Despite an improvement in the regulatory framework in Algeria, VimpelCom – which runs mobile telecom firm, Djezzy – has continued to experience customer churn in the North African country amid an 8% decline in Average Revenue Per User (ARPU) numbers.
The company said on Thursday that it is experiencing "continued weakness in Algeria" and that this was offsetting growth it its other markets across the world. Further compounding Djezzy's performance, subscriber numbers declined by 6% to US$15.9 million in the third quarter to the end of September.
Vimpelcom has said Algeria's regulatory environment "is improving" as Djezzy's 'Significant Market Player' status was lifted in September 2016. This effectively removes the approval procedure and on-net/off-net asymmetry test initiated by the Algeria Regulatory Authority for Post and Telecommunications on new commercial offers.
Djezzy is expecting a positive outcome on current discussions with the regulator and says finalisation of this issue will help the company clear regulatory hurdles it has been facing in the country.
This improvement in the regulatory framework has been unmatched by Djezzy's financial performance and it "expects this pressure (declining ARPUs and falling subscriber numbers) to continue" for the remainder of the year.
Revenues for the third quarter period fell by 13% to about US$263 million compared to the year earlier period, despite continued robust growth in data revenues.
Data revenue for Djezzy strengthened by 57%, and this has been attributed to growing uptake of mobile internet services and an upsurge in subscribers utilising data services. In the half year period to June 2016, data revenues stood at US$32 million.
"The company (Djezzy) is taking further measures to improve performance and stabilise its customer base, including distribution transformation and monobrand roll-out, promoting micro campaigns with tailored services to increase satisfaction, data monetisation activities and smartphone promotions coupled with bundle offers," VimpelCom said.
LTE services are pivotal for the company's quest to grow data revenue and it has earmarked expansion of high speed 4G internet connectivity to 20 areas before the end of this year. This expansion is subject to regulatory approvals which the company anticipates will be granted.
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