Telecommunications in Algeria
- Overview

As part of its restructuring effort, government has set up a new joint-stock company, Algerie Telecom, to take over the operation of fixed line services and GSM network from the Posts and Telecommunications Ministry (PTT). The telecoms law of 2000 sets out a plan for the eventual privatisation of the sector, providing for a state role restricted to regulatory activities. In early 2001, a local firm Eepad signed an agreement with the French internet provider Wanadoo, under which the French firm will buy 20% of Eepad’s capital. Wanadoo wants to invest US$20m over 5 years in Algeria. Eepad says the agreement will help it expand its subscriber base from 4,000 to 30,000 by end of 2001. A consortium of European firms, including Telecom Italia, signed an agreement with PTT to lay a submarine cable linking Algeria with Spain at a cost of US$15m. The cable will link Algeria to European networks for voice and data transmission. Also, agreements have been signed with a number of ISPs and government hopes to have one million internet users by 2004.

Algeria’s second GSM licence was awarded to Orascom Telecom of Egypt in mid-July 2001. Orascom bid US$737m for the licence – half is payable now with the remainder due in 2003. Orange of France was the only other bidder, with a substantially lower offer. Orascom plans to invest US$500m over 5 years. In early August 2001, Orascom awarded a US$365m contract to Alcatel for rollout of at least 50% of its network. Service is to be operational by February 2002 with an aim of reaching 10 million subsribers by 2015. A network with capacity of 500,000 would be installed in first year of operation and would double the following year. The licence is for 15 years, automatically renewable for five years. Currently there are an estimated 17,000,000 mobile phone users in Algeria. Algeria has granted a second mobile licence in 2003 to Algerie Telecom as part of an effort to liberalise the telecoms sector.

Orascom wants to sell its 80% stake in Telecel for US$143 million. Fren

Telecom performance indicators

The government is considering allowing internet service providers to end the current monopoly. It also announced the second mobile licence to be issued within the first quarter of 2001.

According to official estimates, at least 450 000 applications for mobile phone lines have been presented by Algerians since the service started running on March 1999.

Spain-based Telefonica, in a joint venture with US-based Motorola, France Telecom, Finland-based Nokia and Sweden-based Ericsson, have announced interest in the country’s telecommunications privatisation process.

Algeria’s parliament recently adopted a law aiming to reform the postal and telecom sectors that lays the foundations to privatise the state-owned telecom service provider. It also agreed to create a telecommunications authority to ensure fair and transparent privatisation proceedings.

Partial privatisation of Algeria telecoms is expected to occur in late 2001. State-run Administration des Postes et Telecommunications (PTT) has some 1.5 million fixed line subscribers and 60 000 mobile phone clients. Last year, Telefonica won a US$1.1 billion licence in Morocco.

Motorola may also be interested in Algeria’s upcoming launch of a second or third GSM licence. Motorola may be involved in deploying the new GSM network with the participation of Egypt’s Nile Telecom.

Telecommunications Act

Order 75-89 of December 30, 1975 created the Post and Telecommunications Act, and the responsibilities of the Ministry of Post and Telecommunications were laid down in 1983. This assured the implementation of national telecommunications policies. The ministry is responsible for the regulatory framework, ensuring the monopoly remains unthreatened and assigning spectrum and frequencies. It also oversees the development and management of the general network according to specific technical standards established by it.

The Gide Loyrotte Nouel group was selected in early December 2000 to negotiate the consultancy contract for the implementation of the regulatory framework of the telecommunications sector.

The Ministry of Posts and Telecommunications (MPT) is the operating entity as well as the regulatory entity in Algeria and has a monopoly on all telecom services. In 1990, the MPT started deregulating some of its activities, particularly procurement and equipment distribution. Its role in the supply of telecom consumer equipment is now limited to the definition of technical standards, and approval of imported equipment.

A government institute, the Centre for Research in Information Sciences, provides internet service. It was created in 1998 (Ministerial decree no 98-82 of February 25, 1998 related to the creation of a research centre on telecommunication “CERIST”) and placed under the authority of the Post and Telecommunications Minister.

The centre undertakes study programmes and research for the modernisation of the telecommunication national network, by introducing new technology, developing new equipment and material and setting up new methods of development. It updates the validity of technologies to conform to national and international norms.

The private sector may engage in the production, import, and distribution of telecommunications equipment.

In July 2000 the Algerian parliament approved a draft law to privatise state-controlled telecommunications and postal services as part of an ongoing privatisation plan.

Detecon (Germany), Optec (Canada) and Arthur Andersen are bidding for the tender for restructuring of the Algerian posts and telecommunication sector. The three were short-listed from six bidders and are awaiting the final award of the contract. The highest bid was for US$3.5 billion.

Telegraph, telex, telephone, fax, special features (key cities only), mobile NMT – GSM planned) X.25, VSAT

MPT's domestic transmission network comprises 12 000 kms of coaxial cable, 15 000 kms of microwave links and 45 domestic satellite earth stations. From 1985, all new transmission projects are digital making the transmission network over 85% digital. There is a 2 500 kilometres fibre network running along the axes north-south to the east-west. MPT estimates that fibre comprises 50% of the local transmission network.

A combination of fibre optic, coaxial, and satellite links is used for international communications. Algeria has submarine fibre links with France, Italy, and Spain and also connected to the SEA-ME-WE2 fibre link. Algeria is a member of ARABSAT, INTELSAT, and INMARSAT.

In 1998-99 MPT estimated the following:

• Fibre optics US$20 million
• Radio relays US$24 million
• Rural radio networks US$17.5 million
• VSAT US$13 million
• INMARSAT US$10 million
• GSM US$30 million