Internet provider slams Algerie Telecom price cut

HASSI MESSAOUD, Algeria, May 28 (Reuters) - A decision by state telecommunications company Algerie Telecom to halve its price for Internet access is unfair and will hurt competition, a private sector Internet service provider said on Wednesday.

Lotfi Nezzar, owner of Smart Link Communication, a start-up telecoms company created in 2001, described the move as "unfair competition."

He urged the state regulator, the Regulation Authority of Post and Telecommunications (ARPT), to stop the implementation of the new pricing policy.

"Algerian law is very clear on this; you can't sell at a loss," Nezzar told reporters in the Algerian oil town of Hassi Messaoud.

"The Algerie Telecom decision is, in a way, a return to the monopoly era," he added, referring to a state monopoly in the telecoms sector that began to be dismantled in 2000.

Smart Link, one of several dozen private sector Internet service providers in the market, also runs what it calls the Maghreb region's only business providing WiMAX, a super-high-speed wireless technology.

There are 2.5 million Internet users in OPEC member Algeria, and 5000 cybercafes.

"Private ISPs can't cope with the new price imposed by Algerie Telecom. Most of them will disappear very soon," telecommunications expert Faysal Medjahed said.

The cut takes the price of a home subscription to a 128 kilobit Internet connection down to 590 dinars ($8.60) a month.

"It is good to encourage people to be connected, but you cannot do it by killing competition," Medjahed said.

The government has been planning to privatize Algerie Telecom (AT) since 2003, but the process has been repeatedly delayed despite strong interest from majors including France Telecom (FTE.PA), BT Group Plc (BT.L) and Emirates Telecommunications Corp ETEL.AD (Etisalat). ($1=64 dinars) (Reporting by Lamine Chikhi, editing by Gerald E. McCormick)