2007 Africa - Telecoms, Mobile and Broadband in Northern Region

Publication Overview

This report provides a comprehensive overview of trends and developments in the telecommunications markets of seven African countries: Algeria, Chad, Egypt, Libya, Morocco, Sudan and Tunisia. Subjects covered include:

• Key Statistics
• Market and Industry Overviews
• Regulatory environment and structural reform
• Major Players (fixed and mobile)
• Infrastructure development
• Mobile Voice and Data Markets
• Internet, including broadband development

Executive Summary

Northern Africa is home to some of the most developed telecom markets on the continent. All countries in this group except for landlocked Chad have well developed fixed-line infrastructures and direct access to international submarine fibre optic cables. Most incumbent telcos in the region are already privatised, with Algerie Telecom scheduled to follow suit in 2007. Tunisia is planning to licence a second fixed-line operator, joining Algeria, Egypt, Morocco and Sudan which already have two and, in the case of Morocco, three operators. Algeria, Egypt, Morocco and Tunisia have fast growing broadband markets, supported by some of the lowest access prices in Africa. Commercial 3G mobile services have been launched in Egypt, Libya and Morocco and are expected in Algeria and Sudan shortly while Tunisia has several pilot projects. Commercial WiMAX networks are operational in Algeria and Morocco, with rollouts in progress in Egypt and Tunisia.

Algeria

Algeria’s mobile market exceeded all expectations when it continued to grow by around 200% four years in a row and soared past the 65% penetration mark. The country’s fixed-line market lags behind the other relatively affluent North African countries, and its second operator is considering exiting the market again after only one year of operations, claiming unfair competition. Accelerated developments can be expected from 2007 onwards resulting from the upcoming privatisation of the country’s incumbent telco, the award of 3G mobile licences, the expansion of wireless broadband networks and VoIP Internet telephony services. Algeria has some of the lowest ADSL prices in Africa, an extensive national and international fibre backbone network, and a FttH pilot project. For the country overview, see chapter 1, page 1.

Chad

The recent discovery of oil is set to bring Chad some of the foreign investment it urgently needs to upgrade its telecom facilities and other infrastructure. The country has some of the world’s lowest penetration rates for fixed-line, mobile and Internet services. Competition exists only in the mobile sector between two privately owned networks. The fixed-line incumbent’s network is running at its capacity limit which, along with high prices, has also hampered the development of the Internet sector. One of the mobile operators has embarked on seizing this opportunity by introducing mobile data services. For the country overview, see chapter 2, page 21.

Egypt

Egypt’s telecom sector is performing consistently well with all sub-sectors being open to competition. Around 1,500 new fixed lines are installed in the country every day which has helped to reduce the waiting list by around 90% in recent years. The incumbent telco, Telecom Egypt, is partially privatised and highly profitable. The end of its fixed-line monopoly in 2006 has opened up new opportunities for competitive service providers, and a third mobile licence has been awarded. VoIP Internet telephony has been liberalised, and several companies are rolling out NGN to provide converged voice and data services.

Supported by forward-looking government programs, Egypt has become one of the leading Internet markets in Africa in terms of users, international bandwidth and services offered. The country is well connected by several international submarine fibre optic cables in combination with a national fibre backbone infrastructure, and the international bandwidth market has been liberalised. The entire sector is highly competitive with more than 200 Internet and data service providers, which has lead to some of the lowest prices for ADSL services on the continent and broadband packages with up to 24Mb/s delivered to residential households.

Egypt became one of the first countries in Africa to launch 3G mobile services in May 2007, following the award of the country’s third mobile licence in 2006. The record price that was paid for the licence indicates the potential that is seen in the Egyptian mobile market, at less than 30% market penetration which is about equally shared between two GSM operators. In anticipation of the new competition, subscriber growth has accelerated. Both existing networks have launched a range of mobile data and information services. For the country overview, see chapter 3, page 29.

Libya

Libya is emerging from almost two decades of economic isolation, which contributed to the stagnation of its oil industry, the mainstay of its economy, and invariably its telecoms sector. Despite having an old style monopoly player for the provision of posts and telecommunications services, its fixed-line network is superior to those in many other African countries and is sporting one of the highest teledensities on the continent. In sharp contrast, the mobile sub-sector remained underdeveloped until the introduction of a second GSM network in 2004 which sent market penetration skyrocketing from one of the lowest in Africa to one of the highest within only two years. 3G mobile services have been launched and are set to stimulate the underdeveloped Internet sector as well. For the country overview, see chapter 4, page 70.

Morocco

Morocco is one of the most advanced telecommunications markets in Africa, featuring a majority-privatised, highly profitable incumbent telco, three fixed network operators, a mobile penetration in excess of 55%, as well as the highest penetration and some of the lowest prices for broadband access on the continent. The second and third fixed network operators are both rolling out wireless infrastructures based on the WiMAX standard which will allow the provision of converged next-generation IP-based services. A commercial IPTV service was launched as one of the first in Africa. 3G mobile services were introduced in 2007. The Moroccan market is set for continued spectacular growth that will see it reach levels of development rivalling those of some European markets over the next five to ten years. For the country overview, see chapter 5, page 77.

Sudan

The third largest oil producer in sub-Saharan Africa and one of the biggest countries on the continent, Sudan is regarded as one of Africa’s most lucrative telecommunications markets, receiving hundreds of millions of Dollars in foreign investment in 2007. Enormous further potential exists since penetration rates are still low in all market segments. Two fixed-line and three mobile networks are competing for customers, rolling out broadband and next-generation services. The majority stake in the country’s leading mobile network was sold in 2006 for a record price. Under a recent peace agreement, the oil-rich south of the country which has been beyond the central government’s control and deprived of development, is now establishing its own independent telecommunications regime, creating huge new opportunities for service providers and equipment suppliers. For the country overview, see chapter 6, page 98.

Tunisia

Tunisia has one of the most developed telecommunications infrastructures in the relatively affluent Northern African region and sports some of the continent’s highest market penetration rates. The mobile sector has experienced exceptional growth since the introduction of competition in 2002. A nationwide fibre optic backbone and international access via submarine cables, coupled with some of the lowest broadband prices in Africa have supported rapid development of the Internet sector. The incumbent telco was part-privatised in 2006, and the licensing of a second fixed-line operator is expected in the near future. For the country overview, see chapter 7, page 111.

Key highlights

• Fixed-line, mobile and Internet market forecasts to 2010 and 2015 for Algeria, Egypt and Morocco;
• Second fixed-line licence expected in Tunisia;
• Privatisation of Algerie Telecom in progress;
• Algeria and Egypt are the most advanced VoIP markets in Africa;
• One of Africa’s first commercial IPTV services launched in Morocco;
• A majority stake in Sudan’s leading mobile network was sold for a record price;
• Libya’s mobile market penetration has skyrocketed from one of the lowest in Africa to one of the highest within only two years.

Mobile subscribers and penetration rate in Libya - 1998-2006

For those needing high level strategic information and objective analysis on this region, this report is essential reading and gives further information on:

• Government policies affecting the telecoms industry;
• Market liberalisation;
• Telecoms operators - privatisation, acquisitions, new licences and competition;
• Internet and broadband development and growth;
• The fast growing mobile markets of the region;
• Mobile application and content developments.

Data in this report is the latest available at the time of preparation and may not be for the current year.

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