The Future of the Internet Economy in Egypt. A Statistical Profile

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1 The Future of the Internet Economy in Egypt A Statistical Profile

2 The Future of the Internet Economy in Egypt A Statistical Profile

3 Contents The Internet has grown quickly connecting an ever-growing number of people and businesses across Egypt. Broadband is feeding Internet diffusion and driving convergence between ICTs. 8 The Internet is changing traditional behavior without burdening the budget. 1 New labor horizons are being explored and new opportunities are emerging for education Government and Citizen Relationship 14 Still, usage could be increased among the elderly, women and people with low incomes and the gap in usage between urban and rural areas needs to be bridged. 17 More and more firms are connected In support of efforts to establish standardized international ICT indicators, this statistical profile was produced in line with the Organization for Economic Cooperation and Development s (OECD) The Future of the Internet Economy: A Statistical Profile, published in 28. Egypt s Ministry of Communications and Information Technology (MCIT) launched an ICT Indicators Portal in 28 to disseminate information on the Egyptian information society. conduct business over the Internet. 2 ICT is a major driver of economic growth. 21 The Internet is opening new market opportunities but it is important to remove barriers protect privacy and improve security. 24 List of Technical Terms 2 Sources, Definitions and Notes 26 2 The Future of the Internet Economy in Egypt: A Statistical Profile 3

4 The Internet has grown quickly... connecting an ever-growing number of people and businesses across Egypt... million Figure (1) Internet Users and Internet Pentration Internet users (million) (LHS) Internet Penetration () (RHS) The number of Internet users in Egypt increased to 12.7 million in 28 Egypt has adopted many strategies to increase availability and use of the Internet. This is reflected in the significant increase in Internet users from.6 million in 2 to 12.7 million in 28. Internet penetration in Egypt rose from 1.1 in 2 to in 28 with growth rate of.7 during the period. of Egyptian households use the Internet The proportion of Egyptian households using the Internet increased to by January 29, from 14.7 in January 28 and 12.9 in June Figure (4) Proportion of Households Using Internet June 27 Janaury 28 Janaury 29 Dial-up Internet subscription is spreading across Egypt. While around 48 of total Internet subscribers in Egypt in December 28 were in Cairo, dialup subscribers in both the Delta region and Upper Egypt represented 36 of Internet subscribers. Figure (2) Dial-up Internet subscribers by region (28) Figure () Proportion of individuals using the Internet by governorate (January 29) The proportion of individuals using the Internet varies widely in different parts of Egypt Ismailia had the highest proportion of individuals using the Internet in of its population followed by Suez with 19 and Cairo with Cairo Delta Alexa & Matrouh Upper Egypt Sinai - Red Sea & Canal Ismaalia Suez CAIRO Dakahlia Alexandia Sharkia Gharbia Louxor Giza Al Wady El Gadid Fayoum Damietta Benisuiff Kalyubia Aswan Menia Menoufia Asyout Qena Suhag Behera North Sinaa Kafrel Sheikh port Said Bps.8 Figure (3) International internet Bandwidth Percapita share of internet bandwidth (Bps) (LHS) International bandwidth (Mbps) (RHS) Mbps Egypt s international Internet bandwidth increases by an annual average of 94 Egypt s international Internet bandwidth witnessed steady growth between 21 and 28, with an average annual growth rate of 94. Egypt s total international Internet bandwidth reached 27,77 Mbs by the end of 28, bringing per capita bandwidth to 39 Bps. 9.6 of Egyptian private enterprises use the Internet The proportion of Egyptian private enterprises using the Internet increased in 28 to 9.6 of those using computers, up from 3.2 in 27. Large private enterprises (2+ employees) constitute the largest category of private enterprises using the Internet in Egypt. Of the enterprises in this category, 82. use the Internet Figure (6) Private enterprises using the Internet by number of employees (June 28) 2.2 Proportion of enterprises using computers Proportion of total enterprises employees employees employees 4 The Future of the Internet Economy in Egypt: A Statistical Profile

5 Broadband is feeding Internet diffusion Figure (7) Proportion of Government Entities Using Internet June 27 June of Egyptian government entities use the Internet The proportion of Egyptian government entities using the Internet stood at 34 in June 28, up 11. percentage points from 22. in June 27. The number of broadband users in Egypt increased by 41 between 27 and 28 to reach 7.3 million The total number of Internet users in Egypt increased by around 19 between 27 and 28, from 1.3 million to 12.7 million. The number of broadband users increased over the same period from 4.99 million to 7.3 million by a year-on-year growth rate of 41. million users Figure (1) Total Internet Users and Broadband Users (28) Broadband Users (million) 12.7 Total Internet Users (million) year-on-year growth in the number of IT Clubs in Upper Egypt between 27 and 28 The number of IT Clubs in Egypt grew by 13. between September 27 and September 28 to reach 1,71. During this period, the number of IT Clubs in Lower Egypt grew by.2, in Upper Egypt by 26.4, in the boarder governorates by 21 and in urban governorates by 7.. Number of IT Clubs Figure (8) IT Clubs Distributed by Region September 27 September 28 Lower Egypt Upper Egypt Boarder Governorates Urban Governorates Figure (11) Household Internet Access Modes ADSL Dial up Multiple Selection are Allowed June 27 January 28 January of Egyptian households connecting to the Internet use ADSL connection of Egyptian households connecting to the Internet use an ADSL connection, compared to 6.8 in 28 and 6. in 27. ADSL is increasingly replacing dial-up access due to the many government initiatives aiming at reducing monthly costs for the service, which is currently available from around USD 8. This trend is clear in the graph, with ADSL usage for the period increasing by 17.6 percentage points while dial-up usage decreases by 21.3 percentage points. Others Public Libraries Neighbors and Friends IT Clubs Work Internet Cafes Educationl Institutions Home Multiple Selections were allowed Figure (9) Location of Internet connection by individuals (January 29) of Individuals accessing the Internet in Egypt do so from their home More than half the individuals connecting to the Internet in Egypt (.2) do so from their homes. The other most frequently used locations for access by individuals to the Internet are educational institutions, used by 24 of individuals accessing the Internet; Internet cafés, used by 16; and work, used by. 93 of Egyptian private enterprises using the Internet are connected through broadband with speeds equal to or greater than 26 Kbit/s Most private sector enterprises in Egypt access the Internet through broadband connections with speeds of 26 Kb/s or greater. Only 8.2 of private enterprises accessing the Internet do so through analogue modems, and 3.6 using ISDN Figure (12) Proportion of Enterprises Using Internet by Mode of Access (June 28) Greater than or equal 26 Kbit/S Analougue Modem ISDN 8.2 Multiple Selections were allowed The Future of the Internet Economy in Egypt: A Statistical Profile 7

