Telecommunications (telegraph) services were first introduced in Alexandria in 1854. In the last 145 years the telecommunication sector has evolved to the current joint stock company, Telecom Egypt, launched in April 1998.
Like many countries in Africa, Egypt has one fixed line operator owned by the government -Telecom Egypt. Unlike many other companies in the region, however, the company has fostered dramatic growth in the fixed line network in the region.
In 1982 the company was reorganised from a gov-ernment department and given a clear mandate for the development of the telecommunications with a full monopoly on both domestic and international traffic.
Since then the company has put in place strategies based on five-year plans with clear expansion objectives. During the period, telephone service has grown steadily at 12.5% per year. Capacity has increased from 510 000 to 6.2 million; additionally, 271 cities are now on automatic services, from seven in 1982. Currently TE is building an Intelligent Network with some features now being offered in Cairo. Projects in the next five-year plan are set to vastly expand the telecommunication network by increasing the connection rate to 1 million per year and thus reduce the waiting list. Penetration is intended to rise to 18% by the end of the period. Government intends to privatise the TE in 2000.
The company has an ambitious programme to digitise the entire telecommunication infrastructure. Over the past two decades, the company adopted a plan to renew and develop its entire network in switching and transmission systems; analogue exchanges have been replaced with digital exchanges. By end of 1999, about 95% of the lines are expected to be digital. The digitisation of the network now provides the platform to introduce new services and features that respond to customer service and business sector demand based on an Intelligent Network.
Tariffs have been steady, as has the currency. However, it is noted that the tariffs for local traffic are very low (second lowest in the sub-region) and almost certainly cross-subsidised by international rates, which are the highest in the region. With the impending privatisation the tariffs will have to be reviewed in a bid to re-balance.
The main projects revolve around a five-year integrated plan to expand and upgrade switching, transmission and local loop access with the following components:
- Nine Vision: Expansion and upgrade of exchanges capacity and upgrade transmission in the Delta at a cost of US$45 million
- Egypt 2000: Upgrade transit exchanges and interconnect them using SDH at a total cost of US$48 million
- Golden Pyramid expansion and upgrade of exchange capacity: rollout of DECT WILL at a value of US$315 million
Telecom Egypt has announced plans to double the annual installations from 500 000 lines annually to 1 million. With this level of growth, the waiting time will go down to less than two years.
Between 1993 -1997, Telecom Egypt connected an average of 300 000 lines annually. Measured against a waiting list of 1 275 000, this suggests a waiting time of four years.
TE has invested in local production of basic equipment in network expansion. In this regard, Egyptian Telephone Company, operational since 1962, is producing a number of items primarily for the domestic market. These include telephone sets, exchanges to a capacity of 4 000 lines and distribution boxes as well as cross connection cabinets. Additionally, another company, Egyptian German Telecommunications Industries (EGTI), where ET holds 10% equity, provides EWSD switches for the local market. EGTI has already produced over 1 million lines that are already operational in the country.