Egypt is quickly becoming the regional hub for IT and Communications in the Middle East and North Africa.
Information Communication Technologies (ICT): Opportunities in Egypt
Egypt is quickly becoming the regional hub for IT and Communications in the Middle East and
North Africa. Thanks to its strategic geographic location and its time zone which allows two-
operational shifts for call centres (Europe and USA).
Egypt is an emerging market with a multitude of opportunities for business.
Egypt’s developing fibre connectivity with its neighbours makes it a prime location for transient
traffic to the region. Egypt’s strategic location in the centre of the MENA region (800 million
people) is bridging the three continents of Asia, Africa and Europe. It is the hub for the world’s
maritime traffic with commercial ports on the Mediterranean and Red Seas.
The business to business trading relationship will continue as Egypt will remain heavily import-
dependent for the foreseeable future. However, instruments such as letters of credit will gain in
importance as a higher risk profile is encountered.
Egypt-UK business relations are very healthy. The UK is Egypt’s largest foreign investor based
on cumulative FDI figures since 1970.
British goods and services are held in high regard in Egypt and the UK enjoys a good reputation
in the market.
The ICT sector is a major pillar of the Egyptian economy; with growth rate of 13% in the past
three years. ICT accounts for 3.3% of the Gross Domestic Product (GDP) of Egypt, which
equates to as much as LE40 billion annually.
It is projected that demand for ICT in Egypt will reach US$4.9 billion by 2013. Demand is being
fuelled by an expanding population, which is expected to rise to 82.8 million by 2013. The
market also benefits from a youthful population, recent studies suggesting that 50% of the
population is less than 25 years of age.
Data transmission and Internet access via mobile are projected to make up almost 50% of future
gross operating revenues at communication companies by the year 2015.
The Egyptian mobile sector has three operators competing for market share among a subscriber
base of 91.35 million
A number of multinational ICT companies use Egypt as a base for regional operations, including
Hewlett Packard, Oracle, Siemens, Microsoft, IBM and many others.
The public-private partnership (PPP) model has proved instrumental to growth. One successful
PPP is the Smart Village Cairo, a 3 million square meter IT Park housing a number of global ICT
firms such as Systel, Alcatel Lucent, Microsoft, Ericson, IBM World Trade Corp, Hewlett
Packard, Beltone Financial Holding; Nokia, Siemens and Vodafone.
Egypt’s internet penetration reached 37.65%, in June 2012, versus 18.4% in 2009 which
represented 30.8 million users with a forecast to reach 44 million by 2013. Internet costs have
dropped as a result of the government working with internet service providers. Arabic content
online is being promoted via the government’s e-content program, while e-government has been
introduced in many state departments.
ξ The Egyptian government provides excellent financial, legal and operational facilities with
the aim of promoting significant investment and growth in the ICT sector. The government
believes that strong partnership between the public and private sectors is pivotal to the
successful formation of an information society. As part of this belief, providing incentives
that foster an attractive climate for investors is a primary focus. The Information
Technology Industry Development Agency (ITIDA) is providing these services, which
aims to attract further foreign investments and boost exports.
ξ The current level of computerisation in Egypt is low, with PC penetration estimated at
around 10%, and seen as rising to around 17% by 2013. There is therefore considerable
growth potential for PCs, notebooks and accessories and a recent BMI report forecasts that
Egyptian spending on ICT will reach US$960 million by the end of this year. Forecast for
IT spending estimated to reach US$ 2.6 billion by 2014.
ξ Current Egyptian spend on ICT includes PCs, broadband internet subscription, software
industry and service provision including Business Process Outsourcing (BPO).
ξ Immediate opportunities lie in public data and Internet services, wireless local loop
networks, the mobile network, offshore development, and e-Egypt. 200 government
services will soon be available online through a new e-government portal. The portal will
offer 70 services in both English and Arabic, more than 20 government agencies currently
offer services online.
ξ Egypt’s ICT sector also has potential opportunities in sub sectors such as Fibre Optic
Cables, Call Centres, Equipment/Network Centres, GSM Solutions and Applications,
Voice Over Internet Protocol (VoIP), Media Convergence, Triple Play, Wi-Fi, Wi-Max
/Wireless Networks and Solutions.
ξ ICT for health is an area where Egypt needs to modernise its infrastructure and connect
400 primary healthcare unions all over the country. The emergency system needs updating
particularly around emergency services call centres and wireless services. Tele-health and
telemedicine are also among Egypt's priorities. The Ministry of Communication &
Information Technology (MCIT) are looking for partners to advise on the establishment of
an E-health service centre.
