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 hotelsInternet 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 1/1/1995Morocco 1/1/1995 Kuwait 1/1/1995Tunisia 29/3/1995 Mauritania 31/5/1995Djibouti 31/5/1995 Egypt 30/6/1995Qatar 13/1/1996 UAE 10/4/1996Jordan 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 11Telephone sets10%2005 –8517 21FAX10%2005 –8517 30Switches15%2007 –8517 90Parts10%2005 –8544 41Copper Cables30%2005 –8544 70Optic Fibers30%2007 –9030 40Measurement5%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