Algerian mobile incumbent upstaged

New figures have shown that the new entrant into the Algerian mobile market, Orascom Telecom, overtook the government-owned GSM operator Algérie Télécom after only ten months in business.

  • E-Mail
By  Richard Agnew Published  April 22, 2003

New figures have shown that the new entrant into the Algerian mobile market, Orascom Telecom, overtook the government-owned GSM operator Algérie Télécom after only ten months in business.

The Egypt-based firm, which launched its Algerian operation in February 2002, had gained 70% of the GSM market by the end of the year, according to a new report entitled ‘Algeria Communications Projections 2003’ by the Arab Advisors Group.

The figures give a welcome boost to Orascom, which sold off its stake in Jordanian operator Fastlink in January to ease its debt position and focus on its “core operations” in Egypt, Pakistan, Algeria and Tunisia.

The company further strengthened its position in Algeria at the beginning of April after winning one of two VSAT (Very Small Aperture Terminal) licences, the other going to Asatnet.

According to Arab Advisors’ analyst Serene Zawaydeh, Orascom’s entrance into the market lifted Algeria’s GSM penetration rate at the end of 2002 to nearly 400% of its 2001 levels.

Around 330,000 new subscribers were added during the year, more than 14 times the rate of growth during 2001 when Algérie Télécom’s monopoly was still in place. The government-owned firm is now planning to undertake major new projects to remain in the competitive game, according to Zawaydeh.

Further growth is expected with the introduction of a third mobile licence at the start of next year. Equipment vendor Ericsson has also recently struck a deal to supply at least 500,000 GSM lines in the country by August.

The figures are seen as evidence that Algeria is experiencing the growing phenomenon of ‘fixed to mobile substitution’. The fixed line network in Algeria retained its low penetration rate during 2002, ending the year with 6.18%, according to the report.

“The PSTN (public switched telephony network) service… has been the highest revenue generating service for Algérie Télécom, and constituted 73.81% of the total telecommunication revenues in 2001. This trend is set to change,” Zawaydeh says.

“(We) project the number of mobile subscribers to exceed 10 million in 2007, almost double the number of the PSTN subscribers that year. Revenues from mobile operations are expected to reach US$ 2.376 billion in 2007, while the PSTN revenues are expected to grow to US$ 577.500 million in the same year,” she adds.

The government is also now set to accelerate its liberalisation process, which began with the introduction of the Algerian telecommunication law of August 2000 and the creation of a regulatory authority. Licences for a fixed services operator in rural areas and an international and national long distance operator are also due to be introduced next year.

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code