Internet use set to soar as charges are slashed

30 November 2001

Internet usage in Egypt is expected to surge following the long-awaited introduction of a new billing system for internet service providers (ISPs) in mid-January, IT executives say.

The new system will allow users to log on to the internet for the price of a local telephone call. This is at present fixed at £E 0.10 ($0.024) for six minutes. The ISP will retain 70 per cent of the call revenue, and Telecom Egyptwill get the remaining 30 per cent. The government has said that it wants to encourage much greater internet usage through lowering the costs of access.

In preparation for the introduction of the new system, the Telecommunications Regulatory Authority (TRA) has auctioned off a series of numbers to be used by class A and B ISPs to offer access to users. Some of the most sought-after numbers have been sold for considerable sums, up to £E 350,000 ($82,000), telecoms sources say.

'There is going to be much more user churn between ISPs, and so having a catchy number is very attractive,' says one internet executive. 'Marketing and quality of service are going to be key factors.'

The switch to the new system will mean that users will be able to switch between ISPs at no cost, and there will no longer be a mandatory subscriber charge. Growth in the market has been held back in recent months because users were aware that the new system was about to be introduced, and so were unwilling to pay subscriber fees.

The new system is expected to pose problems for class C ISPs, which will not be entitled to install their equipment in the Telecom Egypt exchanges. However, the smaller ISP's will be able to play a role as sub-operators, working in tandem with the larger firms, analysts say.

The leading players in the local market include NileOnLine, EgyNet, LinkdotEgypt, Geganet, Menanet, Starnet and Soficom.

The number of regular internet users in Egypt is estimated to be about 300,000. With the new system, analysts say this number could easily rise to 1 million within just a few months (IT, MEED Special Report, 2:2:01)

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