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Egypt Information Technology Report Q4 2012
Business Monitor International, November 2012, Pages: 81
Egypt's IT market is forecast to increase to US$1.5bn in 2012, up by around 7%, with our projection remaining unchanged from Q112. Consumer and business IT spending is projected to report similar growth in 2012, despite continued uncertainty following the political events of 2011. Over BMI's five-year forecast period, Egypt will benefit from youthful demographics and improving information and communication technology (ICT) infrastructure. However, there are a number of market constraints,
including a sub-optimal distribution network outside Cairo.
Headline Expenditure Projections:
Computer hardware sales: US$956mnn in 2011 to US$1.0bn in 2012, +13% in US dollar terms.
Forecast in US dollar terms upwardly revised due to analyst modification and computer penetration is forecast to rise from 10% now to above 20% by 2016.
Software sales: US$217mn in 2011 to US$236mn in 2012, +11% in US dollar terms. Forecast in US dollar terms downwardly revised due to analyst modification, but SMEs are beginning to see software investments as more important.
IT Services sales: US$376mn in 2011 to US$415mn in 2012, +10% in US dollar terms. Forecast in US dollar terms downwardly revised due to analyst modification, with demand from government, finance and telecoms sectors accounting for more than half of total spending.
Egypt's score was 37.1 out of 100.0 and the country ranked second from bottom in our latest MEA RRR table, behind Saudi Arabia, Kuwait and South Africa, and ahead only of Jordan.
Despite the high growth potential of the market, which was reflected in an IT market score of 40, Egypt's overall ranking was constrained by a lowest-in-region Country Structure score of just 25.
- Although BMI expects IT spending to grow in 2012, uncertainty about the future direction of economic policy will constrain business investment. Any signs of a return of instability could have an impact on the long-term development of Egypt's IT services sector. Following the events of February 2011, some retail outlets and distributors suspended operations, causing disruption to supply chains, which are already patchy outside of major cities.
- Egypt's IT market will stay hardware dominated, with spending on PCs sustained by initiatives such as the 'Computer For Every Student' and 'PC for Every Home' programmes. Hardware accounted for an estimated 62% of Egypt's IT spending in 2011. Households are responsible for 20-25% of unit sales, with 1.0-1.5mn households said to possess a computer at present.
- The Egyptian government has stressed its commitment to modernisation and to continued investment in Egypt's IT sector, with a number of initiatives announced to support local sector companies. Access to credit remains a barrier for smaller Egyptian companies, but initiatives such as that launched by the Bank of Alexandria will help smaller Egyptian companies invest in IT.
Executive Summary 5
SWOT Analysis 7
Egypt IT Sector SWOT 7
Egypt Telecommunications Sector SWOT 8
Egypt Political SWOT 9
Egypt Economic SWOT 10
Egypt Business Environment SWOT 11
MEA IT Risk/Reward Ratings 12
Table: Middle East And Africa IT Risk/Reward Ratings Table, Q412 14
MEA IT Markets Overview 15
IT Penetration 15
Sectors And Verticals 18
Market Overview 22
End-User Analysis 30
Industry Forecast 34
Table: Egypt IT Industry - Historical Data And Forecasts (US$mn unless otherwise stated), 2008-2016 37
Macroeconomic Forecast 38
Table: Egypt - Economic Activity, 2011-2016 40
Competitive Landscape 41
IT Services 43
Internet Competitive Landscape 45
Table: Egypt's Internet Sector - Key Indicators 47
Company Profiles 48
Raya Holding 48
Microsoft Corporation 52
Oracle Corp 63
Table: Oracle: Selected Acquisitions 66
Country Snapshot 73
Table: Egypt's Population By Age Group, 1990-2020 ('000) 74
Table: Egypt's Population By Age Group, 1990-2020 (% of total) 75
Table: Egypt's Key Population Ratios, 1990-2020 76
Table: Egypt's Rural And Urban Population, 1990-2020 76
BMI Methodology 77
How We Generate Our Industry Forecasts 77
IT Industry 77
IT Ratings – Methodology 78
Table: IT Business Environment Indicators 79
Table: Weighting Of Components 80