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The Almighty Buck

Free Internet Access Is Profitable In Egypt 197

prostoalex writes "With the demise of free Internet access providers, it's interesting to see this model working in Egypt, where the state-owned telecom allows people to dial-up for free as long as they pay the regular phone access fees. Associated Press quotes the phone line charges being 25 cents per hour. The ISPs that promote free Internet access from Telecom Egypt are then given their share of the profit."
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Free Internet Access Is Profitable In Egypt

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  • by spakka ( 606417 ) on Monday September 09, 2002 @06:47PM (#4224012)
    more bloody pyramid schemes
  • Sounds like a pretty reasonable plan, all things considered. Too bad the US dosen't have anything like that.
    • Yeah gee, that would be nice. Because then my always on account would only cost me .25c x 24hr x 30 days (ave) = $180 a month. Thats a pretty sweet deal, I'd drop my DSL in a heartbeat!
    • Wow, if only we had a single monopoly that controlled all communications, why then we could have a free ISP (well free in the part that you are still paying for it with your phone bill.) Gosh, they have almost 900,000 of 63 million people online. That is over a full percent! Instead, we have all these greedy little ISPs running around charging people for service. Can any of you remember how great it was when ATT was the only company, and we didn't have all this annoying fax, cellular, nickel a minute LD stuff? It was like paradise on earth. I think we should all get off this open source wagon, and jump back on the one company ruling the world Bill Gates would like. For that matter, I am sure MS would be more than happy to give the US free internet access, if we gave them the monopoly of all software and internet publishing as the fee. Unfortunately, when you don't have one company controlling the entire market, it is really hard to rob Peter to pay Paul.
    • You should see the quality of the copper lines there :-)
  • Associated Press quotes the phone line charges being 25 cents per hour

    Need I say more?
    • If you had read the article (hell, the first damn paragraph), the actual internet service (dial-up) is free, not the phone call, THAT costs $0.25/hr
      • I did read it. It's no different then our system of charging a rate for phone access. If the phone company wanted to do this with internet access, they could, but they wouldn't.

        You know why? Because $0.25 an hour only takes 80 hours (2.5 hrs a day) to get to $20 a month, and that's roughly what internet service providers charge for unlimited service.

        so, no, i don't see what's so revolutionary about this. It is possible in our system, it's probably already been evaluated as a possible business and discarded due to its lack of feasability.
        • Yeah, but this is different from paying telephone fees PLUS Internet Access fees.

          Some of these commercials for free Internet here (like Juno and NetZero, for example) will say free but then have fine print that says something like "local telephone charges may apply."

          That's the point of this whole damn thing.
        • Absolutely right! Amen brother!

          This Egyptian style access is what we get in Ireland and it sucks. Works out much more expensive than the flat rate available in Northern Ireland and Great Britain (unless you use a tiny no. of minutes a month).


          to discover how bad value the "free" service is.

          Only thing it is good for is for visiting tourists with laptops who need no more than a telephone number to get internet access cheap as the natives
        • it costs 25c an hour to use the phone, it doesn't matter if you online or talking to a friend across town. free internet saves them the 20$ or whatever it costs there
          • local calling plus paying $20/mo for internet access still comes out cheaper for any serious usage. So the Egyptians are still getting screwed (then again, so is much of Europe).
            • depending on ware you live local phone calls cost as much as 30$ a month , ya local calling doesnt per min but you still pay for it, so basicly if you dont use the phone more then internet your paying 50$ a month, ehh cheaper then egypt by far but still
      • And I'm quite sure that in real terms, $0.25/hour to an Egyptian works out closer to something like $1-2/hr to you and I - if not more.
  • From what I hear, this internet access is absolutely unreliable. I wouldn't be too glad that it's profeitable since it's pretty easy to make poor service that you basically force everyone to use profeitable.
  • by nuggz ( 69912 ) on Monday September 09, 2002 @06:49PM (#4224023) Homepage
    Good idea, the phone company makes more money due to more phone usage.
    They just pay out a small portion for this, it is like quantity based discounts that other companys use.
  • Around the world (Score:4, Interesting)

    by Banjonardo ( 98327 ) on Monday September 09, 2002 @06:53PM (#4224053) Homepage
    Ig [], or Internet Gratis, is one of the biggest ISPs in Brazil, and it's free. It runs on the advertisements it displays.
    • Running Ads is not FREE. It just means they charge something that is much more valuable, time. You're paying with your viewing of the ads, and your patronage of the sponsors.

