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Orange launches Tunisian operation

France Telecom launches converged service in Tunisia breaking the country's mobile duopoly and fixed monopoly.

Orange's launch in Tunisia is part of the company's plan for major expansion in the MEA region.
Orange's launch in Tunisia is part of the company's plan for major expansion in the MEA region.

French telecom giant Orange launched mobile and fixed services in Tunisia today, making it the third mobile operator and second fixed line provider in the country.

Orange, which won a licence to offer mobile and fixed voice and data services in June 2009, launched the operation with Investec, a Tunisian subsidiary of the Mabrouk group.

The development breaks the mobile duopoly of Tunisiana Telecom and Tunisie Telecom, and the fixed monopoly enjoyed by Tunisie Telecom. It also marks the first foray into the Mediterranean and North Africa for Orange, which has a 49% stake in Orange Tunisia.

Orange Tunisia said it had invested about 1billion dinars (EUR 500 million euros) to launch the operation, which includes Tunisia's first 3G network.

Orange said that the network already covers the majority of Tunisia's major cities and added that overall coverage will be doubled by the end of the year.

Orange Tunisia hopes to gain traction in the market through a network of nine shops and 400 distribution outlets. The operator added that it will employ about  1,500 people by the end of the year.

Didier Lombard, chairman of France Telecom, the owner of Orange, said he had "full confidence" in the partnership between Orange and the Mabrouk group, which he described as a "strong local actor".

"Together we are committed to a project that will transform the Tunisian telecommunications market, and which in turn will help the country on its way to joining the world's most competitive economies," he said.

The launch is also another milestone in France Telecom's plan to ramp up expansion in the Middle East and Africa as it sets about doubling the amount of revenue it generates in emerging markets.

In an interview with Bloomberg, France Telecom's  CEO Stephane Richard said the group, which is now present in 18 countries in Africa and the Middle East, may invest up to US$9.3 billion over the next five years in the region

According to a recent report from UK-based analysts Onda Analytics, the Tunisian telecom market, which has a mobile penetration rate of about 90%, holds significant potential and is likely to see further interest from "outside parties".

The research firm said that foreign companies could be interested in the 35% stake in Tunisie Télécom that is currently held by EIT, a holding company for telecoms investments made by Dubai Holdings,

The increasingly competitive environment in Tunisia may prompt EIT to consider listening to offers from operators interested in joining the market, according to Onda Analytics.

Meanwhile, the other 65% shareholding is owned by the Tunisian government, which recently announced a privatisation drive for 2010.

Tunisia's mobile sector is currently divided between just two mobile operators; Tunisiana Telecom, which has a market share of 51%, and Tunisie Telecom, which has a 49% share of the market.