A recent internet disruption in Algeria was a sobering reminder of the challenges the country’s internet services sector faces. It also underlines the importance of the government’s continuing efforts to develop a comprehensive internet policy framework, while highlighting the potential for WiMAX licensing and the development of asymmetric digital subscriber lines (ADSL).
Algérie Télécom (AT), the public telecommunications company, attributed the limited nationwide connectivity to a rupture in one of the two submarine fiber-optic cables that provide Algeria with its broadband data network. The ruptured cable, named the South East Asia-Middle East-West Europe 4, is maintained by France Télécom Marine, and extends from Marseille to Singapore with a stopover in Annaba, east of Algiers. All of the data activity was transferred to an already saturated cable system, ALPAL-2, which connects the island of Majorca to El Djemila, near the capital. The result was a slow to non-existent connection for Algeria’s ADSL subscribers.
The disruption’s impact on local businesses was limited though, due to the low level of connectivity. Algeria has few internet-based businesses, although in recent years it has become a popular destination for call centers.
Internet connectivity in Algeria’s business community can be broken down into two sectors. State-owned companies, which dominate market activity, rely on phone and fax as their primary means of communication, although email is on the rise.
Larger multinationals, primarily in the oil and gas sector, tend not to rely on the local networks, opting for more stable but costlier satellite-linked very small aperture terminals (VSAT) or WiMAX solutions. These corporations cannot afford to have internet downtime or have operations in rural areas not covered by the ADSL network. Oil and gas rigs, for example, transfer high volumes of data to headquarters on a daily basis.
“There is no way of knowing what is going on in a rig unless it is connected 100 percent of the time,” said Stéphane Valici, the chief executive officer of Divona, a licensed VSAT operator.
The propensity of multinationals to rely on alternative forms of connectivity highlights the enormous potential in the country’s IT sector. WiMAX technology, if properly exploited, is capable of providing broadband internet access to consumers without the need for cables. This is of crucial importance since much of Algeria’s connectivity problems stem from its “last mile” cable network — the final link from the provider to the consumer — rather than the internal fibre-optics.
According to Mohamed Fadi Gouasmia, the general manager of Anwarnet, “WiMAX eliminates the need to depend on this cable network by going completely wireless.”
So far, national scale investment in WiMAX has been limited by the lack of a licensed operator. However, this is now slowly starting to change. The government has begun to hand out exploration authorizations, to seven companies thus far, allowing them to operate WiMAX services over the 3.5 GHz frequency. However, only three of these companies are actively marketing WiMAX services. Divona’s Valici and Anwarnet’s Gouasmia both agree the bandwidth provided operators is too limited for them to expand.
Some of these players do not have adequate resources and consolidation in the industry is being delayed due to the uncertainty regarding their status if a license is issued. Furthermore, companies are not allowed to cede their licenses, nor be acquired without the approval of the national regulator, Autorité de Régulation de la Poste et des Télécommunications.
“WiMAX technology,” Valici said, “is likely to remain a niche in Algeria unless licensing issues are resolved.”
For now, retail users and small and medium-sized companies must use the country’s oversaturated ADSL network. Ali Kahlane, the CEO of Satlinker, an internet service provider (ISP) and virtual private network operator, said this underlines the need for an upgraded ADSL network.
“AT heavily promoted its ADSL services by lowering prices without expanding its bandwidth,” said Kahlane, who is also the current head of the Algerian Association of ISPs.
This promotion, without expanded capability, caused network oversaturation. There was a rush to sign-up in high-density urban areas, and subscriptions ran out quickly.
Other areas with lower populations often have excess capacity. The network is in need of a overhaul that will allow for increased internet penetration and a rise in subscriber numbers. Officially, ADSL penetration has reached 430,000, with 500,000 connections available.
And yet the future looks positive: Kahlane says the Ministry of Post, Media Technology, and Telecommunication and Algérie Télécom have “noticeably” begun to separate “internet policy from telecoms policy,” which will provide a more rigorous legal framework for IT connectivity.
Given the potential in both the corporate and retail segments, combined with an impending $150 billion government spending plan, a robust strategy to build a strong information and communications technology sector could improve Algeria’s profile as a knowledge economy.