      I'd rather pay money.
      • Then you can get a nice firewall or browser plug-in that will block ad images and cookies. The page will look uglier, indeed, but it will save you hours of bandwith.
      • I'd rather pay money too. But I don't live in Brasil anymore and am blessed with a DSL connection that rules. I really pity my family when I go back, though.

        I'm pretty sure the ads are all on the log-on screen, but I can't recall. Besides, the way you get disconnected, you're probably logging on a lot.

    • I don't know what the moderators thought for this to be considered +3 funny, but that's another matter.

      I'm in portugal, and in here there are a lot of free ISPs that are paid by the phone companies. I don't know exactly, but I assume they get about 20-30% from the call fees. At night an hour costs about 0.60.

      The connections are mostly horrible. People can rarely connect at first attempt, and 3kb/sec is considered an excelent download speed from a 56k modem. We get what we pay for, I guess..

      And as they are free, one can keep several accounts on different ISPs, and use one at random, and hope that it works. Doesn't work? No problem, try another...

      But there are a lot of such ISPs..,,,,, etc... They are paid by the telecoms, and also offer free access as a teaser for their paid service, be it modem dial-up, isdn or adsl.

      I can't think of using such ISPs... they are slow, costumer support is inexistent, some don't even offer pop3 email... but they're as cheap as it gets... Most of my friends (about 95%) that are connected to the net use free ISPs. The others have cable for about 50 a month (tv, internet and phone).

      • I completely agree. Ig is inconsistent, boring, slow, and the ads in the log-on screen are annoying.

        Luckily I don't live in Brazil anymore, but I really pity my family members when I get back. *shrudder* You really get what you pay for.

    • Germany has, a 192 number (kind of like 900, minus the porn associations) that charges 1c/minute. Compared to the typical rate of $1/minute for per-hour Internet access (e.g., AT&T's low-usage plan), it's cheap. No contract required. From my experience, it worked well - I never got a busy tone and had 50+ kb/s almost all the time. No need to enter local dialing information, either, as the same number works all across Germany. (In general, phone costs in Germany are now significantly *lower* than in the US, for both mobile and land-line phone calls. DSL is also cheaper, at around Euro 33/month. Flat-rate modem dial-up is still rare, so there, the US rates compare favorably if you're online more than an hour a day.)
    • Re:Around the world (Score:1, Informative)

      by Anonymous Coward
      What's dumb about this thing in egypt is that it seems people think "gee, why doesn't that work in america then?".

      Simple. We pay a flat-fee for our telephone line. We use it as much or as little as we want. It's our phone line. We're paying for it every month.

      In a region where you have to pay per minute for phone usage, it's in the phone company's best interest to find encouraging reasons for you to spend more and more time on the telephone. This is just a service they can spend to get you to stay on. Sort of like BBS's of past where you paid for time on an account and then they installed MUDs and doorgames to make you spend your time up (and, thus, buy more time).

      In America, if you got the ISP access for free but had to pay for the phone time (forgetting the fact that a dial-up account is a horrible HORRIBLE way to live), it would cost a hell of a lot for. Since I tellecommute, this would be doubly so.

      Let us see. I wake up around 6am. Get online. Stay online until about 1am. Go to bed. Still am downloading/serving stuff for the five hours in between while I'm asleep.

      25 cents per hours. Six bucks per day. 186 bucks per month. Hm. I get 640k up and down on a DSL line with half a dozen static IP's and no limitation to what I can use it for (servers, web hosting, email servers - whatever I want to do) for about $135/mo.

  • 25 Cents US? (Score:4, Interesting)

    by drinkypoo ( 153816 ) <> on Monday September 09, 2002 @06:53PM (#4224055) Homepage Journal
    That represents a tiny pittance in our terms; You can get that much by finding pennies on the ground outside the supermarket.

