Over the past three years, the Information and Communication Technology (ICT) sector has become one of the nationally prioritized sectors in Egypt and will continue to be so in the coming years. Investments in the telecommunications sector are expected to exceed LE4 billion in 2001. 1 In 2000, Egypt's telecommunications revenue from the provision of all telecommunications services reached $2.9 billion (LE10 billion), of which Telecom Egypt's, the country's incumbent provider, revenue shares were 57 percent, amounting to LE5.7 billion of total revenues. In 1999, Egypt's telecommunications revenues from fixed-line networks only amounted to $1.85 billion. In 2001, the telecommunication sector contributed over 3 percent of the Gross Domestic Product (GDP), up from 1 percent in 1996. 2 In 2001, there were 565 companies working in the ICT field in Egypt, up from 266 companies in 1999.
In 2001, the Egyptian IT market was valued at $730 million, indicating a 33 percent increase from 1998 and 17.1 percent from 1999. 3 In 2004, the IT market in Egypt is expected to reach a value of $1.315 billion, increasing an estimated compound average growth rate (CAGR) of 16.1% from 1998.
Taking a closer look at the market in 2001 indicates that hardware captured the highest share of the IT market in Egypt, accounting for $364.76 million, representing approximately 44% of the total IT market. This sub-sector is expected to continue to have the highest share in the coming four years, with projected earnings reaching $502 by 2004.
Second in line is the IT services sector, which accounted for $258.43 million in 2001 (representing 30% of the IT sector) and is expected to almost double in value by 2004. The data communications equipment sub-sector (including LAN Hardware and other data communication equipment like analogue modems, ISDN, etc.) comes the last in terms of size, with a share of 11% of the industry in 2001.
The volume of new local and foreign investments pumped into the IT sector in 2001 hit LE1.1 billion compared to LE625 million in 2000. Egypt's IT exports are expected to hit $100 million in 2002. Investment in the field of ICT in Egypt saves 33% of the manufacturing costs and 25%of the designing and development costs. 4
Ministry of Communications and Information Technology (MCIT), "Telecommunications Sector, Status and Prospects.
International Data Corporation (IDC)
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