Egypt shutdown cost $110m

Melissa Chua
07 Feb 2011

The Egyptian government’s recent ban on Internet and mobile services may have cost the country around $110 million, according to industry analysts.

Hassam Barhoush, a senior analyst at Pyramid Research, has estimated that the ban on Internet services could have cost $5 million per day while the clamp down on mobile services may have carried a price tag of $14 million per day.

Barhoush said the above amounts did not include the loss of income from other sectors affected by the communications blackout.

A report from the Organisation for Economic Cooperation and Development said IT outsourcing firms in Egypt made $1 billion in revenue last year – roughly $3 million per working day which, when added to the other two figures takes the total cost to around $110 million.

The six day ban, which took place from 27 January to 2 February, had been triggered by the fact that social networking tools and services had been used to organize protests in the country. These developments had led the government to block Facebook, Twitter and subsequently all Internet services.

The government, which owns a 36% stake in Vodafone Egypt, went on to utilise the operator’s infrastructure to send text messages to subscribers.

Egypt has three cellular operators who cover about 75% of the population. Only the smallest operator, the Noor Group, had been allowed to continue operating during the blackout period.

Egypt has an 80 million strong population and cellular penetration rate stood at 78% last year while 11% of the population were fixed-line subscribers. The country’s mobile phone market grew by 20% to 60 million subscribers. The country’s ICT population grew 12% last year.

Angel Dobardziev, an Ovum analyst, said the Egyptian crisis highlighted the potential political risks telecom operators face in emerging markets.

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