Market privatization and liberalization have ensured the development of a healthy telecoms market in Morocco. Areas of future development include mobile data flows, further fixed-line penetration and Internet access.

Telecommunications is no sneezing matter in Morocco. The sector contributes about 5% of the national GDP. Morocco’s big step in preparing its telecoms industry for competition and private enterprise participation was the 1998 split of the monopoly Office National des Postes et Telecommunications (ONPT) into a postal branch (La Poste Maroc) and a telecoms branch (Maroc Telecom). Maroc Telecom was established as an independent 100% government-owned company.

This scission presaged the auctioning of the second mobile license, later in 1999. The winning bid was filed by the Spanish-Portuguese duo of Telefonica and Portugal Telecom, acquiring 32.18% each. A third entrant in the mobile arena was Wana Corporate in 2009, after being granted a license for second generation mobile phone services.

The Moroccan government also created the telecoms regulatory body (Agence Nationale de Regulation des Telecommunications or ANRT), in 1999, in order to regulate the nascent competitive industry, and to encourage innovation.

As could be expected with three market competitors backed by deep French, Kuwaiti and Moroccan pockets, the market for mobile telephony is quickly reaching saturation. Mobile penetration reached the 109% penetration mark. At the end of 2011, Morocco counted about 36.5 million mobile subscribers. Maroc Telecom is market leader with 47% share, followed by Meditel at 33% and then Wana/Inwi at 20%.

Telecom1

Mobile rates have been dropping thanks to competition. The average revenue per minute dropped 33% from 2010 to 2011, from 1.12 to 0.74 MAD/min (about 9 cents/minute). Part of the drop in charges is due to the increased interconnectability between the three mobile operators. There had been pressure from consumer groups since they claimed that Moroccan rates were among the most expensive in the region. Usage increased by 39% from 41 minutes/month to 57 minutes/month.

On the other hand, in the positive spectrum, mobile operators are hoping that as smart phones become more commonplace, data exchange will take on a bigger impact. ANRT sees the need for another change in regulation as the mobile world moves to billing no longer based on time and distance of call, but on the volume of data transferred.

As Ahmed Khaouja, ANRT’s director of competition and operator surveillance has said: “Digital convergence and the increasing importance of IP (Internet Protocol) for data exchanges between parties is having an impact. Data traffic is bound to multiply 20-fold in the future.”

Slow fixed-line growth

Telecom2Fixed-line penetration has seen recent slow growth, after a decline in the mid-2000s. Currently Morocco counts only 3.7 million landlines, or about the same level as Tunisia, a country with one-third its population. Of these landlines, many come from Wana clients who have access to wireless fixed lines using the CDMA technology.

Fixed lines suffered drops on both average revenue and average usage. Rates dropped from 1.01 to 0.95 MAD/min (2011 vs. 2010), while usage dropped from 136 minutes/month to 126 minutes/month.

Internet access is faster on the pick-up. Of the 3.2 million Internet clients in 2011, more than 80% were accessing over 3G mobile access. The growth here has been much stronger than for fixed lines, with 90% increase in 3G Internet access year-on-year. The expectation is that within five years there will be five million clients.

According to analysts and the ANRT, despite increasing levels of saturation, there is still a silver lining to the telecoms cloud. Aside from new services and the concomitant rise in revenues per subscriber, Morocco can count on increasing numbers of doublesubscribers. ●


For more information:
Agence Nationale de Regulation des Telecommunications (ANRT)
Ministry Industry et al.

Analysis
Driver of foreign investment

Telecoms, especially the mobile variety, have traditionally been a major engine of foreign direct investment, and Morocco is no exception to the rule. The three operators in competition nationally all have foreign shareholders, and the 20-year battle has barely begun.

Morocco’s traditional main operator – what used to be ONPT until Maroc Telecom was founded by law in 1998 – is a $3.7 billion giant that is active in all telephony segments. When partially privatized by the government in 2001, 30% (now increased to 53%) of the company was acquired by Vivendi of France, while about 17% of shares are traded publicly, and the government maintained a 30% share.

Number two in the market is Meditel (Medi telecom), founded in 1999, based upon its capture of the second mobile telecoms license. At its inception, and for its first ten years, Meditel was a child of mixed blood: Spanish and Portuguese for about 64% (via Telefonica and Portugal Telecom), and Moroccan (government via its holding CDG) for the remainder. In 2009, Spain and Portugal divested, replaced first by Moroccan investors, who then flipped their 40% stake for €640 million to France Telecom (Orange).

The third and latest entrant to the market is Wana Corporate (branded Inwi for the Moroccan masses), which has SNI and Kuwaiti ownership (31%). In 2009, the upfront investment for Zain of Kuwait was $324 million.