The TechCo Transformation. Expert Talk About Redefining Telecom Business Models Across MENA
The year 2026 is considered a pivotal year in the history of the digital development and telecom transformation Egypt, and by extension the MENA region.
Egypt can no longer be regarded merely as a transit route for subsea fibre carrying global data. Rather, it is emerging as a data centre hub for high performance computing and artificial intelligence, as well as a preferred location for sovereign data management. Having gained years of experience with the Digital Egypt 2030 initiative, the conversation around ‘Digital Egypt’ has moved on from talking about connectivity and the digital economy to more serious and strategic levels focusing on national security and monopolies and their impacts on the economy.
The digital economy has a “nervous system” that must be understood and developed. In this episode, the discussion revolves around the infrastructure of the digital economy and delved into the details of the geographical concentration of the greater Cairo data center cluster, and the need to disperse some of these centers to Upper Egypt and the Delta in order to meet the strategic needs of the era.
We gathered with Ahmed ElSobky, CEO of ACACIA Integration GmbH (Germany), an elected board member of the Chamber of Industry for Information and Communication Technology, to touch upon the various layers of the infrastructure of the digital economy in order to understand the underlying logic of the digital economy. Our session is an attempt to explore how the adoption of IT initiatives is finally moving beyond traditional IT, enabling Egypt to break away from non-competitive paths and become a more innovative, stable, and digitally sovereign nation
Mr. Ahmed El Sobky is an elected board member of the Chamber of Industry for Information and Communication Technology, part of Egypt’s Ministry of Communications and Information Technology (MCIT). With over 30 years in ICT, he leads ICT market development and the establishment of new Technology Parks in Egypt.
Ahmed El Sobky is also a member of the Internet Security Workgroup at the Academy of Scientific Research and Technology and contributed to drafting Egypt’s Cyber Security Law.
Introducción
Anastasiya: Greetings everyone episode podcast where we’ll take a deep dive into the mana and GCC telecom landscape with a special focus on trends of telecom in infrastructure development technology adoption and business development. So to uncover all of the things I’ve mentioned, we’re joined by special expert Ahmed ElSobky, with a deep understanding of the field of tech innovation, the CEO of ACACIA Integration, an elected board member of the chamber of industry for information and communication technology. So greetings. Thank you so much for joining us today.
Ahmed: Thank you very much. Thank you for inviting me.
Anastasiya: It’s a pleasure to have you here. Joining us as well is our expert, Iván Moroz, who possesses extensive experience in digital transformation. He brings deep expertise in helping telecoms and ISPs build smarter, more connected service ecosystems. To ensure we get straight to the insights, let’s move directly to the questions. First, could you provide a brief overview of the IT sector? How has the ICT landscape in the MENA and GCC regions evolved over the past five to ten years? We know it has been a period marked by major milestones; perhaps you could also share how you and your team were involved in this process.
Ahmed: Thank you very much. Let me say that our area has depended on ICT for a long time. There are many digital transformation programs all over the Arab world, the MEA, and the GCC. The market started to shift from basic services into value-added services over the past five to ten years, so we have begun to invest heavily in IT. These large-scale projects are government-driven. There is a lot of adoption of artificial intelligence applications, alongside 5G tools to expand mobile coverage to every part of every country. We are also focused on creating a healthy ecosystem for startups and building technology partnerships with providers from all over the world. This is, in a nutshell, what has happened during the last decade.
Government Leadership: The Catalyst for National IT Adoption
Anastasiya: You also mentioned government-led initiatives. Did they play the major role in the development and adoption of all these technology services? And when it comes to partnerships with technology companies, do they have the lead role? I’m interested in how exactly they impact the IT sector more broadly.
Ahmed: Governments all over the world are the biggest consumers of any technology, not only ICT. In our area, they are the owners of the main ICT infrastructure. This means major telecom operators are either totally state-owned or are joint ventures between the government and private sector providers. Therefore, governments are the key to digital transformation in our region. They are now the anchor customers for IT solutions, shifting from simple projects to value-added ‘as-a-service’ models.
