2009 Algeria - Telecoms, Mobile, Broadband and Forecasts

With a fixed-line penetration of around 10% and mobile penetration of over 80%, Algeria has one of the highest teledensities in Africa. Its relatively well developed infrastructure includes a national fibre backbone and one of the continent’s first FttH deployments. The country’s oil and gas reserves have made it one of the wealthiest nations in Africa.

Algeria’s mobile market exceeded all expectations when it continued to grow by around 200% four years in a row and soared past the 80% penetration mark. As the subscriber growth curve begins to flatten, attention is shifting to maintaining or improving average revenue per user which has continued to decline under intensifying price competition between the three networks: Algerie Telecom’s Mobilis, Orascom’s Djezzy, and Wataniya’s Nedjma.

The mobile operators have entered the underdeveloped Internet market by launching basic mobile data services, but continued delays with the licensing of 3G mobile spectrum are holding back full competition in the broadband sector. In the meantime, fixed-line incumbent Algerie Telecom – itself a mobile operator – is rapidly expanding its ADSL and WiMAX networks and upgrading its CDMA WLL system with broadband capabilities.

Competition in the fixed-line sector received a setback at the end of 2008 when the second operator, Lacom, exited the market after three years of operations, citing regulatory barriers that made it impossible to compete with Algerie Telecom. Only months later, the already delayed privatisation of AT was called off and the licensing of 3G spectrum delayed further, which may indicate that the government is trying to boost Algerie Telecom’s fixed and fixed-wireless infrastructure in preparation for an eventual privatisation, before allowing more competition in the broadband sector from the mobile operators.

ADSL prices are already among the lowest in Africa. Several of the country’s ISPs are rolling out their own WiMAX wireless broadband infrastructure. The full liberalisation of VoIP Internet telephony is enabling them to become players in the voice market as well. Converged triple play voice, data and video services have been launched, and the incumbent is investing heavily in the expansion of its national fibre infrastructure and the migration to an IP-based NGN.

Illustrated with 18 tables and three charts, this report contains and overview of Algeria’s telecommunications, Internet and broadband market, the regulatory environment, profiles of the major players, analysis and key statistics, and scenario forecasts for fixed-line services and Internet users to 2010 and 2015. The mobile market section includes detailed forecasts for the period 2009-2013 of subscriber growth, ARPU, and the mobile services market in terms of revenue.

Algeria’s mobile market has been affected by the global economic crisis, and its recovery will depend on a combination of regulatory and economic factors, as well as choice of business models. Should the mobile networks succeed in ending their price war and transforming themselves into converged service providers, absorbing much of the broadband Internet market on top of the mobile voice market, the market still has enormous potential. At its advanced penetration rate, the Algerian market can serve as a model for other African markets where subscriber growth is approaching saturation and operators are trying to reverse the downward trend in ARPU.

Key highlights:

·         One of the highest levels of mobile and fixed-line penetration in Africa;

·         GDP per capita to fall by 20% as a result of the global economic crisis;

·         Intense price competition is driving down ARPU;

·         Forecasts of mobile subscriber growth, ARPU and market size, 2009-2013;

·         Forecasts for fixed-line and Internet markets to 2010 and 2015;

·         Profiles of major players in all market sectors;

·         Privatisation of Algerie Telecom called off;

·         3G licensing delayed;

·         Major investments in national fibre infrastructure.

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