The major developments in the years 1999-2000 in the fields of IS regulation and policy have been recorded in the fields of telecommunications and internet, e-commerce, education and research and labour. These are described in sections 2.5, 2.6, 2.7 and 2.10. In addition, there has been substantial development relating to new international relationships and agreements as described in section 4.

As far as the privatisation process is concerned, this has currently been put on hold given the unfavourable stock market conditions (see section 2).

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.

2.1 Historical Overview and General Legislation

2.1.1 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 19^th 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 was assigned the drafting of the 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.
• 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.
• 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 bring 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 anticipated privatization of Telecom Egypt.
• 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.

2.1.2 Present general legislation

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 4^th, 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:

1. Telecom Egypt
2. Two licensed GSM companies (Mobinil & Misrfone)
3. Two licensed providers of payphone services (Menatel & Nile Phone)
4. Two VSAT Service providers (Local Alkan Trading Group and NEC)
5. Low earth orbital satellite systems (Iridium)

2.1.3 Key legislative measures

TABLE 1

 Telecommunications:

TABLE 2

2.1.4 Liberalization Timetable

Minister of Communication and Information Technology (CIT) announced offering of up to 20 percent of Telecom Egypt during the fourth quarter of the year 2000. The offering, valued at around LE 19 billion, will be offered as IPO (Initial Public Offering) and as private placement on international markets.

Nevertheless, on Thursday, October 19th, the Telecommunications and Information Technology Minister Ahmed Nazif has announced the postponement of the privatisation process of Telecom Egypt, due to unfavorable local and international stock market conditions. No new date has been set for the privatization of Telecom Egypt, which had been scheduled to sell up to 20 percent of the company at the end of the November 2000. A further 5 percent will be offered to its employees.

Historically, 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 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 26^th., 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 passenger

2.2 Umbrella Policies and National IS Strategy

2.3 IS Application Areas

The main developments relate to the fields of telecommunications and internet, e-commerce, education and research and labour. These are described in sections 2.5, 2.6, 2.7 and 2.10 below. However, there is also an interesting development related to Government and Administration as outlined below in section 8.4

Within the scope of the e-government initiative in Egypt, the Ministry of International Cooperation recently signed a contract with a software company in Egypt for the automation of all the ministry operations. The contract was signed under the auspices of HE Dr. Ahmed El Darsh, Minister of Planning and International Cooperation. This 1.5 Million US$ project aims at building the Ministry ‘s Information network, which will connect all the Ministry’s departments, Each department will have a site on this network containing all the information of the possible loans, related fields and available services.

2.5 Telecommunications and Internet

New Telecommunications law

The Ministry of CIT has prepared a Telecom Act that was developed with the participation of all the concerned parties including the final users. This new law comes in the context of a unified legislative domain to offer a clear vision that reflects the policies adopted by the Ministry to uplift the telecommunication industry in Egypt throughout the up-coming period. The Ministry of Communications and Information Technology have already presented it to many working groups that were formed. It will be presented to the People’s Assembly in the coming parliamentary round.

Tariffs

From September 1^st, the new tariff for international calls came into effect. The new structure includes a drop of up to 25% of the tariffs on almost all international calls. This is part of the ministry’s plan to price its services in line with the international standard. Although such a reduction will cause a decline in revenues in the short term, the plan aims to counter balance the decline with the increase in the number of international calls made due to the drop in the price.

Services

In addition, Telecom Egypt is introducing a variety of new services to its clients. Telecom Egypt is introducing new services, like 0-800 numbers, which allow clients to contact businesses at no charge to themselves, as well as re-launching optional services like call-waiting, caller identification and voice mail. The campaign follows the announcement that a maximum of 20% of the company will be offered on the stock market. Offering a wider variety of services is likely to raise the value of the stocks, especially to international investors.

Infrastructure

A further development has been the announcement of a three-year expansion plan for the telecom sector, by Ahmed Nazif, Minister of Communications and Information Technology. The Minister announced plans to expand the fixed line penetration rate among residential users to 90% from the current 40%. This will be achieved through the installation of a new fiber optics network. The expansion plan will be implemented over several phases with an initial cost of US$ 1 billion. The first phase of the project, covering the Greater Cairo area, is estimated to cost LE 40 million over the next six months. Meanwhile, there is a five-year plan for the sector aiming to increase fixed line penetration from the current 10% of the population to around 20% by the end of fiscal year 2005.