Most governments are now planning for ICT-as-a-Service across many applications and are depending on the cloud. Consequently, many countries are establishing their own data centers or cloud centers, often with international service providers. In addition to using AI, they are investing heavily in cybersecurity to secure these systems. They are also strengthening the ecosystem by investing in human resources, because you cannot have big projects without the talent to manage them. That is the role of governments nowadays in a nutshell.
Anastasiya: The role of the government is so central, and as you mentioned, trends like AI and value-added services are driving the entire industry forward. But specifically for these coming years, what are the primary objectives for telecoms and ISPs? Out of all these trends, which ones are they prioritizing as they plan for the future?
Ahmed: I think that AI-driven networks, which reduce costs and enable smart operations, will be one of the most important trends. Additionally, digital service platforms will transform carriers into strategic digital partners. We need infrastructure build-outs to support rising traffic and quality demands, and analytics services to unlock new revenue from data insights. Network modernization, which retires old technology to improve efficiency, is also key. Hybrid connectivity, using satellite and wireless, will expand service coverage across the region. Because large parts of the Arab world are desert, cable connectivity is often not cost-effective, making satellite a great solution. 5G will drive this extensively; in fact, Egypt finalized 5G licenses for its four mobile operators last week. Some countries are even preparing for the era of 6G. We have just started with 5G, but others are already planning for 6G to ensure they can cope with the next innovation wave.
The Foundation: Egypt as a Global Digital Gatewa
Ivan: Mr. Ahmed, I recently heard about the major AI event in Egypt – AI Everything MEA. Can you share some insights on what that event meant for the region? Is Egypt positioning itself to be a primary hub for artificial intelligence? I was surprised because it seemed to be the first event of its kind at this scale. Does this mean the government is ready to start deploying AI-driven solutions across its own departments and services?
Ahmed: Egypt is the region’s leader in human capital for the ICT sector, serving not just the Middle East, but Europe and the Southern Mediterranean as well. Our universities graduate approximately 50,000 to 60,000 ICT specialists every year across various disciplines. Because of this talent pool, Egypt has become a strategic hub for multinational corporations; many global giants have established their Middle East R&D and development centers here.
As a result, a vast array of ICT products are now ‘born in Egypt.’ Some come from homegrown Egyptian companies, while others originate from multinational R&D hubs. The AI wave is no exception. Take the French company Valeo, a world leader in automotive software; their R&D center in Egypt is one of their top two largest facilities globally, employing over 5,000 programmers and developers. Given that modern vehicle applications now rely heavily on artificial intelligence, Egypt is effectively at the heart of the next generation of mobility.
This is precisely why GITEX chose Cairo to launch its first Ai Everything MEA event. Egypt provides a robust foundation of over 3,000 software development companies, ranging from innovative startups to large enterprises, all increasingly focused on AI-driven solutions. I believe this explains why Egypt is the natural starting point for the region’s AI revolution.
Ivan: Yeah, I understand. So it means that the Egyptian government is ready for new technologies involving artificial intelligence in the near future as well.
Ahmed: Yes I know I know the Egyptian government is ready. Yes, it is ready. Whether they are ready enough or not, but the Egyptian government is trying to put some efforts in that track.
Anastasiya: Yeah, that’s so nice to hear. I actually see the correlation between so many technologies adopted in Egypt and continuing its development because of so many professionals who have graduated and prepared for this.
Ahmed: Yes. Our wealth is in the human resources of the Egyptian human resources whether they are in the ICT or any other discipline.
Infrastructure Resilience and the 2026 Energy Challenge
Anastasiya: It is fascinating to see such a strong trajectory, but as with any major evolution, there are inevitable challenges. I’m particularly interested in how these obstacles differ across the MENA and GCC regions. While they share a broad vision, do the challenges for telecoms and ISPs remain similar across borders, or is there a significant divergence between, for instance, a high-penetration market like the UAE and an emerging digital economy like Egypt?
