Egypt: A computer in every home

In its effort to boost PC and Internet usage, the government is joining forces with the private sector. Vowing to put a combuter fi kull beit, or “a computer in every home,” a new venture called Centra Technologies is hoping to provide more affordable, locally manufactured PCs. The new company, which will begin its activities in June, plans to produce 150,000 machines in its first year.

Behind Centra Technologies lurk a vast array of big players, including Telecom Egypt (TE), Al-Ahram, of newspaper fame, and Dokki-based system solution provider Prosylab. According to Centra’s managing director Mokbel Fayyad, the largest shareholder is Prosylab, together with its owner Mahmoud Morsi who also holds private shares, although he declined to give an exact percentage. Banque Misr is also a shareholder, while the government reportedly has 35 percent of the whole operation.

Centra computers will be manufactured in three government-owned factories: Benha Electronics, which today mainly produces military goods; the Arab Industrial Organization; and the Armed Forces company, El Basariat. Two other local giants, Orascom and Baghat Group, will be involved in manufacturing and distribution.

Most components of Centra’s PC will be imported, since it is not possible to achieve a significant reduction in production costs without huge volumes, explained Fayyad. “Our PCs will be more affordable but not much cheaper, since we’re only using quality products – most of which are imported,” he said.

But the scheme’s main attraction lies in a payment plan to be offered in cooperation with TE. According to Fayyad, the national phone company is currently working out the details of a system by which PCs can be paid for in monthly, £E 100 installments, to be charged – here’s the twist – on the telephone bill. “That way,” said Fayyad, “it’s not a huge risk. Revenues are great, and everybody has a phone line.”

An earlier scheme, in which big companies like Compaq and Citibank offered installment plans, fell flat because few customers could pass the formidable credit and security criteria imposed by banks. “If it’s such a low sum paid via the phone bill, it will work,” said Mohamed El Nawawy, the chairman of ISP TE Data. “It’s definitely a push in the right direction for Egypt, as it will increase the use of Internet.”

Centra also hopes to impress customers with its quality of service. “We will set up support centers in all governorates that will be staffed by new graduates. We have full control of production and will offer full warranties on all our products,” said El Nawawy.

All machines will be installed with Microsoft’s Windows XP operating system. “It is important for Egypt’s reputation in the market. It does increase the price, but Microsoft has promised to cooperate as much as it can to keep the cost down for consumers,” Fayyad said.

Initially, three models will be introduced, ranging from those fitted with Intel Celeron processors and 1 gigabyte hard-drives, to Intel Pentium 4s with 40 gigabytes of disk space. If all goes according to plan, notebooks will be introduced at a later stage.

Copyright 2000 Business Monthly (American Chamber of Commerce in Egypt). This news item is distributed via Middle East News Online (MiddleEastWire.com) All rights reserved. May not be redistributed, published or used for broadcast without prior written authorization from Middle East News Online.