with Egyptian Mashreq Telecom, and South Africa's MTN Group, bidding in partnership with Raya, Golden Pyramids Plaza (GPP) and Stars Communications.
The bidding process, which will include technical evaluations of the interested parties as well as assessments of their financial offers, is expected to last between three to four months.
Kamel also announced that on 1 March NTRA will call for bids for two licenses to operate international connection gateways which until now have been a TE monopoly. Though Egypt is committed to liberalising all telecom services by 2006 the move, said Kamel, is aimed at developing the telecommunications sector in a way that ensures Egypt receives the latest technology, boosts government revenues and attracts investments, as much as it is part of a package of changes designed to meet international commitments.
Liberalisation will come in two stages. During the first -- 2006-2008 -- gateways will be setup using satellite earth stations and cable landing points operated by Telecom Egypt. Beyond 2008 operators will be allowed to extend their own infrastructure.
The liberalisation of international gateways will impact heavily on TE, whose current monopoly is estimated to bring in LE2 billion a year to the company's coffers.
Akil Beshir, though, is not losing any sleep over the threat of a drop in income that will come with increased competition. TE, he said, has already concluded agreements with many companies. He is counting on growth in the market rather than splitting the existing cake with competitors. TE will also receive a connection fee from the two gateway operators that will be using its infrastructure for the time being. And while the entry of two new players will lead to a drop in prices head of NTRA Amr Badawy insists the regulator will ensure that "a drop in prices does not mean a drop in the quality of services".
Within the framework of telecom sector liberalisation NTRA will also announce, on 20 February, licenses for class A and B Internet service providers to operate the Voice over Internet Protocol (VOIP), which routes voice conversations over the Internet or any other IP-based network.
Alongside these announcements Kamel also presented two computers priced at LE1500, to be paid in monthly instalments of LE49, a development of the PC for Every Household initiative launched two years ago. The computer is produced in cooperation with Microsoft, Intel and the Taiwanese company Via Technologies.
A number of events took place on the fringes of the main Cairo ICT exhibition. A forum organised by the German Arab Chambre of Industry and Commerce addressed a number of issues ranging from ICT and media convergence, satellite technology, the VOIP, electronic signature legislation, cashless societies, call centres and storage issues.
Microsoft also held their annual Microsoft Developers Conference during the exhibition, attended by 1500 developers, while the Sun Microsystems conference attracted 500 Java developers.

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