6 ADSL is the Internet access mode used most by Egyptian government entities 63. of Egypt s government and public sector enterprises using the Internet in 28 accessed it through ADSL, up from.6 in 27. The proportion of Egyptian government entities connecting to the Internet through dial-up decreased 7 percentage points from 27 to 28 due to the shift to ADSL connections. Around 3 of the Egyptian government entities using the Internet access it through other types of connection, including leased lines and ISDN. and driving convergence between ICTs. million Figure (14) Mobile Subscribers and Penetration (28) Mobile Subscribers (million) (LHS) Mobile penetration () (RHS) Figure (13) Internet Access Modes of Government Entities Multiple Selections were allowed ADSL Dial up Leased Lines ISDN Others June 27 June 28 Mobile subscribers increased by 37 in 28 The number of mobile subscribers in Egypt reached million in December 28. The number of mobile subscribers in Egypt grew by 37 between December 27 and December 28. Mobile penetration in Egypt increased from 3.4 in December 2 to 4.77 in December of Internet users in Egypt connect via ADSL The number of ADSL users in Egypt rose to million by the end of 28, representing 4 of the total number of Internet users in the country. 43 of Internet users in Egypt use dial-up connections, while around 17 access the web through ISDN and leased line connections Figure () Internet Users by Mode of Access (28).92 The Internet is changing traditional behavior Figure (16) Proportion of private enterprises using the Internet by type of activity Other type of activity Delivering products online* Providing customer services Transactin with public authority Internet banking or financial services other information searches or researches Informatiom from government organizations* Information a bout goods and services Sending and recieving s *These activities were added in June 28 Survey Multiple Seletions were allowed Communication activities are a high priority for visitors to Egypt s IT Clubs and Internet café 7.9 of those using Internet cafés in Egypt at the beginning of 28 were doing so to engage in communication-related activities were engaging in ing activities specifically. E-learning activities are undertaken by 87 of users of IT Clubs and 4 of those using Internet cafés. June 27 June ADSL ISDN Dial up Leased Lines Egyptian private enterprises use the Internet extensively for communicating Around 8 of Egyptian private enterprises using the Internet do so to send and receive s. The proportion of Egyptian private enterprises using the Internet to acquire information about goods and services increased by 7.3 percentage points from June 27 to June 28, when 66.2 of enterprises were using the Internet for this purpose. Figure (17) Activities undertaken by individuals using IT Clubs and Internet cafés (January 28) Internet Cafes IT clubs The Future of the Internet Economy in Egypt: A Statistical Profile 9

7 Almost one-third of Egypt s Internet users log on to the Internet on a daily basis 31.8 of individuals who use the Internet in Egypt do so on a daily basis, according to January 29 figures, while access the Internet weekly, 2.97 monthly and 26.7 use it upon demand Figure (18) Frequency of Internet Usage by Individuals (January 29) 31.8 Daily Weekly Monthly Upon Demand Figure (21) Total expenditure on ICT for households with income - EGP 1.36 > -4 EGP > 4-8 EGP > 8 EGP Computer Post Fixed Line Mobile Internet Spending on fixed line services constitutes the highest portion of households' incomes less than 4 EGP. However, the higher the income level is, the lower the spending on fixed line services, in favor of spending on the mobile and computer services. without burdening the budget. Canada Morocco France Tunisia China Algeria Egypt Figure (19) Internet Price Basket Internet access costs in Egypt are internationally competitive According to the World Bank price basket methodology, the monthly cost of Internet service in Egypt was USD 4. in 27, which compares favorably to the cost in many countries of the world including North African neighbors Morocco, Algeria and Tunisia of individuals in Egypt using prepaid mobile services spend less than EGP 1 a month on mobile usage 82.7 of individuals in Egypt using postpaid mobile services spend less than EGP 1 a month on mobile usage. Around 96 of mobile users in Egypt use prepaid programs. Only 3.4 of individuals using prepaid mobile cards spend more than EGP1 on prepaid mobile usage monthly 12.1 Figure (22) Monthly Individual Spendings on Prepaid Mobile Usage (January 29) Less than EGP -1 EGP 1-2 EGP more than 2 EGP US$ Figure (2) Total ICT expenditure Distributed on Different ICT Services () New labor horizons are being explored Egyptian Households allocate almost half of their total ICT expenditure to mobile services Average monthly household spending on mobile services represents of total monthly expenditure on ICT. Spending on internet comes next with 24.1 of total monthly expenditure on ICT, followed by spending on fixed line services with Computer Post Fixed Line Mobile Internet 8 of employees using computers in Egyptian private enterprises use the Internet The proportion of employees using the Internet in Egyptian private enterprises increased from of those using computers in June 27 to 8 in June Figure (23) Proportion of Employees using Internet in private Businesses June 27 June The Future of the Internet Economy in Egypt: A Statistical Profile 11

