Algeria’s telecom industry takes off ahead of 3G rollout

Algeria, which so far has not been affected by the turmoil that has rocked its North African neighbours, could be on the verge of taking a major leap in its telecom space. Next year sees the promised launch of 3G network services in the country and the run up to that has already led to exponential growth in mobile revenues.

“The mobile market will remain the dominant revenue-generating sector through 2015,” said Majid Hosni, associate research analyst at Pyramid Research.

“The mobile data [industry] generated an expected US$801 million (Dh2.9 billion) last year and [is] expected to see a strong revenue growth between 2010 and 2015. The figures take into consideration the long overdue introduction of 3G technology next year.”

As this goes through, the restructured Regulatory Authority for Post and Telecommunications (ARPT) looks to attract foreign investment and create a market place yet to realise its full potential.

The regulator so far has been dominated by government and this has hindered not only its ability to encourage competition, but also the rollout of the latest technologies.

Stagnation was also caused by conflicts between Orascom (the owner of Djezzy) and the Algerian government.

Back taxes

“After blocking the sale of Djezzy to MTN last year, the Algerian government hit Orascom with $600 million in back taxes and denied them access to import any equipment until all of the back taxes were paid,” Hosni.

According to new forecasts for the industry, internet services could capture 39 per cent of the fixed market revenues by 2015.

“Despite its history, we foresee change in Algeria translating into a 26.1 per cent revenue growth rate between 2010 and 2015 for broadband internet,” Hosni added.

Mohammad Zeinadeen, a consultant to the telecom ministry, said that by increasing the broadband bandwidth, Algeria can push forward on plans to create an enticing market to international companies.

“The country is moving toward international broadband standards,” he added.

Hosni said the country’s telecom revenues were an indication of healthy growth spurred by broadband internet and mobile data.

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