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ITU meeting of Arab Regulators. Algiers 19-21 April, 2003. Orascom Telecom Algérie brief presentation. Subsidiary of Orascom Telecom Group (Egypt) Licence in Algeria as 2 nd GSM operator awarded to OTA: August 4 th , 2001 Commercial launch in Algiers: February 15 th , 2002

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itu meeting of arab regulators

ITU meeting of Arab Regulators

Algiers 19-21 April, 2003

orascom telecom alg rie brief presentation
Orascom Telecom Algériebrief presentation
  • Subsidiary of Orascom Telecom Group (Egypt)
  • Licence in Algeria as 2nd GSM operator awarded to OTA: August 4th, 2001
  • Commercial launch in Algiers: February 15th, 2002
  • Brand Name: DJEZZY GSM
  • Currently
    • 500 k+ subscribers
    • Network in 38 Willayas (on a total of 48)
    • 100 roaming partners
ota interconnection with pstn
OTAInterconnection with PSTN
  • PSTN operated by Incumbent Operator Algérie Télécom, under separation from Ministry, also our competitor as 1st GSM Operator
  • Currently no clear separation of GSM activities vs others
  • Interconnection Issues
    • National termination charges were easy to negotiate thanks to clear frame in the GSM licence
      • PSTN  OTA 6.5 DA (8 UScents)/min
      • OTA  PSTN (local switches) 1.2 DA (1.5 Uscents)/min
      • OTA  PSTN (transit switches) 2.4 to 2.8 DA/min
ota interconnection with pstn1
OTAInterconnection with PSTN
  • Interconnection Issues (ctd)
    • International incoming termination charges are still a problem
      • PSTN  OTA (international In) 1.2 DA (1.5 Uscents)/min
      • OTA  PSTN (international Out) 80% of public rates
    • Direct costs of interconnection
      • All POIs are in the PSTN => We bear all transmission costs to the PSTN (LL or own Links)
    • Leased Lines
      • Public Price = No volume discount
    • QoS / Service Level Agreement
      • Bad QoS (esp. LL) not in line with basic SLA in contract
      • No offer for various Service Levels
      • Delivery Timing not reliable
ota interconnection with other gsm
OTAInterconnection with other GSM
  • Interconnection Issues (ctd)
    • Termination charges could not be agreed upon
    • Arbitration escalated to ARPT
      • ARPT ruled based on cost analysis
      • Symetrical Termination Charge between 3 and 4 DA/min to be re-assessed after end 2003
      • Agreement reached on 4 DA/min
    • Still we see problems of coherence
      • PSTN originated call GSM terminated is 6.5 DA/min when GSM1 originated call GSM2 terminated is 4 DA/min based on same underlying cost orientation principle
      • Our own cost analysis (Minimum Retail Price Method) showed costs in the range of 6 DA/min for a GSM termination
ota other regulatory issues
OTAOther Regulatory Issues
  • Cross-subsidies by incumbent Operator
    • Their present GSM rates are obviously below costs
    • Arbitration has been escalated to ARPT
  • No licence fees paid for GSM by the incumbent operator
    • They did not participate directly or indirectly (e.g.Right of First Refusal) in the Tendering process
    • We see it as a breach of non-discrimination principle clearly stated in the Telecommunication Law
    • We see it as a breach of licence awarding principles clearly stated in the same Telecommunication Law
    • Definitely not in line with International Regulations and Practises
ota conclusion new entrant expectations as regards regulator intervention
OTAConclusion: new entrant expectations as regards Regulator Intervention
  • Regulator has to go deeper into Interconnection issues on all aspects…
    • Termination charges and Leased Lines prices
    • Direct Costs of interconnection
    • QoS and Service Levels
    • Delivery timing
    • Etc.
  • …and on all issues related to fair competition
  • This should result in a comprehensive set of rules clearly stated in the different licences/authorisations or at a higher level
  • This is critical in the first phases of opening to competition in order to protect new entrants (esp. Small ones) and guarantee smooth transition to a fully competitive environment

Thank You for Your Attention