Internet

In the second half of the year 2000, the international Internet circuit rates have been cut by 30%. Specifically, Egypt's Minister of Communications and Information Technology Ahmed Nazif has reduced prices on international calling and internet bandwidth. This is part of a strategy by the Ministry to position Egypt as a leader on the Internet. The price cuts will immediately affect the country's ISPs, with the tariff for international half circuits reduced by 30% for variable speeds reaching 2 Mbits/s for Internet traffic. The price cuts are then expected to be passed on to subscribers at the discretion of the ISPs.

As a result of the lowered prices of international bandwidth, the Minister also announced that Internet access that is paid per minute via the regular phone bill (instead of pre-paid subscriptions with an ISP) is being cut. The per-minute tariff for the use of this 900-code Internet access via the intelligent network will be reduced by 50%. This brings the cost down to ten piastres instead of 20 piastres during day use.

In another development, a new internet infrastructure is being provided, following the award of government contracts. This will add to the old international bandwidth provided by the government body IDSC of 10 mb capacity which is no longer sufficient even during off-peak hours. Two private companies, namely EgyNet and Nile Online, are creating the new Internet infrastructure. EgyNet has already started providing services in the financial sector, completing phase one of a fiber-optics project to provide a broadband Internet connection of 45 MB. Ultimately it will build a 210 megabit per second (mbps) connection to allow fast Internet access for up to five million subscribers, allowing Egypt to become an Internet gateway for region.

Nile Online recently won a government contract to build and operate an advanced network across all provinces in co-operation with International IT companies. The resulting company, which is being set up with a capital of 400 million Egyptian pounds (about US$110 million) brings together a number of local and regional shareholders including telecommunication companies and financial institutions. It is expected to start operations very soon, with a backbone capacity of 45 Mb.

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 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.

Telecom Egypt has announced that Cairo is soon to be connected to the FLAG Telecom global city-to-city network. The connection will allow the two companies to offer managed high bandwidth services (MBS), and other IP-based services to businesses in central Cairo. It is expected that this will evolve into the first major Internet exchange in the Middle East. By connection to the cable, carriers and ISPs in Cairo will be able to access a full-channel managed bandwidth service for connection to other city centres. Services will be governed by a service level agreement.

Finally, Egypt has sent its second NileSat communications satellite into orbit in August 2000. It will be capable of broadcasting more than 100 digital television channels direct to homes. Also equipped with Internet and IT facilities, it is anticipated that the new satellite will alleviate some of Egypt’s bandwidth problems. The new channels and Internet series will be operated,by the end of September 2000, from the ground control station in the Al Hammam area on the Northern coast.

Also during the year 2000, the government of Egypt has implemented its own internet-based phone service, having previously banned the private Net2Phone internet calling service, which allowed users to make inexpensive international calls through their computer in an effort to prevent erosion of Telecom Egypt's long distance profits. The government service, is driven by the Cabinet's Information and Decision Support Center (IDSC) website: www.support.idsc.gov.eg.

MobiNil, the private telecommunications service provider has announced the introduction of its Wireless Application Protocol (WAP) service. This is a strategic move in order to take an early claim in the future competitive environment anticipated for this service.

The private company Cisco Systems Inc. signed an agreement in April 2000, with the Ministry of Communication and Information Technology (CIT) to develop human resources in the technology sector. Cisco will train Egyptian engineers for Egypt's three-year, $1 Billion investment program for creating "a high speed telecommunication network."

2.6 Electronic Commerce

In the context of the National Plan for Telecommunication and Information the promotion of electronic commerce is targeted through the following key objectives :

• preparation and development of the necessary Egyptian legislation.
• enhancement of the work flow in financial institutions and the securing of financial deals conducted via the electronic networks.
• enhancement of the work flow in some governmental institutions such as Customs and Exports and Imports supervisory institutions.
• raising awareness as to the importance of electronic commerce and carrying out training programs for the business sector.
• increasing the capability of the communication network for information transfer to accommodate the growing demand of electronic commerce applications.

