Mohamed Elnawawy TE Data, SAE Egypt’s Free Internet Initiative The Arab Telecom and Internet Forum 28 - 31 May 2003 Lebanon Mohamed Elnawawy TE Data, SAE Thursday, November 29, 2018Thursday, November 29, 2018 Egypt's Free Internet Initiative

Egypt's Free Internet Initiative Outline Egyptian Market Overview Free Internet Initiative (FII) Framework FII Statistics FII Achievements FII Challenges FII Opportunities FII Growth Indicators FII Business Model Adopters Thursday, November 29, 2018 Egypt's Free Internet Initiative

Egyptian Market Overview Economic Facts Total Population 69,000,000 Under 25 Years Old 65% High School Graduates Annually 1,076,800 University Graduates Annually 223,000 Ranked 17th Worldwide in Annual Graduates   Telephone Subscribers 8,200,000 Fixed Lines 10,700,000 Mobile Subscribers 4,859,000 Thursday, November 29, 2018 Egypt's Free Internet Initiative

Egyptian Market Overview Economic Indicators FY 01/02 - A FY 02/03 - E Real GDP Growth Rate 3.20% 4.00% GDP at Market Price (LE bn) 385 415 Average Annual Inflation Rate 2.40% 3.10% Budget Deficit (% of GDP) 3.60% 4.10% Net International Reserves (US$ bn) 14.1*   Total External Debt (US$ bn) 28.3** Current Account Deficit (US$ bn) 9 Unemployment Rate 7.80% Population (mn) 69 Per-Capita GDP (US$) 1,400 Purchasing Power Parity (PPP) (US$) 2,700 Foreign Direct Investment (US$ bn) 2.7 Population Growth 2% * September 2002 A=Actual Source: CIBC (Commercial International Brokerage Co.) ** October 2002 E=Expected www.cibcegypt.com Thursday, November 29, 2018 Egypt's Free Internet Initiative

Egyptian Market Overview Internet Industry Milestones 1993 - 1996 Ready 1993 First Internet Service Introduced   (Private Sector ISP's Legally Grey) 1996 - 3Q 1999 Steady 1996 Private Sector ISP's Sanctioned 1998 Internet Society of Egypt (ISOC Chapter) Founded Launch of GSM through Private Sector Competition Corporatizing the Sate-Owned ARENTO Regulation: Telecom Regulatory Authotity (TRA), Operation: Telecom Egypt (TE) 3Q 1999 - Present GO 1999 MCIT Established ISP's Recognized as Operators, RS for Toll Based Access 2000 ISP's Licensing Framework 2001 Telecom Egypt Interconnecting with Licensed Operators 2002 Free Internet Initiative (FII) Launched Local Loop Unbundling & ADSL Service Introduction 2003 MCIT New PC's Initiative Launched The New Telecom Act Issued Thursday, November 29, 2018 Egypt's Free Internet Initiative

Egyptian Market Overview ISP’s Licensing Framework CLASS A Facilities-based Backbone Providers CLASS B PDN's CLASS C Non-facilities-based Virtual Purchase International Bandwidth Yes No Install Copper / Fibre Transmission Facility in Cases of non-availability Wholesale Collocation with Incumbent & Offloading Transmission Network Un-bundle Subscriber Loop, Install Splitting Equipment Receive Own Numbering from TRA Revenue Share in Offloaded Call Revenues Retail Awarding Individual Qualification Class License License Fee 3% Rev None License Fee Minimum EGP 500K / Year EGP 300K / Year Thursday, November 29, 2018 Egypt's Free Internet Initiative

FII Framework Inception Initiative First Announced Feb 2001 Subscription Free Internet Service Internet dialup Tariff = Local Phone Call Tariff (EGP 1.2 / Hour) Users don’t pay additional subscription fees Internet Calls Charges are collected by TE With regular telephone bills Basic Model relies on Offloading / Revenue Sharing Mechanisms Special Numbering Prefixes (0777, 0707) Thursday, November 29, 2018 Egypt's Free Internet Initiative

FII Framework Offloading Concepts / o m 3 User Modem Local Exchange Tandem Exchange INTERNET Access Server Radius 1 2 4 6 5 Ethernet E-Mail PSTN TRAFFiC IP TRAFFIC Router DNS Partial Offloading Long Call Hold Local Switch Offloading Transit Switch Offloading Overflowing Traffic Non-POP Traffic Thursday, November 29, 2018 Egypt's Free Internet Initiative

