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Algeria's Djezzy bumps up 4G coverage to offset revenue slide

Algeria's Djezzy bumps up 4G coverage to offset revenue slide

Algerian mobile firm Djezzy has increased its 4G coverage to approximately 25% of the country's population, driving up revenue from data services to help offset a marked decline in revenue and margin.

According to the company's latest quarterly results to end September, the company has lost customers (owing to pricing competition from market rivals), but bumped up its investments in data connectivity.

Djezzy claims its 3G services reach almost 76% of the country's population.

"Price competition, in both voice and data, caused a continued reduction in ARPU (for the third quarter to end September), which declined by 6.4% year-on-year," the company said on Thursday.

Although "operating trends further improved, showing signs of a stabilisation with customers and revenue growing quarter-on-quarter," revenue of US$206.2 million for the period decreased by 6.7% year-on-year.

Data revenue grew by 71.8% to US$48.1 million, with a 23.8% increase in mobile data to 9 million. The higher data revenue has been attributed to "higher usage and a substantial increase in data customers as a result of the 3G and 4G/LTE network roll-out" across the country.

The company's mobile network subscriber numbers increased marginally from 15.2 million to 15.6 million.

EBITDA for the period decreased by 13.7% year-on-year, mainly as a result of the decline in revenue as well as new taxation thresholds, an increase in technology costs primarily related to the migration to a new technology platform.

The government of Algeria has raised "the tax on recharge transfer between operators and distributors from 0.5% to 1.5%" under the Finance Law introduced on 15 July 2018.

"The market is still challenging with intense price competition and a regulatory and macro-economic environment which remains characterised by inflationary pressures and import restrictions on certain goods," said Djezzy.

The company plans to revamp its offering on prepaid and post-paid through a segmented approach, drive up value while protecting its customer base with competitive offers on data services.

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