8 and new opportunities are emerging for education Figure (24) Proportion of Employees Specialized in ICT in private Businesses The proportion of employees specialized in ICT in Egyptian private enterprises increased in 28 The proportion of employees specialized in ICT in Egyptian private enterprises reached 3.3 in June 28, up from 1.8 in June of individuals using computers in Egypt do so for educational purposes Entertainment-related activities are undertaken by 27.7 of individuals using computers in Egypt. Figure (27) Activities Undertaken by Individuals Using computers (January 29) Others Connecting to the internet Work Entertainment Education 66 June 27 June Multiple Selections were allowed 3.8 of Egyptian government employees using computers in 28 are using the Internet The proportion of government employees using the Internet has increased to reach at 3.8 of those who work with computers in June 28, compared to 27.4 in June Figure (2) Proportion of Government Employees Using Internet E-commerce Internet banking E-government Getting Information Communicating Figure (28) Activities undertaken by individuals using the Internet (January 29) of individuals Using the Internet in Egypt do so for educational purposes 2.7 of individuals using the Internet in Egypt engage in communication-related activities, including sending and receiving , chatting and Internet phone communication. Education 46.3 June 27 June Figure (26) Internet Users by Employment Status (January 29) 28 of Internet users in Egypt in 28 are employed Employed Unemployed Outside the Labor Force outside human force 28 of Internet users in Egypt in 28 were employed, 4.7 unemployed, while the largest proportion, 66, were outside the labor force predominantly students. Around 87 of Egyptian public schools using computers in 28 were connected to the Internet 86.9 of Egyptian public schools using computers in 28 were connected to the Internet, compared to 79.3 in of private schools in Egypt using computers in 28 were connected to the Internet, compared to 4.6 in 27. Figure (29) Proportion of Schools Connected to the Internet by Type of Education Public Schools Private Schools Year 27 Year The Future of the Internet Economy in Egypt: A Statistical Profile 13

9 Figure (3) Proportion of Education Institutions with PCs and labs connected to the Internet (28) of Egypt s private higher education institutes are specialized in ICT 66.4 of Egypt s private higher education institutes are specialized in ICT, with 2.9 specialized in IT and 13. in communications of private faculties in Egypt are specialized in ICT, 26.2 in IT specialties. Only 14 of public faculties are specialized in IT, and 7.3 in communications of Egyptian higher education institutions had computer labs and Internet access in of Egyptian higher education institutions had PCs in 28, while 81.4 had electronic labs. All the higher education institutions in Egypt equipped with labs are connected to the Internet. Figure (31) ICT-Specialized Faculties and Institutes (28) IT Specialities Communication Specialities E-government is improving the relationship between citizens and government Most citizens who use e-government services in Egypt do so to check and pay their fixed-line telephone bills. The proportion of households in Egypt using e- government to acquire national ID cards and birth certificates has increased significantly. These activities were undertaken by more than half the users of e-government services in January 29. Around one-quarter (26.6) of those using e- government services in Egypt do so to acquire information. Phone Bill National Id Birth Certificate Information University Allocation Office Figure (33) E-government Activities Undertaken by Households PCs Electronic Labs connected to the internet Car License January 28 January 29. Driving License Others Public Faculties Private Faculties Higher Private Institutes Government entities offer a diversified scope of online services Figure (34) Services provided through E-Government Websites Government and Citizens Relationship Figure (32) Proportion of Government Entities with a Website or Web Presence of total gov. entities gov. entities using internet The presence of government entities on the Internet facilitates communication with citizens The proportion of government entities with websites or a web presence reached 22.3 in June of government entities that use the Internet had a website or web presence by June 28. Provision of information was the main service provided through Egyptian government websites in of government entities with websites were providing information for the public, while 39.4 had in place online systems to reply to public inquiries. Nearly one-third (32.) of Egyptian government entities with websites in 28 were offering citizen services and around one-quarter (2.8) providing forms online. Others Announcement of electonic offers Receiving orders Documentary data Files and data exchange Providing forms Customer service Reply to inquiries Information about the entity June 27 June June - 27 June The Future of the Internet Economy in Egypt: A Statistical Profile

10 Still, usage could be increased among the elderly, women and people with low incomes Figure (3) Population and Internet users by age groups Population Internet Users The first category for population is (-24) according to the classification of central agency for public mobilization and statistics ( CAPMAS) Younger individuals are greater users of the Internet in Egypt Individuals aged from 16 to 4 years constitute around 9 of Egypt s population and 94 of the country s Internet users. Individuals aged from to 74 years constitute 8. of the population and only.8 of the country s Internet users. Figure (38) Proportion of Households Using ICT by Income Level (January 29) using computers using ineternet < > Computer and Internet usage need to be increased among lower-income groups The proportion of households using computers and the Internet increases in line with income levels. 3.3 of households with a monthly income of less than EGP 1, use computers while.42 use the Internet. These figures increase to 1.82 and 2.34 respectively in households with an income of more than EGP 8, a month. The gap in Internet usage between males and females in Egypt is decreasing Males in Egypt are more likely to use the Internet than females. The percentage breakdown of male/female Internet usage in Egypt changed from 61 vs. 39 in January 28 to 9 vs. 41 in January Figure (36) Internet Users by Gender (January 29) 61 Male 9 39 Jan. 28 Jan. 29 Female 41 and the gap in usage between urban and rural areas needs to be bridged. There is a large gap in the proportion of households with computers in urban and rural areas 13.1 of Egyptian households reported having a computer in January 29. The proportion of households with a computer is higher in urban areas (24.2) than in rural areas (4.). Figure (39) Proportion of households with a computer (January 29) Urban Rural Total * Percentages calculated from the total number of households in each category Figure (37) Individuals with Mobile by Gender (January 29) Female 2.9 Male 74.1 But there is a larger gender gap in individuals with mobile phones Almost three-quarters (74.1) of individuals with mobile phones in Egypt are male, while only around one-quarter (2.9) are female, according to the results of a household survey in January 29. Figure (4) Proportion of Households Using the Internet (January 29) There is also a large gap in the proportion of households using the Internet in urban and rural areas of Egyptian households use the Internet according to January 29 figures of households in urban areas use the Internet compared to 1 of households in rural areas. Total Urban rural * Percentages are calculated from the total number of households in each category 16 The Future of the Internet Economy in Egypt: A Statistical Profile 17

