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Published Date: 01 Oct 2013
BMI View : The North African telecoms markets continue to demonstrate variable growth on several levels. Symptomatic of this trend is a lack of creativity and diversity in the type and scope of services on offer, even in mature markets such as Morocco and Tunisia, where mobile broadband is taking off. Nevertheless, Morocco, Libya and Algeria appear to be on the brink of new growth potential as the sale of Maroc Télécom progresses, Libya prepares for a third mobile operator and Algeria issues 3G licences. Although these developments bode well for increased competition and liberalisation in North African telecoms markets, their political and business environments remain challenging and prone to sudden collapse. Key Data Mobile growth continues to be driven by prepaid services, which does little to add value to mobile ARPUs and income relating to non-voice services. However, in Morocco and Algeria, there are signs that operators are seeing better growth in the more lucrative postpaid market. More needs to be done to develop locally relevant content if services are to appeal to more consumers. The possibility for increased foreign investment in Libya, through a third mobile licence and/or the privatisation of Libyana, and the launch of 3G in Algeria should boost competition and open up untapped growth potential in the two markets from 2014. Fixed-line and broadband growth remains variable as demand for traditional fixed telephone lines fluctuates and affordability issues continue to hamper broadband adoption. Maroc Télécom has announced ambitious plans to invest in its fixed broadband network, but this may be undone by a likely upcoming change in ownership at the company. Key Trends & Developments Despite no resolution on Djezzy's ownership structure between VimpelCom and the Algerian government, the Autorité de Régulation de la Poste et des Télécommunications (ARPT) announced a public bid opening for the award of 3G licences. On September 15 2013, the regulator accepted bids from all three mobile operators, Mobilis, Nedjma and Djezzy. The ARPT plans to review each proposal and announce the successful bidders on October 15 and successful bidders are expected to launch 3G services in Algiers, Constantine, Oran and Ouargia by December 1 2013. At the time of writing, state-owned operator Mobilis had reportedly already imported 80 containers of 3G infrastructure equipment. Libya has made important strides towards liberalising its telecoms sector in September 2013. First, the country's communications minister announced that the government aims to grant a third mobile licence in late 2013 or early 2014. Negotiations are currently under way with the Ministry of Economy to agree on licence terms that would be attractive to potential bidders. Second , Libya's state-owned telecoms operator Libyan Post, Telecommunication and Information Technology Company (LPTIC) revealed plans to list its subsidiary Libyana on the Tripoli stock exchange in Q214, according to LPTIC Chairman Faisal Gergar. However, the chairman noted the implementation of the plan will depend on the preparedness of the stock exchange. Both of these developments are intended to boost private sector investment to enhance competition and attract increased foreign expertise in Libya's telecoms industry. A number of regional players, including Zain and Etisalat, stand ready, but much work still needs to be done in developing a comprehensive national ICT policy and regulatory apparatus before BMI will be convinced. UAE-based investors in Tunisie Telecom have opted to exit the state-owned operator, citing increasing difficulties in dealing with the government and with employee unions. Regulatory data show insipid growth at the incumbent, making it a relatively unattractive prospect. Nevertheless, b y September 2013 Etisalat of the United Arab Emirates, South Korea's KT Corporation and Libya's LAP Green Networks had expressed interest in investing in the company . Finally, Vivendi entered into exclusive talks with Etisalat to sell its 53% stake in Maroc Télécom . Vivendi expects to finalise the acquisition, estimated at US$5.54bn, by end - 2013. Although at the time of writing no more details on the deal had been made public, in July 2013 it was reported that the Moroccan government had requested Etisalat to collaborate with a local partner as a condition of the take-over. According to the reports, Morocco's Caisse de dépôt et de gestion would acquire up to 10% of the mobile operator.
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