ICT MAGHREB

Workshop 27.10.2011

Steve CollingMarjaana KarjalainenAnneli Virtanen

Ohjelma

09.00 Seminaarin avaus ja Maghreb-

maiden ICT-alan markkina-

analyysin päähavainnot

Marjaana Karjalainen, Finpro Italy

Anneli Virtanen, Finpro Tunisia

Steve Colling, Finpro France

09.30 Maghreb – Mahdollisuus ja

erilaisuus

Kim Fagernäs, Vice President EMEA

and APAC, Stonesoft Oyj

09.50 Liikekumppanuustukea

kehittyville markkinoille

Siv Alhberg, Programme Director,

Finnpartnership

10.05 Miten tästä eteenpäin Marjaana Karjalainen, Finpro Italy

10.30 Tilaisuus päättyy Mahdollisuus keskusteluun Finpron

asiantuntijoiden kanssa

27/10/2011 2© Finpro

Maghreb (Algeria, Libya, Mauritania, Morocco, Tunisia)

• All states are members of the Arab

Maghreb Union (l’Union de

Maghreb Arabe, UMA). UMA

promotes regional integration

with emphasis on economic and

political co-operation.

• IMF (International Monetary Fund)

divides the region into three groups:

- Major oil producers - Algeria and Libya

- Emerging markets - Morocco and Tunisia

- Poorest country - Mauritania (oil production

started in 2006)

• The population of Algeria, Tunisia and Morocco is around

77 million and the proportion of Muslims is almost 100 %.

12.10.2011 3© Finpro

Tunisia

Tunisia – Arab Spring

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Tunisia – Arab Spring

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Tunisia in brief

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Population 10.5 million

Area 163 610 km2

Capital Tunis

•

Languages Arabic, French

Currency Tunisian dinar (TND)

(1€ = 1.94 approx.)

GDP 2010 33.4 billion €

(per capita € 3180)

Minim. wage 121 € / month

(40 h work week)

Government Presidential Republic

Doing business in Tunisia

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• Exporting to Tunisia

– On the basis of the Association Agreement Tunisia is looking for preferential status within the EU, i.e. “partenariat privilégié”.

– The most used method of payment in Tunisia is letter of credit - international transfer and documentary remittance are also possible.

• Investing in Tunisia

– Good investment and business environment (69th out of 183 countries in WB’s Doing Business 2010) and fairly good banking system.

– Offshore advantages in taxation e.g. full tax exemption on exports-derived profits for the first 10 years and taxation at a low rate of 10% after this period of ten years for the life of the company.

– Tunisia continues to attract Foreign Direct Investment (FDI). Partnership plays a major role as nearly half of foreign companies have mixed capital; they are associated with Tunisians in joint venture.

• Corruption

– In 2010 Tunisia was ranked 59th out of 178 countries in the Corruption Perception Index, ahead Greece, Italy and Romania, as well as most Arab and African countries.

• Travel & safety issues

– No visa needed for Finns staying less than 3 months

– Safe country for foreign people, yet cultural issues must be considered

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• Democratic development –Tunisia as predecessor

• The importance of social media rises (Facebook, YouTube, blogs)

• Strengthening of EU relations –Tunisia’s “statut avancé”

• Offshore – Tunisia provides special benefits for the companies and a natural connection to other Maghreb countries and West Africa

• Influence of China is growing in the region – challenges but also cooperation possibilities in various sectors

• Development of mobile solutions (3G)

• Importance of Arab financiers and international/regional development financial institutions

• Improvement of security systems

• Urbanisation on the coast line - “Medinas 2030”

initiative (EIB, Center for Mediterranean Integration)

