April
2000
Egypt
Master Report
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Egypt Master Report |
I. General Background
1. General policies
1.1 General media policy
The market for Radio and TV is monopolised by the state-owned Union of Radio and TV of Egypt which consists of 13 TV stations and 11 radio channels. The market for broadcasting TV and radio programs is monopolised, whereas the market for subscriber TV is also monopolised by the state owned company CNE, which broadcasts for the subscribers a set of five TV channels (CNN, M-Net, etc.).
The existing radio and TV stations fall under the jurisdiction of the Minister of Communications. The Radio-and-TV Union issues all the relevant licenses.
All operating stations have to comply with the code of conduct described in the laws mentioned in the regulatory framework section.
1.2 General telecom policy
Voice telephony, and data transmission are monopolised by the state-owned "Telecom Egypt", the Egyptian Telecommunications Company. Telecom Egypt (formerly Arab Republic of Egypt National Telecom Organisation "ARENTO") was established under law 153 of 1980, is a government organisation which currently operates under the supervision of the minister of information and telecommunications and the telecommunications regulatory authority (TRA).
However, the market for certain services (mobile telecommunications, pay-phones, pre-paid international calling card services, and Internet services), as well as the market for telecommunications equipment are liberalised. Currently, there are two mobile telecommunications service providers, namely "Mobilnil" and "Click GSM (Misrphone)". In addition, two private companies involved in pay-phone services were identified, their names being "Nile Telephone", and "Menatel". Three companies (Global One, American Express, and MCI) provide pre-paid card services. Finally, 60 Internet service providers are registered.
Meanwhile, there is a strong movement headed by the Egyptian cabinet towards the deregulation of telecommunications, which would consequently lead to the complete liberalisation of the entire telecommunications sector.
2. Institutional structures in charge of the regulatory issues
2.1 Ministry in charge
Media: The ministry of communications and media.
Telecommunications: The ministry of telecommunications and information.
2.2 National regulatory authority
Media: The
Union of radio and TV which was established under law 13 of
1979. It is a dependent authority that follows the directions of
the minister of Telecommunications and Information. It is
managed by a board of directors from different ministries
(information & media, planning, foreign affairs, commerce)
and from the House of Representatives.
Telecommunications: Telecommunications Regulatory Authority. Important steps have been taken towards separating operations from regulatory activities in the telecommunications sector. The main elements of the regulatory framework were embodied in law 19 of 1998 which was followed by a presidential decree no. 101 on April 4th, 1998, establishing the Telecommunications Regulatory Authority (TRA), headed by Mr. Abdel Rahman El-Shaer. Telecom Egypt was incorporated as a joint stock company under Egyptian Companies Law 159. Presently the following telecommunications service providers operate in Egypt, functioning under the Telecommunications Regulatory Authority:
Telecom Egypt
Two licensed GSM companies (Mobinil & Misrfone)
Two licensed providers of payphone services (Menatel & Nile Phone)
Two VSAT Service providers (Local Alkan Trading Group and NEC)
Low earth orbital satellite systems (Iridium)
2.3 Frequencies allocation authorities
Media: Union of radio and TV of Egypt
Telecommunications: Egyptian Telecommunications Company (Telecom Egypt)
2.4 Office for the protection of economic competition
Media: Union of Radio and TV of Egypt which follows the directions of the Minister of Telecommunications and Information.
Telecommunications: Telecommunications Regulatory Authority
2.5 Consultative councils
Media: Union of Radio and TV of Egypt
Telecommunications: Telecommunications Regulatory Authority
2.6 Public communications operator
Media: The
Union of Radio and TV acts as the sole state media operator in
Egypt. The Union currently maintains 13 TV channels and 11 local
radio stations all of which are state-owned. In addition, the
union established the Egyptian Satellite Company "Nile
Sat" with 6 Egyptian specialised channels.
Telecommunications: Telecom Egypt is the sole telecommunications provider for voice telephony, telecommunications equipment provision in Egypt. Telecom Egypt is a government organisation, falling within the jurisdiction of the Ministry of information & Telecommunications and TRA.
3. International relationships and agreements
Media: The
Egyptian radio and TV union signed the first Arab 5-year
agreement with the satellite radio company "World
Spice" to use 3 satellite channels via "Afristar"
which digitizes their transmission and relays it to the Arab
region and Africa. There are also a number of agreements with
major satellite companies e.g. Intersat, Alphastar, Utelsat,
Panamsat,etc. to transmit Egyptian satellite channels (ESC I,
ESC II, Nile TV, Nile specialized channels) to Europe, United
states, Africa and the Arab region.
