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Tunisia - SGV Expansion Analysi

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					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




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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
            –   One party system                        Capitol of Tunis
            –   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)
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Tunisia IT Opportunities


                           Contrasting Country
                                Morocco




Morocco




                                                 Tunisia IT Opportunities - 6
Tunisia IT Opportunities


                           Contrasting Country
                                Morocco
Tunisia                              Morocco
• 163,610 sq km                      • 446,550 sq km
• Coastline: 811 miles               • Coastline: 1,833 miles
• Population: 10,074,951             • Population: 32,728,847
• Language: Arabic, French for       • Language: Arabic, French
  commerce                             often used in business & gov
• GDP: $71 billion                   • GDP: $135 billion
• Unemployment: 13.8%                • Unemployment: 12.1%
• GINI: 41.7                         • GINI: 39.5
• Median Age: 27.3                   • Median Age: 23.6
• Literacy: 74.3%                    • Literacy: 51.7%



                                                    Tunisia IT Opportunities - 7
Tunisia IT Opportunities




      Technology Scene and Business Climate




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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                              Technology Park in progress.
  larger metro
  areas




                                                       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           Manouba University
          such as Tunis' Institute of
          Advanced Business Studies in
          Information Technology and E-
          commerce
                                                     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
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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




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Tunisia IT Opportunities


                             Technology Scene
                           Cell Phone Coverage (2005)



                                                                  Cell phone
                                                                  coverage
                                                                  is solid
                                                                  except for
                                                                  desert
                                                                  areas to
                                                                  the south.




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Tunisia IT Opportunities


                                Technology Scene
                                        Comparison
Tunisia                                      Morocco
• Telephones: 1,163,800                      • Telephones: 1,219,200
• Cell Phones: 1,899,900                     • Cell Phones: 7,332,800
• Radio Stations: 27                         • Radio Stations: 52
• TV Stations: 26                            • TV Stations: 35
• Internet Hosts: 281                        • Internet Hosts: 3,627
• Internet Users: 630,000 (6. 3%)            • Internet Users: 800,000 (2.4%)
• 5-yr Internet Use Growth                   • 5-yr Internet Use Growth
  (735%)                                       (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 second-
           most regulatory and administrative
           constraint

         – Cost of non-tariff constraints estimated
           at 10% of the cost of goods imported
           into Tunisia


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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



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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
                                          Movie sites for Star Wars, Raider
• Several beach resorts along                      of the Lost Ark
  the 810 mile coast, Sahara
  desert


                                                      Tunisia IT Opportunities - 25
Tunisia IT Opportunities


                    IT Investment Opportunities
                                    Tourism Trends

            Old Trends                                    New Trends
    Mass markets                                  Direct customer comm.
    Seasonal visitation                           All-weather visitation
    Product dominance                             Customer orientation
    Cultural intrusion                            Heritage Protection
    New investment                                Revenue enhancement
    Standards                                     Individuality
    Print media                                   Internet, others
    Maps                                          GIS and GPS

    source: ERA (Economics Research Associates)




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Tunisia IT Opportunities


                     IT Investment Opportunities
                 Tourism and IT strategic framework
                                            Customer

      Customer Relationship                                   Marketing
           Maintenance                                       Distribution
     world-wide / local & mobile




 Capacity/Yield management
                                                @                      Reservation
                                                                        Booking
    internally - regionally
                                                                               Enterprise

                                                                   Monitoring
        Partner
                                    Product / information
                                    creation / aggregation          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-ToGuide : mobile tourism devices using GPS
       and WAP/3G technology




                                               Tunisia IT Opportunities - 28
Tunisia IT Opportunities


                    IT Investment Opportunities
                           Mobile Tourism




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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

				
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