VZCZCXYZ0000
PP RUEHWEB

DE RUEHEG #2041/01 2991509
ZNR UUUUU ZZH
P 261509Z OCT 09
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC PRIORITY 3995
INFO RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

UNCLAS CAIRO 002041 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR NEA/ELA AND NEA/EEB 
DEPT OF COMMERCE FOR IT MAS AND NTIA 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EINV PGOV EG ECPS
SUBJECT: EGYPT FAILS TO MAKE CONCERTED EFFORT TO EXPAND 
BROADBAND 
 
REF: STATE 27310 
 
¶1. (SBU) Key Points: 
 
- NTRA does not have a cohesive policy to expand broadband 
internet service to underserved areas. 
 
- NTRA President and private sector media executives believe 
the lack of Arabic language content on the internet has 
prevented demand from growing in underserved areas. 
 
- TEData Chairman believes that line-sharing is the real 
challenge preventing a growth in demand and a push for more 
broadband in underserved areas. 
 
¶2. (SBU) On October 12, Econoff met with Amr Badawi, 
President of the National Telecommunications Regulatory 
Authority (NTRA), to discuss Egypt,s efforts to expand 
broadband internet services to underserved areas.  Badawi 
stated that he was not satisfied with the current broadband 
situation in Egypt but that he was still investigating the 
best way to extend broadband.  Badawi stated that the lack of 
Arabic-language content on the internet was still one of the 
biggest impediments to extending broadband to the rural and 
underserved areas of Egypt.  He claimed that increasedbroadband penetration ha 
not increased Arabic content, and 
the GOE will need to work directly with content sites to 
improve this situation.  The Ministry of Communications and 
Information Technology (MCIT) has not directed efforts to 
push for E-governance, which would increase Arabic content 
for services on the internet, but has rather relied on 
individual ministries (such as the Ministry of Culture and 
Ministry of Education) to make individual progress in this 
area. 
 
¶3. (SBU) Badawi claimed that the use of 3G wireless 
technology was impacting the extension of broadband, as 
approximately 200,000 people are using 3G to deliver their 
internet services.  Badawi noted that the government was 
looking at two parallel tracks: increasing demand in order to 
generate access, while at the same time providing access in 
order to generate demand; however, he was unable to describe 
how the government was working on this. 
 
¶4. (SBU) Azza Torky, Chairman of TEData, an internet service 
provider that is 90 percent owned by Telecom Egypt, told 
Econoff that the lack of Arabic content was not the reason 
behind the lack of broadband or demand in rural and 
underserved areas of Egypt, citing for example the ability 
for people to read the news (such as Al Masry Al Youm) on 
line interactively and leave comments.  Torky stated that 
line-sharing is one of the challenges that internet companies 
face in outlying areas of Egypt, by which multiple users or 
households share the same fixed line.  In the Delta region of 
Egypt, for example, Torky stated that there is typically one 
line for every four homes receiving service.  Torky also 
believes that the GOE needs to focus on increasing internet 
education in schools, rather than simply providing them with 
personal computers.  It should also better publicize those 
E-government services that are currently available, such as 
obtaining birth certificates, renewing drivers licenses, and 
viewing traffic tickets. 
 
¶5. (SBU) Torky does not believe that the entrance of 3G 
technology is competition with fixed lines but rather works 
as a complement.  Torky stated that TEData,s biggest growth 
area is from users moving from narrow band to broadband and 
that they rarely saw users moving from no services straight 
to broadband.  TEData sees Upper Egypt as the fastest growing 
area, despite the fact that their numbers in that region are 
still relatively low.   Approximately 60 percent of TEData,s 
users are in Cairo, while 15-17 percent are in the Alexandria 
area, and 10 percent in Upper Egypt.  TEData finds customers 
to be price sensitive to internet costs and noted that 
internet costs are lower than they have ever been, the 
minimum being LE 45 (US $9) per month to get broadband. 
 
¶6. (SBU) Econoff also met with Sherif Iskander, Executive 
Manager for Online Entertainment and Digital Media with 
Rotana, the Arab world's largest entertainment company with 
ventures in film, magazines, television, and music.  Iskander 
stated that most potential companies who would be interested 
in a fixed line license do not have the money to build and 
establish the infrastructure in outlying areas because prices 
and therefore revenue are too low, and GOE would likely find 
it difficult to attract bidders for a purely fixed line 
license at this point.  Iskander also explained that in many 
rural areas, the current infrastructure can better support 
 
voice services but not data services.  Iskander echoed 
Badawi's view that the expansion of broadband was being 
driven by supply instead of demand.  He believed that there 
was a lack of demand in rural and underserved areas because 
of the lack of Arabic content in education, religion, sports, 
and entertainment and the lack of perceived daily value of 
the internet by the average Egyptian.  Iskander believes that 
the GOE could assist in expanding internet usage and 
broadband in underserved areas by focusing on providing 
educational opportunities delivered through it.  For example, 
the average Egyptian family spends a large portion of its 
income paying for private tutors, often hiring a tutor with a 
few other families to work with their children after school. 
Iskander believed that GOE could meet this demand by helping 
private online tutoring companies get established, thus 
cutting families' costs and increasing the use of the 
internet.  However, Iskander pointed out that while MCIT has 
been more forward-leaning on moving to expand broadband and 
internet use, the GOE as a whole has not. 
 
¶7. (SBU) Comments:  While MCIT does appear to have a sincere 
desire to expand broadband to rural and underserved areas, 
they have not worked effectively with other ministries to 
involve them in a concerted effort to do so.  Rather, the 
MCIT appears to be hoping that ministries will do this on 
their own.  In order to expand Arabic content, the MCIT would 
need to be more proactive in encouraging companies and 
various ministries to put practical Arabic content on 
websites that the average citizen could and would be 
interested in using.  As it stands, neither the GOE nor the 
private sector has not done much to increase demand in rural 
and underserved areas for expanded broadband services. 
Scobey