    How much is that in terms of the average Egyptian's income?

    • Well, that's the point I was going to make. It sounds like the phone rates are pretty expensive in local terms, and they're using free dialup to sweeten the deal. As the article says, per-capita income is $3700/year. Their top export, after oil, is t-shirts.

      Syria seems to charge 2 cents per minute. I'm not allowed there, and my familiarity with the country is limited to being shelled and rocketed by them when I was little, but I certainly doubt Egypt's middle class can afford much more.

      • 2 cents per minute is $1.20 per hour. The article says 25 cents per hour, not minute.
        • Gee... now, I'm an American, so my geography ain't near as bad as my grammar; but I don't think Syria is in Egypt. Someone correct me if I'm wrong here... ;)
          • Your point? Otter did not claim that Syria is in Egypt, nor did I. The example was used because they have similar income and standard of living (though Egypt is a little better off). However, Otter seemed to be implying that 2 cents per minute is somehow cheaper than 25 cents per hour, perhaps because he misread 25 cents per hour as 25 cents per minute.
            • Well, actually I forgot to multiply the 2 cents by 60, and compounded it with some sloppy syntax that does kind of suggest Syria and Egypt are the same place. Forget that whole paragraph.
          • Gee... now, I'm an American, so my geography ain't near as bad as my grammar; but I don't think Syria is in Egypt. Someone correct me if I'm wrong here...

            From 1958 to 1961 the two countries came together under one flag as the United Arab Republic, if that makes you feel any better.

    • Re:25 Cents US? (Score:3, Informative)

      by Drawkcab ( 550036 )
      Their per capita GDP is $3000 per person, about 1/11 of the US, and the distribution of wealth/income is not unreasonable. So lets say that is the equivalent of $3/hour in terms of local purchasing power. That compares favorably to the way dialup ISPs used to work before flat rate plans became commonplace, and they are not committed to any monthly bill, they only have to pay for what they need. Internet Cafes are also popular in Egypt, another way that the general population has affordable access to the net.
      • Their per capita GDP is $3000 per person, about 1/11 of the US, and the distribution of wealth/income is not unreasonable.

        I'm not sure what you mean by ``not unreasonable'', but I'm not going to get into what I consider a reasonable way to distribute wealth ;) I assume you meant that it's comparable to the U.S., since you used the ratio to extrapolate. Having lived in Egypt for nearly three years in the late 1990s, I can categorically say that the distribution of wealth is far more uneven than even the U.S.'s. As some reference points, a friend of mine earned circa US$70 (seventy dollars) per month from his job as an instructor at University of Alexandria -- and that's with a master's degree in English. Pita bread cost less than two cents U.S. per piece at the bakery, and you could feed a family (on bread and beans) for less than a dollar a day.

        Put in that context, a quarter-dollar an hour is a lot of money.

    • its a lot. from a previous article i'm too lazy to search for, they were offing downloads of songs for 50c or something, and that ended up being like $10. so 25c is probably equal to $5
      • The Egyptian Pound (LE) had been pegged at almost exactly 1/3 of a dollar for a long long time, but I look now and see that it's shot up to $1 = 4.65LE. Thus 25 = 1.15LE (approx). It's been about 10 years since I lived there... what does an Egyptian Pound buy you these days? Anyone on the ground in Cairo care to comment?

        Looking for current data on income, the world bank cites a figure of $1,490 [] for Gross National Income per capita in 2000. So, that's about 6700LE. Africare says it's more like $3,420 [] (=15,903LE), but that's "real GDP per capita."

        Getting useful numbers is tricky, especially when you're talking about a country like Egypt that has a vast off-the-books economy going on.
  • At $ 0.25 per hour, I would be paying about $3/day ~ $90/month. Right now I pay about $70/month for unlimited usage.

    Americans hate pay per use pricing schemes. Notice how all of the cell phone companies have moved to flat rates for a large number of minutes .... it's because we like to pay for unlimited usage of things whether it be the internet, phones or sex.

