Egyptians could soon be surfing the Internet at a much lower cost, reports Shaimaa Shalabi
The Ministry of Telecommunications and Information Technology has recently revealed new rates for the high-speed broadband Internet (ADSL) connections offered by the state-owned Internet service provider (ISP) TE Data. All TE Data's ADSL packages have been reduced in price, with other ISPs now considering following suit.
The reduction in prices comes as Telecom Egypt has reduced the cost of leasing the needed infrastructure to the ISPs. However, Internet activists claim that the prices are still too high.
Activists from Internet Revolution Egypt (IRE), a consumer group with a popular Facebook page, say that the government, the first supplier of the service through Telecom Egypt's TE Data, should bring down costs to international standards and remove the maximum quotas on downloads.
IRE coordinator Islam Khaled described the new prices as "unsatisfactory." Instead of a quota of 10 GB now costing LE50 a month, the quota should be raised to at least 70 GB, he stated. A cap of 10 GB on downloads falls short of the needs of average ADSL users, Khaled said.
Communications Minister Khaled Negm told the Al-Ahram Weekly that the reduction in TE Data's prices was in response to the changes in the infrastructure-leasing costs announced last month by Telecom Egypt.
According to Negm, packages costing LE50 a month will come with speeds of one megabyte per second (mbps) and a cap of 10 GB on downloads, while those costing LE95 a month will offer speeds of one mbps and a quota of 100 GB.
There are five different pricing packages, the highest of which costs LE350 a month and offers speeds of eight mbps with a download quota of 300 GB.
"This is the first stage in the fees structure change, and it will be followed by another reduction in six months," the minister promised. "The aim is to meet the needs of all segments of society and achieve an Internet use ratio of 50 per cent by the end of 2016," he added.
Negm said that he hoped the new measure would bring in 1.5 million new subscribers to the world of high-speed Internet. He urged the ISPs to be transparent and to make sure that their clients knew the quota limitations of the packages they were subscribing to, so that they would not feel cheated.
TE Data has not enforced the new prices yet, pending agreement with Telecom Egypt on the terms of the price changes. This has led some business observers to speculate on possible differences between TE Data and its mother company about the scheme.
"TE Data officials are putting on hold the new price scheme, which they announced in mid-July without the approval of Telecom Egypt that owns TE Data," an industry source said, speaking on condition of anonymity.
Wasim Arsani, CEO of LINKdotNET, a leading ISP, said that while the reduction in leasing costs of nearly 70 per cent "may seem big, the costs are still higher than international levels."
LINKdotNET would choose its own set of prices according to "market considerations and profit plans," Arsani added. It has been leasing communication circuits from Telecom Egypt for the last 17 years without any changes in the cost, although international prices have gone down over that same period by "up to 90 per cent," according to Arsani.
The pricing policies of Telecom Egypt had caused major losses to the ISPs, he added. The number of ISPs has gone down from 14 companies to four large ones and two middle-sized ones "now fighting for their lives," he said.
LINKdotNET is currently studying a government-suggested price scheme in the light of the cost reductions. "After negotiating with Telecom Egypt on the impact of the new cost reductions, we will declare our plans and any agreements that are reached," Arsani added.
The ISPs are not only concerned about prices, but also about the quality of the infrastructure and the structure of the market, he said. With nearly 21.6 per cent of the ADSL market in the first quarter of 2015, LINKdotNET is the second-largest ISP in Egypt after TE Data, which has 67.3 per cent of the local market.
Vodafone Data and Etisalat Egypt are the third and fourth-largest ISPs with market shares of seven and 4.1 per cent, respectively.
LINKdotNET officials say that the company has lost thousands of customers recently due to disconnections resulting from TE Data changing its connection cable and switching from copper to fibre optics.
The writer is a freelance journalist
© Al Ahram Weekly 2015
