2010 Algeria - Telecoms, Mobile, Broadband and Forecasts

With a mobile penetration of close to 90% and fixed-line penetration of around 10% in early 2010, Algeria has one of the highest teledensities in Africa. Its relatively well developed infrastructure includes a national fibre backbone and one of Africa’s first fibre-to-the-home (FttH) deployments. The country’s oil and gas reserves have made it one of the wealthiest nations in Africa. However, the 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.

As the mobile voice market approaches saturation, subscriber growth has begun to flatten and the attention is shifting to maintaining or improving average revenue per user (ARPU) 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 operators have entered the underdeveloped Internet market by launching basic mobile data services, but the licensing of third generation (3G) spectrum is being delayed, which makes it difficult for them to fully compete in the broadband sector.

In the meantime, fixed-line incumbent Algerie Telecom (AT) is rapidly expanding its ADSL and WiMAX networks and upgrading its CDMA wireless local loop network with broadband capabilities. ADSL prices are 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 fixed voice market as well, and converged triple-play services (voice, data and video) have been introduced.

Competition in the fixed-line sector received a setback when the second operator, Lacom (a joint venture between Egypt’s Orascom Telecom and Telecom Egypt) exited the market in 2008 after three years of operations, citing regulatory barriers that made it impossible to compete with AT. The government then announced that the national telco will not be privatised, and plans to invest US$6 billion into its mobile, fixed and fibre networks over the five years to 2014 as part of a US$150 billion program to upgrade the country’s infrastructure.

This report contains an overview of Algeria’s telecommunications sector, analysis and key statistics, profiles of the major players, and scenario forecasts for the fixed-line, Internet and mobile market to 2012 and 2015.

Market highlights:

• One of the highest levels of mobile and fixed-line penetration in Africa;
• GDP per capita fell by more than 15% as a result of the global economic crisis, set to recover in 2010;
• Intense price competition is driving down ARPU;
• Forecasts for mobile, fixed-line and Internet markets to 2012 and 2015;
• Profiles of major players in all market sectors;
• 3G licensing delayed further;
• Major investments in national fibre infrastructure.

Estimated market penetration rates in Algeria’s telecoms sector – end 2010

(Source: BuddeComm based on various sources)