With a fixed-line penetration of around 8% and mobile penetration close to 100%, Algeria has one of the highest telecom services tele densities in Africa. The country’s relatively well developed infrastructure includes a national fiber backbone and significant FTTP deployments.

There remains no effective competition in the fixed-line sector since Lacom (a joint venture between Egypt’s Orascom Telecom and Telecom Egypt) exited the market in 2008. The proposed privatization of Algerie Telecom has been in abeyance for some time. To stimulate the sector, the government proposed reintroducing fixed-line telephony competition in late 2014.

Solid mobile subscriber growth in recent years has meant that mobile penetration has now broached 100%. Given the intensifying price competition between the three MNOs, Algerie Telecom’s Mobilis, Orascom’s Djezzy, and Wataniya’s Ooredoo, their focus has shifted to raising ARPU and investing in mobile data services based on HSPA and LTE technologies. Following long delays, the regulator in late 2013 finally issued 3G licenses, which together with LTE services launched by Mobilis in May 2014 will considerably boost mobile broadband services in coming years.

Although the mobile market has been affected by the recent social and political unrest, and investor confidence has been dented by recent moves from the government to take control of the country’s leading mobile operator, with the advent of 3G licenses the MNOs have the chance to transform themselves into converged service providers and to take a share of the broadband market. As such, the country’s mobile market still has enormous potential for growth.

To complement mobile broadband services, Algerie Telecom has invested in DSL and WiMAX network upgrades. The liberalization of the market for VoIP services has also enabled ISPs to become players in the sector, which is placing greater pressure on fixed-line voice services. Algerie Telecom is also investing in its national fibre infrastructure, and has become a major shareholder in a four-company national fibre project.

Key developments:

• Government proposes opening up fixed-line telephony market to competition
• Company of Telecommunications Infrastructure Algeria set up to manage a national fibre network
• Orascom Telecom authorized to extend its networks to an additional four wilaya
• Regulator redefines active prepaid users
• Sale of a 51% stake in Djezzy to the National Investment Fund completed
• Algerie Telecom extends LTE services to the residential sector
• Mobilis sources domestically-built base stations, launches commercial LTE services; regulator responds to customer complaints of poor service from MNOs
• VimpelCom sells its 51% stake in Djezzy to a government investment fund for $2.64 billion
• Algerie Telecom embarks on infrastructure program to build 20,000km of fibre by 2016, connecting 20,000 locations
• Government pursues MSANs program to deliver broadband to towns with populations of between 1,000 and 2,000
• Alcatel-Lucent wins submarine cable contracts.

Given the intensifying price competition between the three MNOs (Algerie Telecom’s Mobilis, Orascom’s Djezzy, and Wataniya’s Ooredoo) their focus has shifted to developing ARPU and investing in mobile data services based on HSPA and LTE technologies. With the award of 3G licenses, the MNOs have the chance to transform themselves into converged service providers and to take a share of the broadband market.

Although the development of Algeria’s fixed-line broadband market has been hampered by the declining number of fixed-lines in service, as well as by an environment which has led alternative operators to invest in fixed-wireless access, the government is expected to pass legislation which will enable players to access Algerie Telecom’s infrastructure through local loop unbundling. This will end the incumbent’s effective monopoly on DSL-based services.