11 The gap between urban and rural areas is also clear with regard to household use of ADSL 32.9 of Egyptian households using the Internet access it through ADSL. This represents 4.93 of the total number of households in Egypt. In urban areas of Egypt 4 of households using the Internet access it through ADSL. This represents 9.6 of the total number of urban households. The Ministry of Communications and Information Technology (MCIT) is focusing on increasing and expanding broadband services to rural areas where broadband penetration is still low. Internet usage among individuals has reached 16.4 in the highest quartile Figure (41) Proportion of Households Using ADSL (January 29) Total Urban 9.62 Figure (42) Proportion of Individuals Using the Internet by Region (January 29) 13 Rural 1.3 of households using Internet of total households Figure (43) Proportion of Localities with Public Internet Access Centers (PIACs) More and more firms are connected Various economic sectors are making use of the Internet The manufacturing sector has the highest weight in the economy (43.6 of enterprises) and accounts for the largest proportion of Internet usage (4. of total enterprises using the Internet). The financial sector has a relatively small weight in the economy (.19) but accounts for a relatively larger proportion of Internet usage (6) Internet access has reached an increasing number of localities in Egypt The proportion of localities with public Internet access centers (PIACs) stood at 41 at the end of 28, up from 39 at the end of 27. The growing proportion of localities with PIACs reflects the government s efforts to increase Internet access and usage among different social brackets and in all regions of the country. Figure (44) Internet Usage in Different Economic Sectors (28) Proportion of the sector in the economy Proportion of internet users in the sector Manufacturing Hotels & Restaurants Trade Construction Finance Others The proportion of individuals using the Internet has reached 16.4 of total individuals and 1.8 of those using computers in the highest quartile, compared to 1.4 of total individuals and 7.8 of those using computers in the lowest quartile. The highest quartile includes governorates with the highest proportions of Internet usage Highest Quartile Ismailia Suez Cairo Alexandria Gharbia Dakahleya Lowest Quartile Qena North Sinai Kafr El Sheikh Suhag Beheira post Said of total individuals of those using computers Highest Quartile Second Quartile Third Quartile Lowest Quartile 7.8 Figure (4) Proportion of Private Enterprises with Websites in Different Economic Sectors (28) Private enterprises are using their websites as tools to facilitate marketing and publicity activities Around 7 of Egyptian private enterprises using the Internet have websites in both the financial intermediation and social services sectors of Egyptian private enterprises using the Internet have websites in the trade sector The Future of the Internet Economy in Egypt: A Statistical Profile 19

12 and conduct business over the Internet. ICT is a major driver of economic growth. Figure (46) E-commerce Activities by Private Enterprises (28) Other 3.7 Publish Bids & tenders 18. Advertising 3.7 Receive technical offers & Finacial 61.1 Send orders - buy goods - acquire services 6.7 Receive orders - sell goods - Provide services *Multiple selection was allowed. A growing number of Egyptian private enterprises conduct business over the Internet Around two-thirds of the enterprises engaging in e-commerce in Egypt use the Internet to receive and sell goods & services (67.6), place orders and buy goods/services (6.7). Around 61 of the enterprises engaging in e-commerce in Egypt use the Internet to receive technical and financial offers, while more than half (3.7) use it to advertise their goods and services. The ICT sector is a major driver of economic growth in Egypt The ICT sector s contribution to real GDP increased to 3.34 in Q3 28 from 3.8 in Q3 27. Figure (49) ICT sector contribution to real GDP () July - Sep. 27 July - Sep. 28 E-sales and e-purchases constitute major portions of the total sales and purchases of Egyptian private enterprises engaging in e-commerce E-sales represented 6 of total sales for Egyptian private enterprises engaging in e- commerce in 28, while e-purchases accounted for 46 of total purchases. The sectors with the highest proportions of e-sales and e-purchases are social services, financial intermediation, trade, construction and manufacturing Figure (47) Proportion of e-sales and e-purchases in private enterprises Undertaking 6 e-commerce (28) of e-sales from total sales of e- purchases from total purchases 46 Figure () Growth Rates of Some Economic Sectors (July-September 28) Electricity 8.1 Gas 8.1 Construction Petroleum Tourism ICT The ICT sector is one of the fastestgrowing sectors in Egypt The quarterly growth rate of Egypt s ICT sector reached 14.6 in Q3 28, ahead of all other economic sectors for the period. Figure (48) Private Enterprise Benefits from Using the Internet Increasing security 16 Reducing transaction Cost Increasing customer accessibility 1 93 speeding up operations Private enterprises are gaining significantly from using the Internet 93 of Egyptian private enterprises using the Internet in 28 considered that it helped them to speed up their operations, while around half (3) believed it increased customer accessibility. Other benefits included reducing transaction costs, according to 22 of private enterprises using the Internet, and increasing security, according to. ICT is a dynamic and attractive sector The ICT sector has attracted talented human resources from diversified fields. The number of ICT employees reached 17,1 at the end of 28, up from 162, at the end of 27 representing a year-on-year growth of 7.8. Thousand employees Figure (1) No. of ICT Employees* Oct.- Dec. 26 April-June 27 Oct.-Dec. 27 April-June 28 Oct.-Dec. 28 Jan.-March 27 July-Sep. 27 Jan.-March 28 July-Sep. 28 * Not including indirect employees working in I.T. clubs, internet cafes and mobile Cards & accessories shops. 2 The Future of the Internet Economy in Egypt: A Statistical Profile 21

