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beating the busy signal
egypt’s companies are finding out that it is better to take
telecoms solutions into their
own hands than wait on reform.
by steve fennessy
when the new managers at al ahram beverages co. took over the stella
brewery 21 months ago eager to turn around a business that had languished
since nationalization, they walked into the admini-stration building
to find they would be sharing one rotary phone.
one.
“when you’re doing business, you need to communicate,”
said steven keefer, director of investor relations, echoing one
of the more ob-vious maxims in the world of business. but as keefer
and company found out, the world of business and the world of egypt
aren’t always orbiting in the same galaxy. and so it passed
that the abc managers found themselves at times scrambling for the
solitary line available to them. and as far as calling them, forget
about it.
“when we first came here, i felt a little bit isolated,”
keefer said.
keefer isn’t the only one with that lonely feeling. business
people here can tell plenty of stories about how it took years to
get a phone line, how their service was cut off at the drop of a
hat and how baksheesh got them what patience couldn’t. the
good news is that egypt’s sole provider of basic telephone
service, telecom egypt (formerly arento), is showing signs it has
got the message. new lines are being added at an unprecedented rate.
a customer service center has been established (albeit only on paper).
and new technologies that promise to compensate for gaps in service
are being sought out and tested. the bad news is that a bureaucratic
behemoth freighted with 50,000 employees won’t be turned around
over-night. in the meantime, com-panies like abc are left to fend
for themselves as they seek novel ways to meet their telecom demands.
fortunately, there are alternatives.
s a basic ingredient to commerce, the importance of telecommunications
can’t be overstated. telephones and their value-added offspring
– from fax machines to internet hookups – have become
required tools of any business, whether it’s a three-employee
startup or a huge multinational. and because telecoms is so essential,
its cost and availability directly affect a country’s economic
performance.
in a paper titled the costs of exchange, published by the egyptian
center for economic studies, author lee benham of washington university
argued that the daily costs of doing business – transaction
costs, to use the buzzword – are perhaps more important than
macroeconomic indicators in predicting the performance of an economy.
to make his point, benham compared the price of a telephone line,
the price of a tractor part and the average interest rate spread
(the rate at which banks lend minus the rate paid on deposits) in
egypt to those in other countries. an egyptian telephone line, he
found, was more than 16 times as ex-pensive as its malaysian counterpart.
the egyp-tian tractor part was three times higher than the same
part purchased in the u.s. and egypt’s average interest rate
spread was three times higher than that of the u.k. “countries
with high costs of exchange will have great difficulty competing
with countries where those costs are low,” benham writes.
countries suffer because time spent sorting out the process of doing
business is robbed from the more worthwhile pursuit of creating
new opportunities. abc, for example, has an em-ployee whose sole
task is to go to the local central every day to expedite paperwork
and follow up applications for more lines. “it’s the only
way,” said paula abdu, abc’s manager of information systems.
“that’s a very frustrating use of time, because that’s
not building a business,” keefer said. “that’s not
any time that we’re spending trying to develop a better product
or focusing on better packaging or thinking about what the consumer
wants. there’s no added value in there.”
where persistence doesn’t pay off, other ap-proaches might.
an official at one company in egypt said it resorted to giving away
its products to employees at central just to get things moving.
“these are people who basically view it as they’re doing
you a favor to get you a line,” the official said. “you
have to pull strings. you have to work connections. there’s
baksheesh. it’s ridiculous.”
the number of installed telephone lines per 100 inhabitants has
more than doubled in under a decade, to 5.02 in 1995/96 from 2.27
in 1987/ 88, but telecom egypt acknowledges that its service needs
improvement. while availability of lines in affluent areas such
as mohandiseen and zamalek is not a major problem, some densely-populated
and rural areas are underserved, leaving waiting times of up to
10 years.
aida el shinawy, chief of telecom egypt’s central department
for planning, follow-up and technical affairs, said that the utility
is working to increase its annual number of new hook-ups from 500,000
to one million and reduce the maximum wait time to three years.
in three areas of cairo – heliopolis, moqattam and mar-ioteya
– telecom egypt is poised to hook up 6,000 subscribers as part
of a “wireless local loop” system, which allows subscribers
to talk on cordless phones that send radio signals to the switch,
thus eliminating the time-consuming need to dig copper lines from
the switch out to the consumer.
ut for businesses whose telecommunications needs go beyond just
a rotary phone and pulse dialing, the wait for value-ad-ded services
can be frustrating and expensive. one alternative is to turn, as
many companies have done, to telecommunications consultants.
alaa abou el seoud is one such consultant. as general manager of
global telecommunica-tions technology, he acts as a kind of fixer.
his clients are often companies that are looking for ways to deal
with the problems that telecom egypt can’t – or won’t
– solve. indeed, those very problems are his bread and butter.