FII Framework Offloading Concepts – Cont’d Interconnection & Not Revenue Sharing Local PSTN Tariff l a t i g d R S C T D A L K / User Mode m Local Exchange Tandem INTERNET Radius Tandom 1 o 3 Access Server 2 Ethernet Route r Mail PSTN TRAFFiC IP TRAFFIC DNS Thursday, November 29, 2018 Egypt's Free Internet Initiative

FII Framework Revenue Sharing TE & ISP’s agreed on an offloading Revenue Sharing Formula ISP TE POP Calls (Offloading) 70% 30% NON-POP Calls (No Offloading) 30% 70% ISP’s tend to cover more exchanges; increase offloading; increase Share of Revenue Thursday, November 29, 2018 Egypt's Free Internet Initiative

FII Framework Numbering Plan Special Prefixes selected for FII (0777-XXXX & 0707-XXXX) ISP’s acquire their number(s) from TRA for an annual fee. ISP’s acquired the premium numbers from TRA in an auction, Dec 2001. TRA guarantees Number Portability to Virtual ISP’s. Thursday, November 29, 2018 Egypt's Free Internet Initiative

FII Framework Launch & Coverage Service was Launched 14 Jan 2002 By H.E. President Hosny Mubarak 100,000 users dialed on the first day Coverage Cairo: 14 Jan 2002 Alexandria: 15 Apr 2002 Canal Cities: 15 Apr 2002 Delta: 15 Jun 2002 Nationwide: 15 Oct 2002 Thursday, November 29, 2018 Egypt's Free Internet Initiative

Egypt's Free Internet Initiative FII Statistics ISP’s Class A ISP's 4 Class B ISP's Class C ISP's 135 Free Internet #'s 213 Access Ports Installed 66,900 Source: MCIT, Apr 2003 Thursday, November 29, 2018 Egypt's Free Internet Initiative

Egypt's Free Internet Initiative FII Statistics Usage Total Unique Callers 767,579 Average Minutes / Call 22 Average Minutes / Day 18,560,653 Average Minutes / Month 556,819,590 Source: MCIT, Apr 2003 Thursday, November 29, 2018 Egypt's Free Internet Initiative

FII Statistics Geographical Distribution Thursday, November 29, 2018 Egypt's Free Internet Initiative

Egypt's Free Internet Initiative FII Achievements Consumer Related Cost Quality of Service (Pervasive Competition) EUP Fixation requires creativity in Customer Care & QoS Market / Industry Related PSTN relief from Long Hold Calls Rise to National Operator know-how EUP Fixation requires creativity in building facility & developing business models Thursday, November 29, 2018 Egypt's Free Internet Initiative

Egypt's Free Internet Initiative FII Challenges Technical Challenges PSTN Billing; Call Calculation Switch Convergence; Blurring the Lines Future Technology; FII is based on copper local loop technologies Blocking Content Regulatory / Business Challenges Local Loop Management PSTN Tariff Re-pricing Jan 2002 – Mar 2002: 10 PT / 6 Min’s Mar 2002 – Present: 2 PT / Min Market Awareness HR Training; Capacity Building Thursday, November 29, 2018 Egypt's Free Internet Initiative

Egypt's Free Internet Initiative FII Opportunities Initiative: “PC for every Citizen” By: MCIT Date: Nov 2002 Target PC’s at affordable prices to be sold and paid through installments on the telephone bills Objective Distribute 7 Million PC’s in 7 Years Milestone 9,000 PC’s sold in less than 5 weeks Impact on FII Increase Total Number of PC’s in Egypt Increase Number of Internet Users in Egypt Increase Total Minutes consumed on the Internet Thursday, November 29, 2018 Egypt's Free Internet Initiative

FII Growth Indicators Minutes Consumption Feb 2002: 193 Million Minutes Aug 2002: 445 Million Minutes (231%) Feb 2003: 565 Million Minutes (293%) Thursday, November 29, 2018 Egypt's Free Internet Initiative

FII Growth Indicators Bandwidth Utilization Feb 2002 Consumption: 155 Mbps Aug 2002 Consumption: 245 Mbps (158%) Feb 2003 Consumption: 380 Mbps (245%) Thursday, November 29, 2018 Egypt's Free Internet Initiative

FII Business Model Adopters Saudi Arabia Thursday, November 29, 2018 Egypt's Free Internet Initiative

FII Business Model Adopters Yemen Thursday, November 29, 2018 Egypt's Free Internet Initiative

Mohamed ElNawawy TE Data, SAE Thank You Mohamed ElNawawy TE Data, SAE Thursday, November 29, 2018Thursday, November 29, 2018 Egypt's Free Internet Initiative