Algeria has launched plans to open its mobile phone industry to international competition.

Telecoms authorities said they were inviting potential investors to apply for a GSM (global standard for mobiles) licence that would have capacity for offering about 500,000 connections.

The Algerian government claims the domestic wireless market has great potential for growth, with only about one in 300 Algerians owning a mobile phone.

At present, mobile phone services are only available through the national telecoms monopoly.

They are relatively expensive, costing 20,000 Algerian dinars ($256) for a handset, 2,000 dinars a month in subscription fees and four dinars a minute for calls.

Driving down prices?

Algerian authorities predict that opening the market to competition will help drive down prices for consumers hungry to catch up with the mobile phone revolution.

They predict competition will help lift the number of Algeria's mobile phone subscribers to about two million in 2002 from about 100,000 now.

Telecoms Minister Mohamed Maghlaoui has previously said he believes the market has potential for four million mobile phone subscribers.

Potential investors were on Thursday invited to submit prequalification documents for the GSM licence tender by 26 May.

Operators following the process are likely to include France Telecom and Spain's Telefonica, industry sources said.