Egypt is the fastest growing internet services market in Africa

Hatem Dwedar ,CEO of Vodafone Egypt

Vodafone understands the challenges experienced by the Egyptian economy … and is determined to continue to increase its investments

24.9 % contribution to “the telecommunications sector “in the State’s Treasury in 2020  …Anddata services will lead the industry to unprecedented growth

Vodafone Egypt plans to pump more than 3 billion pounds of new investments during the current fiscal year for supporting data and internet services on its network this year to seize the investment opportunities expected in this industry in the short term after the availability of mobile money transfer and automated tracking services.

HatemDowidar ,chief executive of Vodafone states that the revenue achieved by the Vodafone mother companyfrom the sale of its shares in Verizon estimated $ 130 billion. Most of this revenue will be employed for the investmentin emerging markets, including Egypt, pointing out that Vodafone Egypt achieved revenue of 10 billion pounds during the fiscal year that ended in March 2013, despite Egypt’s political and economic conditions.

The telecommunications sector in Egypt is betting on the development of “data”internet services in the current period, which is starting to witness high growth rates. Internet users amount to about 30 million users, which offer a new area of investment for mobile network companies to focus about 50% of their annual investments to support infrastructure used in the deployment of online services and coverage.

He adds that most of the company’s new investments will focus on improving the infrastructure that will raise the efficiency of relay towers especially for added services and internet services in the light of a decline of revenue from voice services and an increase in the dependence on data services.

The telecommunications sector has witnessed a difference in the nature of use and its growth rates during the past three years, since the beginning of the January 25th revolution, which was followed by an intense wave of social networking usage and the more recent appearance of a new kind of internet usage by the older generations, that open news sources, etc. especially the presence of new groups using the internet, groups that before the 25th of January revolution did not have any affiliations with using social networks, or were even familiar with the internet as a whole.

Dewedar believes that this recent shift did not become so apparent until the expansion of telecommunications’ services and the internet – whose infrastructure covers the whole country as well as the rapid spread of smartphones that support internet usage.

 

Egypt began experiencing a spread of the use of smart devices, and “tablets” especially during the recent period and these changes reflect on the daily internet usage of consumers.

Among the changes in the nature of internet usage in Egypt, is that a broad segment of users have begun searching the internet for products before they buy them, this in his opinion is a preliminary step on the road to the presence of “electronic commerce” in the local Egyptian market. And Dwedar expects the next stage to witness a lot more online commerce interaction and the usage of new technologies such as mobile payment.

The reflection of these practices on the telecommunication market in Egypt appeared in the growth rate of internet services compared with countries of similar conditions like those of Egypt. Egypt represents one of the fastest growing markets in internet and data services compared with most developing markets similar in their economic circumstances, Egypt is ranked in the African market the first in rate of growth of internet and date services, after South Africa.

A recent study done by The Vodafone Research Institute inBerlin showed that the rate of increase in the Gross National Product (GNP) is strongly influenced by the number of subscribers to mobile services in the Egyptian market, noting that during the 10 years 2010-2020, the telecommunications sector in Egypt is growing steadily.

The study added that the rate of increase in the gross national product (GNP) ranges from 1.8% in England and 24.9% in Egypt, noting that the increase in the number of subscribers of telecommunications services and increase the number of applications clearly contributes to the increased chances of doubling the GNP.

Concerning his company’s participation in the new strategy “broadband” proposed by the Egyptian government, Dwedar stated that AtefHelmy, Minister of Communications and Information Technology has welcomed Nicholas Reid, Regional Head of Vodafone Global, last October and proposed the plan and the most important projects concerned with it and the issues concerning the infrastructure of communications. Reid expressed the company’s determination to continue increasing their investments in Egypt, emphasizing that Vodafone seeks to develop its investments and to study the establishment of a global center for an international servicers sector in the Egyptian market, given the Egyptian markets high quality and competitiveness.

Vodafone understands the challenges experienced by the telecommunications sector in Egypt and the difficulties the Egyptian economy is facing. He praises the policies and priorities of the Ministry of Communications and The National Telecommunications Regulatory Authority and their commitment to deal with the situation.

The new services offered in the domestic market represented in money transfer services via mobile services and tracking via AVL (Automatic Vehicle Location), Dwedar noted that these two services were launched due to the contraction of economic conditions, especially after the political circumstances that havebeen plaguing Egypt.He expects greater reliance on services during the next phase after the country achieves a state of stability, especially the money transfer service via mobile phone, which is expected to witness remarkable growthby increasing the dependency of individuals to transfer funds among themselves easily as well as to pay bills and services.

He pointed out that the services AVL are expected to achieve high returns in the upcoming period and during the current year tracking services will amount toa proportion of 80-90% of the total services, especially with the demand from petroleum service companies, shipping and others for AVL in order achieve a relative sense of security and on the other hand to tighten control on their cars and ensure optimal use of its tankers in addition to the identification of driving errors and improving transportation logistics in the process of achieving a better quality of various business sectors with available sensors and sensors for transport vehicles.

Concerning the provision of licenses in the telecommunications sector, Dwedar states that the experience of providing licenses to integrated operators is present in many countries, and the spread of the internet amounts to about 115% for 96 million users, furthermore the competition taking place in the telecommunications market reflected on the rates of return on the margins of profitability.

In the case that the license is put out, the mobile phone companies would demand justice in the advantages accorded to all parties in return for granting Telecom Egypt the license to provide voice services and mobile internet. A license for the gates of international calls traffic and licenses for infrastructure network should be extended without the extension of these licenses for any other parties, in order to help facilitate mobile operators’ infrastructures.

Dwedar states that Vodafone Egypt has achieved revenue of 10 billion pounds during the fiscal year ending in March 2013, referring to the benefits the company achieved through their infiltration of different markets and by offering different economic services, which include major markets which gives Vodafone Egypt the chance to benefit from the global experience of its mother company.

Vodafone comprises of more than 40% of the mobile market in Egypt and the number of its customers exceeded 42 million subscribers and investments amounting to more than 3 billion pounds, achieving revenue of 10 billion pounds last year.

When asked about the possibility of cutting off telephone services in any circumstances similar to those of the January revolution. Dwedar confirmed that no governmental body has request from telecom companies operating in Egypt to cut telephone services during the past period, especially since service is no longer socially acceptable although it is not amended by the law so far. All relevant security organizations of the state no longer have the choice of deciding to cut telephone services because of its “reverse” impact on the fueling demonstrations and popular protest in the streets.