MyAdhan Blog

Link: Morocco: Competition spurs market growth

Maroc Telecom and Meditel have expanded quickly, but could they do even better in a liberalised market? The winner of the competition for Morocco’s second mobile phone licence set a record for the region in 1999. When Meditel, a joint venture of Spain’s Telefonica and Portugal Telecom, paid $1.1bn for the privilege of competing with the state-owned incumbent, Maroc Telecom, it was one of the highest bids for a mobile phone licence anywhere in the world. It demonstrated the bidders’ confidence that a licence to sell mobile phones in Morocco was guaranteed to make a lot of money. Maroc Telecom and Meditel have grown swiftly since then. Meditel’s customer numbers have tripled from 2 million at the beginning of 2004 to 6.2 million at the end of 2007. Maroc Telecom has kept its comfortable lead, growing from 5.4 million customers to 13.3 million over the same period. Its customer base is one of the largest in the region. Only Telecommunications Company of Iran, Saudi Telecom, Orascom Telecom-owned Mobinil and Djezzy have more customers. Maroc Telecom’s 13.3 million customers is the same number as Vodafone Egypt, the joint venture of UK mobile phone company Vodafone and Telecom Egypt, even though Maroc Telecom is operating in a country with less than half Egypt’s population. Maroc Telecom is one of only a few incumbent operators in the region to have prevented a second entrant from making serious inroads into its market share. The company’s decision to privatise by selling a controlling stake to Vivendi, the French media conglomerate, in 2005 explains Maroc Telecom’s resilience. The incumbent has lost just 5 percentage points of market share over the past four years, falling from 73 per cent at the start of 2004 to 68 per cent at the end of 2007. Its market share is higher than Saudi Telecom’s 61 per cent share of the Saudi market after just two and a half years of competition from Etihad Etisalat, the local subsidiary of the UAE telecoms giant. Maroc Telecom has done better than the state-owned operator in neighbouring Algeria. Algerie Telecom’s mobile phone business, Mobilis, has been overshadowed by the Orascom Telecom-owned Djezzy since its inception. Mobilis could even fall back into third place following the resurgence of Nedjma under new management appointed by its parent, Qatari operator Qtel.