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Jan 10 2006

Second Algerian Fixed Phone Operator to be Operational in Early '06

Algeria now has a second fixed telephony operator. The Consortium Algerien des Telecommunications (Algerian Telecom Consortium) or CAT will begin distributing lines in January to February 2006 and is likely to grow as demand for fixed lines in Algeria is among the highest in the world.

The launch of CAT's services has been delayed due to what the company called "technical glitches" in establishing its network. But the company announced that tests on the completed networks are positive. One important step remains to be completed and that is to sign inter-connection agreements with the other operators, namely Algerie Telecom for both fixed and mobile telephony and Djezzy and Nedjma for mobile telecom. At the moment the company is working to establish fiber connection between its poles and the state-owned phone company's (Algerie Telecom) switching centers. CAT's distribution and marketing strategies have not been made public and at the moment, it has not recruited reseller partners. However, CAT is negotiating partnership deals with Ring Algerie, Djezzy's distributors and others.

The delays are apparently creating tension within the company, which has sent a letter to the telecom regulator ARPT requesting an extension to further postpone the launch of its service and beyond the six month delay it was given when it was established in November 2005. ARPT will likely approve the extension request.

From a technology standpoint, CAT will implement the Wireless Local Loop technology, which costs are lower than in the case of fiber optics. WLL connects subscribers to the public switched telephone network using radio signals as a substitute for copper for all or part of the connection between the subscriber and the switch. This includes cordless access systems, proprietary fixed radio access, and fixed cellular systems.

According to its agreement with the government, CAT is required to offer coverage in five provinces in its first year of operation. Four such provinces have already received the equipment and they are Algiers, Constantine, Annaba and Oran. Coverage will extend to up to 10 provinces over the next three years.

CAT paid $65 million to acquire the fixed telephony license with local, regional and international access. The group is owned by Orascom Telecom Holding and Egypt Telecom, two Egyptian companies. Orascom currently owns a mobile telephony license in Algeria. CAT's license is for 15 years with an option to renew for another five years. The head of Orascom, the Egyptian Naguib Sawiris, says the company will invest $1 billion in the next 15 years to develop fixed telephony in Algeria.

© The North Africa Journal 2006

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