12 Jul 2011Egypt Broadband Overview

The Egyptian revolution in January and February 2011 forced the development and growth of the telecommunication market to stall. At the moment the unsettled political environment in Egypt does not leave much opportunity for long-term technology innovation and service development. Following the revolution, the licensing of a fourth mobile operator was postponed. In addition, an investigation was launched into how an almost complete information and communication blackout could take place during the revolution. It negatively highlighted how dependent the telecommunications market had been on the old regime.

Despite this, the telecommunications market in Egypt has developed rapidly, making Egypt the largest Internet market in Africa by end-2010. The mobile telephony and broadband segments are starting to overtake all others. This was due in large part to the Egyptian government’s recognition of the importance of ICT for economic growth, and the implementation of several successful programs.

Since 2002, a state-sponsored programme allowed manufacturers to provide PCs at affordable prices with flexible payment terms to schools and households. Also, in 2004 the government launched a Broadband Access Initiative which has increased the number of broadband connections ten-fold within four years and has brought 24 Mbps ADSL2+ access to residential households. VoIP Internet telephony has been liberalised and several companies are rolling out Next Generation Networks (NGN) to provide converged voice and data services.

However, despite its successes, Egypt still has a lot to catch up on. Mobile and Internet penetration rates are still relatively low in comparison with the rest of the world and expensive broadband pricing relative to disposable income has also led to a ‘black market’ in ADSL subscriptions, with many single household contracts being extended illegally to multiple parties. In order to address these issues, Egypt’s telecom regulator announced in February 2008 that it would further liberalise the sector by introducing competition into the fixed-line market through the issue of a second licence.