MOBILE TELECOMS MARKET BOOMING IN ALGERIA
Last year saw rapid growth in the Algerian mobile market because of:
- privatization of the publicly owned company AMN (Algerie Mobile Network) which became Algerie Telecom and branded its offer as Mobilis
- a third operator Nedjma (Wataniya Telecom Algerie) started operations in August 2004. Nedjma entered the market with a different positioning - a multimedia operator with aggressive promotions e.g. free minutes at activation, 100 free MMS, free calls during the evenings.
The fast evolving market and the entry of a third operator forced Mobilis and Djezzy (the Orascom brand) to improve their service offerings and cut tariffs. Hence, there was a need to develop new offers and segment the market.
The main action taken by Orascom Telecom was to launch a separate brand under the name of Allo, targeting budget users at low prices ; and to position Djezzy as the value brand. Brand Allo now stands at 18% of the total market, exceeding Nedjma in market share. This unique action - which wasn't seen even in the relatively more developed markets in the region, like Egypt or Morocco - helped Orascom to hold on to its lead position overall and reduced the effect of Nedjma's aggressive price war.
Allo was able to acquire share despite very low media spends compared to the other leading telecoms brands.
In fact, Orascom's branding strategy has inspired the other two operators to develop their own low-price offers - Mobilight from Mobilis ; and Star from Nedjma.
The current price of a Star card, for example, is 400 AD (equivalent to USD $ 5.7), compared to a Nedjma card which sold at 2900 AD (equivalent to USD $ 42) at launch in September 2004.
As a result, the market climbed to 10 million subscribers by October 2005 - a net increase of 102% over December 2004. The peak growth occurred during the summer period when 2 million lines were sold during two months (July-August) alone, increasing mobile penetration to over 30%.
Orascom now leads the market with more than 6 million subscribers, followed by Algerie Telecom with 3.5 million subscribers and Wataniya Telecom Algeria with 1 million subscribers. Through these three operators the mobile sector has attracted a total of USD $ 4 billion dollars in investment and created 70,000 jobs.