Ahmed: One of the most significant challenges facing digital transformation worldwide is the digital divide. This divide exists in every country, regardless of how advanced they are; the real issue is the ratio of that divide. There will always be a gap between those with high digital literacy and those with less.
In my opinion, the digital divide remains the most critical challenge for our region. We see a clear distinction between urban and rural areas, as well as a generational divide between the youth and older populations. Interestingly, the gap between men and women is closing rapidly; in my view, that specific divide has become almost negligible in our sector today.
After the digital divide, the second major challenge is Ciberseguridad. This is a global issue, exacerbated by the widespread availability of dual-use IT tools. Because these tools are affordable, they can be used for both constructive and destructive purposes, making them a central component of modern warfare.
In our region, cybersecurity is no longer just a threat from the criminal underground; it is a fundamental element of a new war methodology. As the Middle East remains one of the most geopolitically sensitive areas in the world, both formal and informal groups are increasingly using cyberattacks as a strategic tool to destabilize or harass regional nations. This makes cybersecurity a matter of national security, not just IT management.
So that is the second challenge. The third challenge is the availability of human resources, specifically, the shortage and the slow rate at which newly skilled professionals are entering the labor market. This is a global issue, as educational systems often struggle to keep pace with the rapid evolution of ICT. On average, it takes three to four years to modify or develop a new academic curriculum. In that same timeframe, the ICT sector undergoes a total transformation, creating a significant mismatch between education and industry needs. To bridge this gap, we must prioritize ‘fast-track’ programs and strategic planning to ensure we have the skilled workforce required to drive our digital transformation projects forward
Financial availability remains a significant hurdle for digital transformation. There is a clear fiscal disparity in our region; not all countries possess the budget surpluses required to aggressively push these initiatives. Beyond the initial investment, we must consider the immense operational costs. As we deploy energy-intensive, AI-driven data centers, our demand for electricity will skyrocket.
Supporting this infrastructure requires the establishment of new power stations—whether traditional fuel-based plants or renewable sources like wind, solar, and nuclear. These energy projects require massive capital investment. The looming question is whether every country in the MENA region is prepared for such a financial commitment, or if they have an alternative strategy in place. In my view, this intersection of finance and energy infrastructure is the ultimate challenge for our digital future
Data Sovereignty and National Security
Anastasiya: That leads to a very specific but critical question regarding cybersecurity. Are telecom and ISP professionals in the region shifting toward on-premise solutions for data-sensitive services, or is there still a preference for the public cloud? Given the rise of data residency laws and the need for ‘sovereign cloud’ environments in 2026, how are they balancing the scalability of public platforms with the security of on-premise infrastructure? Is there a clear preference, or are we seeing a move toward hybrid models?
Ahmed: In my view, we must differentiate between two major user categories. For the private sector, particularly in non-critical areas like e-commerce, storing data on public clouds, even those hosted outside the country, is common practice. However, when it comes to sensitive information, the rules change.
For sectors like banking, healthcare, and any financial services, as well as critical government applications involving citizen data, the requirements are far stricter. Most countries in our region have established regulations mandating that this data be stored in-country. Consequently, these workloads are typically hosted on-premises or within a ‘Sovereign Government Cloud’ managed by state organizations. This ensures that the most sensitive data remains under national jurisdiction.
The Business Shift: From Connectivity to Value-Added Services (VAS)
Ivan: What about video surveillance? Do the same data residency rules apply? We know that many MENA and GCC countries restrict the transfer of surveillance data outside the country. Do you think providers can still use public clouds, or is ‘in-country’ storage now a strict requirement for VSaaS projects?
Ahmed: In my opinion, video surveillance is exceptionally critical and sensitive. These systems provide a wealth of data that goes far beyond simple imagery; they offer insights into traffic patterns, vehicle volumes, and even driver behavior across a city or nation.
