Tunisia IT Opportunities Tunisia Presented by Sheldon Bailiff

Tunisia IT Opportunities Tunisia Presented by Sheldon Bailiff Sam Lin Rufina Osipova Cheryl Zerbst November 8, 2005 Tunisia IT Opportunities - 1

Tunisia IT Opportunities Agenda • Location, Population, Language, Politics, Economy • Technology Scene and Business Climate • IT Investment Opportunities • Questions Tunisia IT Opportunities - 2

Tunisia IT Opportunities Tunisia Location Tunisia IT Opportunities - 3

Tunisia IT Opportunities Tunisia Population, Language, Politics, Demographics • Population – 10, 074, 951 – 98% Arab, 1% European, 1% Jewish and other • Language – Arabic – French • Politics – – Republic Capitol of Tunis One party system Gained independence from France in 1956 Two presidents since independence • Age – Median age is 27 years old Tunisia IT Opportunities - 4

Tunisia IT Opportunities Tunisia Economy • Primary Industries – Petroleum, mining, tourism, textile, agribusiness • GDP (PPP) – $71 billon (2004 est. ) – Compare to Morocco ($135 billion) and U. S. (11 trillion) • Trade – Exports $9. 9 billion, Imports $11. 5 billion • GINI – 41. 7 • Index of Economic Freedom – 64 out of 140 (mostly free) – Compare to Morocco (66) and U. S. (10) Tunisia IT Opportunities - 5

Tunisia IT Opportunities Contrasting Country Morocco Tunisia IT Opportunities - 6

Tunisia IT Opportunities Contrasting Country Morocco Tunisia • 163, 610 sq km • Coastline: 811 miles • Population: 10, 074, 951 • Language: Arabic, French for commerce • GDP: $71 billion • Unemployment: 13. 8% • GINI: 41. 7 • Median Age: 27. 3 • Literacy: 74. 3% Morocco • 446, 550 sq km • Coastline: 1, 833 miles • Population: 32, 728, 847 • Language: Arabic, French often used in business & gov • GDP: $135 billion • Unemployment: 12. 1% • GINI: 39. 5 • Median Age: 23. 6 • Literacy: 51. 7% Tunisia IT Opportunities - 7

Tunisia IT Opportunities Technology Scene and Business Climate Tunisia IT Opportunities - 8

Tunisia IT Opportunities Technology Scene Technology Parks • Technology Parks – Technology parks host innovating companies in IT and promote synergy between IT industry and higher education Six technology parks near larger metro areas Technology Park in progress. Tunisia IT Opportunities - 9

Tunisia IT Opportunities Technology Scene Industry – Sample Technology Company • Industry – Cynex Software is largest software development company – Transferred $2 million worth of software via the Internet last year – Partners in U. S. at Research Triangle, NC – With partners, Cynex operates 24 hours a day, 7 days a week to meet the demands of international clients Cynex Software Tunisia IT Opportunities - 10

Tunisia IT Opportunities Technology Scene Education • Education – 20% of Government operating budget allocated for primary and secondary education • One of highest percentage government investments in education in world • U. S. Dept of Education budget is less than 3% of Federal budget – Higher degrees in IT available such as Tunis' Institute of Advanced Business Studies in Information Technology and E-commerce Manouba University Tunisia IT Opportunities - 11

Tunisia IT Opportunities Business Climate Regulatory Environment • Regulatory Environment – Standardized accounting system used in accordance with international accounting standards – Corporate tax incentives with no taxes on export-derived profits for first ten years – Intellectual property provisions based on international treaties – Enforcement is selective Tunisia IT Opportunities - 12

Tunisia IT Opportunities Technology Scene Teledensity • Teledensity – Tunisie Telecom is the national telecom operator in Tunisia, providing services such as LAN, Wireless, GSM, and Frame Relay in the country – High speed internet is available using ADSL and satellite – Fiber optic backbone runs length of country – Trend in telecom has been to spin government control off to private industry, but slowly Tunisia IT Opportunities - 13

Tunisia IT Opportunities Technology Scene Cell Phone Coverage (2005) Cell phone coverage is solid except for desert areas to the south. Tunisia IT Opportunities - 14

Tunisia IT Opportunities Technology Scene Comparison Tunisia • Telephones: 1, 163, 800 • Cell Phones: 1, 899, 900 • Radio Stations: 27 • TV Stations: 26 • Internet Hosts: 281 • Internet Users: 630, 000 (6. 3%) • 5 -yr Internet Use Growth (735%) Morocco • Telephones: 1, 219, 200 • Cell Phones: 7, 332, 800 • Radio Stations: 52 • TV Stations: 35 • Internet Hosts: 3, 627 • Internet Users: 800, 000 (2. 4%) • 5 -yr Internet Use Growth (3400%) *Technology statistics based on 2003 data Tunisia IT Opportunities - 15

Tunisia IT Opportunities Technology Scene E-commerce • E-Commerce – e-Dinar cards: “virtual currency” available at most post offices. They are re-chargeable and can be used for consumer e-commerce http: //www. e-dinar. poste. tn/index_en. html – e-Tijara: secure-payment service for users of major credit cards – Tunisia Shopping Gallery: example of e-commerce shopping center http: //www. ecom. tn Tunisia IT Opportunities - 16

