ORASCOM

he much awaited deregulation of the sector began in earnest in 2001 when Orascom, the Egyptian conglomerate behind Egypt’s first mobile operator, Mobinil, won the first GSM license offered to a private firm. At a cost of $735 million, Orascom substantially outbid its nearest competitor, France Telecom’s Orange. A second license will be offered in 2004.
Other specific reform measures included separating the telecom and postal services into two separate corporate entities. The public telecom operator, named Algeria Telecom, will be offered for partial privatization, but no fixed time frame has been provided.

SITEL

nother key investor is Sweden’s Ericsson, which has formed a joint stock company, SITEL, with the Algerian government (65% of the equity is held by four state-owned Algerian firms) in 1988. Manufacturing Ericsson’s digital telephone equipment within Algeria to equip the rollout of the digitalized telephone network across the country, the firm spent the past year coming to terms with the new regulatory environment, in which it now has to compete with imports. “2001-2002 was probably the most difficult for SITEL in terms of sustaining and developing growth,” says company chairman, Mr. Amine Baghli. “The major difficulty lies in maintaining ourselves as a leader in this field. We are confident we have all of the necessary skills to succeed, but it will be necessary to fight for growth.”

Future growth will come from the Ministry of Post and Telecommunications’ goal for a fixed-line penetration rate of 12% by 2005 and 500,000 mobile lines by 2003. SITEL signed a contract last year with the Ministry to supply 320,000 lines to low-density areas of the country. SITEL signed another contract with Algeria Telecom for the extension of the GSM network, while it also plans to manufacture the first mobile phones within Algeria. The company is also studying the potential to manufacture fiber optics locally.

DHL

he international courier company was one of the few investors to come into the communications sector, back in 1994 – the height of the civil conflict in Algeria and a time when few investors were willing to take the risk.
Country manager, Mr. Moustapha Rezzoug, argues that investors in Algeria can succeed, but it is not easy. “There is a certain degree of liberalization here, but its implementation is very slow. It is influenced by political considerations. Upon each governmental or presidential change, there is a period of uncertainty, linked to the transition, which hinders economic activity for six months or one year. So while there is a real willingness for change and the success factors do exist, the market is too unstable, making it very difficult to develop a long-term vision. But,” Mr. Rezzoug continues, “we established ourselves when nobody believed our success was possible. This is why, by the very existence of our business, we are a source of hope for investors.”

 

FIXED LINES: FIXED LINE PENETRATION: MOBILE LINES: 1.8 million  12%  500,000 2003 will see the newly founded national telecommunications company, Algeria Telecom, continue to expand its network into rural and regional areas. The Ministry of Post and Telecommunications is expected to offer shares in Algeria Telecom within the coming year, while a third cellular license will be offered to international investors by 2004. Budget authorizations Projects 2001 2002  2003 Cyberparc of Sidi Abdellah $60 million $62.5 million - Local development  (connecting the remote areas, postal services, digitalization…) - $160 million $70 million Source: Ministry of PTT