• Reconstruction of Libya – Tunisia’s good relationship

Tunisia - Future development

ICT, R&D, Innovations

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Tunisia’s ICT market

• Ministry of Communication and Technologies (Ministry of Industry and

Technology at present) is responsible for ICT sector development in

Tunisia

– 1st country in Africa having an ICT-based national strategy

– Government is promoting the use of technology in administration and

education: e-government, e-learning

– Tunisia will be a member of Board of Directors of the International

Telecommunications Union (ITU) 2011-2014

• Tunisia has positioned itself as a regional high-tech centre of the

Maghreb-countries emphasis on software technologies and services

– Global Information Technology report 2010-2011: Tunisia is the 35th out of

138 countries, 1st in Africa and in Maghreb (and gained 4 places from the

previous year)

– During recent years ICT sector has experienced strong growth. Sector

accounted for 11.4 % of GDP in 2009 and attracted EUR 2.1 billion for

2007-2011

27/10/2011 11© Finpro

Sources: Tunisiaonlinenews.com 13.10.2010 , OBG:

the report - Tunisia

Telecom market

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• Fierce competition

– Three operators, Tunisiana, Tunisie Télécom (TT) and Orange, competing in a market with the mobile subscription penetration rate at 106 % (2010)

– TT losing customers to Orange the current trend, Tunisiana holding its position

– Market dominated by pre-paid subscriptions

– Big changes and demand for applications ahead with the extension of the 3G offering in 2011, Orange already holder of 3G licence. TT has recently got a 3G licence and started offering 3G services in July 2011. Tunisiana expects to have its 3G licence in November 2011.

• Orange to challenge TT in the fixed-line and broadband market

– TT’s fixed-line monopoly over since the entry of Orange

– TT has however control of substantial tranches of Tunisia’s telecoms infrastructure

– TT around 470.000 ADSL subscriptions against Orange’s around 36.000 3G subscriptions (9/2010)

• Both TT and Orange offer WiMAX and VSAT services

• Tunisia has participated in pan-African RASCOM initiative intergovernmental commercial satellite enterprise

Sources: OBG, The Report, Tunisia 2010, Tekiano

Tunisia as a market

12.10.2011 13© Finpro

Strengths

• Good business environment

• High education level and good ICT

skills

• Developed and functioning

infrastructure

• Well developed outsourcing and

offshore activities

• Gateway to other African countries

Weaknesses

• ICT sector dominated by public

tendering processes which are difficult

for foreign companies

• Political dimension of the business is

still high

• Limited market in size

Opportunities

• Operators looking for concrete solutions

to leverage their 3G investments

(platforms, services)

• First democratic elections at hand

Threats

• Developing a sustainable business

takes time

• Competition is getting fiercer

Morocco

Kingdom of Morocco

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Population

31,5 million (50% less than 25)

Area

710 850 km2 (excl. W. Sahara)

Capital

Rabat (largest city Casablanca)

Languages

Arabic (French, Berber)

Currency

Moroccan Dirham (1€ ≈ 11MAD)

GDP

€65 446 million

(per capita €2 076)

Minimum salary

0,90 € per hour

Government

Constitutional monarchy

Doing business in Morocco

• Exporting to Morocco

• Tariffs are applied on many imported products

• Investing in Morocco

• Morocco is highly accommodative to foreign investors

• Creation in 2009 of the Moroccan Investment Development Agency (AMDI), under the Ministry of Industry, Trade and New Technologies

• Designed to inform and assist foreign investors throughout the different phases of their project

• Corruption

• In 2009 Morocco ranked 89th out of 180 in the Corruption Perception Index scoring 3,3*, below the world’s average (4) and median (3,35)

• Morocco has set up a commission and voted several laws to fight corruption

• Travel & safety issues

• No visa required to enter the country

• No particular risk

12.10.2011 16© Finpro

ICT sector in the economy

• Current general situation

• The ICT sector currently employs 32 000 people in Morocco

• ICT generates 3 700 M€

• IT offshoring has grown 270% faster than anticipated

• In 2009 the government has launched the Maroc Numeric Plan in order to:

