Government publishes 3G coverage obligations; bans transferability of 3G licences

9 Dec 2013

Algerian telecoms watchdog the Autorite de Regulation de la Poste et des Telecoms (ARPT) has published the 3G network coverage obligations of all three licensees, Mobilis, Ooredoo Algeria (Nedjma) and Djezzy, local news agency TSA Algerie reports. According to the article, Mobilis was granted exclusivity in the towns of Batna and Laghouat and must also cover Algiers, Constantine, Ouargla, Oran, Annaba, Tipaza, Biskra, Sidi Bel Abbes, Setif, Tlemcen, Blida, Tizi-Ouzou, Djelfa, El Oued, Tiaret Tebessa and Ain Defla by the end of its first year of operation. For its part, Nedjma has exclusivity in the town of Bejaia Ghardaia; by end-December 2014 the operator must also provide 3G coverage in the towns of Algiers, Constantine, Ouargla, Setif, Chlef, Blida, Tlemcen, Boumerdes, Tipaza, Biskra, El Oued Sidi Bel Abbes, Medea, Ain Defla and Djelfa. Meanwhile, in the first year Djezzy was granted exclusive coverage of Bechar Skikda, in addition to coverage of Algiers, Constantine, Ouargla, Oran, Blida, Mostaganem, El Oued and Ain Defla. All three operators must achieve coverage of 80% of the population by the end of the seventh year of operation.

In a separate, but related news, the Algerian government has reportedly banned the transferability of 3G licences, with any changes in the ownership of the companies in possession of a 3G licence now subject of approval by the ARPT. Agence Ecofin reports that in accordance with Article 40 of the 3G licence document, all mergers and acquisitions are now subject to approval by the regulator; the move is designed to avoid the type of ownership woes that have dogged Djezzy in recent years.

According to TeleGeography’s GlobalComms Database, the North African country’s government has been in discussions for several years regarding the purchase of a stake in the lucrative Djezzy unit, which was previously controlled by Egyptian telecoms tycoon Naguib Sawiris through his Orascom Telecom Holding (OTH) unit, before being merged with Vimpelcom in a USD6.5 billion deal in April 2011. In January 2012 Vimpelcom signed a memorandum of understanding (MoU) for the sale of a 51% stake in Djezzy to the Algerian state. However, terms and conditions have yet to be finalised, while Vimpelcom is believed to be seeking to retain management control of the cellco, as well as continuing to consolidate the operator under International Financial Reporting Standards (IFRS).