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Telecommunications Policy in Egypt (Status and Prospects)

Telecommunications Policy in Egypt (Status and Prospects). Amr HASHEM Telecommunications Policy Unit Ministry of Communications & IT Egypt. Agenda. Launch of Reform Historical overview National CIT Plan Investment Environment Reform Process Telecommunications Law

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Telecommunications Policy in Egypt (Status and Prospects)

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  1. Telecommunications Policy in Egypt(Status and Prospects) Amr HASHEM Telecommunications Policy Unit Ministry of Communications & IT Egypt

  2. Agenda • Launch of Reform • Historical overview • National CIT Plan • Investment Environment • Reform Process • Telecommunications Law • National Telecom Regulatory Authority • Market Reform • Infrastructure Development • Trade Agreements • Egypt’s WTO Commitments • Challenges for Telecom Sector

  3. Launch of Reform • Support of the Political Leadership for High-Tech industry • Separation between regulatory functions and service provisioning (Law 19/1998) • Establishment of Telecommunications Regulatory Authority (Decree 101/1998) • Establishment of Ministry of Communications & Information Technology ( Decree 387/1999) • Development of the first National Communications & Information Technology Plan (’99-’02).

  4. Historical Overview • De-regulation of the telecommunications market for private investments: • Payphones (’97) • GSM operators (’98) • PDN services (’99) • Internet Infrastructure providers (’00) • High-speed Access Services (’01) • Virtual Operators (’03)

  5. National CIT Plan • Assuring the establishment of state-of-the-art telecommunications infrastructure and provision of world-class services • Promoting access to telecommunications services throughout Egypt. • Developing a competitive local industry and expanding opportunities in the region

  6. Incentives for ICT Investments • Human resources: • Multi-lingual population • Abundance of highly trained fresh graduates on state-of-art ICT • Investment incentive package (Law 8/1997): • No restriction on ownership • No restrictions on flow of funds • No restrictions on labor • Tax exemptions for corporate and foreign employees

  7. Promoting Egypt as a Regional Hub • Special incentives for export-oriented ICT projects: • Support in deploying new technologies • Incentives in customs and taxes • Sharing in costs of training • A new Telecommunications free-zone in the region • Telecom hotels Internet Exchanges • Call centers Data centers

  8. Reform Process • Establishing a workgroup for researching the reform needs • Drafting a new Telecommunications Act to govern the transition • Public hearings and consultative sessions • People’s Assembly Ratifying the Act in February, 2003

  9. The Telecom Law • Transparency in licensing process • Consultation with Industry & Consumers • Universal Services • Competition safe-guards • Interconnection between operators • Sharing of bottleneck resources • Spectrum Management

  10. National Telecom Regulatory Authority • Establishment of TRA in 1998 by virtue of Law 19 and the Presidential Decree 101 • Law 10 changing the status of the TRA to a National Authority (NTRA). • NTRA is an independent regulatory body composed of : • Regulatory Board (17 members) • Executive body (150 professionals)

  11. NTRA Independence • Operations: • NTRA is fully independent from operators and service providers • NTRA is not part of MCIT. It has its own independent structure and independent funds • Funding: • License Fees • State Budget

  12. Market Reform • Consultative Process with stakeholders for technological and business reforms • Promoting models for revenue sharing • Promoting E-Access • Integrations with the regional and international ICT markets

  13. Infrastructure Development • Establishing a high-speed, packet switched backbone for integrated services • Introducing new technologies for access • Standardization of interfaces and promotion of Interconnection • Establishing mechanisms for finance of rollout of new infrastructure

  14. Expansion in Access

  15. Expanding Basic Access

  16. Launching of the Free Internet Services • Providing Internet access at cost of local calls • President Mubarak launching service on 14th of Jan.’02 • Nationwide coverage before end of ’02.

