Arab Mobile Communication Studies

By Andrew Bossone

I feel like a guy in front of a store window, jaw dropped, gawking at the newest mobile phones. I’m no longer shocked when a taxi driver pulls out his mp3 player or when I see a television screen mounted inside a car. If the last few years brought new tech toys into the country, then 2006 was the year we could finally use them. One could easily overstate the significance of all these gadgets, but the fact that technology giants, including Intel, Microsoft and Google, are sending their CEOs here means these companies respect the significance of the Egyptian market.

“If you look at the structure of the internet, Egypt is at center of one of the most important highways,” Google CEO Eric Schmidt said at a recent gathering in Cairo. “By the way, so everybody knows, it’s the Suez Canal. You thought the Suez Canal was important for boats? It’s important for fiber [cables] because the fiber goes right through it. And so the fact that [Egypt] is so central to the structure of the internet, it’s very helpful in terms of having broadband and bandwidth for the kind of technology we’re doing here.”

The Fiberoptic Link Around the Globe, or FLAG, runs from Japan through the Pacific and Indian Oceans, around the Arabian peninsula, through the Red Sea and Suez Canal, continuing through Europe before finally landing at the United Kingdom.

If you look on a diagram of global cable networks, you’ll see that Egypt is at the nexus of Asian, African and European lines, eventually connecting to the Americas through underwater cables. The Nazif government is working out new ways of capitalizing on this fact, and the biggest firms in the world know its value.

What’s more, they want to hook their wires into Egypt.

Google’s recent introduction of Arabic-language services, including web and news searches, email and translation to and from English and other languages, proves that there’s more to the country than just a global crossroads of big cables. Google rarely does anything without a reason, and it rarely takes on an endeavor before it can do the job well.

Egypt also happens to be the largest market for information technology in the Middle East and North Africa, with an estimated 5.5 million internet users, although that figure is likely low. Many subscribers to high-speed internet, via an Asymmetric Digital Subscriber Line (ADSL), share it with neighbors, and while it is common elsewhere for three or four people in one household to share a connection, by splitting the line with neighbors that number can reach 10–12 people over two or three households. Combined with the large number of people who use internet cafés, it’s difficult to get a precise number of internet users here.

Google’s interest in both the local market — whatever the numbers — and the greater Arabic-speaking market is clear. The company’s web-based email platform Gmail has been an exclusive service since its inception. New users could only sign-up through an invitation from someone who already had an account. The company is now freeing up the service in some markets, starting with New Zealand, Australia and Japan, but Egypt is on the list as well.

Gmail, like Google’s other primary services, was offered this year in Arabic. As email addresses require Latin script and few competing email services support Arabic script, Google’s Arabic services support multiple languages at once.

Google’s most significant investment to local investors is probably its translation service (see our October 2006 article “Start Your Engines”). The company is paying particular attention to Arabic-English and Chinese-English translation, using computers to do the work instead of human translators.

Schmidt said these languages provide the “most interesting combinations,” but he also undoubtedly sees the benefit of accessing the 300 million underserved Arabic speakers and China’s population of 1.3 billion. Google’s activities in China recently received a great deal of attention from the press: Google has a policy that it does not censor information, but eventually chose to acquiesce to Chinese authorities’ demands that it restrict search results on topics sensitive to the state. It was subjected to an ad campaign by Chinese search-engine competitor Baidu, which claimed to return more results on Chinese history than Google, although Baidu’s results were also scrubbed of prohibited topics.

“I believe that Arab societies will benefit from the broad use of the internet,” Schmidt said. “And I understand that comes with some tolerance. Not everything on the internet is perfect. Not everything is sanitized. There are bad voices as well as good voices. But the overwhelming benefit to the Arab countries, to the governments, to the rulers, is a more globalized, a more sophisticated, and I think a wealthier population.”