13 The Internet is opening new market opportunities Egypt s expenditure on ICT reached.9 of GDP in 27 According to the World Bank s Little Data Book on ICT, Egypt s expenditure on ICT reached.9 of GDP in 27, coming ahead of many developed and developing countries. Figure (2) ICT Sector Expenditure ( of GDP)-27 China 7.7 Canada Egypt Italy France India Saudi Arabia Chile Russian Federation Algeria Million USD Figure () ICT exports target Egypt is planning to increase ICT exports to USD 1.1 billion by 21 Egypt s ICT sector exports grew from USD 2 million in 2 to USD 7 million in 28, and are targeted to reach USD 1.1 billion in 21, especially in light of the fast growth of the outsourcing market. The Government of Egypt is adopting anumber of policies to support ICT-exporting companies and help them overcome the potential impact of the current global financial crisis. Figure (3) Mobile Companies Profitability Indicators (July-Sep. 28) The profitability indicators of mobile service providers in Egypt are performing well The rate of return on invested capital in Egypt s mobile services sector was 22 for July September 28, while net profit after tax reached 23 of total revenues. Offshore services are growing at fast rates According to global consulting firm A.T. Kearney, Egypt s offshore services, from which the major part of revenues is generated from IT services and technical support, are growing quickly. Arabic content, contact centers and R&D/engineering services are expected to bring larger shares of revenue to Egypt by 21. Figure (6) Egypt s Offshore Services Revenues, 2-21, (US$ million) $2 million $1,8 million R&D/Engineering KPO Services Localization Arab Content BPO Services Technical Support Contact Centers IT Products* IT Services Target Revenue CAGR $1m 38 $ 3m 43 $ 4m 22 $2m 46 $ 7m 72 $2m 27 $1m $ 4m 2 $28m 27 Return on investment Net profit after tax 2 21 But it is important to remove barriers The Government of Egypt is giving priority to the ICT sector as a driver of economic growth According to the World Bank's Little Data Book on ICT, the Government of Egypt gives priority to the ICT sector within its policies, scoring 4.4 on a scale of 1 to 7 in 26. The results of this index are based on responses to the statement ICT is an overall priority for the government, with 1 equaling strongly disagree and 7 strongly agree. Figure (4) Government Prioritization of ICT Sector 26 India.7 South Africa Israel Egypt Turkey China Italy Indonesia Scale from 1 (lowest) to 7.7 (highest) Point Figure (7) Reasons for not Undertaking E-Commerce by Households Others Un-awareness of e-payment methods Language barrier Fear of data disclosure E-contacts denial Rejection of e-commerce Ignorance of e-commerce Lack of awareness of the importance of e- commerce is a major barrier to online trading More than 7 of Egyptian households not engaging in e-commerce attribute their position to ignorance of how to use it, while almost 21 refuse to use it. The denial of e-contracts (12.) and fear of data disclosure (7.6) are other barriers to e-commerce for Egyptian households. 22 The Future of the Internet Economy in Egypt: A Statistical Profile 23

14 protect privacy and improve security. List of Technical Terms* Figure (8) Proporation of Households Facing Security Problems by Type ( January 29 ) 9.7 Viruses 34.4 Spam 16. H.W. & S.W. problems 6.3 Hackers 2.9 Worms Viruses are the most common Internet security problem faced by Egyptian households 9.7 of Egyptian households facing Internet security problems have been subject to viruses, while 34.4 have been subject to spam. Lower proportions have faced problems related to hardware or software (16.), while 6.3 have been attacked by hackers and 2.9 affected by worms. Code i61 i271 Description Population Mobile cellular telephone subscribers (post-paid and prepaid) Definition Refers to the use of portable telephones subscribing to a public mobile telephone service and includes access to a Public Switched Telephone Network (PSTN) using cellular technology. This can include analogue and digital cellular systems. This should also include subscribers to IMT-2 (Third Generation, 3G). Subscribers to public mobile data services or radio paging services should not be included. I911 Cellular subscribers per 1 inhabitants i271/i61 *1 The proportion of Egyptian households taking Internet security measures needs to be increased Only 7 of Egyptian households using computers are taking security measures of Egyptian households taking Internet security measures use anti-virus programs, while employ firewalls and 12 hacking-detection programs. () Figure (9) Proporation of Households Having Security Measures by Type ( January 29 ) 86.4 Anti-Virus Firewall 12 Hacking detection Data backup Anti-hacking i4213tfb I992 I993 Total fixed broadband Internet subscribers Broadband subscribers per 1 inhabitants Internet subscribers per 1 inhabitants Total broadband Internet subscribers refers to the number of subscribers who pay for high-speed access to the public Internet (a TCP/IP connection) at speeds equal to or greater than 26 kb/s in one or both directions. This total is measured irrespective of the method of payment. It excludes subscribers with access to data communications (including the Internet) via mobile cellular networks. Broadband subscribers divided by population and multiplied by 1. Internet subscribers per 1 inhabitants. i4214 International Internet bandwidth (Mb/s) Total capacity of international Internet bandwidth in megabits per second (Mb/s). If capacity is asymmetric (i.e., more incoming than outgoing), the incoming capacity should be provided. I994 International Internet bandwidth per inhabitant (bit/s) International Internet bandwidth per inhabitant (bit/s) * International Telecommunication Union (ITU). 24 The Future of the Internet Economy in Egypt: A Statistical Profile 2

