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Morocco promoting competition in telecom sector

Global Arab Network - - Rabih Serrai

Thursday, 13 October 2011 01:12

Global Arab Network - Even as operators introduce a spate of new calling plans and contract packages, a government agency has recently suggested Morocco’s telecoms sector is not sufficiently competitive, further pushing the country’s largest mobile operators to expand coverage and diversify services to gain an edge in what is becoming an increasingly mature market, Global Arab Network reports according to OBG.

A study released by Morocco’s Competition Council (Conseil de Concurrence) earlier this summer suggested that the National Telecommunications Regulation Agency (Agence Nationale de Règlementation des Télécommunications, ANRT) had not succeeded in promoting enough competition in the sector.

It also charged that access to telecoms infrastructure was uneven, with some operators benefitting from lower access costs. According to the report, Moroccan mobile charges are, together with those in Lebanon, the highest in the Arab world.

However, the Competition Council’s statements come amidst an absence of claims of unfair treatment by Moroccan telecoms companies according to the ANRT. Furthermore, the regulator said, there are signs that competition has recently been driving prices down.

According to the ANRT, the average charge for Moroccan mobile phone calls has halved over the course of the last five years, from Dh1.63 (€0.14) in 2006 to Dh0.86 (€0.08) currently. This has been accompanied by a 50% increase in average usage, with Moroccans spending 45 minutes talking on the phone per month at the start of 2011, compared to half an hour in 2006.

The increase in usage and drop in prices are in large part due to the increasing maturity of the country’s telecoms market, which is forcing companies to come up with ever-more innovative ways of maintaining growth. The intensifying competition has already had a noticeable impact on balance sheets. Maroc Telecom registered a group-wide turnover of Dh15.32bn (€1.35bn) in the first half of 2011, down slightly the same period last year, although it also saw a significant 16.5% increase in its customer numbers to 27.5m. Profits fell by 10.3% year-on-year, however, to Dh3.99bn (€352m).

The firm says it expects revenues for 2011 as a whole to also fall due to its decision to cut prices in the second quarter in the face of rising competition.

Average per minute mobile call prices charged by the firm in Morocco fell by 24% in first-quarter 2011 compared to those of first-quarter 2010, to Dh0.99 (€0.09), though outbound usage per customer rose by 22% to 60 minutes per month.

However, the increased competition in the firm’s domestic market has been partly offset by a 4.8% increase in turnover in its other neighbouring markets, namely Benin, Gabon, Mali and Mauritania, where customer numbers grew much faster on end-June 2010, by 47% to 8.7m. Faced with a maturing Moroccan market, the company is seeking to expand the contribution of its foreign subsidiaries to its turnover from 17.7% in 2010 to 30%.

As the market becomes more competitive, other Moroccan providers are also expanding their networks and offering more innovative packages that offer post-paid contract-style incentives of free minutes and other benefits to prepaid, no-contract customers, who continue to overwhelmingly dominate the market.

Morocco’s second-largest communications provider, Méditel, announced in mid-May that it had expanded its 3G coverage to 27 new municipalities and rural areas in the course of recent months. In June the firm launched a new prepaid service, Méditel Jahiz MIX, aimed at young people that includes free minutes, free SMS messages and unlimited 3G access.

Inwi, the mobile phone service of Wana, in May similarly launched a contract-free phone plan called Zen that, for a prepaid fee of Dh100 (€8.80) a month, will provide customers with 90 free minutes of free calls and another 90 minutes of free off-peak calls, as well as free internet access up to 300MB. The package also charges overseas calls at the same rate as national ones.

Wana (formerly Maroc Connect), controlled by investment fund ONA/SNI, is the most recent entrant to the mobile phone market and still the smallest of the three players in the segment, though it has been growing rapidly and significantly expanding its market share in recent months and years, further underlining the increasing level of competition.

Increased competition will make the regulators happy, while the resulting fall in prices and rise in services will be good for consumers. The innovative packages operators are offering should help them maintain their bottom lines as they adjust to the changes in what is becoming a more challenging market – but one with enhanced opportunities. (OBG)

Global Arab Network

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