The importance of personal journals published on the internet, called weblogs or blogs, has been a big topic of discussion this year, here and abroad. In the West, pundits make much of the influence bloggers have on the media, and question if they even can be considered in the same breadth as the mainstream press.

Here, on the other hand, the discussion has been about some outspoken bloggers that have managed to break a few important stories, including accusations of sexual harassment of women. A handful of Egyptian bloggers were arrested for their criticism of the government. International press-freedom non-governmental organization Reporters Without Borders listed these arrests as one of the reasons for listing the country as one of 13 “enemies of the internet” in 2006.

Critics say many of the bloggers are young opportunists using the attention they gain for their own purposes. Others say their small numbers make them insignificant, although the Egyptian Blog Ring lists more than 1,450 registered blogs at press time, 59% of them published in Arabic and 22% dedicated to politics.

Schmidt suggests that the internet, with its myriad voices and opinions, is too big to control. “Betting against the internet is a bad bet. You will lose that bet because it is bigger than you, bigger than me, bigger than my company, bigger than what you are trying to do,” he said.

“If I think about it, the internet has moved from the periphery to the center of the room. The internet is the story now. Don’t try to control it. Let it happen. Encourage it. Make it successful. We’re just beginning. We only have 15% of the world’s online information on the web — maybe less.”

Access to the world’s information is growing to levels never previously seen. We cannot fully know the final impact of the internet now, but years down the road it could turn out as influential as the introduction of paper or the printing press.

The cost of a new computer is going down rapidly, with some simple units selling for around $150 (LE 855). But according to Google’s Schmidt, computers themselves will become less important for accessing the internet.

“The growth rate in terms of mobile phones is roughly twice that of personal computers, and all of the new mobile phones are internet-capable,” he said. “So it’s likely that much of your children’s use of the internet will be based on mobile phones and not personal computers.” Egyptian mobile networks currently support email and web browsing to users with internet-capable handsets on slow GPRS networks, but newer technologies including 3G, WiMax and WiFi will make mobile internet use much more convenient (see sidebar).

When third mobile operator Etisalat launches its service, scheduled for this coming February, it will offer 3G technology, which enables services like streaming audio and video. Advanced mobile phones, called “smart phones”, have already largely replaced personal digital assistants, and may soon supplant mp3 players. Mobile phone manufacturers are developing new software to satisfy diverse needs, including many Nokia and iMate phones, which have applications that will tell travelers the direction of Mecca and prayer times around the world.

Satyam, an outsourcing giant from India, signed a memorandum of understanding (MOU) with the Egyptian government last month to open a 300-seat facility in the Smart Village. The facility will serve as a technical-development and software-support facility for the company’s Middle East customer base.

Adel Danish, CEO of Egypt’s largest call center, Xceed, welcomes Satyam’s arrival, but says the company might come across a few hurdles. “They will have many issues to resolve with the [Ministry of Communication and Information Technology], such as the percentage of Indian employees (limited by law to 10%), and they want to have a majority of Indians during the first 2–3 years,” he says.

“We don’t see [foreign investors] as a threat at all or as competition. The pie is so huge. If you look at the size of the pie outside the country, I mean the outsourcing business, the offshore outsourcing business is huge so we don’t see them as competition.”

Danish is probably right. The arrival of a company from India, where IT outsourcing first became the rage, shows confidence in the local industry. Satyam’s investment could lead to more Indian investment, perhaps on the scale of the 2,000-seat operation Satyam will open in Malaysia in 2007. For Danish, this is consistent with the same message he’s been delivering all along: What’s good for the industry and country overall outweighs any single company.

Danish is no shameless self-promoter. In fact, when he makes business trips he rarely touts Xceed’s top position in his market, but often rattles the names of competitors including Convergence, Workpro and Infosys as examples of the opportunities here.

Last year, Xceed was granted certification by the Customer Operations Performance Center (COPC) Inc., the first in the region and in near-record time. COPC, a leading provider of contact-center accreditation, also elected Danish to its standards committee. He downplays his role on the COPC standards committee, even though his company shares the distinction with some of the biggest call-center operations, including those run by Microsoft, IBM and Accenture.