  17. Promoting the Information Society • Licensing Data & Internet operators • Interconnecting with PSTN • Establishing a new category of service-based Internet providers • Promoting the development of Arabic content • Providing a basis for development of broadband infrastructure

  18. Regional Trade Agreements • Arab Free Trade Agreement: • Entered into force regarding products • Currently under negotiation concerning services • EU Partnership Agreement: • Immediate opening-up of the EU markets for Egyptian products • Phased in liberalization of Egypt’s markets over 12 years • The Common Market For Eastern and Southern Africa (COMESA): • Free Trade Area between 20 member states (385 million inhabitants). • Harmonization of telecom laws and regulations

  19. World Trade Organization • Born in Jan. 95 on the basis of the GATT • 146 Member states as of Apr. 03 • 11 Arabic Countries as Members Bahrain 1/1/1995 Morocco 1/1/1995 Kuwait 1/1/1995 Tunisia 29/3/1995 Mauritania 31/5/1995 Djibouti 31/5/1995 Egypt 30/6/1995 Qatar 13/1/1996 UAE 10/4/1996 Jordan 11/4/2000 Oman 9/11/2000 • 5 Arabic Countries as Observes (in Accession) Algeria, Sudan, Lebanon, Saudi Arabia, Yemen • 6 Non-Member Arabic Countries Syria, Libya, Iraq, Palestine, Comoros, Somalia.

  20. Basic Telecommunications Agreement (BTA) • Ministerial Decision on negotiations of basic telecommunications and establishment of the NGBT (Marrakesh, 94) • Adoption of the Fourth Protocol by 69 Counties representing 91% of world revenues in telecom (Feb. 97) • Entry into Force of the Commitments liberalizing 82% of world revenues in telecom services (Feb. 98) • 86 Countries committed to BTA representing 93% of world revenues in telecom services (Jan. 03) • Arab Countries with BTA Commitments • Morocco (Apr. 94, Apr. 97, Oct. 00) Tunisia (Apr. 97) • Jordan (Oct. 00) Oman (Dec. 00) • Egypt (Jun. 02) • Arab Countries submitting proposals for BTA • Bahrain

  21. Process for Joining the BTA • MCIT and TRA studying the possibility of joining the BTA (Winter/Spring 2001) • MCIT, TRA, MoFA and MoE Preparing the Final Draft of BTA proposal (June 2001) • Clarifying issues related to the BTA proposal (Fall 2001/Winter 2002) • Meetings for discussing Egypt’s BTA proposal (February 2002) • BTA proposal circulated among WTO members for approval (April 2002) • BTA commitments integrated into Egypt’s schedule (June 2002)

  22. Highlight of BTA Commitments • Reference Paper • Interconnection • Competitive Safeguards • Transparent Licensing Process • Competition Neutral Universal Services • Independent Regulator • Fair Allocation of Finite Resources

  23. BTA Commitments • Table of Specific Commitments • Grace Period for Market Reform • Technology-Neutral approach to services • Development of Local Industry • No Limitations on Foreign Capital • Opening up the market for new services

  24. Information Technology Agreement (ITA) • 29 countries representing 83% of world trade in ICT negotiated the ITA in Singapore (Dec. 96) • 11 more countries joining to reach 90% of world trade in ICT and entry into force for elimination of tariffs by year 2000 (Jul. 97) • Extension of the implementation for developing countries till 2005 • 4 Arabic countries joined the ITA: Oman, Jordan, Egypt, Bahrain • 60 Countries with ITA commitments counting for 95% of the world trade in ICT (Jul. 03)

  25. Process for Joining the ITA • MCIT, MoF, MoI&TD, MoFT and MOFA studying the ITA in respect to: • Impact on the sovereign income of taxes • Impact on industry development • Reaching an initial proposal for phasing-in the items under the ITA • Meetings for discussing the initial ITA proposal • Reaching a final proposal based on phasing in the reductions in customs for items under ITA

  26. Highlights of ITA Commitments • Some items of relevance to telecommunications industry: • 8517 11 Telephone sets 10% 2005 • 8517 21 FAX 10% 2005 • 8517 30 Switches 15% 2007 • 8517 90 Parts 10% 2005 • 8544 41 Copper Cables 30% 2005 • 8544 70 Optic Fibers 30% 2007 • 9030 40 Measurement 5% 2005 Equip.

  27. Impact of WTO on Telecom Development • Customer Focus • Bringing-in new Services • More efficient service delivery • Facilitating Innovation • Technology-Neutral Approach • Allocation of Finite Resources • Investment Safeguards • Eradicating un-necessary Risks • Predictability and Accountability

  28. Thank you AHashem@mcit.gov.eg

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