Since January 1996, Egypt has led the region (Africa and the Middle East/Arab States, excluding Israel) in the availability of Internet services at a wide scale. This was done through the private-sector Internet service providers (ISPs) that were allowed to own and manage their network infrastructure. The government placed almost no restriction on Internet content and commercial spreading. Nevertheless, today the Internet user penetration within the Egyptian population is under 0.4 percent. The primary deterrent and reason for the low number of Internet users in Egypt is awareness and education. Secondary deterrents may include telecom infrastructure, computer penetration, Internet access costs, and other factors. But their significance is relatively diminished when compared with the primary deterrent.
This paper aims to show and establish the primary deterrent to the growth of Internet users in two ways, which are (1) comparatively and by process of elimination and (2) by studying the Egyptian Internet users' profile. Egypt's population, Internet users, and income numbers are compared with other Arab States, solely for the purpose of normalizing the language and cultural factors when reviewing the deterrents to Internet users' growth.
This paper adopts the view of a "practitioner" rather than an academic. The author sees that this "down-to-earth" view is -- like the Internet -- built from the bottom up. For Egyptians to be "citizens of the world" and for Egypt to overcome the primary deterrent, this paper will serve as input to whomever wishes to support efforts to bring Egypt more into the new world order. This paper is, again, nonacademic and depends on view and analysis, which can or may contribute to the nation's development process, and may stand corrected where necessary.
Egypt, a nation of more than 65 million people, is geographically situated in North-East Africa and has benefited from the expensive man-made water passage of the Suez Canal, which has shortened the travel distances of ships for more than 100 years. Also for the Internet, the Suez Canal (and the overall geographic location of Egypt) has positioned Egypt to be the passage for several undersea fiber optic cables (FLAG, Africa-1, SEA-ME-WE2, and others). Other more contemporary advantages of Egypt include (1) a relatively prospering economic regime as Egypt's economic evolution (liberalization and privatization) meets global economic expectations and (2) a proven track record of relative political stability.
The Gross Domestic Product (GDP) for Egypt was forecasted to near 350 billion Egyptian pounds. Per capita income is approximately U.S.$1,500, maintaining an average annual growth rate of 4 percent over the last 10 years. The stock market capitalization neared 30 percent of the GDP for fiscal year 1998-99 and is steadily growing.
The telecommunications and information sector witnessed tremendous improvements in the last two years. Telecom Egypt, SAE is the result of corporatizing the state-owned telecom monopoly, which was done early in 1998. At the same time the Egyptian Telecommunications Regulatory Authority (TRA) was established. Soon Telecom Egypt, SAE is scheduled to become publicly traded. Most significantly, by presidential decree, the Ministry of Communications and Information Technology (MCIT) was institutionalized in the fourth quarter of 1999. MCIT takes the telecommunications sector away from the transportation sector and keeps it as a primary focus, next to information technology (IT). This is proof of the government understanding the convergence of the worlds of IT and telecom, and both of their overall importance.
The teledensity in Egypt nears 8, witnessing an improvement by a factor of 10 over the last 20 years. Telecom Egypt, SAE is announcing ambitious growth plans to add hundreds of thousands of telephone lines. The mobile telephony (GSM service) started late in 1996 by the government. Soon thereafter, the service was privatized and competition was introduced. Today both GSM providers in Egypt have an aggregate subscriber base of 1 million (02/2000), which is almost half the number of mobile subscribers in the entire Arab States.
The total number of IT companies nears 1,200 companies. The annual consumption of the Egyptian market exceeds 170,000 PCs per year, 55 percent of which are locally assembled. 
Internet access in Egypt dates back to 1993, mainly through governmental and educational organizations. Commercial Internet access was also available from mid-1993. In January 1996, the government made an official address authorizing the private sector to step into the provision of Internet services. Commercial ISP efforts that existed before this date were seen within the "legal gray" area. Today Egypt has thriving competition in the ISP market predominantly based on the "service price favor." Egypt still remains in the lower third (or less) in terms of hosts per capita globally.
