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Telecom Infrastructure
- Universal Service Fund
‘Infrastructure is central in achieving the goal of digital inclusion, enabling
universal use, sustainable, ubiquitous, and affordable access to ICT. This
should take into account relevant solutions already in place in countries with
economies in transition. Also provision should be made for sustainable
connectivity and access to remote and marginalised areas at national and
regional levels.’
WSIS Plan of Action, December 2003
Sustainable development requires a step by step approach that relies on solid
foundations for growth and success. As a developing country Egypt has addressed
the issues of infrastructure and universal service to reach out across the
unconnected parts of the country to allow development in ICT. The Egyptian
government has seen that partnerships are an instrumental tool in progressing
towards an Information Society. An environment must be created to allow
private, public, and international sectors to combine in an effective manner.
Numerous and continuing successes so far in ICT development have been based on
mutually beneficial partnering schemes.
Telecom Infrastructure
Egypt’s telecommunications infrastructure has increased dramatically during
the last few years. Fixed telephone lines have shown a steady increase from 7.5
million in 2000 to 10.2 million in 2005. At the end of 2001 two private mobile
operators were servicing 3.4 million mobile users in 2005 this figure had
increased to 11.2 million. Also in January 2002, the country had one million
Internet users, now there are 5 million and international Internet capacity has
increased from 20 Mbps to now 3.2 Gbps in four years.
Telecom Egypt (TE) is the voice incumbent in Egypt. Its nationwide network is
composed of several major components, including access, transmission,
switching, and signalling service intelligence to support the voice services.
In addition, a packet network exists independently as an overlay data network
and offers X.25 and Frame Relay services. This overlay data network provides
basic services for business customers.
The TE switching network includes at least one national gateway in each
governorate to serve long distance calls. Each of Cairo and Alexandria has one
international gateway as well as two mobile gateways. Launched in 1988,
Egyptnet, the packet data network owned by Telecom Egypt, was the first packet
switching network in the country to offer data services to the public. Current
services offered by Egyptnet include X.25 dial-up services and direct lines
with access rates up to 256 Kbps. Also provided are Frame Relay services with
access rates up to 2 Mbps, and digital leased lines with access rates up to 2
Mbps. International access is also available for X.25 services.
The Internet in Egypt started off outside the telecommunication sector, where
services where first introduced in Egypt in October 1993, by the Egyptian
Universities Network (EUN) and the Information and Decision Support Centre
(IDSC) of the Egyptian Cabinet. What makes Egypt’s Internet development
experience unique is the strong support it has been receiving from the
government in all its stages. In 1994, as an effort by the government to
promote Internet services, IDSC was providing free Internet access to
governmental entities, NGOs and to public and private sector companies. In
March 1996, a landmark decision was taken by the government, opening the door
for commercial Internet services. Represented by IDSC and TE, the government
started developing an Internet backbone and gateway facility, to serve at the
time twelve private sector ISPs, providing commercial Internet services in
Egypt for the first time. As a result, by the third quarter of 1999, Egypt’s
Internet user base reached 300,000, and 45 ISPs where in operation and Egypt
was by that time using 20 Mbps of international bandwidth.
With the formation of MCIT in October 1999, the Internet as well as the
telecommunication sectors started to witness a remarkable reform process.
Already in 1998, Law 19 had transformed TE, the state owned incumbent operator
to a joint stock company. The government also created and assigned all
regulatory functions to the National Telecommunication Regulatory Agency
(NTRA) as an independent regulator. The newly established ministry
started a number of initiatives to expand broadband capacity and establish a
reliable, fast Internet backbone. Several ISPs were licensed by the NTRA to
build their own data backbones and expand their broadband capacity by obtaining
separate international gateways. Introducing competition to the local Internet
and data backbone market was a serious step towards providing end users with
maximum capacities and best available service at the minimum costs possible.
This coincided with another landmark initiative that was introduced and backed
up by the government, Egypt’s Free Internet Project. The project, which was
begun in January 2002, pushed both TE and other licensed data backbone
operators, to expand their networks both in terms of capacity and coverage. TE
opened its exchanges nationwide to interconnection and licensed operators were
permitted to co-locate their equipment all across the country. All this
resulted in a significant increase in the number of Internet users, reaching 5
million in 2005. To date there are eight Network Service Providers (NSPs),
while the number of retail ISPs has jumped to one hundred and ninety
nationwide. The total international capacity to the Internet has also been
exponentially increased to now reach 3.2 Gbps.
