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- Egypt – A Safe Haven in the
Center of the World
- The Business Environment
- A high Tech Working Environment –
The Smart Village
- Powerful Telecommunications
Infrastructure
- Multinational ICT Success Stories
in Egypt
- Government Incentive Packages
Egypt – A Safe Haven in the Center of the World
"At more than 45 percent annual growth in sales, the Middle East and Africa
is clearly our fastest growing area." Jean-Philippe Courtois, Microsoft CEO for
Europe, Middle East and Africa.
"Egypt is vital to our Middle East and African business, and with a strong base
in this dynamic marketplace, we see great e-business potential.” Stanley
Krasnow, IBM Software Group, Vice President for Sales Operation.
Egypt has all the resources necessary for becoming a hub in the ICT industry in
the Middle East and North Africa (MENA). With its ideal geography and
infrastructure, Egypt could well become the ICT leader of the region in the
near future.
Egypt's central location in the north east corner of Africa, between the
continents of the world is an amazing asset for any investor who wishes to tap
this region. As a political leader in the MENA region, Egypt provides excellent
access to markets in the area, and acts as a bridge between East and West,
North and South. Egypt is the perfect location for placing a regional office
that covers the entire area, and the time zone allows two operation shifts for
call centers (Europe and USA).
In a turbulent world, Egypt enjoys a great deal of political stability and
peace. In addition, Egypt has an indisputable competitive edge on an
international level, with good trade relations with all its neighbors in the
region and the rest of the world. Businesses can thrive and expand in the
stable Egyptian political atmosphere, without any unnecessary risk to
investments.
The Business Environment
"I am very delighted that I am here today to announce the inauguration of
Oracle's Global Support Center in Egypt. The center is one of the main global
centers that serve over 250,000 customers worldwide. Egypt was chosen for this
project because of the huge improvement in the telecom infrastructure, the
availability of technical engineering talents and calibers, and the flexible
labor laws in the country." Tarek El-Saadany, Vice President, Global Product
Support, Oracle Corporation.
Costs of Doing Business
Egypt represents a low cost base, especially after the local currency was
floated in 2003. Egypt has a skilled and competitively cost-effective human
resources pool. Average pay is US$ 4 to10 per hour for programmers. The
Egyptian government reduced investment capital needed for investing in Egypt by
paying for the required training of the Egyptian professionals according to the
investors' requirements. This directly adds to the investor's bottom line,
hence providing higher returns on invested capital.
Egypt's Greatest Asset – Human Capital
“With very limited investments we can exploit our best asset, which is our
youth, given that more than half of Egypt's population is below the age of
thirty. We can fill the technological and communications gap faster than we can
imagine." Dr Ahmed Nazif, Egyptian Prime Minister.
With a population of about 73 million, Egypt is one of the most
populated countries in the region. About 58 percent of the Egyptian population
is under the age of twenty five, and more than 16 million young Egyptians are
currently enrolled in primary, secondary, and technical education. Meanwhile,
over 265,000 university students graduate each year, as do more than 1.1
million high school students.
Out of the total number of university graduates, 16,000 graduate each year from
technical universities, and more than a third of them speak two or more
languages. The number of graduates from government sponsored human development
programs increases each year, adding to the 23,000 professionals in IT,
communications and networks. The Government is also willing to pay for the
training of Egyptian professionals according to investors’ requirements.
More than 120,000 Egyptians have completed the government sponsored IT Basic
Training Program, which provides training in the use of computers, with the aim
of making IT a part of daily life. At the end of the course, students take the
UNESCO approved International Computer Driving License (ICDL) exam.
Egypt has a young, educated, cost-effective human resources pool that has
proven its efficiency in many fields all over the world for decades. Egyptian
programmers can be recruited from US$ 4 to10 per hour depending on experience,
skills, languages and other factors.
Legislative Environment
"Reducing income, corporate taxes, and custom duties of course is very
positive. A more favorable tax system helps us invest further. We consider
Egypt as being even more attractive now." Vincenzo Nesci, Vice President Middle
East, and Chairman, Alcatel Egypt
In its constant endeavor to create an environment conducive to thriving
investment, the Egyptian government has passed several laws with the aim of
smoothing the way for investors in the ICT industry in Egypt. Among these laws
are the following.
- Investment Law 8 of 1997, in which a great number of incentives for
foreign investors are stated. The General Authority for Investment and Free
Zones (GAFI) is the government body responsible for investor incentives and
guarantees
- Intellectual Property Law 82 of 2002 ensures that
patents, trade marks and copyrights are protected by law in Egypt. Violation of
Law 82 can lead to heavy fines or imprisonment, a guarantee for investors that
the Egyptian government is seriously committed to the protection of
intellectual property.
- Electronic Signature Law 15 of 2004, which was passed specifically
for the ICT industry and regulates electronic signature transactions
(e-signature). The law has also included the establishment of an independent
entity called the IT Industry Development Organization in which one of its
mandates is the regulating of electronic signature and licensing digital
certificates required for conducting any sort of electronic transactions.
- The Labor Law 12 of 2003 clearly states the rights and privileges of
companies and employees. Article 69 of the law gives employers the right to
suspend workers provided they commit one of several misdemeanors listed in this
article of the law.
In addition to the above laws, the Egyptian government provides excellent
financial, legal and operational facilities with the aim of promoting
significant investment and growth in the ICT sector.
