A consortium consisting of Egyptian telcos Orascom Telecom and Telecom Egypt has won a fixed line network operating licence in Algeria. The Egyptian partnership was the sole bidder for one of two concessions for national long-distance and international telephony, referred to by the Algerian government as ‘interurban’ licences because they include no obligations to cover the country’s extensive rural population.
The government had planned to issue up to three fixed line licences in 2004, but lack of interest caused the tenders to stall, mainly because the sale conditions stipulated a minimum investment of USD1 billion. In the case of yesterday’s award, the size of the required investment to build a nationwide network was set at a lower, undisclosed level but, nonetheless, analysts say rollout costs will reach between USD200 million and USD500 million.
With the new licence, Orascom and Telecom Egypt will join an underdeveloped wireline market – 2.2 million at year-end 2003 in a country of 31.8 million. State-owned Algerie Telecom has up to now been the lone provider of fixed telephony and will continue to hold a monopoly on the local calls market. The operator has increasingly struggled to meet rising demand, but says it plans to invest USD2.5 billion in the next few years to improve its capacity and coverage and finance the rollout of high speed internet services.
Orascom is already well established in Algeria as the wireless market leader via its mobile arm Orascom Telecom Algeria (Djezzy GSM), which claimed 2.44 million subscribers at the end of September 2004. It also has wireless interests in Egypt, Tunisia, Zimbabwe, Congo, Chad, Pakistan and Iraq.