Telecommunications: The ministry of telecommunications and information, in the national telecommunications plan, stated explicitly that among its main objectives and priorities is performing world-wide agreements with key technology companies in order to attract investments to Egypt in these fields. The following agreements have been established to date:
The ministries of Education, telecommunications and information and higher education signed two agreements with Oracle to provide the various Egyptian universities with advanced networks and Databases as well as to develop applications concerning the internet, and to train the university staff and provide free internet access to oracle networks for the students.
Global Star agreement adoption by the telecommunications regulatory authority to provide a wider coverage for mobile and fixed line telecommunications in Egypt. It will also provide a wider range of telephone models that work on dual systems (Global Star / GSM). Global star have also renovated the pay-phone network in the remote areas. Global Star will operate in Egypt from the second half of the yr. 2000 through Tisam co. (a joint venture between French telecom and Alcatel)
Microsoft signed a protocol with the Egyptian government to provide a wide range of Microsoft software applications with minimal cost for 100,000 student (applications cost will be L.E.30). The protocol will also offer the opportunity for 100 scholarship for young programmers to be trained towards obtaining the Microsoft professional certificate. This training will take place inside Egypt with the technical assistance of Microsoft. The protocol will also provide training abroad scholarship for three months for a number of students. Microsoft will provide technical assistance for training centers to train about 1000 person annually.
4. Regulatory framework
4.1 Historical overview
Media: The
market for radio and TV is monopolised by the Egyptian Radio and
TV Union, which operates 13 subscriber TV stations, 11 radio
channels and one subscriber TV station called CNE. In this
respect, there are no privately owned broadcasting TV stations
in Egypt.
Telecommunications:
Telephone services were first introduced in the late 19th
century.
In 1918, the Egyptian telephone and telegraph administration was
established and operated until the Egyptian telecommunications
organisation was founded in 1957.
The Arab Republic of Egypt National Telecommunications
Organisation (ARENTO) was established under law 153 in 1980. In
1998, it was renamed as "Telecom Egypt", and some
telecommunications services were liberalized. Telecom Egypt
operated under the supervision of the Minister of Transport and
Communications until September 1999, initially as the sole
provider of certain telecommunications services in Egypt.
In 1977, the telephone system was severely congested and became
virtually obsolete, as a result of the cable networks being in
poor condition. The telecom network consisted of 375,000 lines
of switch equipment therefore the expansion of the telecom
infrastructure was essential. Transmission networks were
increased from 8,900 in 1981 to 90,000 in 1994, fibre optic
cables and digital switches replaced copper ones. From 1981 to
1992, the number of telephone lines increased 4 times at 17% per
annum, and in 1996 the number of telephone lines reached 4.2
million. Nowadays the number of telephone lines has increased to
reach 6.7 million.
The capacity of telecommunications networks increased from 160
circuits to 3680 in 1991. In 1996, the number of international
circuits nation-wide reached 5560.
In 1996, Telecom Egypt announced the establishment of new
venture for operating GSM telephones. In November 1997, Telecom
Egypt invited qualified international companies to submit
proposals for the implementation, financing and operation of a
second GSM 900 network.
In the first quarter of 1998, Telecom Egypt finalized the
concession of the pay-phone service to two private companies,
and proceeded with the privatization of the state-owned GSM
network.
In late September 1999, a new ministry was established" the
ministry of telecommunications and information" to
undertake the responsibility of transferring the Egyptian
society to the second millennium towards an information-based
society, and Telecom Egypt fell under the responsibility of the
said ministry. The Ministry of Telecommunications and
Information, headed by Dr. Eng. Ahmed Nazif, aims at enhancing
the usage of technology and telecommunications systems in all
the government organizations. This, in return, will help
simplify the provision of services to citizens, eliminate
bureaucracy, and maximize productivity. The ministry created a
number of working groups during December 1999. The private
sector and Telecom Egypt massively participate in these groups
which comprise the following :
A legal working group which is assigned the drafting of a new Telecommunication Act for Egypt. This would recommend a stronger private sector participation in the operation industry, as well as many other issues such as the quality of services. The draft is expected to be ready late January.
