US embassy cable - 02AMMAN6250

UNCLAS SECTION 01 OF 03 AMMAN 006250 
 
SIPDIS 
 
DEPT PASS FOR ANE/MEA KIM FINAN 
USDOC FOR 4520/ITA/MAC/ONE/PAUL THANOS 
USDOC FOR 6400/ITA/TD/OEC/KFERGUSON 
TREASURY FOR PIPATANAGUL 
TDA FOR SIGLER 
 
E.O. 12958: N/A 
TAGS: ECON, ECPS, EAID, JO 
SUBJECT: ICT PROGRAMS IN JORDAN 
 
REF: A) AMMAN 6060 B) STATE 203796 
 
1.  (U) Per REFTEL request, we are providing information on 
telecom regulation, internet, and other IT-related questions 
posed, as well as a description of ICT projects related to 
education, business skills, business development, and 
e-government in Jordan. 
 
----------------------------- 
THE TRC: REGULATOR-IN-WAITING 
----------------------------- 
 
2.  (U) Under the terms of the new Telecommunications Reform 
Law passed last year, the Telecommunications Regulatory 
Commission (TRC) becomes the sole regulator of telecom policy 
in Jordan, now effective November 1, 2002.  As of that date, 
the five member commission will be totally independent of the 
Ministry of Information Communications and Technology 
(MOICT).  The commissioners work full time, and are appointed 
by the Council of Ministers under the recommendation of the 
Minister of ICT, currently Dr. Fawaz Zu'bi. 
 
3.  (U) Unfortunately, various political and operational 
considerations have delayed the appointment of the five 
members, originally expected to have been made early in the 
spring of 2002, until very recently, with a fifth slot yet to 
be filled.  According to MOICT Policy Advisor Roger Guichard, 
the TRC will be headed by Muna Nijem, former Director of Next 
Generation Business Technology at Motorola.  Nijem will be 
joined on the TRC by former TRC Director Mamoun Balqar, MOICT 
Chief Information Officer Mahmoud Khasawneh, and Fadi Kawar, 
Executive Director of Talal Abu Ghazaleh and Co.  The fifth 
commissioner, designated as a lawyer slot, will be filled by 
October 30, an earlier appointee having removed his name from 
consideration. 
 
4.  (U) According to Guichard, Bob McDonald, formerly an 
attorney for Regulatory Affairs for Sprint, has been hired to 
work with the TRC on regulation and policy with USAID 
funding.  Guichard said that now that the TRC is finally a 
full-time, independent board, it can proactively address the 
many challenging issues on its agenda, such as market 
liberalization for mobile in 2004 and fixed-line in 2005, 
interconnection rates, voice-over Internet Protocol, and pay 
phone connection rates.  (Note: Guichard told us that Allo, a 
major pay phone provider in Jordan, had its service cut off 
by Jordan Telecom October 1 over a payment dispute.  As the 
provision of this service is a public policy issue, the TRC 
will step in and attempt to bring the parties to resolution. 
End note) 
 
--------------------- 
Telecom Privatization 
--------------------- 
 
5.  (U) Having begun the privatization of Jordan Telecom in 
2000, with the support of the USAID-funded Executive 
Privatization Commission, by selling 40% of the company to 
France Telecom, 8 percent to the Social Security Corporation, 
and 1 percent to the Jordan Telecom Employee Provident Fund, 
the Government recently put up an additional 15% for sale via 
an Initial Public Offering that closes on October 24. 
Speculation on whether or not France Telecom will exercise 
its option to buy a further 11% of JTC has been tempered by 
the French company's announcement of a $12 billion loss for 
the first half of 2002.  Under its new management, JTC has 
succeeded in substantially reducing waiting time for new 
lines and has expanded penetration.  Jordan Telecom's 
fixed-line monopoly is set to expire in 2005, and a current 
TDA-funded feasibility study is expected to show the need for 
another market entrant to stimulate competition, improve 
quality, and reduce costs, among the highest in the region. 
Likewise, another feasibility study is likely to demonstrate 
room for a third mobile operator, along side JT-owned 
Mobilecom and Fastlink, a subsidiary of the Egyptian 
conglomerate Orascom.  Mobile phone penetration has overtaken 
fixed-line use in Jordan, with over 1.1 million mobile phones 
currently in use and demand increasing.  The mobile duopoly 
expires in 2004. 
 