Because this information is vital for national security, most countries mandate in-country hosting. In fact, many governments require this data management exclusively by national authorities. Authorities are increasingly cautious about this intelligence being stored abroad. As the analysis of such data from rush-hour dynamics to behavioral trends is now considered a sovereign asset that must be protected from external access.
Ivan: I recently spoke with Telecom Egypt at Capacity Middle East, and they highlighted their major data center in 6th of October City. It is currently the largest international data center in the country. By hosting global players like Amazon (AWS) and potentially infrastructure partners like Hikvision, they are effectively implementing the ‘in-country’ hosting model we discussed. This infrastructure ensures that even when using global platforms, the data physically remains within Egypt’s borders, satisfying both national security requirements and local data residency laws.
Ahmed: While Telecom Egypt’s Regional Data Hub (RDH) is a flagship, we must acknowledge that it is part of a broader, yet concentrated, ecosystem. Major facilities from Vodafone, Raya, and the GPX Tier 4 center in New Cairo (a vital joint venture for the financial sector) form the core of our current capacity.
However, a strategic challenge remains. Almost all this infrastructure is concentrated within the Greater Cairo area from 6th of October in the west to the Fifth Settlement in the east. Even the landmark Governmental Cloud Center, which opened in April 2024 on the Ain Sokhna Road, remains tied to the capital region. For Egypt to truly mature as a digital hub, we need to expand this capacity beyond Cairo to ensure regional redundancy and support the high-demand ‘data center industry’ our digital transformation requires.
Looking ahead, Egypt must move beyond the ‘Greater Cairo’ model and develop regional data centers across the country. We need a decentralized strategy with hubs in Upper Egypt and the Delta to provide load balancing and reduce network congestion.
This is especially critical as we move into the next phases of the Universal Health Insurance (UHI) project. As this system rolls out to more governorates, the sheer volume of sensitive patient data and real-time medical applications will require localized storage and processing. We cannot rely on a Cairo-centric infrastructure to serve a nationwide health system; we need data centers in every major regional city to ensure the low latency and reliability that life-critical services demand.
The Paradigm Shift: Winning the B2G and B2B Markets
Ivan: So it can be a good investment opportunity for international companies.
Ahmed: When it comes to international providers, the strategy is entirely different. For global companies, data centers must be positioned in close proximity to the subsea cable landing stations either near Alexandria on the Mediterranean or along the Red Sea coast.
Egypt currently operates ten landing stations, split between these two coasts. To truly leverage this, we need ‘International Data Center Parks’ that act as direct hubs for these cables. This was our vision back in 2017 when I was Chairman of Silicon Waha. As the largest operator of technology parks in Egypt, we planned an international data center park near Alexandria precisely to capitalize on this geographic advantage. Positioning infrastructure at these four key maritime gateways is the only way to transform Egypt from a transit corridor into a global data destination.
Ahmed: So that this is a dream. I hope it will be true one day very soon. Thank you.
Anastasiya: That’s a very fair point. While we’ve discussed infrastructure and the financial barriers to investment, I suspect the primary solution isn’t just building more hardware. It seems the key lies in Value-Added Services (VAS). These services aren’t just an add-on; they are the most effective way to monetize the infrastructure already in place. Looking at global trends, what are currently the most popular services that telecoms and ISPs in our region are adding to their portfolios to drive this growth?
Ahmed: In my view, the monetization of anonymized data strictly compliant with the Egyptian Data Protection Law is one of the most significant revenue streams available to these companies. By analyzing vast datasets to extract statistical insights, operators can provide high-value analytics to service providers and retailers.
In this context, the cloud is more than just storage; it is a platform for monetization. It is important to note that in Egypt, we don’t have independent ISPs; instead, operators hold integrated licenses to provide both voice and data services. While this consolidated model is common in Egypt and several other countries, it differs from regions where ISPs operate independently from telecom carriers. Regardless of the model, the goal remains the same: turning raw data into actionable intelligence
In summary, cloud-based services and the Internet de las cosas (IoT) represent the next frontier for telecom monetization. IoT applications, ranging from smart gates and surveillance to day-to-day automated activities, are becoming essential to modern infrastructure.
