Pioneering Liberalization & Regulation of Telecommunications In The Arab Region

1. Pioneering Liberalization & Regulation of Telecommunications In The Arab Region DR. OLFAT ABDEL MONSEF POLICIES & LICENSING TRA Egypt Olfat A. Monsef

2. TRA • WTO/BTA • Liberalization of Telecom Services • New Initiatives • Regional Cooperation and Integration Olfat A. Monsef

3. TRA - Background: • Until 1998, the Arab Republic of Egypt National Telecommunications Organization ( ARENTO ) was exclusively responsible for providing all telecommunication services in Egypt. ARENTO acted as both Operator and Regulator. • Law no. 19 of 1998 transformed Telecom Egypt ( previously ARENTO ) to a joint - stock company and established the TRA. • Presidential Decree no. 101 of 1998 set out TRA mission, strategies and responsibilities. • New Telecommunications Act (Law no. 10 of 2003) Olfat A. Monsef

4. TRA – Background(cont’) • The Authority consists of : • The Board of Directors. • The Executive Commission. • The Board of Directors is headed by the Minister of Communications and Information Technology (MCIT) with the membership of 16 members. Olfat A. Monsef

5. TRA - Mission The aim of the Telecommunication Regulatory Authority is to guarantee high quality of the telecommunication services at reasonable prices for all Egyptian citizens taking into consideration national interests while enabling the sector growth and encouraging national and international investments. Olfat A. Monsef

6. TRA - Strategies • Maintain full transparency • Provide advanced and adequate telecommunication services all over Egypt at affordable prices. • Promote and encourage fair competition between different vendors and service providers. • Protect the public interest and user interest. • Ensure optimization of scarce resources mainly the frequency spectrum. Olfat A. Monsef

7. Policies for Licensing and Regulation • WTO/BTA • Approval of Egypt Commitments June 2002 • Deregulation plan towards 2005 • Mobile • Towards tariff structuring for existing networks • Preparation for 3rd Mobile Operator • Internet • Free Internet licensing • Refinment of the overall Internet licensing environment • Fixed Network • Unbundelling of the Local Loop • PayPhones • TE Licensing • Opening new services for competition • PPCC • Wireless Trunk • Vehicle Tracking Olfat A. Monsef

8. TRA – Licenses: Olfat A. Monsef

9. New Licenses: • Prepaid Calling Card (PPCA) • A RFP was issued • The technical and commercial evaluation of the offers lead to the selection of 2 service providers in addition of the 2 existing ones. Licenses will soon be issued. • Payphone licenses • Licensing of the existing service providers : Menatel, Nile and TE is taking place in accordance to the telecommunications Law.. • ISP licenses • A large number of companies have applied for ISP class C licenses and joined the Free Internet service. Olfat A. Monsef

10. The Incumbent Operator License (Telecom Egypt) • The Final License Modules • Basic Services ( Voice services) • Local • Long distance • International • Facility Based Services • Local Loop ( ADSL) • Long Distance ( Leased Lines) • International ( cable landing points, satellite…) • Value Added Services ( ISDN..) • Liberalized Services ( Payphones, PPCC, Wireless Trunk ..) • Historic Services ( Telegraph, Telex, Paging..) • Adaptation of TE licensing to modular service and activity subsidiaries in preparation for future liberalization phases. • Issuing of Reference Interconnection Offer Olfat A. Monsef

11. Technical affairs Type approval for Telecommunications equipment . Develop criteria of QoS for all licensed services Monitor licensed operators and service providers for compliance with QoS , health and environmental criteria Olfat A. Monsef

12. Consumer Affairs • Consumer Protection Committee is being set up to represent telecommunications services end users and to provide recommendations regarding the protection of consumers’ interests. • Quality assurance policy and application of standards to ensure health and environmental criteria. • A call center was set up to • Receive investor and licensed operators queries and provide licensing information • Receive and follow up consumer complaints • Conduct opinion polls to determine customer requests and needs for specific services.. • Generate statistics and reports and draw trends for market and business studies Call the Free Number 0800 3330333 Olfat A. Monsef

13. Frequency Management • Optimize usage of the frequency spectrum in accordance • with the international standards . • Planning for frequency spectrum allocation • Develop interactive licensing procedures through the TRA web-site • Frequency spectrum management and optimum utilization • of unused spectrum. • Enhance spectrum monitoring and inspection • procedures • Coordinate with administrations in different countries regarding • interference and security issues Olfat A. Monsef

14. Legal affairs • Legal Issues related to BTA commitments • Rule making and implementation of the telecommunications law • Revision and validation of license procedures and contractual terms • Monitoring market for compliance with free competition rules • Enforcement • Dispute resolution Olfat A. Monsef

15. Research and Development Conformity & Type Approval Health and Environmental Issues Documentation And Training Technical support & technology tracking Regulation Consultations & projects Projects Olfat A. Monsef

16. Basic Regulatory Issues • Cost modeling for networks and services • Tariff rebalancing strategies • Interconnection • Development of teledensity Studies • Universal Service obligations and Implementation • Competition policy framework - Olfat A. Monsef

17. Economic Affairs Market analysis Business planning Performance evaluation Forecasting Financial analysis Universal service fund Olfat A. Monsef

18. TRA build up Capacity Building • Organization • Hiring • Training • Technology • Regulation • Tariffs, Interconnection and universal Service Full Office Automation: • Databases • Work Flow Olfat A. Monsef

