Maroc Telecom (MT) has long held a dominant share of Morocco’s mobile market, but a new entrant will increase competition for the kingdom’s subscribers. On February 4, the National Agency for the Regulation of Telecommunications (Agence Nationale de Réglementation des Télécommunications, ANRT) announced that the third second-generation (2G) mobile license had been awarded to Wana, a subsidiary of domestic conglomerate Omnium Nord Afrique (ONA).
Wana’s new 2G GSM license, which pits it against current incumbents MT and Méditel, is only the latest addition to the company’s telecoms portfolio that also includes a third generation (3G) license awarded in 2006. Details on the exact amount of Wana’s bid have not yet been released, but both the ANRT and Wana have described it as a “significant investment.” The new 15-year nationwide license gives Wana access to a market that includes 22.82 million mobile subscribers, according to figures published by the ANRT.
Despite its late start, Wana will hope to take advantage of an under-saturated market, which has a penetration rate of 74 percent, and to entice subscribers with competitive technology and pricing.
ANRT announced the tender on October 30, 2008 as a measure to boost competition and bring down prices in the sector. Since its creation in 1998, after the amendment of the Post Office and Telecommunications Act, the ANRT has been charged with modernizing, regulating and supervising the telecoms sector, while implementing the law, which calls for increased competition to provide consumers with more choice and better products and services. MT, the formerly state-owned company, had a monopoly over the sector until liberalization began in 1999.
MT is a formidable competitor with Vivendi, Europe’s largest entertainment group, now holding a controlling 54 percent share in the company. According to the most recent figures released by the ANRT, Wana controls 1.2 percent of the market, while MT and Meditel have market shares of 65.6 percent and 33.2 percent, respectively.
Despite increased competition from the new entrant, MT has stated that it expects to build on its 2008 growth, predicting a revenue increase of more than three percent this year. On February 23, MT announced that its 2008 net profits rose 18.5 percent year-on-year to $1.16 billion, and that its consolidated earnings from operations were up 13.5 percent to $1.62 billion, with revenue growing 7.2 percent to $3.53 billion, mostly on the back of mobile customers.
As the telecommunications arm of ONA, Wana already has a strong foundation to build on. ONA is Morocco’s biggest conglomerate, with broad interests such as banking, insurance, retailing and mining. Although Wana has been active in other segments of the telecoms market, such as Internet and fixed-line telephony, the new license gives it access to one of the sector’s most lucrative areas. The first mobile phone network, introduced in Rabat in 1989, had 700 subscribers, a figure that jumped to three million by 2000. Mobile phone use has continued to rise and the current national penetration rate of 74 percent far exceeds ANRT’s growth prediction. A 2004 study forecast that it would take until 2014 to reach this level.
Mobile subscribers jumped from 700 in 1989 to three million by the year 2000
Spinning the web
Despite the impressive subscriber growth to date, the government is doing even more to expand the reach of the kingdom’s mobile phone network. In November 2006, the ANRT adopted the Program for Universal Access to Telecommunications (PACT), which aims to connect some two million people and 9,200 remote villages by 2011. The program extends to telephony and Internet services. MT recently signed a $342 million contract to connect more than 7,000 towns and villages nationwide, which represents some 80 percent of the PACT program.
Morocco’s mobile expansion is part of a larger regional trend. Cell phone sales have proved resilient in the Middle East and Africa and purchases are projected to increase 14.77 percent from 176 million units in 2008 to 202 million units in 2009, as prices for handsets fall and more 3G networks are established.
For the kingdom, mobile telephony contributes significantly to the value of the telecoms sector as a whole. Its continued liberalization is expected to increase the industry’s proportion of GDP from seven percent in 2008 to 10 percent in 2009. At a time when other sectors are facing declining demand, telecom is a bright spot in Morocco’s economy.
