Internet shutdown in Egypt has wider implications for telecoms industry

Angel Dobardziev, analyst.

AUSTRALIA: Press reports that Internet connectivity has been shut down in Egypt, and that mobile operators have been ordered to shut down services have several broad implications for the wider telecoms industry, and the Middle East in particular.

At a most basic level, it underlines the political risk of operating in the emerging markets for players as diverse such as Vodafone, Blackberry, and Google, which they have to weight against the undoubted growth opportunity.

More importantly, it is clear that the massive growth of mobile and internet services, while bringing massive productivity and social benefits to the region, has also brought a whole new level of social connectness, openness, information access, and aspiration. Particularly, in the younger generation, that goes against the more conservative and authoritarian tradition that has been the norm hitherto.

In this context, the telecoms boom in the region accelerated the clash between tradition and modernity, the open versus closed society, which we are now witnessing in the Middle East, and other places (e.g. China), which regimes are trying to contain.

All said, the genie is out of the bottle, and while some regimes may try, there is no way of reversing the impact communications have made on the emerging markets and their people. But as events in Egypt show, the road ahead may be rocky for all, including telcos and the people they serve.