By mid-1996, 12 ISPs were competing for a growing market. By 1998 this market neared a total of 120,000 users featuring 25,000 to 30,000 subscribers (each subscriber account is used by 2.5 to 3.5 users). In September 1999 the total number of Internet users grew by 42 percent to near 200,000. With a 4:1 user-to-subscriber ratio, some see this to lead to 50,000 subscribers. Those who disagree discount the number of subscribers to not exceed 35,000 to 40,0000 subscribers, basing their argument on a larger subscriber-to-user ratio (>5).
|Arab States||Population (1000s)||Income per capita (USD)||GDP (USD 1000s)|
|Palestinian Territory||1,077||Not Available||Not Available|
|Western Sahara||2,840||Not Available||Not Available|
For the Arab States in 1999, the aggregate total number of Internet users is 1 million. The numbers of subscribers range from 236,000 to 338,000, thus registering a growth of 43 percent over 1998. Saudi Arabia, which introduced Internet services locally earlier in 1999, featured a 140 percent increase, whereas in Lebanon the subscriber count increased only by 60 percent. The United Arab Emirates grew by only 34 percent to reach 82,000 subscribers, which marks the largest subscriber base in the Arab States.  The aggregate population of the Arab States nears 275 million people, with an aggregate GDP (for all Arab States) of U.S.$700 billion, making the Arab States' income per capita about $2,500.
|Arab States||Egypt||percent approx|
|Internet users (upper limit)||1,000,000 users||250,000 users||25 percent|
|Internet subscribers (upper limit)||338,000 subscribers||50,000 subscribers||15 percent|
|User-to-subscriber ratio||3:1||5:1||166 percent|
|Teledensity (no. of telephone lines per 100 people)||7.3||8||109 percent|
|Income per capita||$2500.00USD||$1500.00USD||60 percent|
|Total mobile subscribers||2.0 million + subscribers||1 million + subscribers||50 percent|
Explanation: The teledensity in Egypt is 8, nearing the average teledensity in the Arabic States (which is 7.3). Egypt has 25 percent of the population of the Arab States and its pro-rata share of 25 percent of the Internet users. As for Internet subscribers, Egypt has less than 40 percent of its pro-rata share. (Egypt has 15 percent of the Internet subscribers, thus featuring 166 percent higher user-to-subscriber ratio than that of the Arab States' average). Egypt income per capita is also 60 percent of the Arab States' average. However, this is not the reason for the lower Internet subscriber base. Two factors explain why:
Conclusion: After normalizing the factors of language and culture (compared with Arab States), infrastructure (teledensity is similar), and income/cost (lesser income in Egypt maybe balanced against lesser cost of Internet services), the number of Internet subscribers in Egypt is still lower than its arithmetic and logical pro-rata share, compared with the rest of the Arab States, and compared with subscribers to other value-added telecommunications services (mobile telephony) within Egypt.
The author does not see that Internet and mobile telephony applications are necessarily comparable (competitively or otherwise). The association is based on the subscriber numbers and similar service economics (shown later in detail).
There are numerous deterrents: infrastructure, individual income, language, culture, awareness, education, and others. Which of these is the primary deterrent to Internet users' growth in Egypt?
Egypt has teledensity exceeding the Arab States average by 8 percent. Egypt public policy supports the Internet growth. With a growing annual consumption of 177,000 PCs for 1999, and 1,200 IT companies, Egypt has a comparatively similar IT infrastructure, and an even more thriving private sector at the Internet services level than the rest of the Arab States. Hence, Telecom and IT infrastructure are not the primary deterrent.
The reason this paper compares Egypt's numbers with those of the Arab States is because the Arab States have a similar culture and similar language capabilities (potentially seen as Internet barriers because the Internet is predominantly English). Hence, as Egypt has significantly less than its pro-rata share of Internet subscribers compared with the Arab States, then the culture and language may be a secondary deterrent.
It is true that income per capita in Egypt is less than the Arab States' average by 40 percent. This may be balanced against the lesser cost of the Internet in Egypt by a factor that nears half as compare with the rest of the Arab States. Additionally, consider the case in the following comparison for users of value-added communications service within Egypt.