In a development which is ultimately expected to boost e-commerce in Egypt, Lucent Technologies has signed a US $51 million contract with the Egyptian Company for Networks (EgyNet) to expand its national asynchronous transfer mode (ATM) backbone data services network. The network will provide Internet access and video broadcast capability for EgyNet's business customers.

The current expansion project will provide EgyNet's national data network with high-capacity multiservice switches supporting ATM and frame relay, DSL access concentrators and router/bridges.

In the future, EgyNet plans to introduce new services, such as video on demand, and e-commerce, to its business customers.

The Information and Decision Support Centre (IDSC) of the Egyptian Cabinet has represented Egypt in a symposium organised by the International Bank for Reconstruction and Development (IBRD) as part of its first programme for implementation of remote-education international centres.

The Minister of Communication and Information Technology (CIT), Ahmed Nazif, announced an agreement made with Egyptian computer manufacturing companies to import 100,000 machines for local universities. The computers will be offered to enrolled university students on a minimal installment basis. It is expected that there are currently 250,000 university students who could benefit from agreement.

Towards the training of new engineers in the field of telecommunication networks the Minisrty has proceeded in the last quarter of 2000 on a special program. Specifically, the Ministry has prepared a training program through which three hundred and fifty engineers are being trained at the National Communication Institute in cooperation with international organizations and companies in the field of operation and management of Telecommunication Networks.

IBM and the the Ministry of Communication and Information Technology (CIT) in Egypt announced a joint initiative that will result in over 15,000 graduates receiving comprehensive IT training. IBM 's commitment is worth more than US$ 44 million over the course of five years. and will cover the development of the courses, the facilities used by the students, all materials and part of the training. The agreements were announced during President Hosni Moubarak's visit to the United States April 2000.

In another development, the Egyptian government has announced an ambitious plan to raise the IT knowledge. Towards this, the Future Generation Foundation together with Microsoft Egypt, is offering a set of scholarships for young IT Professionals in Egypt. The scholarships will offer training courses that qualify the individuals to obtain certificates of Microsoft Certified System Engineer (MCSE) , Microsoft Certified Solution Developer (MCSD) and Microsoft Certified Data Base Administrator (MCDBA).

Furthermore, the Information Technology Institute (ITI) and Mentor Graphics Egypt (MGEG) are offering 25 scholarships fully covered tuition fees for nine months, in addition to a monthly allowance for exceptional candidates, for VLSI Design and EDA Tools Diploma. The goals are the development advanced design skills of VLSI circuits, high development capabilities of Electronic Design Automation tools (EDA) and acquisition of adequate efficiency levels very rapidly for work in Hi-Tech companies.

Finally, Egypt has joined the global net of Tele-education, the World Bank affiliate, which will help in increasing the co-operation between Egypt and the World Bank in the fields of training and education. The objective is to increase the exchange of experience and knowledge between Egypt, World Bank and other members countries. Dr. Hisham El Sherif the chairman of the Regional Information Technology and Software Engineering Centre has stated that the centre will carry out the implementation of education and training programs in co-ordination with the World Bank and under the supervision of the Ministry of Planning and International Co-operation.

No specific IS policy or application related to Transport has been found.

2.9 Health Care

No specific IS policy or application related to Health Care has been found.

Ahmed Nazif, Minister of CIT, and Cisco International’s regional director have signed an agreement to proactively address Egypt’s lack of skilled IT engineers. The two-part agreement consists of a technology-planning program, namely a US$1 billion three-year investment program aimed at establishing an Egyptian high-speed telecommunications network and a human-resource development program. The human-resource development program’s initial objective is to establish regional and local training academies for potential Egyptian IT engineers, with the ultimate goal of making Egypt the first Cisco Network Training Hub for the Arabian and African region.

In another development, Lucent Technologies has pledged US$10 million over the next two to three years to recruit and train professionals in the fields of software development and wireless communications. In an attempt to increase the number of communication-related software design and engineering graduates, US$2 million of the US$10 total will be targeted to helping the government develop its IT education infrastructure.

No specific IS policy or application related to Competiton has been found.

2.12 Access for all

No specific IS policy or application related to Access for all has been found.

No specific IS policy or application related to Copyrights has been found.

2.14 Public access to data

No specific IS policy or application related to Public access to data has been found.

2.15 Privacy, data protection, consumer protection

No specific IS policy or application related to Privacy has been found.

