The Tunisian telecommunications market is seeing large increases in mobile phone plans over fixed-line subscriptions as smartphones continue to offer voice-over-IP (VoIP) services and messaging applications that enable consumers to call and text using their mobile internet. Though the sector has been liberalised for many years, Tunisie Telecom remains the dominant operator; however, competing operators Ooredoo Tunisie and Orange Tunisie have gained market share in recent years. The determining element that sets operators apart will now likely be the speed with which they roll out their 4G coverage nationwide.
Governance
The Ministry of Communication Technologies and Digital Economy (Ministère des Technologies de la Communication et de l’Economie Numérique, MINCOM) is the main public authority on all matters related to ICT. MINCOM establishes a national telecommunications strategy and ensures its proper implementation through the necessary regulation, infrastructure and cybersecurity policy.
A number of public agencies are under the ministry’s umbrella, such as the National Telecommunications Agency (Instance Nationale des Télécommunications, INT), the market regulator that handles phone numbers, mobile networks, licences and pricing. The INT also publishes monthly statistical bulletins and reports on the state of Tunisia’s mobile, fixed-line and internet subscriptions.
The Centre for Studies and Research of Telecommunications (Centre d’Etudes et des Recherches des Télécommunications, CERT) assists the regulating agency when it conducts quality-control studies by providing the INT with data related to the current quality of mobile phone networks. “There are no Tunisian norms and standards on this matter,” Ahmed Gharbi, head of the CERT’s international cooperation office, told OBG. “But the Ministry of Industry and MINCOM are looking to transpose EU norms and US Federal Communications Commission norms to Tunisia in 2017.”
Other public agencies include those that handle both telecoms and IT, such as the National Digital Centre and the National Agency for Electronic Certification (see IT overview).
The telecoms sector is regulated by the 2001 Telecommunications Code, amended on several occasions, most recently in 2013. The 2013 amendments introduced several new provisions, including increasing financial penalties for telecoms operators that violate the code and allowing institutions that operate private telecommunications infrastructure to lease out excess capacity to other providers. In 2015 the INT, along with the country’s three major The determining element that sets operators apart will now likely be the speed with which they roll out their 4G coverage nationwide operators, signed an agreement allowing number portability, whereby clients from one operator can switch over to another without having to change numbers. The agreement was implemented in May 2016. Newly arrived mobile virtual network operator (MVNO) Lycamobile, which joined the Tunisian market in November 2015, also began offering portability of numbers in September 2016. As an MVNO Lycamobile has not established its own network infrastructure, but instead leases equipment from existing operators. In the case of Tunisia, the MVNO has been leasing equipment from Tunisie Telecom.
Fixed-Line Subscriptions
The number of users with fixed lines seems to be plateauing in Tunisia, with little growth or decline. According to INT monthly statistics, the country had 983,731 fixed-line subscriptions as of January 2017 – a figure only slightly higher than each month going back to January 2015. In June 2015 and June 2016, for example, monthly subscriptions stood at roughly 940,000.
As of January 2017 the bulk of fixed-line subscriptions in Tunisia were held by private households – 794,715 in total – while businesses accounted for 189,016 subscriptions. The majority of subscribers (729,714) had post-paid contracts, in which they were billed at the end of each month based on their usage, while 254,017 had pre-paid contracts.
Tunisie Telecom, the country’s legacy operator, which is 65% owned by the state, consistently dominates the market of fixed-line subscriptions by a wide margin. In January 2017 Tunisie Telecom held around 86.3% of the fixed-line market, with approximately 848,800 subscriptions. However, these figures are down from one year earlier; in January 2016 the company accounted for 91% of the fixed-line market with total 853,000 subscriptions. The second fixed-line operator in the country is Orange Tunisie, a local subsidiary of French telecommunications group Orange, which held about 7.3% of the market – or 72,200 subscriptions as of January 2017, a very slight increase from the 6.7% market share recorded during the same month of 2016.
Ooredoo Tunisie is the third fixed-line operator in Tunisia and a local subsidiary of Qatar-based telecommunications group Ooredoo. The Tunisian subsidiary accounted for 62,700 fixed-line subscriptions in January 2017, or around 6.4% of the local market.
Fixed-line telecommunications had a 34.2% penetration rate in January 2017, representing 0.7-precentage-point increase compared to January 2016, when the penetration rate was 33.5%.