Early in 1996, Internet services in Egypt are launched into the mainstream through the governmental full sanctioning for private-sector ISPs. November 1996 marks the launch of mobile phone services in Egypt. Thus, both services were rolled out in the mainstream in 1996. To subscribe to the Internet, the premium cost represents the cost for the hardware, which was approximately 5,000LE. Premium cost for the mobile phone nears the same, as each line premium + GSM set charges near 5,000LE as well. The monthly charges for the Internet may be under 150LE (including local PSTN costs). For the mobile phone the costs were similar; the monthly invoice for a moderate user may near (or slightly exceed) 160LE. Hence, it is safe to say that both Internet access and mobile telephone services commenced in a similar timeframe, and with similar premium and recurring charges. Premium and recurring charges for both services went down, more on the side of the Internet. Yet today 1 million people pay for their mobile subscription, while only 50,000 pay for the Internet subscription. These are services offered within the same nation, with the same income per capita. Yet the willingness to invest in one value-added communications service exceeded that of the Internet by 17 times (or more).
The conclusion is simply that the Egyptian mobile phone users' see enough added value in the mobile phone service to pay its charges. Only 5.8 percent of these people see enough value in Internet use to pay for it. Hence, the buying power of the individual is not the primary deterrent.
The remaining deterrent group is that of awareness and education. By a process of elimination, this is the primary deterrent.
Conclusion: The primary deterrent for Internet users growth in Egypt is an individual awareness and education factor. Solving this issue alone may increase the number of Internet subscribers up to 10 to 20 times.
Again, there are numerous deterrents: infrastructure, individual income, language, culture, awareness, education, and other. Overcoming the awareness and education deterrentss is -- in the opinion of the author -- the most pressing. Additionally, the author sees that solving any of the aforementioned deterrents, other than awareness and education, will have marginal (if any) impact on the growth of Internet users. But, as the awareness and education issues are resolved, the issues of computer penetration, income per capita, service costs, and infrastructure will appear more as relevant deterrents that must be overcome.
The following profile comes from an ISP as an example of the average customer:
|1||Use e-mail (store-and-forward communications)||25 percent frequent use||24 percent moderate use||27 percent light use||24 percent do not use|
|2||Use of interactive communications (ICQ and other)||14 percent frequent use||9 percent moderate use||31 percent light use||46 percent do not use|
|3||Use of browsing||66 percent frequent use||20 percent moderate||13 percent light use||1 percent do not use|
|4||Use of VPN and Enterprise LAN access (business connectivity)||17 percent frequent use||0 percent moderate use||2 percent light use||81 percent do not use|
|5||Number of users sharing the account||23 percent: one user only uses the account
38 percent: that only one SME (and home) office use the account
39 percent: that 2 or more use the account
|6||Use for entertainment (music, movies, games)||43 percent frequent use||24 percent moderate use||27 percent light use||6 percent do not use|
|7||Use for news||48 percent frequent use||15 percent moderate use||25 percent light use||12 percent do not use|
|8||Use for business information||5 percent frequent use||21 percent moderate use||45 percent light use||29 percent do not use|
|9||Use for downloading computer files for business/personal||47 percent frequent use||23 percent moderate use||10 percent light use||20 percent do not use|
|10||Use for shopping||13 percent frequent use||19 percent moderate use||20 percent light use||48 percent do not use|
|11||Use for communicating (e-mail, ICQ, other)||39 percent frequent use||20 percent moderate use||11 percent light use||30 percent do not use|
|12||Use for education||20 percent frequent use||1 percent moderate use||40 percent light use||39 percent do not use|
|13||In your ISP selection, what is the most important feature that you look for?||34 percent cost of service||28 percent access speed advantage (Bandwidth)||20 percent customer support||18 percent no busy signal|
|14||How frequently do you use the Internet?||15 percent > 3 hours/day||48 percent < 3 and > 1 hour(s)/day||11 percent < 1 hour/day||26 percent < 15 minutes/day|
|15||Question to the ISP: When is the Internet most in use (weekdays)?||Most busy 8p-3a||lightest 3a-2p||busy 2p-5p||lighter 5p-8p|
The use of the Internet in Egypt is not for business at large. Thus the value-added presented by the Internet is limited, and so is the user's willing to pay. The reason why the Internet business value is not felt is because of the primary deterrent: education and awareness.