ξ Egypt’s computer hardware sales are 944 million in 2012, forecast to reach around US$1.5
billion in 2014. Computer penetration is forecast to rise from a little above 10% currently
to about 19% in 2014, and annual computer sales could increase to nearly 470,000 in the
ξ Egypt's IT market will stay hardware dominated, with spending on PCs sustained by
MCIT initiatives. Hardware accounted for an estimated 61% of Egypt's IT spending last
year. Households account for 20-25% of unit sales, with 1.0-1.5 million households said to
possess a computer at present.
ξ Spending on software is about US$211 million in 2012. The domestic software market is
expected to grow at a compound annual growth rate (CAGR) of around 11% by 2014.
Access to credit remains a barrier for smaller Egyptian companies, but various banking
initiatives may help smaller Egyptian companies to invest in IT.
ξ The future of the software market will belong to vendors that can successfully develop the
SME sector. With more than 50% of the regional business community comprising SME’s,
this sector is likely to emerge as the main driver of enterprise application spending over
the next few years.
ξ IT services revenue was US$351 million in 2012, accounting for about 25% of Egypt's
total spending on IT. The Egyptian IT services market is dominated by demand from the
government, financial and telecoms sectors, which account for more than half of total
spending. One key driver is likely to be the continued expansion of Egypt as an
international outsourcing destination.
ξ There were around 30.82 million internet user by June 2012 according to the National
Telecommunication Regulatory Authority (NTRA), which was largely made up of ADSL
connections. The government has promised to spend US$1 billion to boost broadband
penetration over the next five years to improve not just network reach, but quality of
service and greater reliability.
ξ In areas where fixed line is unavailable, the provision of wireless alternatives such as 3G
dongles is expected to help provide broadband access which will also help to provide
access to e-healthcare and e-education services.
ξ As for the broadband sector, while it surpassed its benchmark figure of 1 million in August
2011, the sector is yet to show significant levels of growth and is expected to reach 3.3
million subscribers by 2014.
Latest export opportunities in the ICT sector
Latest export opportunities in Egypt
Getting into the market
Egypt is an attractive market that can offer major business opportunities to informed traders and
investors. Trade and investment between the UK and Egypt is promising. However it is not
always an easy market. A successful entry into Egypt will be determined by the quality of the
information and advice upon which the decision to enter is based. Continued success is also
dependent upon the ability to navigate the laws and practices of Egypt.
The Egyptian market requires careful study and a sustained sales effort. There is strong
competition from other exporting countries. Price and credit terms are a deciding factor when
obtaining contracts, though quality is increasingly important. Back-up servicing facilities and the
supply of spare parts is also important.
Having a local partner can be vital to successful penetration of this market. There are several
reasons for this. Firstly, given the continuing bureaucracy, a local partner can shepherd the
foreign business through the delays and obstacles. Secondly, foreign companies require a local
agent to bid for government tenders. Thirdly, as the Egyptian market becomes more
sophisticated there is a growing demand for after sales service, which a local agent can
In general, British products and services are very highly regarded in Egypt for their quality. The
main obstacle facing the growth of British involvement in the Egyptian market is that British
products have a reputation as being expensive compared to some foreign products, though this
has lessened slightly over the past year as exchange rate fluctuations have been in favour of UK
British companies wishing to develop their business in the Egyptian market are advised to
undertake as much market research and planning as possible in the UK.
The Egyptian government provides excellent financial, legal and operational facilities with the
aim of promoting significant investment and growth in the ICT sector. They believe that strong
partnership between the public and private sectors is pivotal to the successful formation of an
information society. As part of this belief, providing incentives that foster an attractive climate
for investors is a primary focus. The Information Technology Industry Development Agency
(ITIDA) is providing these services, which aims to attract further foreign investments and boost
More about doing business in Egypt
Market intelligence is critical when doing business overseas, and UKTI can provide bespoke
market research and support during overseas visits through our chargeable Overseas Market
Introduction Service (OMIS).
To commission research or for general advice about the market, get in touch with our specialists
in country - or contact your local international trade team.
Wafaa Saad, British Embassy Cairo. Tel: + 202 2791 6000 or email: email@example.com.
ξ Gary Hunt, British Embassy Cairo. Tel: + 202 2791 6000 email: firstname.lastname@example.org.
UKTI runs a range of events for exporters, including seminars in the UK, trade missions to
overseas markets and support for attendance at overseas trade shows.
Latest events in the ICT sector
Cairo ICT 2013
Cairo Int’l Convention Centre, Cairo
9-13 April 2013
Click here to visit the event website
More about OMIS and other UKTI services for exporters