--------------------- 
COMMUNITY ICT CENTERS 
--------------------- 
 
6.  (U) The Jordan Information Technology Community Centers 
(JITCC) are small centers located throughout the country to 
provide low-cost access to computers and computer related 
technology.  To date, 40 of the planned 68 centers have been 
established.  Open to all Jordanians, the centers provide 
training courses that are tailored to the specific needs of 
groups and individuals in the community.  Originally funded 
by the UNDP, these centers are now funded by the King 
Abdullah Fund and will receive technical assistance from 
USAID's AMIR program and the Case Foundation.  USAID is 
currently planning to conduct a sustainability study, which 
it expects to conclude in six months.  The centers are 
successful in that they provide IT access and training 
previously unavailable in the more remote regions of Jordan. 
The centers also host NetCorps, a training program designed 
to field youth volunteers at the IT centers for up to six 
months, and is supported by USAID.  INJAZ, the Jordanian 
Junior Achievement Association, is using the centers for IT 
access and training.  Computer Clubhouse is an IT program for 
kids based at the centers. 
 
7.  (U) Business development centers, known as Enterprise 
Development Centers (EDCs) in Jordan,  are co-located with 
the community ICT centers where appropriate.  The centers are 
funded locally.  Business consultants are available through 
the EDCs to offer support services and consultation also with 
AMIR program support.  The EDCs are not yet self-sustaining. 
Other activities under consideration include a comprehensive, 
integrated, competitive placement based Women's 
Entrepreneurial Development Center, a Women in ICT program 
which aims to increase employment opportunities for women 
through training on market needs, improving access to IT 
technology, establishing linkages with IT companies, and a 
review of Sector Based Training focusing training needs on 
certain sectors with identified growth potential. 
 
-------------------- 
PRIVATE SECTOR NEEDS 
-------------------- 
 
8.  (U) The REACH program, the Jordanian government's 
strategy for developing its IT sector, and INTAJ have created 
an environment in which business and government work together 
to develop a globally competitive IT industry in Jordan. 
Having said that, a recent independent study of Jordan's IT 
industry commissioned by the MOICT and conducted by IT 
consulting firm McConnell International (REF A) asserted that 
the needs of small and medium enterprises are not being 
adequately addressed by the government or the private sector. 
 The report also states the ICT adoption rate among 
businesses is low, as is the rate of credit card penetration 
necessary for the growth of e-commerce.  While training 
opportunities are increasing, via AMIR, INTAJ, and private 
sector players such as INTEL and Microsoft, businesses 
complain of a dearth of technically savvy IT professionals 
with management and marketing skills.  In addition, the high 
cost and low quality of international service has been a 
deterrent to foreign investment and participation in global 
e-commerce. 
 
-------------- 
INTERNET CAFES 
-------------- 
 
9.  (U) Internet cafes are prevalent in Jordan.  Privately 
owned, these small shops typically contain 4 to 5 PCs and 
generate small profits.  Under regulations now being more 
zealously enforced by the government, cafes must register IDs 
for users, as well as log sites visited and maintain the log 
for 60 days pending inspection by officials of the Ministry 
of the Interior, or risk paying large fines.  A number of 
cafes, most recently in Irbid, have recently been closed due 
to their inability to pay these fines. 
 
------------ 
ICT PROJECTS 
------------ 
 
10.  (U) The primary vehicle for USAID support to the ICT 
sector in Jordan is the AMIR Program (Achievement of 
Market-Friendly Initiatives and Results).  The objective of 
AMIR's ICT initiatives is to support Jordan in becoming a 
leading regional ICT hub and a competitive exporter of ICT 
products and services.  These initiatives promote increased 
ICT access and connectivity for all Jordanians, utilize IT to 
facilitate the provision of government service, promote 
increased business growth and employment in the sector, and 
helps upgrade human resources with respect to IT. 
 
