Algerian mobile operator Djezzy added 1 million customers this year

Djezzy, Algeria’s No. 2 mobile operator, has seven million smart phones users. (Reuters)
Updated 06 December 2018

Algerian mobile operator Djezzy added 1 million customers this year

  • Djezzy, or Optimum Telecom Algérie, will have 16 million subscribers by the end of 2018
  • The rate of penetration of smartphones in Algeria is around 40 percent, much lower than in other Arab countries

ALGIERS: Algerian mobile telecoms operator Djezzy has added 1 million customers this year and plans to further invest to offer more online payment services, its CEO said.
Djezzy, or Optimum Telecom Algérie, will have 16 million subscribers by the end of 2018, up from 15 million a year ago and including seven million smart phones users, said Matthieu Galvani.
Djezzy is Algeria’s No. 2 mobile operator, behind state-owned Mobilis, and also competes with Qatar’s Ooredoo.
It is owned by Egypt’s Global Telecom Holding (GTH) , in which Dutch-based Veon, formerly know as VimpelCom, has a 57.7 percent stake.
Galvani declined to give a forecast for next year, saying only the potential was huge as the government was planning to make more online payment services available.
Some government bodies and even banks in Algeria still use the fax to communicate with the world. Online payments are very limited and such services require special central bank approval.
However, authorities plan to expand the network as part of efforts to boost private investment and lower the country’s dependency on oil and gas revenues.
To tap into this nascent market Djezzy will invest more after spending 30 billion dinars ($253 million) in the past two years to become an online business platform, Galvani said, declining to give a figure.
“The potential of (Algeria’s population of around) 40 million people once it goes digital is huge, so we need to be ready, hundreds of thousands of jobs will be created,” he said.
Other shareholders in Djezzy are a state-owned fund called FNI with 51 percent and CEVITAL, a local private company, which owns 3.3 percent.
The rate of penetration of smartphones in Algeria is around 40 percent now, according to official figures, much lower than in other Arab countries.
The rate for mobile phones is 111 percent.
Algeria has the slowest fixed Internet speed connection in the world at 3.5 megabits per second (mbps), compared to world leader Singapore with 161.2 mbps, according to 2018 Digital yearbook.
Mobile connections are faster at 7.4 mpbs but even then only seven other countries offer slower services, according to Digital yearbook.

Easy credit poses tough challenge for Russian economy minister

Updated 18 August 2019

Easy credit poses tough challenge for Russian economy minister

  • Measures being prepared to help indebted citizens; situation might blow up in 2021

MOSCOW: New machines popping up in Russian shopping centers seem innocuous enough — users insert their passport and receive a small loan in a matter of minutes.

But the devices, which dispense credit in Saint Petersburg malls at a sky-high annual rate of 365 percent, are another sign of a credit boom that has authorities worried.

Russians, who have seen their purchasing power decline in recent years, are borrowing more and more to buy goods or simply to make ends meet.

The level of loans has grown so much in the last 18 months that the economy minister warned it could contribute to another recession.

But it’s a sensitive topic. Limiting credit would deprive households of financing that is sometimes vital, and could hobble already stagnant growth.

The Russian economy was badly hit in 2014 by falling oil prices and Western sanctions over Moscow’s role in Ukraine, and it has yet to fully recover.

“Tightening lending conditions could immediately damage growth,” Natalia Orlova, chief economist at Alfa Bank, told AFP.

“Continuing retail loan growth is currently the main supporting factor,” she noted.

But “the situation could blow up in 2021,” Economy Minister Maxim Oreshkin warned in a recent interview with the Ekho Moskvy radio station.

He said measures were being prepared to help indebted Russians.

According to Oreshkin, consumer credit’s share of household debt increased by 25 percent last year and now represents 1.8 trillion rubles, around $27.5 billion.

For a third of indebted households, he said, credit reimbursement eats up 60 percent of their monthly income, pushing many to take out new loans to repay old ones.

Orlova said other countries in the region, for example in Eastern Europe, had even higher levels of overall consumer debt as a percentage of national output or GDP.

But Russian debt is “not spread equally, it is mainly held by lower income classes,” which are less likely to repay, she said.

The situation has led to friction between the government and the central bank, with ministers like Oreshkin criticizing it for not doing enough to restrict loans.

Meanwhile, economic growth slowed sharply early this year following recoveries in 2017 and 2018, with an increase of just 0.7 percent in the first half of 2019 from the same period a year earlier.

That was far from the 4.0 percent annual target set by President Vladimir Putin — a difficult objective while the country is subject to Western sanctions.

With 19 million people living below the poverty line, Russia is in dire need of development.

“The problem is that people don’t have money,” Andrei Kolesnikov of the Carnegie Center in Moscow wrote recently.

“This is why we can physically feel the trepidation of the financial and economic authorities,” he added. Kolesnikov described the government’s economic policy as something that “essentially boils down to collecting additional cash from the population and spending it on goals indicated by the state.”

At the beginning of his fourth presidential term in 2018, Putin unveiled ambitious “national projects.”

The cost of those projects — which fall into 12 categories that range from health to infrastructure — is estimated at $400 billion by 2024, of which $115 billion is to come from private investment.