Destination Egypt: ITO-BPO Value

Proposition

March 2011

2 |

Contents

Egypts ITO & BPO Value Proposition

Proven Industry Track Record

3 |SOURCE: Analyst reports

Egypt ranks as one of the top five outsourcing destinations by

World wide rankings and Associations

Egypt was ranked as the number 1 outsourcing destination in Africa.Commonwealth Business Council and CyberMedia, 2009

Egypt further strengthens its position, ranking 4th on the Index.A.T. Kearney Global Services Locations Index, 2011

Egypt outsourcing destination of the year.European Outsourcing Association Awards, Brussels, 2010

National Outsourcing Association, UK, 2008

Cairo has once again been recognized as one of the worlds top offshoring cities, ranked 4th emerging city. Alexandria, also showed marked improvement jumping to 47th having only entered the top 50 last year.

Top100 Outsourcing Cities Global Services-Tholons, 2010

4 |SOURCE: A.T. Kearney Global Services Location Index 2011

In 4 years, Egypts position in the A.T. Kearney Global Services

Location Index improved by 9 positions to Rank 4th

1 Financial attractivenessSkills availability

Business environment

Egypt has improved by 9 positions in 4 years.

A.T. Kearney ranks Egypt

number 1 Global Service Delivery location in the EMEA region

India

2 China

3 Malaysia

7.01

6.49

5.99

4 Egypt 5.81

5 Indonesia 5.78

6 Mexico 5.72

7 Thailand 5.72

9 Philippines 5.65

15 UAE 5.41

24 Poland 5.23

35 Czech Rep

4.98

37 Morocco 4.96

2009 Ranking 2011 Ranking 2009 vs. 2011

11

5

6

3

2

7

38

30

32

29

4

1

5 |

Egypt is the pioneer in ICT in the Arab world

First Arabic

terminal world-

wide designed by

IBM for an

Egyptian

customer

Establishment

of IBM research

centre

Government push

to ICT sector by

commissioning

IDSC1 over-seen by

PM office

MCIT (Ministry of

Communications

and Information

Technology)

established

ICT export

revenues of ~USD

850 million p.a.,

goal of USD 1.1

billion by end of

2010

ICT history of Egypt (select milestones)

SOURCE: ITIDA team; MCIT; industry experts

NOT EXHAUSTIVE

1 Information Decision Support Centre

1970s 1980s 1990s 2000s

Egypt's key success factors for becoming a No.1 IT location

ICT innovation hub since the 1960s

Pioneer in localization (Arabization) gateway to the Arab world

Early and substantial commitment of Egyptian government to IT sector

6 |

ITIDAs strategy framework follows a holistic approach

to support all aspects of the offshoring industryNational education system and

research centers

Insourcing and mega

companies (FDI)

Local market

demandExport growth

Enterprise capacity building

Innovation, research and development

Human capital

development

IT industry

intelligence

Real estate

(infrastructure)

Legislative

environment

Telecommunications infrastructure

Multinational support

ITIDA responsibility

Essential enablers

SOURCE: ITIDA

USD 1.1 billion in Exports in 2010

Unique focus

placed on ensuring

vibrant links with the

education system

7 |

ITIDA will build further upon these through 3-pronged focus in

next 10 years ICT for ICT

Innovate (high-end product development and R&D services)

Leading hub for high end ICT-

based Innovation (e.g., R&D,

product development) with

potential themes like

Engineering services (e.g.

embedded systems software,

MEMS, Product design, Plant

engineering)

Product R&D

Mobile applications

(including gaming)

Clinical research

Create sustainable ecosystem

for high end ICT services

delivery

Innovation

Transform

Egypt as a leading regional/

global O&O destination

building on its current

capabilities and expanding

horizon

Building upon existing services

lines

BPO - Multilingual delivery

location (voice and data);

F&A

ITO - Technical support; PIS

Leadership in emerging

segments (e.g., Travel and

hospitality, healthcare)

