Cisco Egypt is planning to contribute to an investment fund for start-ups and entrepreneurship alongside a number of other international donors.
The fund will be managed by a company specialised in financial investments, General Manager of Cisco in Egypt and Libya Ayman El-Gohary told Daily News Egypt in an interview. The fund is expected to officially launch this year.
How do you view the communications market in Egypt at present?
Cisco has offered its services in Egypt for nearly 17 years and continues to expand its services in the market despite the political and security conditions over the past five years. This reflects the company’s optimistic outlook on investment opportunities in the Egyptian market.
The government also has a plan to offer a number of major projects, which represent investment opportunities for international companies in Egypt, such as the Suez Canal Area Development project, the new administrative capital, and automation projects for commercial registry and notary offices.
There has also been a recovery in the construction sector in touristic areas, such as the North Coast and the Red Sea, which represent investment opportunities for Cisco to provide communications and technology infrastructure services for those projects.
The Egyptian government also has a clear intention to employ technology services to push the growth of its economy. This was evidenced by President Abdel Fattah Al-Sisi’s visit to the Cairo ICT Exhibition in December, as well as continuous meetings with the Communications Minister.
What makes the Egyptian market attractive for investment?
The Egyptian market has a wide base of users with a population of 90 million, 50% of whom are youths, in need of communication and technology services, and the presence of labour that is well-trained or has the potential to be trained. This makes the Egyptian market a valuable source for technical personnel in the sector of communications and information technology in the Gulf and parts of Europe. This feature also makes the Egyptian market attractive for investment.
How many employees does the company have in the Egyptian market?
The company operates a branch in Egypt with about 80 employees and we have more than 200 partners and agents in the Egyptian market, including at Raya Information Technology.
We offer our network and data centre services to many actors, including the four telecom operators: Telecom Egypt, Vodafone, Mobinil, and Etisalat. We do the same for a large number of banks and most ministries rely on our services in the telecom sector.
What were the company’s growth rates locally in 2015 and what is the target for 2016?
Last year, the company witnessed a jump on the Egyptian market, where the volume of our business increased by 40% in 2015 compared to 2014. We expect this growth to continue throughout 2016 and anticipate a 10%-20% expansion before the conclusion of the first half of this year.
What are the reasons behind the growth achieved throughout 2015?
The Egyptian economy witnessed some stimulation last year thanks to the advent of stability and several projects presented by the government and private sector. The Egyptian market especially requires communications and information technology services, which represent an opportunity for growth.
What about financial indicators for the company?
Cisco Global was able to achieve revenues of up to $50bn during FY 2014/2015, which ended on 31 July 2015. The company is located in more than 120 countries around the world through representation or partner offices and employs approximately 75,000 people. The market value of the company is more than $130bn.
The company was recently ranked among the top 10 in the world, with financial liquidity estimated at $60bn.
Do you have plans to invest in the field of entrepreneurship in Egypt?
We are very interested in the field of entrepreneurship and start-ups, and based on this, we have set out a plan to contribute to an investment fund for start-ups in cooperation with several international donors. The fund will be managed by a specialised financial investment company and it is expected to be launched this year.
We have had an investment plan for this sector since 2011 but we were not able to implement the plan due to market deficiencies at that time. We are currently completing some formalities in preparation to launch the fund, which is expected to invest in developing start-up companies based on creativity and innovation in the field of telecommunications and information technology.
What are the challenges you see in the Egyptian market?
The dollar crisis, as well as the Central Bank of Egypt’s regulations on withdrawals and deposits, and paying the insurance value of imported goods represent the most prominent challenges, as well as a lack of clarity surrounding some laws governing the investment climate, including tax laws.
What are the main features of your strategy for the near future?
In the near future, we will focus on providing smart community infrastructure solutions in addition to Internet of Things solutions, which are expected to have an economic value of $19tr over the next 10 years, according to some reports issued by specialised research institutions.
The use of Internet of Things technology will help achieve financial savings for consumption. For example, the city of Barcelona saved approximately $50m during 2013 due to using Internet of Things technology for all services they offer in the city, including lighting, and traffic services.