A Promising Prospect
"Egypt is a promising market with a lot of potentials and offers an attractive
investment environment."
Karim Fahmy, Country Manager, Egypt Levant and North Africa (ELN), Intel
Corporation
Egypt is one of the most densely populated countries in the area and the
Egyptian ICT market is a young and growing market with great potential. The
number of ICT companies in Egypt has increased from 185 companies in 1998 to
15132 companies in 2005, an incredible 522 percent increase over seven years.
However, the market is still growing and has the potential to grow even
further. The Egyptian ICT market contains enormous untapped opportunities just
waiting for investors to capitalize on.
The implementation of the WTO agreements and many other regional and
international trade agreements means that Egypt has excellent potential as a
regional exporter and provider to other markets in the area.
Number of Fixed and Mobile Lines
Fixed lines: 10.7 million
Mobile lines: 16.7 million
A high Tech Working Environment – The Smart Village
"We are impressed with the quality of the software engineers available, as
well as the availability of state-of-the-art infrastructure in the Smart
Village. These factors have been key in our decision to increase our investment
in Egypt."
Sergio Giacoletto, Oracle Executive Vice President Europe and MENA
On the outskirts of Cairo, close to the Pyramids, lies Egypt's first high-tech
park, the
Smart Village. With an area of 450 acres, the Smart Village is a large,
high-technology zone that aims to be the all-round business district of the
region. Several multinational giants have already set up in the Smart Village,
and many more are soon to follow. The companies that have already moved to the
Smart Village include prominent names such as Microsoft, Alcatel and Vodafone.
In addition, a large call center, Xceed, which has a capacity of 2000 agents,
has already started its services in the Smart Village.
The Smart Village's amenities include an enormous, modern conference center,
public library, exhibition Center, hotel, health center, day care center, and
an emergency services center.
Cairo’s Smart Village is only the first of several high-tech parks that will be
located in cities all over Egypt. The Smart Villages are part of an initiative
to create technology districts all over Egypt.
Smart Village Financial District
The aim of the Smart Village is to create an all-encompassing hub of commerce
in the region. For this reason the Smart Village also includes an entire
financial district dedicated primarily to financial institutions, banks, and
stockbrokers. Some of these financial institutions include the following:
- Cairo
Alexandria Stock Exchange (CASE)
-
Capital Market Authority
-
Egypt for Information Dissemination (EGID)
-
Misr for Clearing, Settlement & Depository
In the near future the Smart Village financial district will include an even
larger number of financial institutions.
Smart Village ICT Infrastructure
The main ICT infrastructure of the Smart Village consists of the
following:
- High-speed network for data, voice, and video transmission.
- VPN connection, VoIP capabilities and data center.
- Cable TV and video conferencing systems.
- State-of-the-art power network that meets international standards and
codes
of practice.
- Uninterrupted power supply and standby generators.
Powerful Telecommunications Infrastructure
International Telecommunications Hub
The Egyptian telecommunications infrastructure is engineered to provide
substantial services and to absorb the rapidly growing ICT industry. With its
current infrastructure, and the large number of international and regional
fiber optic cables that pass through Egypt, the country has international and
national links and reliable connectivity to the rest of the world. In this way,
Egypt has excellent components for an emerging call-center hub. The following
are the regional and international telecommunications links between Egypt and
the rest of the world.
- SEA-ME-WE. This is the first submarine cable to pass between South
East
Asia, the Middle East and Western Europe.
- SEA-ME-WE-II. This is a second cable along the same route as the
first, but
serves more countries and uses digital fiber optic
technology.
- SEA-ME-WE-III. This is a third cable using the same routing with
extended
coverage from Europe to Japan, Australia, and elsewhere
in East Asia.
- The FLAG Project (Fiber Optic Link around the Globe). Egypt is a part
of this
worldwide project.
- A submarine cable shared with Italy and Greece.
- A submarine fiber optic cable shared with Sudan.
Regional microwave links to Libya and Jordan.
- Telecom Egypt (TE) satellite earth station with multiple connections
to
Intelsat, Inmarsat, and Arabsat.
National Backbone Network
Egypt's core infrastructure is based on optical fiber 10 Gbps and 2.5 Gbps
rings. This huge infrastructure is the fundamental layer that connects and
delivers services over PSTN, mobile and packet based networks across the
country, in addition to Class 4 switches in Cairo and Alexandria respectively.
This nationwide optical core has been expanded not only to accommodate the
increasing demand in voice and mobile services, but also to allow for fully
fledged IP backbones to be built to absorb the exponential growth in data and
internet traffic.
Government Incentive Packages As an indication
of support for potential investors, the Egyptian government offers a generous
incentives package to each investor. The government works in partnership with
each investor to customize an incentives package to cater to the investor's
needs. Examples of these incentives include the following:
- The Egyptian government offers special tax exemptions and reductions
for ICT
industries.
- There are special reductions on land prices for investors in the ICT
sector.
- Easing of export and import regulations.
- The Egyptian government offers training programs for professionals in
the ICT
industry that investors intend to recruit. The
government offers training in IT,
communications and networks according to investors'
standards and
specifications. These training programs are often
offered at the government's
expense.
- The Egyptian government assigns a government official to facilitate
interaction
with government organizations.
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