ICT sector in Egypt
Egypt offers easy access to markets in the Arabian Gulf, the Levant, North Africa and Sub-Saharan Africa as well as Europe.
Egypt is an ideal location to base a business with regional – and even global – ambitions
Leading global players ranging Intel and Oracle to Orange and Vodafone have established product development divisions and call centres serving global operations.
A key to the success of this industry sector is the close partnership between the government and businesses.
The ICT sector contributes by 4.4% of the GDP in 2013.
There was a 14.85% increase in the number of companies operating in the ICT sector in Egypt between April 2012 and April 2013, recording 5243 company.
Egypt has three advanced mobile phone networks. All three either have, or soon will have 3.75 G infrastructure, they serve over 91 million subscribers as In April 2013. growing by 23.41% since April 2012 – and hitting a penetration rate of 112.64%
There were more than 33.26 million regular internet users in May 2013
Over 2.36 million subscribers used ADSL line in May 2013, with annual growth rate of 20.37%
Fixed line subscribers were 8.6 million in May 2013.
WiFi networks are provided countrywide by businesses, restaurants and cafes for their customers.
Computer Hardware Sales have reached EGP 6.737 Bn in 2013 compared with EGP 6.175 Bn in 2012. It is expected to grow further to reach EGP 10.787 Bn in 2017.
Software Sales have reached EGP 1.673 Bn in 2013 compared with EGP 1.408 Bn in 2012. It is expected to grow further to reach EGP 3.202 Bn in 2017.
IT Service Sales have reached EGP 2.894 Bn in 2013 compared with EGP 2.474 Bn in 2012. It is expected to grow further to reach EGP 6.052 Bn in 2017.
The IT market value is expected to grow by 12.4 % in 2013 to reach 11.303 Bn EGP.
The number of internet users reached 34,972 users in May 2013 and is expected to grow yearly till it reaches 40,752 users in 2017.
The number of broadband subscribers has reached 6,473 users in 2013 compared with 5,570 users in 2012. The number of users is expected to grow yearly to reach 8,949 users in 2017.
The MCIT announced the launch of Egypt’s national ICT strategy for 2013-2017 in April 2013. The strategy aims to attract foreign investment, create jobs and establish Egypt as an ICT hub in North Africa through the development of technology infrastructure, updating of legislation and promotion of Egyptian companies.
Further, between 2013 and 2017, the MCIT plans to invest EGP450mn (US$64mn) in Egyptian ICT companies and EGP20mn (US$2.8mn) in small and medium-sized enterprises (SMEs) in the mobile and open source application fields. By 2018 the MCIT expects to have doubled the ICT sector’s 2014 output to EGP120bn (US$17bn) and to have created more than 100,000 direct jobs.
The Egyptian government has established a new technological zone in Maadi in Cairo on a space of 42,000 meter square with investments worth 750 Million EGP in an effort of attracting new foreign investments in the ICT sector in Egypt.
The government has planned to establish the “Automatic Vehicle Location” technology in an effort of improving the domestic security and decreasing traffic congestion.
The current level of computerisation in Egypt is low, with PC penetration estimated at around 10%, and seen as rising to around 17% by 2013. There is therefore considerable growth potential for PCs, notebooks and accessories and a recent BMI report forecasts that Egyptian spending on ICT will reach US$960 million by the end of this year. Forecast for IT spending estimated to reach US$ 2.6 billion by 2014.
Current Egyptian spending on ICT includes PCs, broadband internet subscription, and software industry and service provision including Business Process Outsourcing (BPO).
Immediate opportunities lie in public data and Internet services, wireless local loop networks, the mobile network, offshore development, and e-Egypt. In addition, 200 government services will soon be available online through a new e-government portal. The portal will offer 70 services in both English and Arabic, more than 20 government agencies currently offer services online.
Egypt’s ICT sector also has potential opportunities in sub sectors such as Fibre Optic Cables, Call Centres, Equipment/Network Centres, GSM Solutions and Applications, Voice Over Internet Protocol (VoIP), Media Convergence, Triple Play, Wi-Fi, Wi-Max /Wireless Networks and Solutions.
Getting into the market
Egypt is an attractive market that can offer major business opportunities to informed traders and investors. Trade and investment between the UK and Egypt is promising. However it is not always an easy market. A successful entry into Egypt will be determined by the quality of the information and advice upon which the decision to enter is based. Continued success is also dependent upon the ability to navigate the laws and practices of Egypt.
The Egyptian market requires careful study and a sustained sales effort. There is strong competition from other exporting countries. Price and credit terms are a deciding factor when obtaining contracts, though quality is increasingly important. Back-up servicing facilities and the supply of spare parts is also important.
Having a local partner can be vital to successful penetration of this market. There are several reasons for this. Firstly, given the continuing bureaucracy, a local partner can shepherd the foreign business through the delays and obstacles. Secondly, foreign companies require a local agent to bid for government tenders. Thirdly, as the Egyptian market becomes more sophisticated there is a growing demand for after sales service, which a local agent can convincingly provide.
In general, British products and services are very highly regarded in Egypt for their quality. The main obstacle facing the growth of British involvement in the Egyptian market is that British products have a reputation as being expensive compared to some foreign products, though this has lessened slightly over the past year as exchange rate fluctuations have been in favour of UK exporters.
British companies wishing to develop their business in the Egyptian market are advised to undertake as much market research and planning as possible in the UK.
The Egyptian government provides excellent financial, legal and operational facilities with the aim of promoting significant investment and growth in the ICT sector. They believe that strong partnership between the public and private sectors is pivotal to the successful formation of an information society. As part of this belief, providing incentives that foster an attractive climate for investors is a primary focus. The Information Technology Industry Development Agency (ITIDA) is providing these services, which aims to attract further foreign investments and boost exports.
A number of multinational ICT companies use Egypt as a base for regional operations, including Hewlett Packard, Oracle, Siemens, Microsoft, IBM and many others.
The public-private partnership (PPP) model has proved instrumental to growth – one successful PPP is Smart Village Cairo, a 3 million square meter IT Park housing a number of global ICT firms such as Systel, Alcatel Lucent, Microsoft, Ericson, IBM World Trade Corp, Hewlett Packard, Beltone Financial Holding ; Nokia Siemens and Vodafone.
Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits though our chargeable Overseas Market Introduction Service (OMIS).
To commission research or for general advice about the market, get in touch with our specialists in country – or contact your local international trade team.
Wafaa Saad, British Embassy Cairo, Egypt; Tel: +202 27916067; Email: [email protected]
Heba Mohamed, British Consulate General Alexandria; Tel: +202 27916000; Email: [email protected]
UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows.
Cairo ICT 2013
Cairo Int’l Convention Centre, Cairo
Date: 29 Sep – 2 Oct 2013