Nizar Bouguila, CEO, Tunisie Telecom: Interview

Interview: Nizar Bouguila

How can future investment in Tunisia’s telecommunications and IT sectors be ensured?

NIZAR BOUGUILA: In recent years there has been a price war among Tunisia’s three telecommunications service providers (TSPs). The arrival of a third TSP was the starting point of the price war, which obviously had an impact on the profitability of all TSPs and which continues to weigh on the telecommunications sector. The average price per minute is now about a fifth of what it was five years ago and among the lowest prices observed globally. However, growth in the mobile internet segment has allowed the sector to maintain revenue streams.

Nevertheless, what is at stake is the ability of TSPs to invest for future network and services development. Indeed, covering infrastructure maintenance costs, improving customer service, laying the groundwork for fibre to the home and the future introduction of a 5G network, and fostering innovation in both the telecommunications and IT sectors will depend on the ability of telecommunications operators to maintain an adequate capacity for investment. In turn, maintaining that kind of investment will require a conversation among the TSPs and the regulator regarding the sustainability of current price levels. Competition should focus on fostering services with greater added value.

What factors affect the use of value-added services, especially among individuals?

BOUGUILA: The use of value-added services boomed in 2016, which occurred for the most part thanks to the expansion of 3G and 4G internet networks. Use of such networks, however, remains below levels seen in the US and EU.

Providing services with higher added value will require creating a pricing environment that allows for future investment and overcoming obstacles like piracy. Furthermore, making value-added services available to consumers in Tunisia must be encouraged by partnerships with local start-ups as well as with international players.

In 2017, for example, public entities such as the Ministries of Health and Education will begin to increase their use of value-added services. A change in the sector’s regulatory framework allowed for the arrival of a mobile virtual network operator, which is likely to provide an added-value for certain niche markets. These niches can include certain Tunisians with family living abroad, young people, Libyans living in Tunisia, and so on.

How can the government support the expansion of broadband networks in interior regions?

BOUGUILA: Today, broadband connectivity is available in all of Tunisia’s regions. However, the challenge remains in expanding coverage to the rural areas of these regions. Part of the solution is putting in place a universal service, which is a mechanism by which the government will subsidise the extension of telecommunication services into zones where coverage is not profitable. The ICT Ministry is currently finalising a plan for universal service, for which it will shortly hold a tender.

To what extent should Tunisia encourage competition within the fixed-line segment?

BOUGUILA: Fixed-line services are extremely important for the Tunisian economy. Indeed, developing the telecommunications sector will require significant investment in both mobile and fixed-line services. The government should continue to encourage consumers to use the fixed-line services and TSPs that are providing and developing these services.

In some instances, it makes more sense for a newcomer TSP to partake of already existing infrastructure rather than for the company to invest in the creation of additional, new fibre-optic networks.