Tunisia Major African Mobile Markets: Future Growth Prospects  

Tunisia has one of the most developed telecommunications infrastructures in the Northern African region, with some of Africa's highest market penetration rates, and information technology is projected to contribute 13.5% of GDP in 2011. Mobile phone subscription rates have continued to grow since over the last decade, showing a CAGR of 8.57% during 2005-2008, while fixed-line subscribers have declined slightly at a CAGR of -0.30% over the same period.

The former government-owned telecom operator Tunisie Telecom was part-privatised in 2006, opening up the industry to competition from other providers. France Telecom-owned Orange was licensed as the country's second fixed-line and third mobile operator in June 2009 and began providing providing 3G services in May 2010. The internet sector has developed rapidly, supported by a nationwide fibre-optic backbone and some of the lowest broadband prices in Africa.

Tunisia has one of the most developed telecommunications infrastructures in the North African region and sports some of the continent's highest market penetration rates. The mobile sector has experienced exceptional growth since the introduction of competition in 2002. A nationwide fibre optic backbone and international access via submarine cables, coupled with some of the lowest broadband prices in Africa have supported rapid development of the Internet sector.

Table 2 provides an overview of country's key indicators in the telecom sector.

Tunisia has one of the more developed mobile markets in Africa as indicated by the high level of mobile penetration, which has exceeded 93 percent.

There are three mobile operators in the country - Tunisie Telecom, Tunisiana, and most recently Orange, who began operating the first country-wide 3G network in May 2010. As a state-owned utility, until 2001 Tunisie Telecom enjoyed being the only operator in a monopoly market, but competition was finally introduced in 2002 by the launch of mobile services from Tunisiana, and in this more competitive market prices came down, stimulating growth.

Market Size

Tunisia has one of the most developed telecommunications infrastructures in the North African region and sports some of the continent's highest market penetration rates. The mobile sector has experienced exceptional growth since the introduction of competition in 2002. A nationwide fibre optic backbone and international access via submarine cables, coupled with some of the lowest broadband prices in Africa have supported rapid development of the Internet sector.

The total number of mobile subscribers in Tunisia at the end of 2010 was approximately 10.95 million, with a corresponding mobile penetration rate of 103.5 percent.

During the 1st Quarter of 2011 Tunisia had recorded 11.28 Million Subscribers with the penetration rate exceeding more than 105%.

Table 3, below, shows the mobile subscribers in Tunisia for the period from 2002 to 2011.

Year-end	Subscriber (millions)	Penetration (%)
2002	0.56	6%
2003	1.91	19.3%
2004	3.73	37.5%
2005	5.68	56.4%
2006	7.33	72.1%
2007	8.77	85.1%
2008	9.76	93.9%
2009	10.48	99.8%
2010	10.95	103.4%
2011	11.28	105.5%

Source: Blycroft Publishing

Figure 1 illustrates the trends and forecasts for mobile subscribers and penetration rate in Tunisia for the 10-year period from 2002 to 2011.

Source: Company Reports

The three operators currently providing mobile services in Tunisia are discussed below.

Tunisie Telecom

Tunisie Telecom was the first mobile operator in Tunisia and was completely owned by the Tunisian government until it was part-privatized in July 2006, when a 35 percent stake was sold to a consortium of TECOM Investments and Dubai Investment Group (TECOM-DIG).

The operator's GSM network covers 100 percent of the urban population and 85 percent of the rural population. The operator also provides value-added services, such as SMS, voice messaging, etc. Tunisie Telecom had 6 million mobile subscribers at 2011.

Tunisia's telecom market will be one of the fastest-growing markets in the Africa/Middle East region with total telecom revenue estimated to grow at a CAGR of 5.4 percent over the next five years, reaching $2.2 billion in 2014.

Figure 3 illustrates the ownership split of Tunisie Telecom

Tunisiana

Tunisiana launched its mobile services in December 2002. The operator's total network coverage extended to 99 percent of the total population in 2005. The operator also provides value-added services, such as voicemail, SMS and fax service, and had 5.2 million subscribers at the end of 2009.But Currently Tunisian is the leading Player in telecom sector of Tunisia as it covers 55% of market till 2010 .

The major shareholders of the operator are Wataniya Telecom and Orascom Telecom, where Orascom Telecom Holding have 35 % of share, Wataniya Telecom have 50 % of Share & Carthage Consortium 15%.

Figure 4 gives the latest ownership structure of the operator .

Source: Company Reports

Table 4 provides an overview of the operator's key performance indicators.

Recent Developments

Investment in Telecommunications Infrastructure: -

With the arrival of Orange, Tunisia now has a 3G network that will cover 98 percent of the population by 2011, and Orange have begun unbundling local exchanges for broadband, further opening up competition in the internet market. There are plans for further expansion of the country's IT infrastructure with the announcement of a USD 3 billion deal from Vision 3 to develop the Tunis Telecom City concept. This is described as "the first in a planned network of telecom cities, [...] designed to cater to the location, infrastructural, research and development, educational and support service needs that will allow telecoms and I.T. sector organizations to flourish." Taking advantage of Tunisia's stable economy, labour supply and proximity to Europe, the project aims to provide an environment that will foster investment, education and research in telecommunications.

1Q11 Tunisia Mobile Operator Forecast, 2010 - 2015: Tunisia to have 16.7 million mobile subscriber connections in 2015 with Tunisiana (Orascom Telecom) taking 58% market share

The mobile market in Tunisia has grown at a rapid pace since 2002, and exceeded 93 percent penetration in 2010. Competition between the two major mobile providers has driven down activation and usage charges. Additional services such as mobile email and multimedia messaging will become more widely available with the introduction of 3G, and Orange has been in talks to distribute the Apple iPhone in the country. Other developments include the increasing use of mobile phones for payments, and several Tunisian banks have already begun to integrate payment by GSM into their services.

The information and communication technology sector in Tunisia is an increasingly important part of the economy. In 2008 it contributed 10 percent of the country's GDP, and is expected to reach 13.5 percent in 2012. The government has placed many of its services online, and over 80 percent of the total ICT sector revenue is generated by state and public enterprises. With continued investment in infrastructure and education planned for the future, Tunisia aims to remain a world leader in promoting ICT and its importance in government policy.