Kuwait's Wataniya Telecom is expected to reveal further losses by its Algerian operations when it releases results for the

third quarter of the year later this month.

Its local subsidiary, Nedjma, is suffering the effects of a price war with its two larger competitors, Djezzy and state-owned operator Algerie Telecom. However, Harri Koponen, chief executive officer of Wataniya, says it will turn the situation around in the near future.

'There is a heavy price war,' he says. 'Our Algerian subsidiary has become a strange business case because of the price war. Maybe we will not make a profit [in the third] quarter but we will improve soon.'

Third-quarter results for Wataniya, which is majority owned by Qatar's Qtel, are expected by mid-November.

Koponen would not predict when Nedjma will start making a profit. The company, which launched as Algeria's third mobile operator in September 2004, has made a loss every quarter despite steady revenue growth. In its most recent set of results, covering the three months to 30 June, it lost KD 3.6 million ($13 million), 18 per cent less than the KD 4.4 million ($15.9 million) loss in the same period in 2006.

Revenues were KD 25.3 million ($91.3 million), up 48 per cent from 2006.

Wataniya paid $421 million

for its Algerian licence, but Nedjma has consistently dragged down the performance of its parent group.

'Algeria was an easy business case for us to make when we entered the market, but we made mistakes,' says Koponen. 'Now we are done making mistakes.'

Djezzy, which is owned by Orascom Telecom, has more than 11 million customers, while Algerie Telecom has 10.5 million. Nedjma had 3 million customers at the end of June.

www.meed.com/telecomsit