After the turmoil in the first quarter of 2011, it is unsurprising that the picture in North African telecoms

markets remains unclear. At the time of writing, the conflict continued in Libya, while Tunisia has

achieved substantial progress in its political transitions. Our Country Risk analysts have increased the

short-term political risk ratings for Tunisia, but we anticipate continued risks to a successful political

transition.

Political risks weigh heavily on the region, although we anticipate continued growth in the mobile sector

in particular. In the short term, BMI has noted little real impact on the market, with the exception of

Libya where rebels have reportedly built their own mobile network. The impact of the upheaval will be

more long term, particularly in encouraging future outside investment and overall ICT policy.

That said, investment in Algeria's Djezzy still remains under question after the valuation deadline passed

without resolution. Although Algeria may not have been affected by as much upheaval as its neighbours,

signs of resistance to outside investment were already apparent and concerning to BMI. That the issue

goes on is equally concerning, and BMI does not see a quick or easy solution to the problem.

North African markets remain at the bottom of our Business Environment Ratings, with only Iran

showing weaker scores. The low rating is from a combination of weak Industry Rewards and Country

Risk scores. Libya has the dubious honour of holding the poorest score for Industry Risks, a score which

considers the independence of the national regulator.