"Awareness" is different from "education." Education herein refers to systematic and formal education. Awareness is the build-up of street-smart characteristics imposed by society or business or both.
For Egyptian individuals, awareness and education are the primary deterrents to increased use of Internet in Egypt. To counter, the recommendations "short list" may include the following:
The author wishes to thank Emad El-Azhary, cofounder, vice chair, and CTO of InTouch, for his review and support of this paper. Thanks also go to Raed Mounir, customer care manager at InTouch, for supporting the survey effort. Additional thanks go to Magda Ismail with whom previous work was coauthored, and from which this work drawn.
Mohamed El-Nawawy graduated from the American University in Cairo in January 1992, where he majored in computer science and minored in electronics. Since his second year in college, El-Nawawy has been a part-time employee participating in various freelance development projects. After cofounding InTouch, Egypt's first value-added communications services company and ISP, in January 1992, El-Nawawy held the position of director of business development responsible for sales, marketing, and finance. In September 1997 he assumed the position of managing director responsible for the entire welfare of InTouch. El-Nawawy is a member of IEEE, ACM, and ISOC and a board member of the Internet Society of Egypt, which he cofounded. In Janueary 1998 he also became chairman of the InTouch board of directors. He coauthored the paper "Overcoming E-Commerce Deterrents in Egypt," presented at INET'99.
 The earliest commercial ISP activity dates back to 24 June 1993 (InTouch.COM). But it was only in January 1996 that through the government's open support for commercial ISP efforts that large-scale Internet advertizing took place (02/96). Competition among ISPs started in April 1996.
 According to MCIT (January 2000), the total number of Internet users is 250,000.
 Overcoming Deterrents and Impediments of Electronic Commerce in light of Globalization, Egypt -- A Case in Point. INET'99. http://www.isoc.org/inet99/1g/1g_3.htm.
 Read author bio (footnote #2).
 Gross National Product.
 Derived from the Ministry of Economy, Monthly Economic Digest, November 1999. Volume1 No. 9.
 8 lines for every 100 people.
 El-Aalam El-Youm Newspaper, 18 August 1999, page 7.
 The ITU (International Telecommunications Union) forcasted in its report on the Arab States Telecommunications Indicators of 1996, that total mobile subscribers in the Arab States will near 2.0 million subscribers by year 2000.
 El-Aalam El-Youm Newspaper, 26 June 1999.
 InTouch.Com registered on 24 June 1996 as the nation's first ISP.
 ISOC referral, April 1998.
 The World Factbook 1998. Central Intelligence Agency, U.S.A. http://www.cia.gov/cia/publications/factbook/.
 El-Aalam El-Youm, 5 September 1999, page 7.
 Data Source is United Nations Statistics Division at http://www.un.org/Depts/unsd/social/main.htm.
 See footnote #11.
 Overcoming Deterrents and Impediments of Electronic Commerce in light of Globalization, Egypt -- A Case in Point. http://www.isoc.org/inet99/1g/1g_3.htm. In this paper a list of nine main deterrents of e-commerce in Egypt are listed and explained. One of the authors developed the paper further to include policy recommendations in OnTheInternet (ISOC Magazine), November/December 1999.
 LE stands for Livres Egyptien, or Egyptian Pounds.
 Public Switched Telephone Network.
 Overcoming Deterrents and Impediments of Electronic Commerce in light of Globalization, Egypt -- A Case in Point. http://www.isoc.org/inet99/proceedings/1g/1g_3.htm. In this paper a list of nine main deterrents of e-commerce in Egypt are listed and explained. One of the authors developed the paper further to include policy recommendations in OnTheInternet (ISOC Magazine), November/December 1999.
 Virtual Private Network.
 There is a Ministry of Education and a Ministry of Higher Education.
 Read article about Dr. Sherif Hashem article titled: "200,000 Internet users in Egypt and the Information Centers are the solution," in Akhbar El-Youm Newspaper, 9 October 1999.
 An official in the Ministry of Economy in 4Q1999 "...in the previous, we pampered the money savers, now we will pamper the investor..." (meaning investor in Egypt's capital market).