19. Road Map • Future Short Term Plan • Refinement of the free internet and internet licensing models (2002) • TE licensing • Modular Licensing process • Interconnection offer • Enforcing TRA role in coordination with industry and consumer committees • Economic group enforcement • Cost based methodology for calculation of tariffs and interconnection rates • Universal Service Obligation and Implementation • Enforce the department legal capacity • Post-Law activities to materialize new rules into concrete steps • Competition Law , rules and directives • Deregulation long-term plan towards 2005 • Setting up the environment for multi-operators and multimedia services • Re-iteration of TRA organization structure, regulatory rules and directives, • Liberalization of Basic Voice Services • Liberalization of International Voice Services • Introduction of new services and technologies • Ongoing development of tariff structure, interconnection and Universal service Olfat A. Monsef

20. Information and closing the Digital GapFree Internet Initiative Olfat A. Monsef

21. Initiative was first announced February 2001 • Subscription-free Internet services: • Internet dial-up calls tariff is equal to the local phone call tariff (1.23 EGP/hr) • Users don’t pay additional monthly or yearly subscription fees • Internet calls charges are collected by TE with regular phone bills • Basic Model relies on an offloading / revenue-sharing mechanism and has its own numbering scheme (0777xxxx / 0707xxxx) Olfat A. Monsef

22. ISP installs RAS equipment at local exchanges in a region • TE configures the Free Internet number of ISP on all local exchanges in this region • Free Internet calls in this region are mainly serviced by the ISP RAS in the same local exchange • Only calls from local exchanges with no ISP PoPs are routed through TE PSTN to the closest local exchange in this region with an ISP PoP • Model offloads TE transit exchanges and trunk lines from the longer lasting Internet calls Olfat A. Monsef

23. Offloading Model Olfat A. Monsef

24. Revenue-Sharing Model • TE and the ISPs have agreed on a Revenue-Sharing Model of 30%:70% in case of offloading • In Greater Cairo and Alexandria: • ISP receives 70% of a call’s revenue when directly serviced by its RAS equipment in the same local exchange • ISP receives 30% of a call’s revenue when serviced by its RAS equipment in another local exchange • ISP tends to cover more exchanges in a region to maximize its revenue share • In Areas outside Cairo and Alexandria: • Within one governorate, ISP receives 70% of all calls’ revenues, when installing its RAS equipment in the main local exchange Olfat A. Monsef

25. Licensing Framework • Licenses for data backbone operation and Internet services provided by TRA • 3 types of licenses: Class A – Class B – Class C • Class A (closed license): international IP peering – co-location – wholesale of Internet services – build and operate data backbone • Class B: co-location – provide Internet services to end customer – build and operate data backbone • Class C: virtual ISP – lease infrastructure – reseller of Internet services Olfat A. Monsef

26. Revenue-Sharing Model • TE and the ISPs have agreed on a Revenue-Sharing Model of 30%:70% in case of offloading • In Greater Cairo and Alexandria: • ISP receives 70% of a call’s revenue when directly serviced by its RAS equipment in the same local exchange • ISP receives 30% of a call’s revenue when serviced by its RAS equipment in another local exchange • ISP tends to cover more exchanges in a region to maximize its revenue share • In Areas outside Cairo and Alexandria: • Within one governorate, ISP receives 70% of all calls’ revenues, when installing its RAS equipment in the main local exchange Olfat A. Monsef

27. Licensing Framework • Licenses for data backbone operation and Internet services provided by TRA • 3 types of licenses: Class A – Class B – Class C • Class A (closed license): international IP peering – co-location – wholesale of Internet services – build and operate data backbone • Class B: co-location – provide Internet services to end customer – build and operate data backbone • Class C: virtual ISP – lease infrastructure – reseller of Internet services Olfat A. Monsef

28. Numbering Plan • Special prefixes selected for Free Internet Service Numbers: 0777 xxxx and 0707 xxxx • Numbers assigned to ISPs by TRA for a yearly charge • Distinctive numbers initially assigned by auction (December 2001) • ISP number portability ensured by TRA Olfat A. Monsef

29. Nationwide Statistics • Total contracted international capacity: 845 Mbps • Total access ports: 66,510 • Total unique numbers: 767,579 • Average minutes per call: 22 min. • Average minutes per day: 13,112,650 min. • Average minutes per month: 393,379,510 min. • Estimated number of users: 1.8 M • Total Free Internet numbers assigned: 213 • Total number of ISPs: 143 Olfat A. Monsef

30. Regional Distribution of Users Olfat A. Monsef

31. “PC for Every Home” Initiative Olfat A. Monsef

32. Project Start Date: 21/11/2002 • Project Duration: 7 years • Partners: Banque Misr – Telecom Egypt • Outlets Available Nationwide : January 2003 • Target in 2003: 250,000 PCs Olfat A. Monsef

33. Affordable High-Quality Local-Brand PCs to Meet Local Demand • Paid on Monthly Installments • Every Phone Owner is Eligible • Outlets located at selected TE central offices • Suppliers accredited and samples approved by MCIT • Project to Develop a Strong Local Manufacturing and Assembly Industry Olfat A. Monsef

34. Procedure • At one of the project outlets: • Choose supplier and PC configuration • Fill application • Submit initial downpayment • Sign contract with Misr Bank • Receive PC and bundled software from one of the dealers • Pay monthly installments at any TE central office Olfat A. Monsef

35. Regional cooperation • Arab regulators coordination and exchange of information • Regional standards • Common projects • Seminars, training and consultancy • Cairo is offering to host a regional office for Arab regulators Olfat A. Monsef

36. Contacts : • Telephone : +(202) -3315 665 • 3377711 • Fax : +(202) - 3373300 • E-mail address : tra@tra.gov.eg • - Website : www.tra.gov.eg Olfat A. Monsef