11.  (U) Jordan,s IT Industry association, INTAJ, has 
received grant support from USAID for staff training, 
e-commerce workshops, lobbying in favor of IT-related 
reforms, human resources development, and other projects.  In 
addition, INTAJ, with the support of USAID, held the 
successful ICT Forum (REF A) in Amman September 30-October 1. 
 The Forum, which attracted more than 1200 participants from 
the Middle East, Europe, Asia and the United States, featured 
INTEL CEO Craig Barrett, John Gage of Sun Microsystems, and 
George Vradenburg form AOL-Time Warner as keynote presenters. 
 
12.  (U) USAID has assisted the government in producing the 
REACH initiative, Jordan's national IT strategy.  The plan 
calls for the creation of 20,000 IT-related jobs, $550 
million in IT exports, and $150 million in FDI, all by 2004. 
With UNDP assistance, the Ministry of Education has invested 
$67 million in an ongoing program to provide IT training to 
6000 teachers.  The Ministry of Information Communications 
and Technology (MOICT) has also introduced the Connecting 
Jordanians initiative, a national campaign to improve and 
ensure Internet access throughout the Kingdom. 
 
13.  (U) The Jordanian Government's e-government strategy is 
also supported by USAID through the AMIR program.  A number 
of infrastructure projects have been initiated, including the 
secure government network government E-mail System, Operation 
and Data Center, and portal website. Other e-services, such 
as the Business Registration unit at the Ministry of Industry 
and Trade and the Investment Promotion Information System are 
expected to be ready in early 2003.  In addition, an 
e-government Program Management Office (PMO) has been 
established to coordinate e-government initiatives and to 
implement other projects across the public sector. 
 
14.  (U) The MOICT has embarked on the ambitious task of 
training government employees in computer literacy. To this 
end, the Ministry has adopted UNESCO,s International 
Computer Drivers Licensing (ICDL) program as an effective 
vehicle for the promotion of computer literacy in  Jordan. 
Likewise, to enable the use of e-Government applications and 
services supported by AMIR, ICTI has provided management, 
communication, logistical and other local support to 
facilitate the provision of the ICDL Program. 
 
15.  (U) USAID's ICT support also extends to enhancing 
computer education in universities, expanding the ministry of 
Education's e-Learning Network, and providing technical 
assistance to encourage outreach and innovation and increased 
access throughout primary and secondary schools.  In 2001, 
AMIR and the Canadian International Development Agency (CIDA) 
began working with the MoICT, Intaj, and other stakeholders 
to develop a strategy for connecting Jordanians to the global 
information superhighway, now known as the Connecting 
Jordanians Initiative (CJI).  USAID has worked closely with 
the stakeholders involved in CJI to develop and implement a 
comprehensive connectivity business plan for Jordan.  The 
first draft of this business plan was completed and presented 
at the end of August 2002. 
 
16.  (U) In addition to USAID-funded assistance, the EU is 
providing some industry-level support.  In the past, the 
British, World Bank and EU have been involved in establishing 
the TRC.  The UNDP is supporting the development of the 
Jordan Information Technology Community Centers. In addition, 
CIDA is working closely with the Ministry of Education (MOE) 
in supporting the Ministry's e-learning strategic framework. 
The Japan International Cooperation Agency (JICA) is also now 
considering major support for the rollout of the MOE,s 
e-learning network.  There are also a number of U.S. 
corporate sponsors of Jordan,s ICT initiatives including 
Microsoft, Cisco, Sun Microsystems, Hewlett Packard and 
Oracle.  Given the important role of such firms in developing 
Jordan,s ICT industry, strategic alliances involving the 
GOJ, donors and U.S. ICT firms are becoming increasingly 
important. 
 
 
 
 
 
GNEHM