Transform O&O supply engine

to achieve scale

Catalyze

Catalyze injection of IT into

government/private entities

Improved quality and

productivity of services through

IT enablement/outsourcing in

domestic economy

Key themes to pursue

Cloud computing

Healthcare

Education

8 |

6 strategic focus areas for Egypt in ITO, broader play in BPO

Strategic

focus areas

for Egypt in

ITO

Technical

support

Remote

infrastructure

management

Application

development

and main-

tenance

Testing

Package

implementation

Engineering/

R&D

SOURCE: ITIDA

Broader play in

BPO across

industry verticals

(eg: Banking,

Telecom) and

functions (eg: F&A,

help desk)

9 |

Egypt provides unique advantages as an offshoring location

for IT and business process outsourcing

Structurally

low cost of

operations

Quality and

scalable

infrastructure

Conducive

business

environment

Government

Support

Abundant

talent supply

10 |

Egypt provides unique advantages as an offshoring location

for IT and business process outsourcing

Structurally

low cost of

operations

Quality and

scalable

infrastructure

Conducive

business

environment

Government

Support

Abundant

talent supply

11 |

Talent Pool with a Heritage of Mixed Culture

670 BC 332 BC

30 BC525 BC

Assyrians

Persians

Ptolemaic

(Greek)

Roman

642 AD

Islam

1260 AD

Mongolians

1517 AD

Turks

(Ottoman)

1798 AD

French

1805 AD

Mohamed Ali Modern History

1883 AD

British

Colony

1922 AD

Independ-

ence

1953AD

Egyptian

Republic

12 |

Number of graduates p.a. across offshoring destinationsThousands, 2009

Jordan

Tunisia 58

Morocco 63

Czech Republic 70

Hungary 72

Romania

Malaysia 166

Egypt

Philippines 410

Poland 505

Brazil 860

Russia 1,870

India 3,245

China 5,600

Country

Egypts graduating pool of ~330,000 students is one of the

largest among low cost offshoring destinationsILLUSTRATIVE

SOURCE: MCIT data; LRI analysis; Egypt CAPMS; UNESCO statistics

Third largest talent pool amongst

offshoring destinations in EMEA region.

Largest talent pool amongst Arabic

speaking countries.

13 |

Egypts large graduating talent pool has multilingual spikes in

English and Western European languages (1/2)

1 Berlitz level 4+ indicates ability to function in common personal and professional situations

SOURCE: MCIT data; AC Nielsen language study 2009

Other

Health

Sciences and technology

Engineering

Arabic studies

Law

Arts

Education

Commerce

~330

26

29

1716

29

39

49

59

66

Total suitabletalent pool ~ 31,000

Spanish ~ 300

German ~ 800

Italian ~ 1,500

French ~ 3,000

English ~26,000

Annual Number of Graduating StudentsThousands

Annual Suitable and Willing Graduates

Pool for Offshoring Industry 1

Number of graduates

14 |

Total relevant

talent pool~18,500

Arabic only ~13,100

German ~150

French ~250

English ~5,000

Annual relevant talent pool with language

capabilities Number of graduates by language1

~1,000~1,000

~3,000

Computer science

Communications

IT

Electrical

Mechanical

Civil

Others2

~18,500

1,500

~6,000

~3,000

~3,000

Annual relevant pool for RIM, PI, ADMNumber of graduates by faculties

RIM, PI, ADM

1 Berlitz level 3+ for English and Continental European languages; indicates ability to handle tasks in common personal and professional situations2 Includes architecture, construction, chemical, and others

SOURCE: MCIT data

Relevant talent

pool out of 33,000

Engineering &

Sciences students

Egypts large graduating talent pool has multilingual spikes in

English and Western European languages (2/2)

15 |

Estimated number of

trainees (2010)XXXX

1 Includes 3rd and 4th year students2 Scaling up to 10,000 students over the next 4 years to cover all students in faculties of commerce, engineering and computer science.

Programs launched Programs in design phase

MCIT professional training program

3

~ 5,000~ 5,000

MCIT customized training program

4

~ 500 ~ 500

EduEgypt (ITO program)

2

~ 1,000~ 1,000

EduEgypt