Xceed was also recently granted a contract with Microsoft to provide 150 seats of technical support in English, French, Italian and Spanish for their Xbox 360 video-game console. Microsoft asked Xceed to get their operation up by the Christmas season, the biggest consumer sales period for the US-based technology giant.

Xceed will open a 2,400-seat center in Maadi and a another in the Smart Village of about 300 seats early this year, as its current 1,200-seat home has filled to capacity. A number of other call centers are growing as well, and Raya, for example, is applying for COPC certification.

As Egypt’s IT reputation spreads, Xceed and others will begin to take on more sophisticated outsourcing projects. Two of the areas Danish says will open up in the near future are insurance claims and business processes. So far, some of the services have been rather simple, and some — like product activation (when you buy a product and then call a phone number to get a code that allows you to turn it on) — can be computerized.

Business processes take more time and coordination. Order processing, for example, involves tracking shipments through several locations. Large companies often have regional distribution centers all around the world. Outsourcing centers can evaluate the entire distribution process, potentially making it more efficient.

Microsoft’s late 2006 release of its long-awaited and long-delayed Windows Vista operating system, as well updated versions of its Office suite and Exchange Server, was one of the biggest product launches in the short history of computer software. The company invested some $20 billion in the new software, focusing particularly on expanding capabilities for business users.

While giants like Microsoft continue to grow, the local companies aren’t doing so badly, either. ITWorx, founded by CEO Wael Amin, witnessed 40% growth in the last year. It opened an office in Saudi Arabia, expanded its building in the Nasr City free zone and will open a new facility in Dubai.

Amin says much of his company’s success has been driven by increased IT spending by Gulf countries. Some of his major clients come from the financial sector, as well as telecoms and government authorities in the two countries.

In addition to building the Egyptian e-government portal, ITWorx has made business-intelligence software for the Ministry of Health and Population. Its “decision-support system,” which is up and running in Saudi Arabia and coming soon to Egypt, will help with data mining of patient records and disease outbreaks. When epidemics like Avian Flu occur, the software can help track the incidences and finds patterns that can prevent further spread of the disease.

When it comes to health in particular, the speed at which the government can discover trends means the difference between saving lives and losing them, not to mention the money it saves on treatment and prevention. This type of software is more and more being used by governments and businesses alike to improve efficiency and expand the scope of service offerings (see related story page 34).

“The use of portals, of information-based decision making, is a great way to promote transparency in a region that has been known for opacity,” Amin says. “If you’re able to, let’s say, take the steps for a building permit, you can code that digitally, put it onto a portal that citizens can get access to. So they cannot just see what is required, but also take advantage of it and do it online and just get the permit going. So this removes the opacity and uncertainty built into the system.”

Egypt Post, the largest economic institution in the country, was able to offer new services as well as advertise its old ones through the use of computers and portals. The post office offers several hundred services, but few actually knew what they all were. Using the organization’s new portal, people can now do everything from buying stamps to getting an international money order. According to Amin, whose company created the portal, Egypt Post had always wanted to offer daily interest rates, but could only do so after it moved to digital.

Portals and business intelligence are what Amin calls the past and present of software development for large organizations. ITWorx is focusing its attention on new projects dedicated to “service-oriented architecture.” The old models of business software organized the departments of a business under a single monolithic computer structure. This gets prohibitively expensive and difficult to manage as a business grows. ITWorx’s new model will change all that by dividing the organization by services.

“Instead of having a huge [Human Resource] system, you look at just hiring or monitoring as an individual piece, so when your business model changes, you just reframe the new parts and get rid of the old, instead of dumping an entire system for a new one.”

The system allows for coordination of data between the different departments. If you asked the question, “What is the cost of acquiring a new customer?” you would see the cost displayed across different departments. If the operating cost of one of these departments changes, then the change will affect that department, leaving the rest intact.