Overall, the data paints a relatively static picture of fixed-line telecommunications use in Tunisia over the past few years. As a further illustration, the figure from both January 2015 and January 2017 noted the same fixed-line penetration, at 34.2%. “In order for fixed-line competition to improve, there needs to be better access to and investment in fibre infrastructure, as well as number portability,” Didier Charvet, general manager at Orange, told OBG.
Mobile Subscriptions
According to the INT, Tunisia had a total of 14.2m mobile subscriptions as of January 2017. Considering a population of nearly 11m people, the data suggests that Tunisians often have more than one active SIM card. The mobile market contracted by about 3% compared to levels of 14.6m in January 2016. Upon closer inspection, it is apparent that fluctuations on a month-by-month basis between January 2015 and January 2017 have not been significant, with only a 100,000-subscriber variation recorded over the period. In fact, the highest subscription rate in those two years was in September 2016, with nearly 14.9m. Between March and October 2016, the number of mobile subscriptions in Tunisia remained above 14.7m.
Around 92% of all mobile subscriptions in Tunisia – or about 13.1m – are pre-paid, meaning that users top-up their phones using scratch cards rather than paying a monthly bill. Similarly, close to 93% of all subscriptions are tied to individuals, with only 934,123 subscriptions dedicated to businesses. This ratio has remained fairly constant throughout 2016, with clear indicators pointing towards a vast majority of users being households. That said, it is also very likely that many individuals use their mobile phones for business purposes.
Segment Competition
Competition and the battle for market share in the mobile telecoms segment is a lot more fierce than in the fixed-line market. Ooredoo Tunisie leads the mobile segment with 5.7m subscriptions as of January 2017, or a 40.2% market share. Legacy operator Tunisie Telecom comes in second, with a 32.2% market share, or 4.6m subscriptions. Orange Tunisie held a 25.9% market share and 3.7m mobile subscriptions for the same month, while London-based MVNO Lycamobile holds 1.7% of the market with 247,545 subscriptions as of January 2017. Ooredoo Tunisie and Tunisie Telecom have been leading the market for the past few years, with their market shares and subscription numbers never too far from each other. While the gap has been very narrow in some months, Ooredoo Tunisie has been the market frontrunner since January 2014.
The sector’s penetration rate reached 124.7% in January 2017, somewhat lower than the level seen in the previous two years, when penetration was recorded at 129.7% for January 2016 and 128.7% for January 2015. Mobile penetration stayed steady between June 2015 and September 2016, hovering near 130% virtually every month, but the rate has been trending downward since then.
In the month following the agreement for number portability in May 2016, 8621 requests to transfer to a different operator were submitted and accepted. Of them, around 71% switched to Orange Tunisie, almost 20% moved to Ooredoo Tunisie and around 9% changed to Tunisie Telecom.
Voice Services
Ooredo Tunisie is shown to have the most talkative users, according to INT statistics, speaking for a combined 903m domestic minutes in January 2017 – a daily average of 29.1m minutes. Total minutes by all mobile users in the first month of 2017 amounted to 2.3bn, with approximately 58% of those minutes spent calling phones on the same network as those that placed the call.
International voice usage is well illustrated through Lycamobile, the UK MVNO that joined the Tunisian market in November 2015. Even though INT data indicates a low level of market penetration, the company is shown to account for 37% of the country’s inbound international mobile voice traffic. Lycamobile registered the highest volume of incoming international traffic at the end of January 2017 despite capturing less than 2% of customers.
Data Subscriptions
While the environment remains competitive, and market share and revenues fluctuate, new opportunities are arising. “Intense competition among the operators has brought prices down, especially for voice services, but increasing data revenue has helped to compensate for that decline,” Hatem Mestiri, chief technology officer at Ooredoo Tunisie, told OBG. The vast majority (93%) of all data subscriptions in Tunisia are dispensed through mobile means, namely 3G and 4G dongles, and 3G and 4G mobile data. The data market in Tunisia accounted for 7.8m subscriptions as of January 2017, including 7.1m mobile subscriptions and 678,500 fixed-line subscriptions.
According to the INT, almost 6.3m data subscriptions come from mobile 3G and 4G subscriptions. In the first month of 2017 Ooredoo Tunisie came out on top in terms of data consumption – with 39.9% of the market – while Tunisie Telecom customers consumed 33.2% of total data and Orange Tunisie users consumed a combined 26.9%. In terms of the number of subscriptions, Ooredoo Tunisie and Orange Tunisie hold nearly equal 39% shares, while Tunisie Telecom is a bit further behind at 22%.
