The American Chamber of Commerce in Egypt held its first event of 2006 with a special tour of the Smart Village followed by a luncheon with keynote speakers Tarek Kamel, minister of communications and information technology, and Jean-Philippe Courtois, president of Microsoft International and vice president of Microsoft Corporation. The event was designed to provide AmCham members with a private tour of the Smart Village to see how far Egypt’s IT and communications sector has come.

Five years ago, the futuristic technology park was nothing more than a smart idea in the minds of the Ministry of Communications & Information Technology (MCIT) team. The plan was to construct a high-tech village that would house leading Egyptian and multinational telecommunications and IT companies. The MCIT team projected that the creation of such a community would increase domestic and foreign investment in the sector.

The Smart Village, located on the outskirts of Cairo, is seen as the jewel in the crown of MCIT’s plans to develop Egypt’s CIT sector. The high-tech village, built on 1.3 million square meters with 67 office plots, has attracted multinationals including Microsoft, HP, Alcatel and Vodafone, as well as local companies and government bodies such as Xceed, Cairo & Alexandria Stock Exchanges (CASE), CULTNAT and MCIT headquarters.

But the Smart Village is hardly MCIT’s only recent achievement. In Kamel’s first public event following his reappointment as minister, he noted that the government is working to integrate IT more fully in all its work. “This cabinet wants to be seen as catering to the needs of the business community, but also the needs of people and [focusing on] the social dimension of our initiatives,” he said. The first step, he added, will be to increase average citizens’ access to computers.

Accordingly, MCIT, in cooperation with Microsoft and other local and international partners, is introducing an initiative within the PC for Every Home program that will make home PCs available for less than £E 1,600. “We were able to get the full-fledged PC, with Windows and other accessories, for £E 1,500,” he said. “Installments will be... £E 47 per month. This will help us... increase the penetration of information technology in Egypt.”

Kamel noted that mobile phone penetration in Egypt increased rapidly after service providers lowered prices to increase accessibility for previously untapped segments of society. “ Egypt has had, through the two existing mobile operators, 7 million new subscribers, probably the highest mobile penetration growth rate in the world. This shows that there is room in the market... This encouraged us to work with our partners to create more affordable PCs,” he said. The challenge of increasing the penetration of PCs at the grassroots level falls upon the ministry, the CIT community, multinationals working in Egypt and financing institutions.

The PC initiative is only one of a number of programs on the MCIT to-do list for 2006. Also part of what Kamel calls the sector’s “third wave of deregulation” is the long-awaited request for proposals (RFPs) for a third mobile operator as well as the RFPs for an international calling license, the last service on which nationally-owned Telecom Egypt (TE) exercises a monopoly. These steps come on the heels of TE’s very successful IPO in December 2005. “Deregulating the CIT sector is not just because [of our] World Trade Organization commitments. It is because we are convinced that it’s helping us realize our potential as a CIT community. Egypt deserves to have bigger international traffic [in the sector].” Egypt’s geographic position, according to Kamel, could make it an international communications hub. “We need to use profit from the international market and attract more foreign direct investment.”

The second keynote speaker, Microsoft’s Courtois, began his presentation with an overview of the unique relationship between the IT giant and the government of Egypt. Microsoft was the first multinational to set up offices in the Smart Village, and has seen its activities in Egypt spike sharply during the last decade. Courtois highlighted the 2004 establishment of a Microsoft developers support center in the Smart Village. This center, which serves the Middle East and Africa, is a base for advanced interactions with developers in English, Arabic and French. “A year later,” Courtois said, “the company announced that Egypt will provide product activation services... This is being done out of Egypt in nine languages with 130-150 people.”

Courtois also focused on the strong partnership with the government that began in 2001. “We expanded to cooperate in the education sector [when] we launched the... ‘Partners in Learning’ initiative in partnership with the Ministry of Education,” said Courtois. This program trains thousands of teachers in IT and ensures that students gain an understanding of the technology. He said that all companies working in the sector – whether Egyptian or multinational – have a role in supporting the government’s initiative to promote computer skills among the public. This responsibility, he said, led Microsoft to support the government’s PC for Every Home initiative by developing a special version of Windows, the Windows Starter Edition.

“This will provide children... access to PCs and Windows at an affordable price,” Courtois said. “[In] the US, similar products [sell for] three or four times the price.” Cutting costs, though difficult, expands markets among populations without prior IT experience. Such changes, he pointed out, could make positive ripples in the economy.

The initiative is coupled with several others that Microsoft has implemented in partnership with NGOs. Such measures, said Courtois, increase access to IT services in hard-to-reach areas. Microsoft has helped NGOs set up more than 300 IT clubs around the country.

He concluded by comparing the past 10 years to a journey. Given the government’s emphasis on IT development, he said, the journey can only grow more interesting in years to come.