    Okay, well we've worked out the first two at least.
    • According to the article (which you of course read), the $0.25/hr charge is for the PHONE CALL, not the internet service (which is $0.00/hr).
  • the state-owned telecom If I staretd a free ISP and the gov't subsidized me, yeah I'd be making a profit as well.
  • I would be willing to bet that is quite a bit more than the average Egyptian can afford. I dunno, I might be wrong. Still, for rudimentary text-only web, email, and Usenet usage, say 1 hour/day it would be quite adequate.
    • If you have a 24/7 need (ie, running a server) you probably won't use dialup anyway. Or do they not have broadband in Egypt yet?
      • If you have a 24/7 need (ie, running a server) you probably won't use dialup anyway.

        Although I 100% agree with you, I'm on 56gay and my line is up 24/7. I pay $178US a year. I can run whatever I want (yea, it's just a modem but, still...). I run SSH, my own mail, etc. And anytime anyone in the household sits down to a machine on the LAN, the Internet will be there. Anytime I need to check on my LAN or need a 100% external connection from work for testing or something, it's there. Granted I happen to have a pretty damn good ISP (I only get hung up on every 1.5 to 2 weeks (yes, seriously).

        The point is, what I pay a year is what (roughly) these folks over there would pay a month.

  • The U.S. has free internet access too. All you have to do is live in a college dorm at most large colleges.
  • Ummm how is .25 per hour free???? I'm sure if you call up the local bells they would love to implement a similar "free" system!
  • Successful in India (Score:3, Informative)

    by daaku ( 199603 ) on Monday September 09, 2002 @06:56PM (#4224073)
    The same strategy is being used in India, and its quite successful. Its not exactly free, as you pay for phone access plus more, but there's no account setup, username/password and so on. Its extremely convenient, you get charged for what you use with your phone bill.
  • This is the dominant mode of internet access. All (2 or 3) major ISP's allow free modem access, while you pay the cost of the telephone call (about 70 cents an hour evenings and weekends, 4 times that at other times)

    It is not bad, (no contract) but leaves a bit to be desired, and there is NO affordable broadband access
  • When I lived in the UK (mid to late 90s), there were plenty of free ISPs (including the national carrier). All worked on the same premise - the ISP get's a cut of the telephone call charge. Note that back in the old dart, local calls are timed, otherwise this would not work.
    • Indeed, while freeserve [] wasn't the first to use this model, they were the first to do it in a big way. Within a few months they became the largest ISP in the UK.

      One big advantage was that they didn't need to have a billing operation at all. Abuse was prevented by severely limiting what you could do if you withheld caller line ID. And they hijacked all outgoing SMTP. They didn't "officially" support Linux, but informally they did.

      It did seem to work well, and they were profitable within a year of starting up. Ultimately, their customers demanded "flat fee, toll-free numbers". Also freeserve got swallowed up by something that got swallowed up, and the people I knew who worked there said it no longer was fun to do so.

  • So basically in Egypt, the majority of people, who do not have computers, pay for the internet through normal phone usage, assuming they have phones. This must be true if there is no difference in the phone rate whether you're making a local call or using the internet. Why should people not using the internet provide cheap access for the minority who do? Also, as more people get computers in Egypt, won't the cost of phone service go up as more bandwidth is tied up. Incidentally, we do this in the US. We all pay a surcharge on our phone bills so schools can get cheap T1 access.
    • So basically in Egypt, the majority of people, who do not have computers, pay for the internet through normal phone usage, assuming they have phones. This must be true if there is no difference in the phone rate whether you're making a local call or using the internet. Why should people not using the internet provide cheap access for the minority who do?

      You've got it backward.

      Peak dialup internet usage comes about 4 hours later in the day than peak phone usage.

      So the Egyptian phone company has found a way to make use of excess phone network capacity that is required to accommodate daytime usage but which goes underutilized in the evenings.

      This would theoretically make it possible for phone rates to go down.

  • So basically you are paying for internet access, just in a different form.