– Develop the domestic demand by boosting the use of IT in households,

companies and schools

– Create 26 000 additional jobs, and gain productivity in all sectors

– Multiply by 7 the revenues generated by the IT offshoring sector

• Morocco to focus on the following sectors and around which specific techno

centers are being built:

– Multimedia, software development, BPO, mobile applications, on-board

electronic equipment

• Moroccan ICT sector is expected to grow 10% annually for the coming years

12.10.2011 17© Finpro

Telecom market

• Mobile penetration rate reached 108% in June 2011

– 96% of lines are pre-paid

• 35% of Moroccans are internet users

– Most of users connect from internet cafés

• 70% of private internet connection through 3G networks

• 3 operators

– Maroc Telecom (55% market share in mobile, 36% in 3G)

– Meditel (35% and 21%)

– Inwi (10% and 43%)

12.10.2011 18© Finpro

Business parks

• 4 business parks host nearshoring activities

• Rabat Technopolis is operational but isn’t completed yet

• 5th business park is being built in Fez

• Another project planned in Marrakech

• All business parks are developed and managed by state-controlled

organizations

• Caisse de Dépôt et de Gestion, through its subsidiary MEDZ is the most

important, financing all projects except in Tangier

• Tanger Free Zone is managed by TMSA, the state organization in

charge of the entire Tangier harbor area project

• Casanearshore is the only park focused exclusively on nearshoring activities

(ITO and BPO)

• Tanger’s focus is nearshoring to Spain

• Technopolis’ focus is R&D

12.10.2011 19© Finpro

Morocco as a market

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Strengths

• Stable and open country with pro-

business authorities

• Skilled, experienced and English-

speaking personnel

• Thriving private sector with a sizable

number of SME and large corporations

as potential clients

Weaknesses

• Morocco is still a developing country

with a large share of poor, rural and

illiterate population

• Difficult access to large public projects:

relations and local partners are

necessary

Opportunities

• State-sponsored projects and

nearshoring activities create new and

more complex needs

• All solutions related to data transfers

will keep on growing

• A gateway to French-speaking African

countries

Threats

• Increasing competition from local and

foreign companies

Algeria

Algeria (People's Democratic Republic of)

12.10.2011 © Finpro 22

Population

35,7 million (47% less than 25)

Area

2 381 741 km2 (2nd largest in

Africa)

Capital

Algiers (largest city in Maghreb)

Languages

Arabic (French, Berber)

Currency

Algerian dinar (DZD) (1€ ≈ 100

DZD)

GDP

€80 368 million (per capita €2520)

Min wage

15 000 DZD / month

Government

Presidential Republic

Doing business in Algeria

• Exporting to Algeria

• Tariffs and quotas for most of the products

• Since 2009 documentary credit is the only method of payment possible

• Investing in Algeria

• Foreign Direct Investment (FDI) projects must be presented to the Agence National pour le Développement de l’Investissement (ANDI)

• In 2009 only 4 FDI projects were presented to ANDI (102 in 2008)

• Since 2009, at least 51% of a joint venture’s capital must be owned by Algerian partners. For micro structure the local partner(s) share must be 30%.

• Corruption

– In 2009 Algeria ranked 111th out of 180 in the Corruption Perception Index, scoring 2,8*, below the world’s average (4) and median (3,35)

• Travel & safety issues

– A visa is required to enter the country

– Recommended to stay in secured hotels in Algiers and to travel only by plane between the main cities

12.10.2011 23© Finpro

ICT usage evolutions

12.10.2011 24© Finpro

0

20

40

60

80

100

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Internet users as a % of population

