f there is
one area for investment in Algeria where the potential rewards could
be very big, it is telecommunications. The market will be fully opened
in 2004, and the race will soon be on to establish a dominant position.
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The
incumbent operator, Algeria Telecom, however, has not been an easy steed
to ride for Messaoud Chettih.
The Chairman and Managing Director of the state-owned company still
faces the huge task of modernising and extending both fixed-line and
mobile networks to meet the country’s burgeoning demand.
Only six per cent of the population of 32 million
has a fixed-line telephone. “This falls short of the country’s
level of social and economic development,” says Mr Chettih. “In
the short term we want 12 per cent of the population to have their own
phone.”
The digitalisation of the network has been completed
and the 15,000 km fibre-optic backbone is virtually complete.The government’s
economic revival plan provides for 812 newly-equipped telephone exchanges.
The rate of development is increasing to meet the anticipated growth
in small and medium-sized enterprises, seen as the driving force of
economic renewal.
Capacity on the Algiers to Palma link, which provides
secure international communications, is being increased. “The link
can even supplement the needs of neighbouring countries,” says
Mr Chettih.
There are two operators of mobile networks, Algeria
Telecom’s ANM and Egypt’s Orascom. Mr Chettih describes their
combined number of subscribers as “ridiculously low” for the
size of the population. “I put the size of the market at two million,”
he says. Delay in awarding contracts to roll out new networks “harms
not just Algeria Telecom, but users and fair competition”, he adds.
Under the terms of the GSM licence, which Algeria Telecom gained last
May, the company is obliged to provide cover for 12 provinces a year.
“There’s no competition in terms of
costs or service provision yet. There have to be proper GSM networks
first.”
Algeria Telecom has not yet found its ideal strategic partner. Mr Chettih
says the company itself may raise the capital to roll out a 500,000-line
capacity GSM network. Orascom still rents lines from Algeria Telecom,
but is beginning to build its own network. The problem is the interconnection
fees. Mr Chettih explains: “We’re bound by law to ensure interconnections
from other networks, but not to lose money. Our ANM mobile network is
bigger than Orascom’s, as it covers all of Algeria’s 48 provinces,
so we would end up paying more to cover the cost of routing their calls.”
The demand for mobiles and fixed-lines is matched
by Algeria’s need for more Internet services. Algeria Telecom’s
Internet subsidiary Dawab “plainly doesn’t meet demand”,
says Mr Chettih, even though it can be easily accessed.
France’s Internet subsidiary Wanadoo launched
a new portal
in Algeria last year, and other companies are waiting in the wings.
The government’s desire to create an
ICT (information, communications and technology) society should be achieved
as newcomers head into
the market.
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