15 Sources, Definitions and Notes Figure (1) Internet users and Internet penetration Source: Telecom Egypt and National Telecommunication Regulatory Authority (NTRA) Figures sourced from an estimate based on the summation of the number of dial-up, DSL, ISDN and leased line subscribers after multiplying each one by the average number of people using each subscription type. Figure (2) Dial-up Internet subscribers by region (28) Source: Telecom Egypt and NTRA Dial-up Internet subscribers are those who connect to the Internet via a modem and telephone line, which requires that the modem dial a phone number when Internet access is needed. This item includes: Free Internet users, who pay via the cost of their telephone call; those who pay in advance for a given amount of time (prepaid); and those who pay for a subscription (either flat-rate or usage-based)(international telecommunication unit ITU). Figure (3) International Internet Bandwidth Source: NTRA International Internet bandwidth is calculated in megabits per second (Mb/s), while Internet bandwidth per capita is calculated in bits per person). Figure (4) Proportion of households using internet Source: Ministry of Communications and Information Technology (MCIT) Results of survey covering 18,781 households released in January 29 in cooperation with the Central Agency for Public Mobilization and Statistics (CAPMAS), with a response rate of Calculated as a percentage of the total number of households included in the sample. Figure () Proportion of individuals using the Internet by governorates (January 29) Results of survey covering 18,781 households released in January 29 in cooperation with CAPMAS, with a response rate of Figure (6) Enterprises using the Internet by number of employees (June 28) Results of survey covering 2,63 private enterprises in 27 governorates conducted in 28 in cooperation with CAPMAS, with a response rate of 8.9. The sample represents different geographic areas, economic sectors and enterprise sizes. Calculated as a percentage of the total number of small, medium and large enterprises in the sample, and as a percentage of the small, medium and large enterprises using computers. Small enterprises are those with 1-49 employees, medium are those with -249 employees and large enterprises are those with 2 employees or more. Figure (7) Proportion of government entities using the Internet Results of surveys conducted in 27 and 28 on all government and public enterprise sector organizations in cooperation with CAPMAS. The 27 survey covered a total of 3,74 entities, while the 28 survey covered 2,394 entities, of which 636 were governmental (136 ministries and presidential bodies, 372 governorates and directorates, and 128 general agencies) and 1,78 public and public enterprise sector entities. The framework was obtained from the governmental administrative structure. Calculated as a percentage of the total number of government entities using computers. Figure (8) IT Clubs distributed by region IT Clubs, established through an MCIT initiative supported by the public and private sector, provide users with access to computers, printers, networks, Internet, courses and well-trained instructors. Priority is given to lowincome and rural/isolated areas. Results of survey covering 1,719 IT Clubs conducted in January 28 in cooperation with CAPMAS, with a response rate of 7.3. Figure (9) Location of Internet connection by individuals (January 29) Results of survey covering 18,781 households released in January 29 in cooperation with CAPMAS, with a response rate of Figure (1) Total Internet and broadband users Source: Telecom Egypt and NTRA The International Telecommunication Union (ITU) defines broadband as any Internet connection with a minimum speed of 26 Kb/s. Hence, ADSL and leased lines are considered broadband in Egypt. The number of broadband users was calculated by multiplying the number of broadband subscribers by the average number of people using each subscription. Figure (11) Household Internet access modes Results of survey covering 19,289 households released in January 28 in cooperation with CAPMAS, with a response rate of 92. Results of survey covering 18,781 households released in January 29 in cooperation with CAPMAS, with a response rate of Calculated as a percentage of the total number of households using the Internet. Figure (12) Breakdown of private enterprises using the Internet by mode of access (June 28) Results of survey covering 2,63 private enterprises conducted in 28 in cooperation with CAPMAS. The sample contained a number of enterprises from each governorate proportional to the national distribution of enterprises and included all economic activities. Calculated as a percentage of the total number of small, medium and large enterprises using the Internet. Figure (13) Internet access modes of government entities Results of surveys conducted in 27 and 28 on all government and public enterprise sector organizations in cooperation with CAPMAS. The 27 survey covered a total of 3,74 entities, while the 28 survey covered 2,394 entities, of which 636 were governmental (136 ministries and presidential bodies, 372 governorates and directorates, and 128 general agencies) and 1,78 public and public enterprise sector entities. The framework was obtained from the governmental administrative structure. Calculated as a percentage of the total number of government entities using the Internet. Figure (14) Mobile subscribers and penetration Source: NTRA Figure () Internet users by mode of access (28) Source: NTRA Figure (16) Proportion of private enterprises using the Internet by type of activity Results of survey covering 1,821 private enterprises conducted in 27 in cooperation with CAPMAS. The sample contained a number of enterprises from each governorate proportional to the national distribution of enterprises and included all economic activities. Results of survey covering 2,63 private enterprises conducted in 28 in cooperation with CAPMAS. Figure (17) Activities undertaken by individuals using IT Clubs and Internet cafés (January 28) Results of survey on IT Clubs and Internet cafés conducted in January 28 in cooperation with CAPMAS. Survey data was collected from 1,719 IT Clubs, with a response rate of 7.3, and 8,61 Internet cafés, with a response rate of The Future of the Internet Economy in Egypt: A Statistical Profile 27