This more flexible process takes less time because it can be reconfigured, and should be attractive to companies in sectors that change quickly or demand a quick time to market, like the mobile-phone sales industry, for example.

Amin is working with Vodafone Egypt (bt100 number 5) to integrate its billing, customer service and operations-support systems to help it prepare for the as-yet-unnamed Etisalat network, which will likely offer original offerings, as Vodafone did when it introduced pre-paid cards and completely changed the market.

The whole landscape of how we communicate and do business is changing. This year saw an increased number of netcafés popping up, from the crowded streets of Cairo to the remote outskirts of desert oases. ADSL rates dropped in half this year, bringing tons of new subscribers. An Apple showroom opened, proving the market for computer buyers is large enough to support an alternate operating system, even if the price balloons to LE 18,000 per unit. And now all the talk is of wireless internet through WiFi and WiMAX, which could connect the entire country — schools, hospitals, banks, offices and homes.

We will always have to balance issues such as privacy, security, and offensive content, but one thing is for sure: Like everywhere else, Egypt is tech crazy and we “should not bet against the internet,” because we will lose every time.

New technologies mean internet users are no longer chained to their walls or, increasingly, their homes

Times have changed. The days of dial-up internet are dying, replaced by affordable high-speed internet. Originally only accessible through a fixed cable, now broadband internet access is available wirelessly. Mobile phones are also being upgraded: around the world — and soon in Egypt — new models allow users to do things even fully networked PCs had trouble with five years ago. Here’s a quick review of the technologies that are freeing us from our desks:

WiFi: Not a true abbreviation, the WiFi name indicates a device that can communicate with another such device without a fixed line between them. Originally used mainly to allow network access for laptops, the standard is becoming increasingly popular in setting up local area networks using desktop computers because it requires fewer cables.

A simple wireless network can be set up by hooking a WiFi access point to the network server or, in the case of a home network, into the DSL modem. The access point’s antenna sends out a signal which can then be accessed by another wireless modem, such as those that have become standard in laptop computers. The range of a typical access point can be as high as 45 meters, but the signal is weakened and often interrupted by walls. It’s advisable to encode a wireless network using Wireless Encryption Protocol or something similar, as an opportunistic neighbor can easily hop onto an unprotected network and steal bandwidth.

WiFi access points and modems are widely available for purchase, and will also be rented out by internet service providers.

WiMAX: A much sexier name than Worldwide Interoperability for Microwave Access, is a wireless standard used in so-called ‘last-kilometer’ connections, the expensive phase of telecom network construction which connects a distribution hub to its many terminals. The standard operates similarly to WiFi, but has much greater range, from 6–8 kilometers in normal city conditions, to 50 or more if the endpoints have direct line of sight. Orascom Telecom Holdings (bt100 number 1) and Intel Capital, the venture-capital arm of Intel Corporation, announced last year a joint venture called Orascom Telecom WiMAX to develop systems based on the technology standard here.

WiMAX is particularly attractive to isolated communities without preexisting fixed-line access. By setting up a series of WiMAX stations, oasis cities could for instance set up broadband internet access for a cost that is much cheaper than laying cables. It can also be set up on a moving platform, which suggests shipping, military, etc. applications.

3G: Standing for third-generation mobile technology, is a system of network standards that allows the simultaneous transmission of both voice and other data. 3G networks in Europe and elsewhere allow video conferencing and significantly higher data-transfer rates than 2G networks.

Mobinil (bt100 number 6) ran into trouble with authorities when its EDGE service, which allows higher transfer rates than standard protocols, was declared too advanced for Mobinil’s license, although the company still offers the service. At press time Mobinil and Vodafone were pursuing negotiations with the National Telecommunications Regulation Agency (NTRA) to lower the price of the 3G licenses. The new mobile network to be operated by Etisalat will offer 3G services

# posted by Unknown : Monday, January 15, 2007