Furthermore, we are seeing a significant move toward Managed Private Networks y IP Telephony for both government and large private organizations. Instead of these entities making massive capital investments to build their own internal networks, telcos and ISPs can provide this as a service. By installing a managed private network, we can link an organization’s branches nationwide through a single, secure infrastructure. This ‘as-a-service’ model is a powerful monetization stream that provides high value to the client while ensuring recurring revenue for the provider
A competitive telecom market is a primary driver of national economic health. Our digital strategy should focus on expanding the overall ecosystem; as we enable more businesses and government sectors to undergo digital transformation, the demand for telecom services increases proportionally.
Ivan: In short, supporting the national digital agenda is the ultimate growth strategy. Expanding the ecosystem creates a larger market for everyone, ensuring that the infrastructure we build today is fully utilized by the digital economy of tomorrow. Thank you, Mr. Ahmed, for these invaluable insights
Conclusion: The Future of the Regional Digital Ecosystem
Anastasiya: Looking at the adoption of video surveillance, there are clearly challenges for both telecoms and system integrators. When building a rollout strategy, which segment should be the priority? Is it more effective to start with the B2B (Business-to-Business) sector, or is there a bigger immediate opportunity in the B2C (Consumer) market? Which group is currently showing the most interest and readiness for these advanced surveillance solutions?
Ahmed: I firmly believe that video surveillance adoption must be led by the B2G and B2B segments. B2C is not the priority here. For a technology as sensitive as surveillance to succeed in Egypt, it must first win the confidence of the government.
When the government adopts a concept, they create the necessary regulations to make it viable. This is vital in 2026, as we finalize our national data protection and cybersecurity standards. Without clear government-backed regulations, no one can operate effectively. Therefore, the strategy must be: convince the government first, let the regulations follow, and only then will the market have the clarity it needs to invest
Anastasiya: You’re right. I guess that’s kind of a final conclusion for all things we’ve covered today actually.
Ahmed: In my view, the primary focus for penetration should be the government sector. Beyond public streets, the government manages a vast array of facilities – hospitals, universities, and ministries – each with an extensive network of indoor surveillance. Currently, managing these disparate systems is a significant administrative ‘headache.’
The solution lies in a unified approach, where a specialized organization, either state-owned or a trusted private partner, handles this as a managed service. This would be a true paradigm shift for the government. To achieve this, the most compelling argument will be a rigorous Total Cost of Ownership (TCO) analysis. By comparing the cost-effectiveness of Videovigilancia como servicio (VSaaS) against traditional, fragmented on-premise systems, we can demonstrate how the government can achieve superior security, real-time tracking, and automated reporting while significantly reducing their long-term capital and maintenance costs.
Ahmed: To secure government buy-in, we must present a robust Total Cost of Ownership (TCO) Comparison Model. We need to demonstrate that whether we are managing 100 or 1,000 cameras, the ‘As-a-Service’ model is significantly more efficient than the traditional approach).
By providing a transparent mathematical analysis factoring in hardware depreciation, maintenance, energy consumption, and storage we can prove the superior cost-effectiveness of this modern business model. When the data clearly shows that the traditional way is three or four times more expensive over a five-year lifecycle, the decision to transition becomes a financial necessity rather than just a technological upgrade
Ivan: Thank you Mr. Ahmed. I hope to see you soon.
Anastasiya: Yeah. I also want to express my gratitude for you joining us today.
Ahmed: Thank you very much for this meeting. It has been a truly engaging session; the questions were challenging and provided a vital opportunity to generate new ideas, spark discussion, and explore the future of our region. I appreciate the depth of this dialogue and look forward to our future cooperation. There is immense potential across our region to explore together, particularly in countries currently embarking on their digital transformation journeys from the ground up. There is much work to be done, and I am excited about the possibilities ahead.
Things are changing rapidly in the digital world and this is just the tip of the iceberg of the transformative changes that will be witnessed in the MENA region.
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