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ITU meeting of Arab Regulators

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

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  1. ITU meeting of Arab Regulators Algiers 19-21 April, 2003

  2. 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

  3. 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

  4. 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

  5. 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

  6. 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

  7. 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

  8. OTA Thank You for Your Attention

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