Broad opportunities

Broadband is now satisfying Egypt’s need to stay connected to the world at high speed | Business Today Egypt

Broadband is slowly becoming the on line wave to the future, opening up new routes for many industries to benefit from the World Wide Web.

A lesson learned from the 1990s internet saga in Egypt is, arguably, only internet service providers (ISPs) survive. By Y2K, the vast majority of the dot-coms and content-intensive internet startups were readily defunct. The very few startups that survived could do so only when they converted their identities to become largely ISPs, or at least when partnered with ISPs, especially with the launch of the free internet initiative earlier in 2002. 

Case in point, one of the first Egyptian portals, Masrawy.com. 

 
Early internet entrepreneurs were dealt a blow after failing to come up with a viable business model to make money out of the heavy content and services they made available on the web. This, in turn, crippled potential for a new breed of creative, lucrative businesses that tap the capabilities of the internet and the web.

Enter broadband

In 1997, broadband a term simply defining high-speed, online-all-the-time access exploded in the United States. It embodied a new twist in the tale. Broadband, which is provided basically through the digital subscriber line (DSL) and the cable modem technologies, is transforming the way people use the internet. 

For instance, when users convert from dial-up (narrowband) to broadband, the time they spend online per month increases by 27 percent. Additionally, broadband users spend 57 percent more time using online entertainment, according to a study by McKinsey & Co., an American consultancy group. Second, which holds particularly true in Egypt, broadband is reviving hopes for businesses other than the ISPs to benefit from the internet.

No longer a hype

Internet startups began popping up rapidly between 1995 and 2000, and with them grew hopes for the commercial potential of the internet. But troubles to reel in profits caused the hopes of many to vanish into thin air. 

Ambitious ideas such as real-time gaming, real-time audio-video streaming, real-time video-conferencing and the like ended up being a bust. This is due to two reasons: first, most of these real-time services startups required high-speed internet access that was either not available, not so widespread or too expensive at the time. That, of course, impeded the companies from delivering on their promises. And, therefore, almost all the “real-time” promises were perceived or marked as hype. Second, the share prices of most internet startups were extremely overrated. These factors together led to the crash of the technology stock market in the US in 2000. 

Now, after the dust has settled, and with the prices of shares of the surviving internet startups like Yahoo and Amazon coming to their rational values, the broadband is poised to solve the remaining dilemma; the high-speed access to the web. And it’s steadily and quickly gaining ground. The number of broadband subscribers worldwide was estimated at more than 73 million households at the end of the first quarter of 2004. Not bad, considering there were no broadband users only 7 years ago. And the subscription fees are on the decrease, becoming affordable to a wider base. In Egypt, it averages LE 150 per month.

Window of opportunity

The inherent characteristics of broadband give it an abundance of potential on different levels, and for a variety of sectors, at a scale previously unimagined. 

A study published in McKinsey’s 2002 Quarterly online journal outlined the strongest business models to best tap the potential of the thriving access technology. The most prominent was selling non-web-based digital entertainment, either by direct streaming or downloading to the user’s PC. 

Considering the high downloading speed broadband creates, video downloads seem to be the natural sequence. It’s an insurmountably big area that Hollywood moviemakers are coveting anxiously. After all, the future of movie releases is expected to evolve as follows: theatres, internet downloads and then DVDs. 

Even Microsoft is getting in on the act according to the May issue of Business 2.0 by designing a software called Digital Rights Management (DRM), which secures a producer’s rights once their movies are released online. 

Broadband’s remarkable capacity in bringing about high quality video teleconferencing makes it a perfect enabler to particularly two fledgling fields: e-learning and telemedicine. Indeed, with teleconferencing making the “death of distance” a reality, it is simultaneously democratizing many services, by transforming them from exclusive into inclusive. 

The most advanced surgical procedures can be carried out in a destitute hospital in rural Upper Egypt, under the supervision of acclaimed world experts in Britain or the US. 

The same is true about e-learning. The two-way communications made available by broadband is facilitating online learning very close to the real classroom experience. 

To make its model more viable to succeed, one Egyptian company, OstazOnline, has recently started to give broadband (DSL) connections as a free bonus to customers who pay a monthly subscription fee to its online interactive private lessons. It remains to be seen whether the company’s model will succeed. But the company’s grasp of the technology essentiality for business is apparent.

Broadband is branching out at high-speeds in more ways than one. A study by Brookings Institution (US) reports broadband-related businesses to have added about 1.2 million jobs in the US alone. More so, US economists estimate these businesses should add $300 million to $500 million annually to the country’s economy. 

Finally, as broadband gives a big boost to online gaming, a business alone looking to reel in $2.8 billion in 2005, it further proves it’s a technology with vast reaching potential.

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