Egypt is missing out on vital communications income

Egypt should set appropriate prices for the use of communications cables that run through the country and benefit instead of letting cables pass free of charge, a communications expert has said.

US based Nail Al-Shafee stressed the growing importance of the Suez Canal in the transmission of information between the East and West. “All we have to do is to set the appropriate pricing for the transmission of information through Egypt and benefit from these fees instead of letting cables pass free of charge or with insignificant prices.”

Al-Shafee was speaking following the announcement that an “indefeasible right of use” agreement was signed between Telecom Egypt and Egypt Orascom Telecom Media and Technology Holding (OTMT) subsidiary Middle East and North Africa Submarine Cable Systems (MENA) on January 22.

The agreement allows MENA to use Telecom Egypt’s link between Zaarafana on the Red Sea and Abu Talat on the Mediterranean for 20 years, OTMT said in an emailed statement.

Using the infrastructure of Egypt Telecom inside Egyptian territories, OTMT expects to launch the first submarine cable during 2014.

“This is a dangerous precedent,” said US based communications expert Nail Al-Shafee. “Until last week, the policy of the Egyptian state was not to offer opaque cables that would grant its beneficiaries unlimited bandwidth. International cables passing through Egypt were given only limited bandwidth.” Al-Shafee added: “Negotiations used to take place secretly and, under the pretext of national security, lots of corruption took place. Since 2000, I have been warning ministers and prime ministers that Egypt squanders over $2 billion of annual revenues that would be gained from cable fees. However, in spite of this, a number of influential individuals acquired commissions from international cable firms.”

He pointed out that only recently some communication ministers claimed Egypt earns one billion Egyptian pounds annually from cables. “I challenge those officials to announce the name of a single foreign company that paid even a million dollars. These companies have public financial records and nothing would support the claims of Egyptian officials.”

Al-Shafee said there’s a lot of evidence to prove ousted President Hosni Mubarak’s son Alaa took revenues from foreign cables for his personal use. During the rule of the military council and Mohammed Morsi, Qatar surreptitiously passed its “Gulf Bridge International” cable through Egypt in apparent negligence from Egyptian authorities.

“The marine and digital Suez Canal are geographic advantage points which the Egyptian state should not abandon except with legislative decisions and national discussion, then auction,” he said.

While Egypt postpones the Suez Canal Corridor development project, granting OTMT a “digital Suez Canal” eliminates the most important source of income for this corridor, he added.