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ALGERIA |
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Success story |
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In July 2001 Orascom Telecom Holding (OTH) won for US$ 737 million the competition for the second mobile telephone licence in Algeria after a tough battle with some of the biggest companies in the world. OTH belongs to the Egyptian group Orascom, the property of the Sawiris family. It employs around 20,000 people in Egypt in Public Works, the hotel trade, cement plants and telecommunications. This holding claims to be the largest GSM operator in Africa, the Middle East and the Indian subcontinent. |
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Orascom, 10 million subscribers in Algeria |
In July 2001 Orascom Telecom Holding (OTH) won for US$ 737 million the competition for the second mobile telephone licence in Algeria after a tough battle with some of the biggest companies in the world. OTH belongs to the Egyptian group Orascom, the property of the Sawiris family. It employs around 20,000 people in Egypt in Public Works, the hotel trade, cement plants and telecommunications. This holding claims to be the largest GSM operator in Africa, the Middle East and the Indian subcontinent. Alongside France Télécom (Orange) it co-operates MobiNil in Egypt. On 15th February 2002, Orascom Algérie officially launched its activities under the brand name Djezzy GSM. The 48 main towns of the wilayas (Departments), the most distant being Tindouf and Tamanrasset, were covered at the end of 2003.
After having reached the symbolic figure of one million subscribers in September 2003, Djezzy’s growth accelerated, with two million subscribers in July 2004, three in December 2004, 4 in March 2005 and 6 million at the end of September 2005. In only 5 years, Orascom secured an outstanding leadership on the Algerian mobile market, reaching the threshold of 10 million subscribers in September 2006 (a 50% market share by the number of subscribers, and 70% of the sector’s total sales figures), according to the National Authority for the Regulation of the Post and Telecommunications (ARPT in French).
As of June 2006, Djezzy represented 39% of OTH’s total sales figures, making it Orascom Telecom’s most significant and profitable subsidiary. As a consequence, the Egyptian parent company increased its participation all along 2006 until owning 96.8% of the capital at the end of 2006. Cevital SPA, Algeria’s first agro-food company, holds the remaining shares.
This success has not, however, been achieved without hitches. Since the opening of the market, a severe price war has raged between Orascom and Algérie Télécom (AT), the historic operator, through its mobile subsidiary Mobilis, while competition further increased with the launching of Nedjma, a third operator, by Kuwait’s Wataniya Telecom in August 2004. Orascom’s success seems to be at present a cause of worry for the ARPT which, in Decision n°11 on March 12, 2007, forced Djezzy to withdraw its cheapest offers, in the name of preserving competition. |
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