    Move along folks nothing to see here.
  • don't privatize! (Score:2, Insightful)

    by Roadmaster ( 96317 )
    Kudos to the egyptians, now they only need to keep their telecom company state-owned; nasty things happen when you privatize those companies without adequate governmental regulation; witness what happened to the telecom companies in Mexico, Chile and perhaps other countries in south/latin america. They turned, overnight, into greedy monopolies which can't be stopped (here in Mexico, Telmex is running their competition, even the giants like Worldcom-backed Avantel and AT&T, into the ground via dumping and other monopolic practices); and the quality of service hasn't really improved. i'll stop ranting now :)
    • Do privatize! (Score:1, Insightful)

      by Anonymous Coward
      nasty things happen when you privatize those companies without adequate governmental regulation....[in Latin America] They turned, overnight, into greedy monopolies which can't be stopped"

      Isn't that what they were before privitization???? The problem isn't the idea of privitization itself, it is that there is too little of it. Monopolies exist because of government regulation that keeps the small fish out. We need to privitize with even less government regulation.

      "Telmex is running their competition, even the giants like Worldcom-backed Avantel and AT&T, into the ground via dumping"

      Dump on! This means the customers end up paying less.
  • Not big news (Score:4, Informative)

    by Stephen Samuel ( 106962 ) <samuel@b c g r e e n . com> on Monday September 09, 2002 @07:07PM (#4224151) Homepage Journal
    I remember similar things going on in England. As I remember it, there was a big fight going on about who should get what part of the reciprocal payments for customers using the service. This was a couple of years ago.

    The real fact of the matter is that the service isn't free.. It's just being paid for through your phone bill.

    Because I get my ADSL from my phone company (Telus) I can also pay for it through my phone bill... Does this mean that I'm getting my ADSL for free too?

    (at $40CAN/month ($25US) for 1.5megabit down and 500kbit up, some people might claim that I really do)

  • This will work in the U.S.... ... when we all agree to pay a per-minute charge for local phone calls.

    Wait? What's that you say? We all like paying a flat rate for unlimited local calling?

    Hmm.. I suppose this means this model will never work in the U.S. after all.
  • by aquarian ( 134728 ) on Monday September 09, 2002 @07:13PM (#4224186)
    One of the biggest enablers of commerce in the US is that we can just pick up the phone and yak without thinking about the cost. Letting your fingers do the walking can be quite expensive in many countries. While low cost internet access is a nice thing, low cost everyday phone service is far more important. I'll take free, unlimited local calling any day, then gladly pay $20/month for internet access if need be.
  • Not Free (Score:3, Interesting)

    by mc6809e ( 214243 ) on Monday September 09, 2002 @07:16PM (#4224201)
    This is a state-owned monopoly telephone system that is very profitable. In essence, the state is providing "free" internet access by over-charging everyone else for telephone service.

    This is really a strategy by the State of Egypt to keep itself firmly in control of the Internet in the country. The deals with local ISP's to split the money are just to ensure the ISP's loyalty. They are being bought by the state.

  • This is how internet access is in the uk for the most part, the options are usually:
    1. pay telephone calls + internet access.
    2. pay telephone calls & part goes to isp.
    3. pay fixed rate and phone calls are cheaper.
    4. pay fixed rate and calls are free.
    5. broadband access via dsl / cable modem.
  • When netoworks came to Egypt land,
    let us gratis surf,
    They raked in cash fist under hand,
    let us gratis surf,
    Go down, users,
    way down in Egypt's land;
    tell Tel'com Egypt
    let us gratis surf!
  • In Portugal it's the same. Free access, except you pay the huge cost of the phone calls to our evil monopolist phone company which then pays a percentage of the cost to the ISPs. The access is quite good, for a dial up, but we all know that dial up is a thing of the past so everyone's moving to cable and ADSL's monthly fee which is far cheaper for most users than our extorsionist monopoly's inflated phone prices. I had already mentioned all of this a long time ago in a past comment...
  • by afflatus_com ( 121694 ) on Monday September 09, 2002 @07:26PM (#4224264) Homepage
    Here in Ireland, all dialup Internet access is this type of "free", in which you are billed for the phone time online.

    For the phone company and ISPs, this "Free" Internet Access Is Profitable In Ireland, also.

    Few people like it, and would rush to support the other side of the fence, in which there is a flat rate of about $40 euro a month for dialup, and that is it (following the typical unmetered approach available in most of North America). An option of pay-for-phonecall is good, but when the phone company colludes with ISPs to make it the only option available, it cripples the country's online growth.

