The following information is reproduced courtesy of Oxford Business Group. To purchase a copy of ‘The report: Algeria 2010′ please click here.
The growth of broadband, falling computer prices and an increased role for private enterprise have enabled the IT sector to rapidly expand in the past five years. IT penetration is still low, but several factors indicate the potential for continued growth. The young population is becoming more educated and the demand for IT services is rising. “Algeria is one of the most important regional markets for IT. “The country has huge infrastructure needs, but there are a lot of young people who are open to information and communication technology [ICT].” The sector should also get a boost from programs addressing both software and hardware deficiencies. The e-Algerie 2013 plan is an ambitious government effort to encourage the spread of ICT and the Ousratic program aims to provide Algerian households with low-cost computers. An additional project endeavours to equip primary and secondary schools with computers.
SECTOR PERFORMANCE: Turnover in the IT sector was $650m in 2008 and hardware spending reached AD27.9bn (€290m), while software cost AD8.9bn (€93m) and expenditure on IT services totaled AD8.7bn (€91m). The IT sector employs some 24,500 people. Between 2003 and 2007 the Algerian government spent AD18bn (€187m) in subsidies on the public sector for IT equipment and services.
Increasing ADSL penetration rates is a primary goal for the government, as ADSL penetration remains low, with 600,000 lines for a country of 34m people. The ministry of postal services and ICT announced that if the e-Algerie 2013 plan is successful, there could be 6m lines by 2013. Currently, 7% of the population has a personal computer without an internet connection, and only 2.5% of homes have ADSL connections. However, some 4.5m Algerians, 12.8% of the population, use the internet, most of them in inter-net cafes or other public locations. According to the Ministry of Postal Services and ICT (Ministere de la Poste et des Technologies de I’lnformation et de la Communication, MPTIC), 41.4% of businesses use the internet and of those that do, 58.2% have an email address, 29.4% have a website and 15.2% have a domain.
Most large companies have realized the importance that IT and the internet will play in increasing their competitiveness, however small and medium-sized enterprises (SMEs) are often under-equipped.
GOVERNMENT HELP: Under the e-Algerie 2013 plan, the country is tackling the integrated problems of ICT infrastructure, availability and usage. Much effort and expense is going to improving the national ICT infra-structure. Additionally, the government hopes to encourage local content and a digital economy. Finally, through improving legal regulations governing the sector, the government is attempting to enable greater public-private partnership and attract more ICT companies with financial and tax incentives. “Government contracts are the most lucrative in the IT sector right now, especially with the ambitious e-Algerie 2013 program.
The MPTIC has issued a list of 13 focus areas for the plan. The most important areas are human resources, information and communications, legal framework, infrastructure and ICT use in public administration. A total of close to $4bn has been budgeted for the program, with infrastructure to receive the largest share, at $104m. Some 60% of the funding will be supplied by public sources, roughly $245.3m. Microsoft’s Said told OBG that the e-Algerie plan proves there is a clear focus on IT development on the part of the public sector.
The Ousratic program is tackling ICT deficiencies by reaching out to Algerian households. Phase one of the program ran in 2005, and distributed nearly 50,000 computers among the population. Phase two of Ousratic effort attempts to correct problems that came up in phase one, tailoring the technology and soft-ware available to the needs of end-users by providing different packages for families, businesspeople and students.
ISP ACTIVITY: Fixed broadband connections account for 70% of total internet connections, and the ADSL market in Algeria is dominated by Djaweb, Algerie Telecom’s (AT) internet subsidiary; Djaweb has 99.99% of the country’s 600,000 subscriptions.
There are some 2 500 VSAT subscriptions in the coun try, 1700 of which are provided by Algerie Telecom Satellite, the national operator’s satellite division. Apart from ATS, Divona and Orascom are licensed to offer VSAT. There are also a limited number of WiMAX connections. Although there are over 70 registered ISPs in Algeria, only about 40 are active.
LOCAL INTERNET CONTENT: To promote the creation of local content and encourage internet use, CERIST, which is one of nine registrars for the country’s .dz domain name, has begun to offer free domain name registration and has made it easier to register names online. CERIST is also conducting an awareness campaign to promote the use of the .dz domain name. According to CERIST, there are only about 2400 sites with the .dz domain name, while approximately 45,000 Algerian sites are hosted abroad. The e-Algerie plan envisions increasing the number of .dz domain names to 1m in 2013.
IMPROVING CONNECTIONS: AT is taking steps to expand its fiber-optic connections. The operator has signed agreements with the state-owned petrochemicals production and distribution companies, Sonelgaz and Sonatrach, to use their fiber-optic network. The operator also plans to install a fiber-optic link between Oran and Valencia, Spain, which would be the country’s third such connection. Several government-owned companies were recent-ly restructured to better compete with their private sector counterparts in installing the hardware needed for better connectivity.
E-GOVERNMENT: More and more government services are making their way online, with the Algerian Ministry of Justice recently revamping its website to make it easier for citizens to find legal information, submit requests for documents, and arrange meetings with officials.
OUTLOOK: The IT deficit, coupled with its young, growing population, mean that there is potential for rapid growth in the sector. The spread of ICT throughout the general population in the form of the e-Algerie 2013 plan and the Ousratic program will provide needed funding for sector growth. The availability of government services and interesting local content has the potential to encourage internet use.
GETTING ORGANIZED: While government policy and public sector investment promise to drive growth in the sector, notably in the forms of the e-Algerie 2013planand the Ousratic program, two IT associations composed of private sector companies have also been instrumental in encouraging development and formulating strategy. In 2007 six internet service providers (ISPs) from the Association Algerienne des Fournisseurs de Services Internet (Algerian Internet Services Providers Association, AAFSI) provided President Abdelaziz Bouteflika with a 30-page report containing recommendations for reforms in the IT sector.
Notably, the top levels of the Regulatory Authority for Post and Telecommunications (Autorite de Regulation de la Poste et des Telecommunications, ARPT) and the CEO of Algerie Telecom (AT) were changed, with many of the new people coming from the IT sector, rather than elsewhere in the government. The structure and functions of the Centre de Recherche sur I’lnformation Scientifique et Technique (CERIST) were altered as well.
For instance, it will no longer manage the .dz domain name and will now function as one of the nine domain registrars. Finally, the Institut National d’lnformatique was separated from the Universite d’Alger and became the Ecole Nationale Superieure d’lnformatique.
A second IT association has also put forth proposals for a national IT policy. The Algerian Information Technology Association (AITA), which has a membership base consisting of 36 companies active in the Algerian IT sector, has organized seminars and discussions on how to better integrate ICT into the country’s economy.