16 Figure (18) Frequency of Internet usage by individuals (January 29) Results of survey covering 18,781 households released in January 29 in cooperation with CAPMAS, with a response rate of Figure (19) Internet price basket for 27 Source: World Bank Internal Database, Draft for Little Data Book on ICT, 29 The price basket for Internet service is calculated based on the cheapest available tariff for connecting to the Internet for 2 hours a month (1 hours peak and 1 off-peak). The basket does not include telephone line rental but does include telephone usage charges if applicable. Data are compiled in the national currency and converted to US dollars using the annual average exchange rate. (International Telecommunication Union (ITU)) Figure (2) Average monthly expenditure on ICT services as a percentage of monthly income (January 29) Results of survey covering 18,781 households released in January 29 in cooperation with CAPMAS, with a response rate of Calculated as a percentage of monthly household income. Figure (21) Breakdown of household spending on ICT by income level Results of survey covering 18,781 households released in January 29 in house hold spending on ICT by income levels & total spending on (ICT)-EGP cooperation with CAPMAS, with a response rate of Figure (22) Monthly individual spending on prepaid mobile usage (January 29) Results of survey covering 18,781 households released in January 29 in cooperation with CAPMAS, with a response rate of Figure (23) Proportion of employees using the Internet in private businesses Results of survey covering 1,821 private enterprises conducted in 27 in cooperation with CAPMAS. The sample contained a number of enterprises from each governorate proportional to the national distribution of enterprises and included all economic activities. Results of survey covering 2,63 private enterprises conducted in 28 in cooperation with CAPMAS. Calculated as a percentage of total employees in private enterprises using computers. Figure (24) Proportion of employees specialized in ICT in private businesses Results of survey covering 1,821 private enterprises conducted in 27 in cooperation with CAPMAS. The sample contained a number of enterprises from each governorate proportional to the national distribution of enterprises and included all economic activities. Results of survey covering 2,63 private enterprises conducted in 28 in cooperation with CAPMAS. Figure (2) Proportion of government employees using the Internet Results of surveys conducted in 27 and 28 on all government and public enterprise sector organizations in cooperation with CAPMAS. The 27 survey covered a total of 3,74 entities, while the 28 survey covered 2,394 entities, of which 636 were governmental (136 ministries and presidential bodies, 372 governorates and directorates, and 128 general agencies) and 1,78 public and public enterprise sector entities. The framework was obtained from the governmental administrative structure. Calculated as a percentage of the total number of governmental entities using computers. Figure (26) Internet users by employment status (January 29) Results of survey covering 18,781 households released in January 29 in cooperation with CAPMAS, with a response rate of Calculated as a percentage of total number of Internet users. Figure (27) Activities undertaken by individuals using computers (January 29) Results of survey covering 18,781 households released in January 29 in cooperation with CAPMAS, with a response rate of Calculated as a percentage of individuals using computers. Figure (28) Activities undertaken by individuals using the Internet (January 29) Results of survey covering 18,781 households released in January 29 in cooperation with CAPMAS, with a response rate of Calculated as a percentage of individuals using the Internet. Figure (29) Proportion of schools connected to the Internet by type of education Results of survey covering 36,274 schools (31,411 governmental and 4,863 private) conducted in 27 in cooperation with CAPMAS. The proportion of governmental schools connected to the Internet is calculated as a percentage of the number of public schools with computers. The proportion of private schools connected to the Internet is calculated as a percentage of the number of private schools with computers. Figure (3) Proportion of higher education institutions with PCs and labs connected to the Internet (28) Results of survey conducted on all private and public universities and institutes of higher education in cooperation with CAPMAS. Data was collected from 313 public universities, 61 private universities and 14 private higher education institutes. Figure (31) ICT-specialized faculties and institutes (28) Results of survey conducted in 28 on all private and public universities and institutes of higher education in cooperation with CAPMAS. Data was collected from 313 public universities, 61 private universities and 14 private higher education institutes. Figure (32) Proportion of government entities with a website or web presence Results of surveys conducted in 27 and 28 on all government and public enterprise sector organizations in cooperation with CAPMAS. The 27 survey covered a total of 3,74 entities, while the 28 survey covered 2,394 entities, of which 636 were governmental (136 ministries and presidential bodies, 372 governorates and directorates, and 128 general agencies) and 1,78 public and public enterprise sector entities. The framework was obtained from the governmental administrative structure. Calculated as a percentage of the total number of entities and as a percentage of those using the Internet. Figure (33) E-government activities undertaken by households Results of survey covering 19,289 households released in January 28 in cooperation with CAPMAS, with a response rate of 92. Results of survey covering 18,781 households released in January 29 in cooperation with CAPMAS, with a response rate of Calculated as a percentage of the total number of households using e-government services. 28 The Future of the Internet Economy in Egypt: A Statistical Profile 29