A technical planning working group aimed at assessing the current infrastructure and the convergence towards an integrated master-plan for telecommunications in Egypt. It is a plan that covers all telecommunications players, these being the GSM operators, the payphone operators, the data communication operators as well as Telecom Egypt. This plan should be ready to be implemented by next June and should take care of interconnections between the various players now and in the future.
A business development and service definition working group that works on the short term on marketing and pricing recommendations for existing and new services offered by Telecom Egypt. The private sector will help bringing these new services to the end users. An example is the Intelligent Network (IN) services which use the premium rate and toll free services (800) in greater Cairo. The premium rate, based on revenue sharing between Telecom Egypt and the ISPs, has been already announced and introduced with some providers while the 800 service will be introduced soon for the different business sectors. Pilot implementations have been already completed. The ISDN primary rate using 128kb/sec has been tested on national and international level and is being priced with affordable prices. ISDN primary rates up to 2 Mb/sec will be tested and announced soon. This will help the international video-conference with bandwidth-on-demand facilities. The long term objective of the said working group is to help on issues like the development of a business plan for the telecommunications services in Egypt, taking into consideration the privatization of Telecom Egypt which is expected to take place in the first quarter of the year 2000
The fourth working group is concerned with human resource developments in telecommunications and IT, and negotiates a new human resource development plan in cooperation with multinational organizations.
4.2 Present general legislation
Media: Media law 13 of 1971 grants full monopoly over the information and media sectors to the Egyptian Radio & TV Union.
Telecommunications: The law 19 of 1998 (presidential decree 101) which establishes the Telecommunications Regulatory Authority. The deregulation of certain telecommunications services law which liberalizes the market for mobile telecoms, pay phones, pre-paid cards, VSAT services, and Internet services.
4.3 Key legislative measures
Media:
| Key measures |
Objective |
Date |
|
Law 13 |
The law establishing the Egyptian Radio and TV Union, and defining its powers and responsibilities. |
1979 |
|
Law 223 |
Amendments to law 13 of 1979, partly liberalising the market (liberalising the subscriber TV market) |
1989 |
Telecommunications
| Key measures |
Objective |
Date |
|
Law 153 |
The law established the Arab Republic of Egypt National Telecommunications Organisation (ARENTO) as the sole provider for telecommunications services |
1980 |
|
Law 19 |
The law renaming ARENTO into Telecom Egypt |
1998 |
|
Presidential Decree 101 |
Formulation of Telecommunications Regulatory Authority |
1998 |
4.4 Issues
4.4.1 Liberalisation
|
Liberalisation status |
Comments |
|
|
Infrastructures |
|
|
|
Public telecommunications Network |
State monopoly |
|
|
Local networks for voice telephony |
State monopoly |
except pay phone network (set up by private companies) |
|
Leased Lines |
State monopoly |
|
|
Alternative infrastructure |
Non existent |
|
|
Subscriber (pay) TV |
State monopoly |
|
|
Broadcasting TV |
State monopoly |
|
|
Cable TV |
State monopoly |
|
|
Voice Telephony |
|
|
|
Local Communications |
State monopoly |
|
|
Domestic long distance |
State monopoly |
|
|
International communications |
State monopoly |
|
|
Provision of voice services to closed user groups |
State monopoly |
|
|
|
|
|
|
Mobile Communications |
|
|
|
Analog |
Non existent |
|
|
GSM digital |
Fully liberalised |
Two private providers |
|
DCS 1800 digital |
Non existent |
|
|
Paging |
State monopoly |
Almost extinct (replaced by mobile phones) |
|
Satellite communications |
Fully liberalised |
Offered by Mobilnil |
|
Data transmission |
Mobile service liberalised. Fixed line service monopolised |
Mobile data transmission is privately offered. |
|
Value added services |
State monopoly |
Mobile VAS are privately offered. These are voice mail, sms, callwaiting, call forwarding, call conference, call diverting, double line, roaming, caller ID, fax / data |
|
Internet services provision |
Fully liberalized |
60 registered companies |
|
Equipment provision |
Fully liberalized |
|
4.4.2 Licensing
Media: Egyptian radio and TV union
Telecommunications: Telecom Egypt
4.4.3 Universal service
Media: Radio and TV programs are broadcasted to Europe, North America, Africa and the Arab region via the Egyptian Satellite "Nile Sat" (which was launched in April 1998) and other satellite companies such as Intersat, Alphastar, Utelsat, and Panamsat.
