VimpelCom is confident of strong future growth for its Algerian operation despite challenging operating conditions in the North African country which had seen first quarter revenues slide by 11%.

A new chief executive officer will be appointed in the next few months to lead a strengthened Algerian management team following the disposal of a 51% stake in Djezzy, VimpelCom's Algerian unit, to Fonds National d'Investissement (FNI) for $2.6 billion in January this year.

"The new structure in Algeria provides Djezzy with a strong local partner and a full transformation programme," said Global Telecom chief executive officer, Vincenzo Nesci, on Wednesday. VimpelCom controls nearly 60% of Global Telecom.

After launching 3G internet in July last year, the Algerian telecoms unit has started to grow its subscriber base.

VimpelCom's customer base for the quarter in Algeria increased 6% to 18.7 million.

The company has now earmarked further roll-out of 3G internet coverage across the country after the number of subscribers using 3G increased to 2.1 million by the end of March. This was despite "challenging" market conditions during the period under review which saw revenues decline.

"As a result, total revenue declined 10% year-on-year, while mobile service revenue decreased 11% year on year. Mobile ARPU decreased 16% YoY to DZD 528 due to the churn of high-value customers as a result of the delayed 3G services and migration of customers to the new and more attractive Djezzy offers and bundles," the company said.