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WiMAX takes off in Algeria despite stalling 3G auctions

Despite delays to its 3G licensing process and limited competition in certain areas, Algeria’s telecoms sector can boast high mobile penetration and a burgeoning internet telephony market, according to Research & Markets.

With a fixed-line penetration of around 7% and mobile penetration of over 90%, Algeria has one of the highest teledensities in Africa. Its relatively well developed infrastructure includes a national fibre backbone and one of Africa's first FttH deployments. The country's oil and gas reserves have made it one of the wealthiest nations in Africa.

Competition in the fixed-line sector received a setback in 2008 when the second operator, Lacom (a joint venture between Egypt's Orascom Telecom and Telecom Egypt) exited the market after three years of operations, citing regulatory barriers that made it impossible to compete with Algerie Telecom (AT). Only months later, the already delayed privatisation of AT was called off and the licensing of third generation (3G) mobile spectrum delayed further. The number of fixed lines in service fell by 16% the following year. 3G licences are now expected in 2011.

To provide fixed connections, AT has made extensive use of CDMA wireless technology which supports broadband and full mobility. In parallel with the access networks, the national and international fibre optic backbone is being upgraded to an IP-based next-generation network (NGN). The government has announced investments of 100 million into national fibre infrastructure over the five years to 2014.

Continued delays with the licensing of 3G spectrum to Algeria's mobile network operators has held back full competition in the country's Internet and broadband sector. It is now planned for 2011. In the meantime, fixed-line incumbent Algerie Telecom, itself a mobile operator, has expanded its ADSL and WiMAX networks and upgraded its CDMA WLL system with broadband capabilities.

ADSL prices are already among the lowest in Africa. Several of the country's ISPs are rolling out their own WiMAX wireless broadband infrastructure. The full liberalisation of VoIP Internet telephony is enabling them to become players in the voice market as well. Converged triple-play voice, data and video services have been introduced, and AT is investing heavily in the expansion of its national fibre infrastructure. On the other hand, almost half of the country's ISPs lost their licences in early 2011 due to unpaid licence fees.

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