4.4.4 Tariffs policies
Media: Each TV station sets its own tariffs for advertisements according to the estimated level of viewership.
Telecommunications:
The board of directors of Telecom Egypt through the Minister
of information and telecommunications recommends
telecommunications tariffs to the Council of Ministers
(Cabinet). Once approved, the Council puts them in effect by a
ministerial decree.
Mobile telecommunications service providers maintain their own
tariffs under the regulations set by the TRA.
5. Copyright and intellectual property rights
Telecommunications: The unified law for telecommunications will be issued in the near future to become the basis for the telecommunications industry and services, which will address in details intellectual property rights in the electronic age. The ministry will prepare an integrated draft legislation for information and telecommunications that will define the role of the government and the private sector.
6. Information society policies
An information Society Policy is being formulated under the guidelines of H.E. President Mubarak. The ministry of telecommunications issued its first plan for telecommunications and information technology which comprises many aspects encouraging investments (Local or foreign) in the information technology and telecommunications industries. At the same time the plan sets up an information based society with an Information Society Development Office headed by Dr. Sherif Hashem. This office undertakes the responsibilities of promoting information society initiatives, matchmaking projects with suitable funding organisations as well as encouraging further investment and social awareness.
II. On-going developments
1. On-going developments in institutional structures
Telecom Egypt has recently announced its need for local and international financial and consulting firms to pre-qualify for consulting services in the field of privatization of telecommunications companies. 21 companies have paid for the tender documents, including: Arthur Andersen, Morgan Stanley, Credit Suisse, First Boston, HSBC Investment Banking Merrill Lynch, Chase Manhattan Bank, etc. The final decision as to the successful candidate has not been taken so far.
In order to privatize telecommunications services in Egypt, Telecom Egypt has opened the following areas to the private sector:
1. Pre-paid international calling card services: Currently Global One, American Express and MCI provide international calling card services.
2. Pay phones: Two private companies, Menatel and Nile Phone, provide pay phone service in Egypt. Each company plans to install 20,000 lines within the coming five years.
3. Mobile Phones: Two private consortia, MobiNil and MisrFone, operate Egypt’s GSM 900 cellular phone systems. It is estimated that in August 1999, there were 550,974 cellular subscribers in Egypt, and it is expected that this number will reach five million in the next ten years.
4. Internet service : 60 Internet service providers are currently registered in Egypt.
2. On-going developments in the regulatory framework
2.1 Telecommunications liberalisation
2.1.1 Overview
The process of liberalising non-basic services started in November 1997.
In the first quarter of 1998, Telecom Egypt finalised the concession of the pay-phone service to two private companies, and of the mobile telecommunications service again to two private companies, and proceeded with the privatisation of the state-owned GSM network.
From 1995-1996, the Egyptian government has stated to issue licenses for VSAT terminal distribution, Internet services provision, pay-phone and local information networks to private companies.
In the near future, the government intends to start the privatisation of Telecom Egypt, selling 10% of the company’s stocks by the end of this year and another 10% by the end of next year. Of the total number of stocks to be sold, 33% would be directed towards the local market, while the remaining 67% towards international investors.
In a further step towards the liberalization of the telecommunications market, the board of directors of Telecom Egypt, the state owned telephone company, decided in their meeting in October 26th., 1999, to eliminate subscription fees that were previously required on fax machines. The decree also allowed telephone subscribers to connect fax machines onto their residential telephone lines. This was restricted in the past and only allowed at offices or factories, after paying an annual subscription fee of $73.50. The said decree also states that fax machines are allowed to be brought into the country by airline passengers.
Another initiative undertaken by Telecom Egypt in cooperation with the ministry of information and telecommunications was to offer the public the ability to link to the internet directly by dialing special allocated numbers. The prices for this service will range from L.E. 0.15 to 0.20 per minute.
New low cost services are being offered to the university students and graduates in order to help them in their academic research: providing low cost computers and internet access (L.E. 200 / month for three years) and providing low cost software applications by major technology companies (L.E. 30). Expanding the network of training centers to develop high caliber of young graduates that can fulfill the needs of the technology market.
2.2 New laws under preparation
The minister of telecommunications & information announced that in line with the government’s efforts to promote information technology products to all sectors in the society, a law would be shortly issued reducing tariffs on personal computers and abolishing (tariffs) for software applications.
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