Assessing the economic impact of the Egyptian uprising
Issue 14, Summer 2011
A graph showing the precipitous decline in Internet activity in Egypt on Jan. 28
“I heard em say the revolution won't be televised; Aljazeera proved em wrong, Twitter has him paralyzed.” So begins the hip-hop song that became an anthem of the Egyptian revolution, highlighting the key role Al Jazeera played in covering the uprising and the critical importance of Twitter to activists who helped organize the protest that led to the ouster of President Hosni Mubarak after 30 years in power. Egypt’s youth movements sparked the nationwide protest, inspiring people with Facebook pages, communicating via SMS and posting blogs with pictures and video of people in the streets for all the world to see. Mubarak tried shutting down Twitter and Facebook, but that only proved he was scared of the 4 million Egyptian on Facebook. His next move took the world by surprise.
Shortly after midnight on Jan. 28 Mubarak took the radical step of shutting down the entire Internet and blocking mobile services. Weeks earlier Tunisia’s deposed president had blocked access to popular social media sites Twitter and YouTube, but nonetheless ended up fleeing to Saudi Arabia. With a population of about 80 million and a median age of 24, Egypt has nearly 4 million Facebook users, representing about 5 percent of the population. Facebook exploded in 2008 with the April 6 Youth protests and has doubled in the past year. Google, Facebook and YouTube are the three most visited sites in Egypt, and have been essential to digital activism in the region since Blogger became popular in 2005. In 2008 the April 6 strike page garnered 70,000 followers in about two weeks. In the first 24 hours the Khaled Said Facebook page had 56,000 followers. Twitter hashtags #jan25, #Egypt and #Mubarak were all worldwide trending topics for the first several days of the protests. And becoming a trending topic helps generate media attention, even as it helps organize information. The power of social media to help shape the international news agenda is one of the ways in which they subvert state authority and power.
Such a broad blackout in such an economically and politically powerful country is unprecedented, and raises significant concerns about the risk of doing business in countries where authoritarian rulers are deeply unpopular. Although Burma and Iran have attempted to do the same, Egypt’s successful blockage was a wake-up call to experts and officials who thought such a possibility was off the table.
Egypt has at least 200 ISPs according to official figures, but state-owned Egypt Telecom owns the country’s largest ISP, TE Data, which owned 70 percent of the country’s Internet capacity and had a 61 percent market share in 2010. On Jan. 27 it and the three other leading ISPs (Etisalat Misr, Link Egypt, Raya) were ordered to cut off access to the Internet and shortly after midnight they complied, casting Egypt into virtual darkness. The ISP Noor, which has a reported 8 percent market share, managed to stay online through Jan. 30 before caving. The speculation that this was because Noor serviced major international clients including Coca-Cola and ExxonMobil is well-founded. Since the government also owns the portals and pipelines that bring the Internet into Egypt and allow information to spread across the land, it was able to essentially block the Internet’s point of entry.
The government maintained the Internet blackout for five days, and the OECD estimated the cost at about $90 million, or $18 million a day, between 3 and 4 percent of the country's GDP for the period of the blackout.
Mobile phone operators were also targeted. Vodafone and France Télécom, a major shareholder in Mobinil, said the Egyptian government told them to shut off service. Their decision to comply generated enormous amounts of negative press around the world. Although they spoke out against the orders, they said they were hamstrung by national regulatory requirements. On Feb. 3 the companies were forced to send out pro-Mubarak SMS messages in a bold political commandeering of a private company that could inspire future interventions and represents a worrying intrusion into the freedom of companies to control their infrastructure, network and public perception. Vodafone also had to shut its call center in Egypt, hire 100 workers in New Zealand to handle the volume of calls, and fly 25 employees and their families out of Egypt.
The intrusion of the state into the communication networks of private, multinational corporations should raise a red flag for businesses in the rest of the region and beyond, wherever authoritarian governments and monarchies are having to contend with their own domestic uprisings.