The state-owned fixed-line monopoly holder Algérie Telecom (AT) is in the midst of a major roll-out of fibre optic cabling, with a view to bolstering internet access and speeds. The firm is working with the authorities on plans to bring fibre directly to new homes, allowing for much faster access as well as the provision of a range of additional services, though both this and the pace of the wider fibre roll-out face some constraints.
Speaking at a conference in September 2015, Adbelmalek Touati, the director of communications at AT, said that the firm has laid a total of more than 70,000 km of fibre to date and aims to deploy around 10,000-15,000 km a year, a goal that has been in place for the last three years. “The company now has a bit more flexibility as regards management, allowing us to speed up the acquisition of cable and equipment,” he told OBG.
The firm’s investment budget for 2015 stood at AD40bn (€368m), up from AD15bn (€138m) the previous year, most of which is going into the network upgrade. According to the ICT minister Iman Houda Feraoun in September 2015, AT’s fibre roll-out was not expected to be affected by planned government spending cuts – a result of lower oil prices – in the ICT sector in 2016.
“Algeria was a pioneer in laying fibre-optic cables, becoming one of the first countries in Africa to do so in the 1990s, but subsequently fell behind,” Abdelmalek Touati, director of communications at AT, told OBG. “By deploying a new network we are catching up after a period of delayed investment due to factors such as the events of the 1990s,” he said, referring the country’s civil war. The upgrades are also needed to address changing network traffic, following the launch in December 2013 of 3G services and amid growing internet usage. “The old network was designed for supporting voice calls whereas the tendency now is for much more data than voice traffic, so there is a need to deploy a new network supporting both voice and high-speed internet traffic,” Touati told OBG. He also added that copper networks were also vulnerable to cuts and to theft due to the high value of copper cabling.
The roll-out is helping to build capacity in local industry. In June 2015 Feraoun said that the government was considering a project to launch the production of fibre optic cable in Algeria, which would allow it to reduce foreign currency outlays on imported cabling.
Further to this, to speed up the delivery of the project AT itself is relying on a network of subcontractors, which it is working to build up. “We cannot roll out all the fibre by ourselves as Algeria is an enormous country,” Touati told OBG.
To increase the availability of subcontractors, the firm has launched a national tour to raise awareness of its need for help in expanding the network and in particular to encourage recent graduates to create micro-enterprises to lay fibre and carry out maintenance on its behalf.
The first phase of the initiative was launched in August 2015. Speaking to OBG in September, Touati said that the company had already registered more than 700 graduates willing to create and develop their own micro-enterprises. AT already has 370 firms working on the ground. The firm is currently providing such start-ups with between 15 and 45 days and three months of training in the laying of fibre-optic cables as well as the erection of antennae, and expects the initiative to lead the creation of at least 1000 new micro-enterprises in total.
Under AT’s 2010-14 strategy, the firm allocated €4.8bn to rolling out fibre and other investment upgrades. This includes plans to extend the country’s fibre network to all northern town with more than 500 inhabitants, as well as all towns in the south of the country with more than 1000 inhabitants. However, the target date for completion was pushed back; in February 2015 Zohra Derdouri, then the minister of Post and ITC, said that all remaining municipalities in the country would be connected to the national fibre network by the end of 2015, while current minister Feraoun said in August 2015 that the country would be covered by fibre optic networks by the end of 2016. “It can be difficult to find subcontractors,” said Touati.
Ali Kahlane, president of Algerian IT services firm and internet service provider Satlinker, said that other factors also appeared to be slowing down the rollout. “Laying fibre is relatively easy to do in rural areas but is extremely difficult in cities, where the main needs are,” he told OBG. “It is good that AT itself is not involved in rolling out fibre, but small and medium-sized enterprises face problems doing so as the state of urban infrastructure and municipal bureaucracy surrounding urban planning makes it difficult to get approval to dig up roads for example in order to lay fibre,” he said. He further added that smaller firms often lacked the clout to get meetings with high-level municipal officials in order to overcome such bottlenecks, leading to substantial delays.
In addition to laying down fibre backbone networks and connecting municipalities, AT is also working with the housing ministry to provide fibre-to-the-home (FTTH) services in new housing developments currently being built as part of the government’s efforts to address the country’s accommodation shortfall.
“Telecoms and DSL services were not taken into consideration when older developments were being built; however, the network will be installed from the beginning in new projects alongside water and electricity, which will allow us to connect residences directly to the fibre network, providing very high speeds,” said Touati, adding that the first such connected residences should be completed in early 2016. The service will bolster AT’s plans to offer a range of value-added-services to fixed internet customers such as video-on-demand and smart-homes (see analysis).
Calls For Competition
While efforts to upgrade the country’s fibre network have been widely welcomed, there is certainly scope for further growth within the segment, particularly as competition allows for improved access and affordability, in turn contributing to the rise of secondary and tertiary IT services. “Cloud computing would allow for companies and government entities to reduce costs by obviating the need for them to build their own infrastructure, but at the moment costs need to come down before segments such as the cloud and data centres can take off,” Ali Azzouz, founder of IT firm Icosnet, said. “Likely changes in the ICT law such as local loop unbundling won’t help; rather there is a need to allow big infrastructure companies such as (state energy and power firms) Sonatrach and Sonelgaz to provide infrastructure and bandwidth,” he told OBG, adding that he believed this was likely to happen successfully in the near future..
An effort was made to do precisely that in 2007, with the establishment of Algerian Energy Telecom Company by AT, Sonatrach, Sonelgaz and the National Company for Rail Transport (SNTF). However, the project seems to have stalled in recent years after issues raised by AT halted development.
The firms have laid significant fibre for their own internal use. However, this is not currently open to commercial exploitation. The SNTF also has its own fibre network that is several thousand km in length. Mohammed Gouasmia, general manager of ICT firm Anwarnet, said that other IT firms should be allowed access to existing networks. “AT is currently the only firm with access to the fibre network, which needs to change,” he told OBG. “If other sector players had access it would provide for competition, pushing towards better-quality services, and would better help get services such as FTTH off the ground.”
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