2.16 Security

No specific IS policy or application related to Security has been found.

2.17 Freedom of expression and information as far as the distribution via electronic networks is concerned

No specific IS policy or application related to Freedom of Expression has been found.

3.1 Ministries

• Ministry of communication and information technology
• Ministry of Information

1. The Central Agency for Public Mobilization And Statistics (CAPMAS)
2. Information and Decision Support Center (IDSC)

No new developments

No new developments

No new developments

3.5 Organisations in charge of the promotion of the IS

No new developments

Egypt is participating in a number of international relationships and agreements as described below.

In the last quarter of the year 2000, The World Bank selected Egypt to receive technical and financial support for Internet services and applications technology transfer. The International Finance Corporation IFC, and a major financier of high technology projects, particularly information technology, worldwide, are funding it.

In the year 2001, Egypt and India have agreed to establish joint ventures in the field of information technology and software next year. The projects fall within a recently signed agreement to begin a new stage of cooperation in the field of IT and software, which will also encourage the private sector in this new area.

In addition to the above-mentioned recent agreements Egypt is also involved in a number of international projects and agreements :

Egypt is participating in a US$500 million investment project in a fiber-optics network linking Italy, Egypt, Greece, Cyprus, Turkey and Israel. Telecom Italy is the major shareholder amongst several partners forming a new company, Mediterranean Nautilus Ltd., to oversee the project. The 7000-Kilometer Nautilus 1 (MN1) submarine system will be gradually implemented during 2001. The band capacity 3.84 Terabits per second can transport over 3,000 billion bits per second of Internet traffic or 45 million phone calls simultaneously or 300 hours per second of digital video.

Telecom Egypt (as well as other carriers from other African and Arab countries) has also reserved its stakes in Africa One, the US$1.9 billion project involving Global Crossing and Lucent that is placing a fiber optics ring around Africa, and which will be ready by 2002. The project aims at giving African countries direct connectivity to each other, and will enable Egypt to save substantially on transit fees. The 32,000-km network with a capacity of 80 Gbits/s will have up to 30 landing stations. In the first phase, 19 will be implemented in Africa, one of these being in Egypt’s Mediterranean City of Alexandria.

The Minister of Communications and Information Dr. Ahmed Nazif has announced a plan that will be implemented to increase the value of the information technology industry via benefiting from the Indian expertise in this domain. The Indian Minister of Science and Technology has visited Egypt to meet with Dr. Nazif and confer with Egyptian companies on data technology and for discussions on boosting co-operation between the two sides.

Dr. Ahmed Nazif, Minister of Communication and Information Technology, has also signed an agreement for the development of programs and applications between Egypt and United States. The objective is to develop the programs and applications domestically and then market them in the American Market.

In another development initiated in the first half of the year 2000, in a plan to reach "2 Million Web-Users by 20001", Telecom Egypt has signed an agreement with Network Solutions, Inc. (NASDAQ: NSOL), the world's leading register of web addresses, through which the former will join the latter's International Premier Domain Registration Service Program. Moreover, NSOL pledged to use its UNI-CODE character system for domain name registration so that it may be used for Arabic character domain names in the future. This agreement marks the first of its kind in Africa and the Arab World.

Since the creation of the Ministry of Communication and Information Technology, tenders have gone out to open 250 tele-centres, aimed at providing technology, Internet access and advice to young children, youths and professionals. Twenty percent of the funding for the first 250 centers (about 1.1 billion UK sterling), plus free internet connections, will come from the state.

Telecom Egypt has 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.

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.

In another development the Minister of Communication and Information Technology (CIT) has announced that the government will award a cellular-telephone operators' license to the state-owned, fixed-line monopoly Telecom Egypt once the government's exclusivity agreements with Egypt's current license holders expire in December 2002. The announcement has prompted concern from Egypt's current GSM license holders, since Telecom Egypt also controls their access to the country's fixed-line and long-distance networks.

In turn, the ministerial committee for privatization established a timeframe for establishment of the third Egyptian mobile telephone network. The new network will take its place with existing two companies after the pair's terms of exclusively end-May 2001 for the first and November 2002 for the second. The ministry is currently discussing opportunities for granting another license, which would be publicly offered in an international tender, to a fourth mobile service provider.