Tunisia IT Opportunities IT Investment Opportunities Tunisia IT Opportunities - 17

Tunisia IT Opportunities IT Investment Opportunities Government Import Services • Create IT business to facilitate filing government paperwork by foreign entities wishing to export to Tunisia • Increase efficiency by providing the necessary information in the “right” format to the “right” people • Provide additional personalized navigation to keep trade authorization process flowing Tunisia IT Opportunities - 18

Tunisia IT Opportunities IT Investment Opportunities Government Import Services • Why does opportunity make sense? – “Free” trade with EU coming in 2008 – Tunisia is a launching pad for trade in North Africa – Potential exists to integrate Tunisian firms into EU production network – Government bureaucracy makes transparency difficult and foreign businesses need “inside” help – Tunisia is an enticing market given cultural, political, and economic conditions Tunisia IT Opportunities - 19

Tunisia IT Opportunities IT Investment Opportunities Government Import Services • Why does opportunity make sense? – Technical barriers lengthen clearance delays by weeks – Firms report that it can take three weeks to comply with regulations and administrative requirements – Customs procedures rank as secondmost regulatory and administrative constraint – Cost of non-tariff constraints estimated at 10% of the cost of goods imported into Tunisia IT Opportunities - 20

Tunisia IT Opportunities IT Investment Opportunities Government Import Services • Why does opportunity make sense? – Tunisia imports a range of products including machinery, fuel, chemicals, and food – Copyright, patent, and trademark laws have been modernized to be in line with WTO expectations – Pressures will exist to reduce transaction costs and make Tunisia competitive with world market Tunisia IT Opportunities - 21

Tunisia IT Opportunities IT Investment Opportunities Government Import Services • What are the risks? – Government may assimilate business – New steps may be taken to reduce transparency if government feels threatened by loss of control – Ad hoc enforcement of trade laws or government protectionism may dissuade import business – Discretionary authority of local officials may still cause continued uncertainty – Government bureaucracy and regulation of IT business may stifle profit potential Tunisia IT Opportunities - 22

Tunisia IT Opportunities IT Investment Opportunities Government Import Services • Considerations for Success – Business must have “insiders” with established relationships to government authorities – Sales and marketing team must have presence in major EU markets – Workforce flexibility must be supported with contractors in foreign countries – Incentive agreements or partnership should be negotiated to provide insurance against government control Tunisia IT Opportunities - 23

Tunisia IT Opportunities IT Investment Opportunities Tunisia Tourism Tunisia IT Opportunities - 24

Tunisia IT Opportunities IT Investment Opportunities Current Tourism Atmosphere • 5. 9 million tourists, 722 hotels, 7 airports (2004), 10% increase from Jan 2005 – Jun 2005 – 58. 9% European visitors, $1. 95 billion in Euro generated – Morocco: 5. 5 million tourists, $3 billion in Euro generated • 2 hours from London and Paris to Tunis, 50 minutes from Rome by air • Several beach resorts along the 810 mile coast, Sahara desert Movie sites for Star Wars, Raider of the Lost Ark Tunisia IT Opportunities - 25

Tunisia IT Opportunities IT Investment Opportunities Tourism Trends Old Trends Mass markets Seasonal visitation Product dominance Cultural intrusion New investment Standards Print media Maps New Trends Direct customer comm. All-weather visitation Customer orientation Heritage Protection Revenue enhancement Individuality Internet, others GIS and GPS source: ERA (Economics Research Associates) Tunisia IT Opportunities - 26

Tunisia IT Opportunities IT Investment Opportunities Tourism and IT strategic framework Customer Relationship Maintenance world-wide / local & mobile Capacity/Yield management internally - regionally Marketing Distribution @ Reservation Booking Enterprise Partner Product / information creation / aggregation Monitoring Planning Source: Professor Wertner of Vienna University Tunisia IT Opportunities - 27

Tunisia IT Opportunities IT Investment Opportunities EU research • Recent EU tourism projects – Catch 2004: multilingual speech, text, and graphics interaction – M-PIRO: “Amazon” personality – MIETTA: integrated solutions to multilingual queries – CRUMPET/m-To. Guide : mobile tourism devices using GPS and WAP/3 G technology Tunisia IT Opportunities - 28

Tunisia IT Opportunities IT Investment Opportunities Mobile Tourism Tunisia IT Opportunities - 29

Tunisia IT Opportunities IT Investment Opportunities “On-Star” and location-based mobile tourism • Why does opportunity make sense? – Addresses: What to do? How to get there? When? Where are we? – Barcode guidebooks, maps – Recommendations of restaurants, historical sites – “On-star” assistance on demand – The best route? Mode of transportation? – Car rentals partnerships – EU studies provide data for financial feasibility Tunisia IT Opportunities - 30

Tunisia IT Opportunities IT Investment Opportunities “On-Star” and location-based mobile tourism • What are the risks? – – – Privacy issues Initial investment may be expensive Different tourist groups Government interference Resistant to change Tunisia IT Opportunities - 31

Tunisia IT Opportunities Questions? ? Tunisia IT Opportunities - 32