The Cost of Egypt’s Internet Blackout: $110 Million+

The Organization for Economic Co-operation and Development has come up with a figure of $90 million for the financial cost of the Egyptian Internet blackout. It may be much higher.

Egyptian authorities ordered the country’s major ISPs to shut down on January 27th. They turned them back on February 2nd, leaving the country in the informational dark for six days.

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For some reason the OECD calculated based on five days at $18 million dollars per day for a total of $90 million in lost wealth due to the shutdown. This figure represents three to four percent of the country’s gross domestic product.

According to the OECD:

“(T)his amount does not include the secondary economic impacts (such as) e-commerce, tourism and call centres. In fact, the IT services and outsourcing sector in Egypt has been a growing part of the economy and relies heavily on the Internet and communications networks. IT outsourcing firms in Egypt made USD 1 billion in revenues in 2010 (or around USD 3 million per working day), servicing overseas customers through call centres, helpdesks, etc.”

In its coverage, by Parmy Olson, Forbes added that outsourcing revenue of $3 million per day. Further, they calculated “businesses that simply require the Internet to operate, along with Egypt’s e-commerce industry” at an additional $1 million per day.

Given that extra $4 million per day for five days, Forbes’ calculations add $20 million to Egypt’s loss, for a grand total of $110 million.

Although the Internet came back online fairly quickly, it took people time to discover that fact and boot up. Even when the country was wired again, complaints persisted of exceptionally slow connections, possibly on purpose as a kind of stealth block. That, combined with the fact that five down days is a rather conservative number (as I said, it seemed more like six to me), I wouldn’t be surprised to find the ultimate figure to be more along the lines of $135 million.

As Forbes’ Olson points out:

“(T)here’s also the long-term effect of the blackout on future business. Foreign companies will hardly be falling over themselves to invest in a telecommunications infrastructure that could be shut down at a moment’s notice.”

For those in the high-tech industry, the reality of one of their own being snatched off the street may linger when fear for the stability of information access is a thing of the past.

Currency images via Wikipedia.

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