The launch of 3G services at the end of 2013 and Algérie Telecom’s ongoing efforts to roll out fibre have opened the way for telecoms and other ICT operators to offer a range of value-added services. The expansion in internet services is providing opportunities for equipment providers and local content producers, including a new generation of start-up companies, despite some ongoing regulatory issues to do with the voice over internet protocol (VoIP) market.
The launch of 3G has seen local operators branch out and offer a range of new services. All three mobile operators run their own app stores, and while much of the content on the stores is free, app usage and downloads helps to drive increased data traffic, bolstering sector revenues.
Ooredoo Algeria CEO Joseph Ged has said that the firm is seeking to promote the development of a local content industry to help it provide value-added services to clients, and the company operates a number of initiatives in conjunction with the National Agency for the Development of Small and Medium-Sized Enterprises (l’Agence Nationale de Développement de la Petite et Moyenne Enterprises, ANDPME) aimed at helping local app developers, with plans to market products via its app store, and develop ICT start-ups.
The sector is showing increasing signs of an entrepreneurial spirit. “There are more and more start-ups appearing, and the Algeria 2.0 industry event in September 2015 brought in more than 600 young people, which is a good sign,” Ali Kahlane, president of Algerian IT services firm and internet service provider Satlinker, told OBG. “The government’s Agence nationale de soutien à l’emploi des jeunes programme to help young entrepreneurs establish businesses did not work that well in practice but it has nonetheless created a language of entrepreneurialism, which is positive for the sector,” he added.
In May 2015 the IT firm Icosnet launched a messaging and voice-and-video-calling app called Vazii, which is available on Android, iOS and PC platforms. The firm’s owner, Ali Azzouz, told OBG that it was happy with the app’s performance so far but that regulatory issues related to restrictions on local provision of VoIP had held back its development. “We are working to develop a range of services through the app but have not been able to move as quickly as we would like and are still in discussions with the regulator,” he said in September 2015. “International apps such as WhatsApp and Viber work without any problems, but local firms need additional authorisations because of the VoIP regulations.”
AT is also working on value-added services on the back of its fibre optic cable network roll-out. “We are seeking to pass from being an access provider status to a content service provider,” Abdelmalek Touati, director of communication at AT, told OBG. In early 2015 it launched three annual subscription-based digital library services – one general, one academic and another Arabic-language one. As a result, the launch of fibre-to-the-home services will be able to underpin the launch of such services by ensuring high connection speeds.
Touati told OBG that the firm is also currently working on a “smart home” service project, under which various elements of a residence will be connected to the internet, and that it intends to launch a video-on-demand service by the end of 2015.
The launch of 3G services in December 2013 has seen the local smartphone market take off. While smartphone penetration is at less than 25%, the market is growing quickly, with some sources describing Algeria as the last major untapped market in North Africa. The market is tilted to the budget end, with cheap smartphones costing around $50 accounting for around two-thirds of total sales. It is estimated that high-level phones like iPhones and the Samsung 6S account for a maximum of around 6%, which is set to grow but is unlikely to surpass 10%.
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