Algeria

Finland

0

50

100

150

200

Mobile phone penetration rates in %

0

10

20

30

40

50

60

Fixed telephone lines as a % of population

ICT in organizations

• 41,4% of companies use the Internet for business

• 58,2% of these have an e-mail address

• 29,4% have a website

• 15,2% have a domain

• Due to many disruptions in the Internet network, many companies are turning

towards alternative technologies such as WiMAX

• The e-Algeria project supports the integration of ICT in companies and publics

administration

• According to local IT firms, the project is too vague, lacks leadership and

resources to implement concrete actions

12.10.2011 25© Finpro

Algérie Télécom /

Mobilis

Djezzy (Orascom

Telecom Algérie )

Nedjma

Activities Fixed, mobile (2G),

satellite, broadband

Mobile (2G) Mobile (2G)

Market share 100% (fixed)

34,8% (mobile)

41,8% (mobile) 23,4% (mobile)

Number of

mobile clients

12,29 million 14,79 million 8,28 million

Net revenue Doesn’t disclose financial

information

€ 353 million € 377 million

Revenue per

mobile user

(monthly,

Q110)

Doesn’t disclose financial

information

7 € 3,96 €

Ownership Algerian State (100%) The Egyptian Orascom

Telecom Holding (97%) and

the Algerian Cevital SPA

(3%). The Algerian

government may take

control of the company.

The Kuwaiti Wataniya

Telecom (71%) and the

Kuwaiti Gulf Investment

Corporation and United

Gulf Bank (29%)

Telecom operators

12.10.2011 26© Finpro

Algeria as a market

12.10.2011 27© Finpro

Strengths

• Large untapped market with little

competition

• Local private ICT companies are

mainly SME accessible and

responsive

Weaknesses

• Red tape and heavy restrictions on

imports & FDI

• Telecom and media sectors dominated

by state-owned companies

• Underdeveloped infrastructure

(networks)

Opportunities

• Arrival of 3G should create new

demands that local resources cannot

meet

• Expertise and investments needed to

initiate cloud computing

Threats

• Increasing state control over telecom

sector may affect competition and

delay investments

Project financing

Project finance in ICT sector

• Development Financiers

– European Union / European Investment Bank

– African Development Bank

– World Bank

• ICT sector funding is focused on institutional support, capacity building and development of telecommunication networks and systems

• Funding focused on regional projects, principally in Sub-Saharan Africa

• Other Financiers

– Finnfund / Finnpartnership

– Finnvera

– Finnish Concessional Credits (Tunisia and Morocco eligible)

– Nordic Investment Bank

– Commercial Banks

Business opportunities and

how to take advantage of them

Business opportunities

31© Finpro

Operators Enterprise software

Financial sector Outsourcing / offshore activities

• Vertical enterprise software markets

in a huge growth:

• Health

• Education

• E-government

• Logistics

• Lot of opportunities as banks are

renewing their systems often done in-

house

• Risk management software

• Card management systems

• A high number of people without a

bank account => how to serve them

• Recent and planned roll-outs of 3G

networks open up opportunities

• Content and applications should have

a local flavour (sports, social media,

chat, music)

• Applications for logistics, tourism,

agriculture and education and health

• Content management systems,

middleware

• Technical know-how at a good level

in Tunisia and in Morocco

• Still lacking high level project

management skills

What next?

32© Finpro

Fact finding trip Test Drive

Partner search Finpro at your service

• Get direct feedback for your offering

• Understand the concrete market

potential

• Start discussing with potential clients

• Local partner is a “must” for a

successful business

• Find right partners

• Have smooth start for your business

• Fact-finding trip in Tunisia and

Morocco in March 2012

• Seminar, B2B-meetings, networking

• You can either participate in one or

two countries

• Office in Tunis covering Maghreb

• Finpro Tunisia supported by Finpro

Trade Centres in Southern Europe

Contact information

27/10/2011 33© Finpro

• Anneli Virtanen

Finpro Tunisie

Section Commerciale

Ambassade de Finlande

Immeuble Samarcande

2ème étage

Rue du Lac Majeur

1053 Les Berges du Lac

Tunis, Tunisie

+216 71 963 033

+216 98 358 392