Introduced to the market in 2016, 4G services have enjoyed significant expansion in Algeria, growing by 573% in 2017. As market competition drove down prices, 4G has been adopted by 9.87m subscribers as of end-2017, up from 1.46m subscribers a year earlier, according to the Post and Telecommunications Regulatory Authority, which became the Regulatory Authority of Posts and Electronic Communications (Autorité de Régulation de la Poste et des Communications Electroniques, ARPCE) in July 2018. About one in three mobile internet users are currently on the 4G network, with this expected to increase further in 2019. The boom is a natural process, as 3G subscribers equipped with compatible smartphones have tended to migrate to 4G packages.
Shift to Data
Mobile data revenue is making up an increasing share of operators’ income. Djezzy, for example, saw a surge in data services, increasing from AD6bn (€43.6m) to AD10.8bn (€78.4m), an 80.7% year-on-year increase in the first six months of 2018. However, as is the norm in the sector, the shift in consumption habits has continued to erode operators’ revenues as the cost of data decreases.
“In 2013, 1 GB of data used to cost AD800 (€5.81) to AD1000 (€7.26). Five years later, the price hovers around AD60 (€0.44),” Salim Tamani, head of PR and media at Djezzy, told OBG.
Mobile network operators have made a pronounced effort to increase users’ access to the internet. The three major operators – Ooredoo, Djezzy and Mobilis – invested AD1.2bn (€9m) in infrastructure development from 2001 to 2017. In the first six months of 2018 Ooredoo invested AD7.8bn (€56.6m) into the reinforcement, expansion and modernisation of its network, while Djezzy invested some AD4.9bn (€35.6m).
In September 2016, after the ARPCE delivered licences for the deployment of 4G, a roadmap to its rollout was adopted. By September 2018 Ooredoo covered the country’s 48 wilayas (provinces); Djezzy had networks in 28 wilayas; and Mobilis in 32.
However, these figures hide disparities in population coverage of each of the operators. As Ooredoo has maintained a presence in each wilaya, Djezzy and Mobilis have established coverage within selected wilayas, but with higher coverage rates. In Algiers, for example, Ooredoo covers 15% of the population, while Djezzy and Mobilis cover 40% and 90%, respectively.
In the International Telecommunication Union’s “ICT Development Index 2017”, Algeria jumped four places from 2016 to reach 102nd out of 176 countries, in large part due to the expansion of its network. The index indicated improved performance in all three categories: access, use and skills. Furthermore, Algeria’s average international internet bandwidth per user increased by 33% in 2017 to reach 40 Mbps. Comparatively, international bandwidth per user stood at 31.2 Mbps in Tunisia (99th) and 25.7 Mbps in Morocco (100th) that same year.
The new law regulating telecoms, Law No. 18-04, adopted in June 2018, draws general guidelines on the development of the infrastructure and includes measures to support connectivity to the network. The law reiterates the principle of universal service by establishing a new fund for the sector, used to connect 560 white zones that are not profitable for network operators, including 193 zones in the south that have populations under 500 people. Furthermore, the unbundling of the network is expected to increase competition in the sector with the sharing of infrastructure, potentially attracting virtual network and mobile operators to the market.
As international rankings have indicated, Algeria continues to improve and expand its network connectivity, despite its large size and dispersed population. Efforts should continue to focus on growing local content, shifting international bandwidth to a national one and reducing the cost of the internet.
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