2011 Algeria - Telecoms, Mobile, Broadband and Forecasts

3G mobile licences expected in 2011

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 FttH deployments. The country’s oil and gas reserves have made it one of the wealthiest nations in Africa.

The market has been affected by the global economic crisis, and its recovery will in part depend on how the wave of social and political unrest currently sweeping the region will pan out. A shadow has also been cast on investor confidence by recent moves of the government to take control of the country’s leading mobile operator.

At over 90% penetration, subscriber growth in the mobile market has slowed considerably, and the attention is shifting to maintaining or improving the 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 operators have entered the underdeveloped internet market by launching basic mobile data services, but the licensing of 3G spectrum has been delayed, which has made it difficult for them to fully compete in the broadband sector. However, 3G licences are now expected to be issued in 2011.

In the meantime, fixed-line incumbent Algerie Telecom, itself a mobile operator, has expanded its ADSL and WiMAX networks and upgraded its CDMA WLL system with broadband capabilities. 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. On the other hand, almost half of the country’s ISPs lost their licences in early 2011 due to unpaid licence fees.

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. Only months later, the already delayed privatisation of Algerie Telecom was called off. The number of fixed lines in service fell by 16% the following year.

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 over the five years to 2014.

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

Market highlights:

• One of the highest levels of mobile and fixed-line penetration in Africa;
• Intense price competition is driving down ARPU;
• 3G mobile licences expected in 2011;
• Government is trying to take control of the country’s leading mobile operator;
• Almost half of the country’s ISPs lost their licences in early 2011;
• Forecasts for mobile and internet markets to 2013 and 2016;
• Profiles of major players in all market sectors;
• Major investments in national fibre infrastructure.

Estimated market penetration rates in Algeria’s telecoms sector – end 2011

(Source: BuddeComm based on various sources)

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