17 Figure (34) Services provided through e-government websites Results of surveys conducted in 27 and 28 on all government and public enterprise sector organizations in cooperation with CAPMAS. The 27 survey covered a total of 3,74 entities, while the 28 survey covered 2,394 entities, of which 636 were governmental (136 ministries and presidential bodies, 372 governorates and directorates, and 128 general agencies) and 1,78 public and public enterprise sector entities. The framework was obtained from the governmental administrative structure. Calculated as a percentage of the total number of government entities with websites. Figure (3) Proporation of Internet users by age group Results of survey covering 18,781 households released in January 29 in cooperation with CAPMAS, with a response rate of Calculated as a percentage of the total number of individuals using the Internet. Population age groups obtained from the 26 Population and Housing Census conducted by CAPMAS. Figure (36) Internet users by gender (January 29) Results of survey covering 19,289 households released in January 28 in cooperation with CAPMAS, with a response rate of 92. Results of survey covering 18,781 households released in January 29 in cooperation with CAPMAS, with a response rate of Calculated as a percentage of the total number of individuals using the Internet. Figure (37) Individuals with mobile phones by gender (January 29) Results of survey covering 18,781 households released in January 29 in cooperation with CAPMAS, with a response rate of Calculated as a percentage of the total number of individuals using mobile phones. Figure (38) Proportion of households using ICT by income level (January 29) Results of survey covering 18,781 households released in January 29 in cooperation with CAPMAS, with a response rate of Calculated as a percentage of the total number of households within each income level. Figure (39) Proportion of households with a computer (January 29) Results of survey covering 18,781 households released in January 29 in cooperation with CAPMAS, with a response rate of Figures calculated based on survey sample calculated as a percentage of the total number of households in the survey, as well as from the households living in urban rural areas Figure (4) Proportion of households using the Internet (January 29) Results of survey covering 18,781 households released in January 29 in cooperation with CAPMAS, with a response rate of Figures calculated based on survey sample calculated as a percentage of the total number of households in the survey, as well as from the households living in urban rural areas Figure (41) Proportion of households using ADSL (January 29) Results of survey covering 18,781 households released in January 29 in cooperation with CAPMAS, with a response rate of Figures calculated based on survey sample calculated as a percentage of the total number of households in the survey, as well as from the households living in urban rural areas Figure (42) Proportion of individuals using the Internet by region (January 29) Results of survey covering 18,781 households released in January 29 in cooperation with CAPMAS, with a response rate of Governorates included in each quartile: - Highest quartile: Ismailia, Suez, Cairo, Alexandria, Gharbiya and Daqahliya - Second quartile: Sharqiya, Luxor, Giza, Al Wady Al Gadid, Fayoum and Damietta - Third quartile: Aswan, Beni Suef, Qalioubiya, Minya, Menoufiya and Assiut - Lowest quartile: Qena, North Sinai, Kafr Al Sheikh, Sohag, Beheira and Port Said Figure (43) Proportion of localities with public Internet access centers (PIACs) A public Internet access center (PIAC) is a site, location or center of instruction at which Internet access is made available to the public on a full- or part-time basis. All such centers should have at least one computer available for public Internet access. Localities refer to a country s villages, towns and cities. The percentage of localities with PIACs is computed by dividing the number of localities with at least one PIAC by the total number of the country s localities and multiplying by 1. (Core ICT Indicators, Partnership on Measuring ICT for Development) Figure (44) Internet usage in different economic sectors (28) Results of a survey covering 2,63 private enterprises in 27 governorates conducted in 28 in cooperation with CAPMAS, with a response rate of 8.9. The sample represents different geographic areas, economic sectors and enterprise sizes. Calculated as a percentage of the total number of private enterprises using the Internet. The weight of economic sectors in the economy was obtained from a CAPMAS enterprise census. Figure 4 Proportion of private enterprises with websites in different economic sectors (28) Results of a survey covering 2,63 private enterprises in 27 governorates conducted in 28 in cooperation with CAPMAS, with a response rate of 8.9. The sample represents different geographic areas, economic sectors and enterprise sizes. Calculated as a percentage of the total number of private enterprises using the Internet. Figure (46) E-commerce activities by private enterprises (28) Results of a survey covering 2,63 private enterprises in 27 governorates conducted in 28 in cooperation with CAPMAS, with a response rate of 8.9. The sample represents different geographic areas, economic sectors and enterprise sizes. Calculated as a percentage of the total number of private enterprises engaged in e-commerce. Figure (47) Proportion of e-sales and e-purchases in private enterprises engaged in e-commerce (28) Results of a survey covering 2,63 private enterprises in 27 governorates conducted in 28 in cooperation with CAPMAS, with a response rate of 8.9. The sample represents different geographic areas, economic sectors and enterprise sizes. Calculated as a percentage of the total number of private enterprises engaged in e-commerce. Figure (48) Private enterprise benefits from using the Internet Results of a survey covering 2,63 private enterprises in 27 governorates conducted in 28 in cooperation with CAPMAS, with a response rate of 8.9. The sample represents different geographic areas, economic sectors and enterprise sizes. 3 The Future of the Internet Economy in Egypt: A Statistical Profile 31

18 Figure (49) ICT sector contribution to real GDP () Source: Ministry of State for Economic Development The ICT sector includes all main telecommunication, postal services and IT companies, as well as other telecommunication companies. Figure () Growth rates of some economic sectors (July-September 28) Source: Ministry of State for Economic Development Figure (1) Number of ICT employees and Ministry of Investment Figure (2) ICT sector expenditure as a percentage of GDP (27) Source: World Bank Internal Database, Draft for Little Data Book on ICT, 29 Figure (3) Mobile companies profitability indicators (July-September 28) Figure (4) Government prioritization of the ICT sector (26) Source: The World Bank s Little Data Book on ICT, 28 Figure () ICT exports Source: Information Technology Industry Development Agency (ITIDA) and MCIT Figure (6) Egypt s target offshore services revenues for 2-1 Source: A.T. Kearney Figure (7) Reasons for households not engaging in e-commerce activities Results of survey covering 19,289 households released in January 28 in cooperation with CAPMAS, with a response rate of 92. Results of survey covering 18,781 households released in January 29 in cooperation with CAPMAS, with a response rate of Figure (8) Proporation of households facing security problems by type ( January 29 ) Results of survey covering 18,781 households released in January 29 in cooperation with CAPMAS, with a response rate of 89.4 Calculated as a percentage of the number of households with Internet security problems Multiple answers were allowed proportion & households facing security problems by type (January 29) Figure (9) Proporation of households having security measures by type ( January 29 ) Results of survey covering 18,781 households released in January 29 in cooperation with CAPMAS, with a response rate of 89.4 Calculated as a percentage of the total number of households taking Internet security measures Multiple answers were allowed proportion & households having security measures by type (January 29) 32

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