Currently, the domestic Internet infrastructure consists of several backbone
networks using different technologies such as IP, Frame Relay and ATM. Eight
private sector operators, in addition to TE, are licensed by the NTRA to build
and operate those networks, providing reliable Internet services with enhanced
quality. Another class of licenses is granted by the NTRA to virtual ISPs,
renting infrastructure and providing access, content and customer support to
the end user.
Egypt currently has two mobile telephone operators,
Mobinil and
Vodafone. Mobinil has 1824 towers covering 220 cities in Egypt
including 61 highways and has also roaming agreements with 240 different
operators in 107 countries worldwide. Vodafone has 1718 towers covering 214
cities in Egypt including 111 highways and has roaming agreements with 250
different operators in 105 countries worldwide. There is a mutual
interconnection agreement between both operators as well as with Telecom Egypt
who is acting as the incumbent fixed voice operator.
Although Telecom Egypt has so far been enjoying a monopoly over international
connectivity, which will end as of 1 January 2006, prices for international
leased lines have experienced a number of successive reductions during the last
three years. Prices are showing a clear sign of the government’s commitment to
link the country to the global society. IP peering is to different global
operators connected to the US and European backbones, such as UUNet, France
Telecom and the Fibre Optic Link around the Globe (FLAG) project. Egypt’s
international Internet capacity is not yet fully utilised, which makes it ready
to accommodate further expansions to the domestic Internet infrastructure and
usage.
The main indicators of growth in the telecommunications sector are shown on
Table 3.1 below.
Table 2.1: Telecommunications Infrastructure Indicators
|
Detail
|
Indicator
|
October 1999
|
March 2004
|
March 2005
|
|
Fixed Services
|
Exchange capacity |
6.4 million |
11.6 million |
12.1 million |
| No. of fixed telephone line subscribers |
4.9 million |
9.1 million |
9.6 million |
| Waiting list for fixed telephone lines |
1.3 million |
99,000 |
65,000 |
| No. of exchanges in rural areas |
775 |
1082 |
1112 |
| No. of public phone cabinets |
13,300 |
48,983 |
54,346 |
|
Mobile Lines
|
No. of mobile phone subscribers |
654,000 |
6.1 million |
8.6 million |
| No of mobile phones per 100 people |
0.98 |
8.9 |
12.3 |
| Mobile service companies |
2 |
2 |
2 |
|
Internet Penetration
|
Internet capacity |
20 Mbps |
1102 Mbps |
2060 Mbps |
| No. of Internet users |
300,000 |
3.15 million |
4 million |
| Monthly Internet subscription |
100 LE (US$ 29) |
Cost of local call |
Cost of local call |
|
PC Penetration
|
No. of PCs |
850,000 |
1.7 million |
2.0 million |
| No. of PCs per 100 people |
1.25 |
0.25 |
2.85 |
Universal Service Fund
Most governments of the world still envisage the spread of
telecommunications as a favourable social goal. It is an important key to a
modern employment market in which more people can work from home, small
businesses can flourish, and enterprises can market their products to more
customers. The non economic benefits of universal access include improved law
enforcement, rapid and effective communication during disasters, and stronger
kinship ties. Hence governments, including that of Egypt, are willing to invest
in a service with definite, albeit often intangible, benefits on economic
diversity and social unity. Furthermore, news stories, which are increasingly
focusing on the rising trend towards outsourcing services from developed to
developing countries, tend to sometimes neglect the fact that this phenomenon
depends on the widespread use of communications as indicated by teledensity and
the availability of broadband.
For all these reasons universal access and service is a priority on the agenda
of National Telecom Regulatory Authority (NTRA) in its quest to serve both the
interests of the consumers and the state. The Telecom Act of 2003 placed the
responsibility of establishing and managing a Universal Service Fund on NTRA.
The fund is being spent on infrastructure projects required to effectuate
universal access. Moreover, NTRA is also responsible for determining the
services that are considered basic telecom services and subsequently set their
prices as it sees fit. If the margin between these set prices and the
economical price of providing these services to certain areas is wide,
operators should be compensated through the Universal Service Fund
Introduction
The Foundation for the Information Society
e-Access
Innovation
Capacity Building
Enabling
Environment
Industry
Development
ICT
Applications: Benefits in All Aspects of Life
International and Regional Cooperation
Conclusion
References
Appendix
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