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The Algerian communications market, which generated revenue of US$4.9bn in 2012, is growing at a 2.9% CAGR. The government is about to acquire VimpelCom's 51% stake in Djezzy and should dominate both the fixed and mobile segments by the end of 2013. With the introduction of 3G and regulatory reforms, the market is nevertheless set to become more competitive.
Introduction and Landscape
The Algerian communications market generated revenue of US$4.9bn in 2012; we forecast $5.65bn for 2017, for a 2.9% CAGR. The market is set to become more competitive as 3G is introduced in the second half of 2013 and expected regulatory changes allow number portability and local loop unbundling. The mobile sector produced revenue of $3.6bn in 2012. The arrival of 3G will boost mobile data ARPS, which should generate 24% of total mobile ARPS by 2017. The government is talking to Amsterdam-based VimpelCom to acquire its 51% stake in Djezzy: by the end of 2013, the government should be the strongest player in both the fixed and mobile segments. Now that that conflict is winding down and new regulations are on the way, we project that the market will grow faster than in previous years. We expect Djezzy and ATM Mobilis to hold nearly 75% of the mobile market throughout the forecast period, but we also expect Nedjma to continue to compete strongly against these two government-controlled powerhouses. Circuit-switched service generated 74.6% of total fixed revenue in 2012, but we expect this figure to fall to 63.1% by 2017 because of the increase in revenue from Internet access. We also forecast that broadband will capture 99% of total Internet access revenue by 2017.