VZCZCXYZ0000
PP RUEHWEB

DE RUEHTU #0371/01 1671239
ZNR UUUUU ZZH
P 161239Z JUN 09 ZDK
FM AMEMBASSY TUNIS
TO RUEHC/SECSTATE WASHDC PRIORITY 6372
INFO RUCNMGH/MAGHREB COLLECTIVE PRIORITY

UNCLAS TUNIS 000371 
 
SIPDIS 
 
STATE FOR EEB/IFD/OMA, EEB/EPPD, AND NEA/MAG 
(PATTERSON/HAYES) 
STATE PASS USTR (BURKHEAD) AND USAID (MCCLOUD) 
USDOC FOR ITA/MAC/ONE (MASON), ADVOCACY CTR (TABINE), AND 
CLDP (TEJTEL AND MCMANUS) 
USDOC PASS USPTO (ADAMS, BROWN AND MARSHALL) 
CASABLANCA FOR FCS (ORTIZ) 
RABAT FOR FAS (HASSAN) 
CAIRO FOR FINANCIAL ATTACHE (SEVERENS) 
LONDON AND PARIS FOR NEA WATCHER 
 
E.O. 12958: N/A 
TAGS: ECON EFIN ETRD ETTC FAO EINV TS
SUBJECT: TUNISIA'S IT SECTOR GROWING, BUT SOME CHALLENGES 
REMAIN 
 
REF: STATE 27310 
 
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Summary 
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¶1.  Tunisia's Ministry of Communications recently announced 
that the IT sector grew 17.8 percent from 2008 to 2009, 
contributing 10 percent of GDP and poised to create over 
10,000 jobs per year.  In the face of the economic crisis, 
this sector continues to grow.  Already, mobile telephone 
penetration rates are among the highest in the region.  The 
GOT has plans for liberalization in telephony, and is due to 
announce the winner of a 2008 tender for a third mobile 
provider (which will also provide landline service) in the 
coming months.  Regarding the Internet, however, restrictions 
on the number of service providers and GOT censorship of 
content remain barriers to expansion.  The GOT does have 
ambitious plans to increase the reach of the Internet in 
Tunisia, especially to poorer regions.  End Summary. 
 
--------------------------------------------- ----------- 
Telephony: High Penetration, Liberalization in the Works 
--------------------------------------------- ----------- 
 
¶2.  As of March 2009, there were 9.84 million subscribers to 
mobile and fixed telephone lines in Tunisia.  As of February 
2009, the fixed and mobile telephone density reached 94.6 
lines per 100 inhabitants.  Mobile telephony has seen the 
largest boom of all IT capabilities in recent years.  After 
the GOT enacted some important reforms in 2001, the number of 
mobile phones went up from 400,000 to more than six million 
in four years.  The penetration rate surpassed that of fixed 
telephony as early as 2003.  By June 2006, the penetration 
rate of mobile phones had reached 62 percent.  Today, the 
total number of subscribers to mobile services is 8.59 
million.  (Tunisia's population is just over 10 million.) 
This amounts to a penetration rate of over 93 percent -- one 
of the highest on the African continent. 
 
¶3. There are currently two providers for mobile telephony: 
Tunisiana and Tunisie Telecom.  Tunisiana's ownership is 
shared between Qatar Telecom (whose shares were purchased 
from one of the original tender winners, Kuwait's Wataniyya 
Telecom) and Egypt's Orascom Telecom.  Tunisie Telecom, the 
state communications agency that currently controls all fixed 
lines, was partially privatized in 2006, when 35 percent of 
its capital was sold to a Dubai-based consortium.  Current 
market share for mobile telephones is split evenly between 
the two companies.  In December 2008, the GOT released an 
international tender to award a third telecom license for 
fixed and third-generation (3G) mobile telecommunications 
networks and services.  No U.S. companies have bid for the 
license, and the decision on the winner is expected in the 
coming months. 
 
--------------------------------------------- --- 
Internet: Users Increasing, but so is Censorship 
--------------------------------------------- --- 
 
¶4.  As of August 2008, there were 2.3 million internet users 
in Tunisia, but only about 365,000 subscribers.  Recent 
numbers provided by the Ministry of Communications (MOC) 
place the number of users at 2.8 million by the end of 2008. 
The MOC also announced ADSL (Asymmetric Digital Subscriber 
Line) connections are expected to reach 400,000 by the end of 
2009, up from 212,639 currently. 
 
¶5.  Over 300 universities and research centers have ADSL, as 
well as 1,600 companies and 300 industrial and administrative 
zones.  According to a local media report, 420 offshore 
logistics and call centers use high speed Internet. 
Geographically, an increasing number of towns and regions are 
connected to broadband -- although the interior of the 
country is behind the coastal areas in this regard.  The 
number of computers in Tunisia rose 30 percent from 767,600 
units in 2007, to 997,000 units at the end of 2008, according 
to the GOT.  The number of Tunisian-registered websites also 
increased 12 percent, from 5,796 in 2007 to 6,467 by December 
¶2008. 
 
¶6.  Government restrictions and censorship pose a challenge 
to this sector.  There are only five private Internet service 
providers (ISPs) licensed by the GOT, and they can only 
provide service via the state Tunisian Internet Agency (ATI). 
 This agency frequently blocks access to sites it considers 
dangerous to national security, damaging to moral values or 
critical of the government.  This includes sites whose 
content is considered critical of GOT policies, including 
international human rights groups Amnesty International and 
Human Rights Watch as well as YouTube. 
 
------------------------------ 
GOT Forecasts IT Sector Growth 
------------------------------ 
 
¶7. Telecom's contribution to GDP has been steadily growing in 
the last two decades.  According to the World Bank, the share 
of telecom in GDP tripled in 15 years, from 1.3 percent in 
1990 to 4.3 percent in 2005.  Today, the GOT says the IT 
sector grew 17.8 percent year-on-year from 2008, and has gone 
from contributing 9 percent of GDP in 2007 to 10 percent in 
¶2008.  Minister of Communications El Hadj Gley said the 
sector's contribution to GDP was expected to grow to 13 
percent in 2011 and that he expected 10,000 new IT-related 
jobs each year. 
 
¶8. In 2008, the Ministry of Communications unveiled a series 
of goals and upcoming projects, including an e-mail address 
for each citizen and one million computers by 2009.  It also 
outlined the goal of one public internet service center in 
each village by the end of 2009 and free hosting for 
associations creating national cultural, educational, and 
scientific content.  On some of these goals, such as the 
number of computers, Tunisia has come close (see Para 5). 
 
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Comment 
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¶9.  Undoubtedly, IT is one of the sectors of the Tunisian 
economy that has enjoyed steady growth over the last decades. 
 High rates of telephone penetration and increasing internet 
connectivity have contributed to overall economic growth. 
Since the sector is mostly driven by domestic demand (versus 
European demand in the export sectors), the economic crisis 
has not had the same negative effects on IT.  However, other 
stumbling blocks remain.  Although the sector is growing, 
many businesses and individuals still complain of problems in 
service, especially during summer months and peak hours.  In 
fact, the Tunisian-American Chamber of Commerce's 2008 
Business Survey cited internet connectivity problems as one 
of the barriers to doing business in Tunisia.  State control 
of internet content and ISPs not only curbs development of 
the sector, but significantly limits freedom of expression. 
The issuance of a new tender for telephony and the push for 
higher internet penetration, at least, are moves in the right 
direction.  End Comment. 
Godec