“with telecommunications technology, there’s no problem
even if the infrastructure technology is not good,” he said.
“there are always alternatives.”
abou el seoud said telecom egypt’s main problem is an inefficient
use of its bandwidth. technology that’s already available –
hooking anode lines into digital channels, sharing lines, “smart”
switches that automatically find open lines – can fill your
telecoms needs, he ex-plained, in ways that don’t require long
waiting times or huge outlays of cash.
in the case of abc, he helped establish a “digital inward dialing”
system, a kind of technological sleight of hand that transformed
two of abc’s phone lines into 30. different departments at
abc now have their own seven-digit phone numbers, but the calls
go through a main switch and then, in a split second, are routed
through to their destination. “it’s a maximum optimization
of two telephone lines to turn them into the usage power of 30 different
telephone lines for inward dialing purposes,” keefer ex-plained.
as a fringe benefit, the did system frees up existing lines for
outgoing calls. it’s hardly a revolutionary or perfect system
– managers are still never far from their mobiles – but
it’s a far cry from constant busy signals.
ore technology is on the way, shinawy said, that would in-crease
the number of lines as well as the speed of transmissions. integrated
ser-vice digital network technology, or isdn, al-lows a subscriber
to connect one conventional phone line to as many as eight devices,
such as a fax machine or a modem. with isdn, a subscriber can talk
on the phone while he’s sending a fax or downloading a web
page. shinawy said telecom egypt is currently determining a fee
structure for the service. she expects it to be of-fered by the
end of this year.
moreover, she said, an integrated network set to come online in
november promises to introduce universal personal numbers, 800-numbers,
voice mail and prepaid cards to certain sectors of the market, with
expansion to follow.
but for the time being, businesses hoping to exploit telecom egypt’s
technological potential will have to ask for it. according to industry
ex-perts, the problem is not that the authority lacks solutions.
the problem is that it doesn’t market them properly.
“they have the latest technology,” said ah-med sedky,
manager of mash consultants, a telecoms firm. “the problem
is how to use it, why to use it, for whom to use it.” the reason
these problems exist, said suilin ling, owner of communication development
corp. and a consultant helping to establish a telecoms regula-tory
authority in egypt, is that telecom egypt is too consumed by the
demands of providing basic telephony services to spend the time
needed to market available value-added services. “it’s
not a lack of technology or knowledge of it,” he said. “they’re
overloaded by day-to-day operations.”
to learn what services are available, consumers can attend exhibitions
that shinawy said the utility hosts throughout the year to demonstrate
its new services. eventually, however, telecom egypt should be doing
more to reach out. for the moment, shinawy said, employees have
no incentive to sell telecoms services be-cause their efforts aren’t
reflected in their pay. but she said the authority expects to launch
a new marketing department once the planned sale of 20 percent of
the shares in telecom egypt takes place, and this department will
create in-centive systems to encourage employees to spread the word
about telecom egypt’s various services. once private owners
creep into the au-thority, qualified employees will be promoted
and given raises. the mediocre ones will be fired or relegated to
other positions. but all that remains on the drawing board. “for
political reasons, we couldn’t fire anyone now,” she said.
in the end, telecom egypt faces obstacles typical to other state-owned
industries that are headed for the selling block: too many employees,
little incentive to perform and an organizational structure that
frustrates change. for-tunately, the technology exists for diligent
consumers to put a dent in their communications problems, and at
least some of the authority’s employees recognize the need
to change. but until telecom egypt sorts out its troubles, the costs
of inadequate communication will be felt all the way down the line,
from the beermakers to the bawwabs.
“it hurts me if i miss a phone call, or if i miss a message,
or if i can’t get in touch with somebody,” keefer said.
“it bothers me because it’s a wasted opportunity.”
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