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Dissolution of Fixed-line Monopoly and Launch of 3G to Invigorate Tunisian Market

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Tunisia's telecommunication sector contributes to 11 per cent of the country's Gross Domestic Product (GDP). With three operators in the market (Orange Tunisia, Tunisiana and Tunisia Telecom), the mobile penetration rate stood at 115.3 per cent in 2011. Recently introduced competition in the fixed line segment and the launch of 3G services will continue to push the industry forward.

New analysis from Frost & Sullivan finds that the market earned revenues of USD 2.03 billion in 2011 and estimates this to reach USD 2.82 billion in 2018.

"The arrival of the new fixed and mobile service operator in 2010 dissolved the monopoly of the fixed-line incumbent," notes Frost & Sullivan Research Analyst Jonas Zelba. "At the same time, it increased competition which is likely to drive growth in the telecom market."

The duopoly in the mobile segment of two operators ended in 2010, when the third mobile operator, Orange Tunisia, launched its services. Orange was the first operator in the country to launch 3G services in May 2010. However, four months later, Tunisie Telecom acquired the second 3G license for USD 80 million.

The fixed-line segment was controlled by Tunisia Telecom until 2010. In May 2010, newly established operator, Orange Tunisia, launched fixed, mobile and internet services. Greater competition and the dissolution of monopolies have boded well for the Tunisian telecom market.

­However, recent political unrest and the current political instability in Tunisia have slowed down enterprise spending, internal Information and Communication Technologies (ICT) investments and Foreign Direct Investment (FDI). The telecommunication market was significantly affected by the unrest as the market's revenue shank by 3.6 per cent in 2011.

"It is critical for Tunisia to resolve the political instability quickly to ensure healthy and much needed investments in the country," says Zelba.

To maintain market momentum, operators should focus on extending coverage to rural areas and introduce aggressive pricing to attract subscribers. Affordability for lower-income subscribers will remain a key factor to penetrate this mature market.

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Tags: Tunisia