Data subscriptions purchased through dedicated 3G and 4G dongles decreased between June 2016 and January 2017, according to statistics from the INT. In June the number of subscriptions amounted to 932,960 – 17.5% higher than January’s 769,477. Orange Tunisie, through its 3G and 4G dongle offers, held 41.3% of the market in terms of subscriptions, while Ooredoo Tunisie held 36.9% and Tunisie Telecom hosted the remaining 21.8% 4G ROLLOUT: Tunisia’s three main operators – Tunisie Telecom, Ooredoo Tunisie and Orange Tunisie – received their 4G licences in March 2016 and have been working towards rolling out their 4G LTE services countrywide, which are said to reach peak download and upload speeds of 150 Mbps and 50 Mbps, respectively. According to MINCOM, Ooredoo Tunisia bid TD160bn (€68.6bn) for the licence, while Orange Tunisie offered TD156.3bn (€67bn) and Tunisie Telecom TD155bn (€66.5bn).
Tunisie Telecom has been rolling out its 4G LTE coverage in Tunis, Sfax, Sousse and Bizerte, and sought a €105m loan from the European Investment Bank to help finance its €200m nationwide roll-out plan. In December 2016, €100m was secured. The company plans to use the funds to further develop its landline and mobile networks, and aims to lay 2000 km of fibre-optic cable, and establish 1500 4G stations around the country.
The other major players have been competing to gain more market share in the wake of 4G launches. Orange Tunisie, for its part, already has 4G coverage in at least 20 cities around the country, and according to its website, the company is currently installing several hundred new 4G sites around Tunisia.
Ooredoo Tunisie, meanwhile, has a coverage map on its site that illustrates full 4G services in 13 cities and growing – from Bizerte to Tataouine and Medenine. “Increasing the bandwidth available to consumers has been complicated, in part because the launch of fibre optic services was not as successful as hoped. As a result, expanding internet access will rely on 4G wireless services in the short and medium term,” Mestiri told OBG.
New Player
US telecoms company Virgin Mobile is currently working on increasing its presence in the Middle East and Africa, looking to extend past the UAE, Oman, Saudi Arabia and South Africa. It is considering an initial public offering on a stock exchange in the Gulf region, as the company’s regional headquarters are in Dubai.
Virgin Mobile is hoping to expand in the North African region in particular, and is in the process of acquiring an operating licence in Tunisia. The company would provide services as an MVNO.
However, Ooredoo’s Mestiri sees the need for more infrastructure in Tunisia before these types of partnerships can happen. “The Tunisian telecommunications sector would benefit from the licensing of an additional infrastructure operator that would further develop the fibre-optic network, and which other operators would be able to lease,” he told OBG.
Foreign Expansion
As a new player is looking to enter the local market, Tunisian operators are seeking to expand abroad. Tunisie Telecom, for instance, announced in the summer of 2016 that shareholders of Maltese telecoms company GO had accepted a bid from Tunisie Telecom at €2.87 per share. Tunisie Telecom was chosen as the preferred bidder over Bahrain Telecoms Corporation. The majority state-owned operator secured some 66.3m shares and now holds a 65.4% stake in GO; the former controlling shareholder was Emirates International Telecommunications. The shares were transferred to TT ML Limited – a wholly owned subsidiary of Tunisie Telecom – and the rest of the shares will continue to be floated on the Malta Stock Exchange.
This transaction places the Tunisian player in an ideal position to expand beyond its historical market, as GO is one of Malta’s main telecoms companies, with more than 500,000 customers. The company reported revenues of €123.7m in 2015 and holds a 51% stake in Cablenet, a Cypriot telecoms company.
Outlook
The Tunisian telecoms sector continues to witness a plateau in fixed-line connections and is moving rapidly towards mobile subscriptions as many Tunisians acquire more than one SIM card and operators offer increasingly competitive packages to attract consumers. With the progressive deployment of 4G services in Tunisia, as well as the expected arrival of Virgin Mobile to the market and the growing presence of Lycamobile, it is likely that competition for users will grow even more fierce.
Ultimately, government authorities will have to partner with local operators in order to improve the quality of the country’s networks. This will ensure the sustainable development of Tunisia’s telecommunications sector, as residents throughout the country will be able to utilise the technology.
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