    The largest ISP in Ireland is IrelandOnline(IOL).
    The nexus of protest against this forced free-but-pay-for-the-phonecall scam is logically located at []
    • At least Ireland now has a reasonable phone system.

      As late as 1985, it took three manual operators to get a voice call through from moderately remote spots in Ireland to the outside world. Regular phone calls were still going through cord boards. But Telex, the teletype-based message system, worked well. Some people were putting in Telex terminals (big mechanical teletype machines) in farm houses in the middle of nowhere so they could communicate with their neighbors.

  • Poland (Score:4, Insightful)

    by jfedor ( 27894 ) <> on Monday September 09, 2002 @07:26PM (#4224266) Homepage
    In Poland, we've had "free" dial-up like this for about five years now.

    But I wouldn't call it free in the presence of people that still are in this dial-up hell if I were you.

  • How is this free?

    They still have to pay 25 cents an hour, and that is a lot considering how much average Egyptian makes.. So no its not free internet... Its like AOL merging with BellSouth or whatever Bell there is in your area and saying we offer free internet access as long as u pay Bell $$$ an hour..

  • We have such schemes in the UK too, infact they were once so popular that the telecom company was complaining about the overload to their exchanged at peak times. Nowadays while many users pay a flat rate per month, many light users still use the per-minute systems.
  • Slashdot == idiots

    Free internet access that costs 25 cents a minute? Is that free as in "we're uncommonly dull" free?
  • by hysterion ( 231229 ) on Monday September 09, 2002 @07:54PM (#4224396) Homepage
    Where have you been?!?

    It's not just Egypt, it's any place with no flat local phone rates, i.e. basically everywhere except North America . Example: it's the standard in Switzerland [].

    (See also Estonia [], Brazil [], Portugal [], India [], Ireland [], Argentina [], Guatemala [], England [], Poland [], ...)

    Slashdot editors need to get out more.

  • by evilviper ( 135110 ) on Monday September 09, 2002 @08:25PM (#4224554) Journal
    Free Internet can work anywhere that people are already paying per-minute for local phone calls. It doesn't work in the US where unlimited local calls are free.

    I think it would be more appropriate to call it "Free Internet Fails in USA, works everywhere else"

    Anyone know why Egypt is getting singled out?
  • Argentina has experienced the first wave of free ISPs that displayed ads to support themselves and they failed like almost everywhere else. Nowadays a new wave of free ISPs has arrived, completely free and adless. They support themselves by being tied somehow to other ISPs/Telecoms and by offering special content to their users (Where they display ads). ISPs here have special "reduced fee" telephone numbers which save you quite a lot of money if you stay connected more than 15 minutes. Free ISPs do not have this kind of services. So, they support themselves in part from the money that doesn't go to the "reduced fee".
  • 25 cents per hour?

    My local phone service provider [] wanted to get into the Cleveland, OH. market badly to offset Ameritech [] they made an offer I could not refuse:

    unlimited local phone service.

    10 cents local toll and long distance.

    call waiting included.

    caller ID included.

    800 number (if I wanted it).

    unlimited dial-up internet.
    At the time I got this, it was $25.99 per month. However, about 6 months ago, that price rose to $39.99 per month. But, I still pay $25.99 per month because the service said they would honor that deal as long as I do not cancel (according to them, I was a "good customer"). Even at $39.99, it is still a bargin!

    Even if I did not have this deal, I prefer an unlimited internet package so I do not need to worry about running up the internet bill. Screw the per hour toll!

  • Here [] is the TelecomEgypt page describing their service offering.

    It's 10 pt/6 minutes, or 1 LE/hour, which is $0.22 at today's exchange rate. If you're connecting between midnight and 8 am, it's only 75 pt/hour, or $0.16!

    So, what does a dollar buy you these days? With 07777777, it gets you over 4.5 hours of internet access. Thanks, GegaNet!

    My question is what kind of throughput can you get over the average Egyptian phone line? I somehow doubt that it's a solid 56K from most locations.

  • According to the Freedomhouse report [] Egypt has a pretty poor freedom rating.

The unfacts, did we have them, are too imprecisely few to warrant our certitude.