2013 Algeria - Telecoms, Mobile, Broadband and Forecasts

3G spectrum licenses to bolster mobile broadband services in coming years

With a fixed-line penetration of around 8% and mobile penetration close to 100%, Algeria has one of the highest teledensities in Africa. The country’s relatively well developed infrastructure includes a national fibre backbone and one of Africa’s first FttP deployments. Oil and gas reserves have made the nation one of the wealthiest on the continent.

Competition in the fixed-line sector received a setback in 2008 when the second operator, Lacom (a joint venture between Egypt’s Orascom Telecom and Telecom Egypt) exited the market after three years of operations, citing regulatory barriers that made it impossible to compete with Algerie Telecom. Shortly afterwards the delayed privatisation of Algerie Telecom was called off and the licensing of third generation mobile spectrum was again put back. The number of fixed lines in service fell by 16% the following year but has since then recovered.

To provide fixed connections, Algerie Telecom has made extensive use of CDMA wireless technology which supports broadband and full mobility. In parallel with the access networks, the national and international fibre optic backbone is being upgraded to an IP-based next-generation network. The government has announced investments of €100 million into national fibre infrastructure to 2014.

The licensing of 3G spectrum to the three mobile network operators in late 2013 will provide a strong stimulus to the development of mobile broadband services in coming years. In addition, commercial services based on LTE technology are expected to be available in early 2014. At the same time, Algerie Telecom has invested in expanding and upgrading its ADSL and WiMAX networks. ADSL prices are already among the lowest in Africa. This infrastructure is complemented by WiMAX wireless broadband infrastructure put in place by several ISPs. The liberalisation of the market for VoIP services has also enabled ISPs to become players in the sector, which is placing greater pressure on fixed-line voice services. Algerie Telecom is investing in the expansion of its national fibre infrastructure, while the operator has also become a major shareholder in a four-company national fibre project.

The report contains an overview of Algeria’s internet and broadband market, providing key statistics, profiles of the major players, and scenario forecasts for the internet market to 2016.

At close to 100% penetration, subscriber growth in Algeria’s mobile market has begun to slow. Given the intensifying price competition between the three MNOs, Algerie Telecom’s Mobilis, Orascom’s Djezzy, and Wataniya’s Nedjma, their focus has shifted to developing ARPU and investing in mobile data services.

The overall market has been affected by the recent social and political unrest, while investor confidence has been dented by recent moves from the government to take control of the country’s leading mobile operator. Nevertheless, with the advent of 3G licences, the MNOs have the chance to transform themselves into converged service providers and to take a share of the broadband market. As such, the country’s mobile market still has enormous potential for growth.

The report contains an overview of Algeria’s mobile market, analysis and key statistics, profiles of the major players, and scenario forecasts for 2013 and 2016.

Key developments:

Bill to revise the Telecom Law fails to pass Parliament; regulator’s activity report; Company of Telecommunications Infrastructure Algeria set up to manage a national fibre network; regulator awards licences for 3G services; Djezzy given special permission to purchase 3G equipment; Huawei trials LTE; regulator’s market data for 2012; telcos’ operating and financial data to Q3 2013; market developments to end-2013. 

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