Arab Advisors Group
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Morocco's second GSM operator, MédiTélécom picks up speed.
Monday, February 3, 2003

Morocco's communications market is the first market in the region to undergo a very clear "fixed to mobile substitution" phenomenon. The voice services (fixed and Mobile) still constitute the biggest share of the market with the mobile capturing the winning position. While Maroc Télécom's GSM service boomed, its fixed service declined. MédiTélécom, which garnered a larger share of new mobile subscribers additions in 2002 than Maroc Télécom, seems to be securing its position as a viable operator in the country.

February 03, 2003 -

The year 2002 has been a disappointing year for the liberalization process of the communications market in Morocco. Neighboring countries closely watched Morocco since it was the first country in the region to try to liberalize its fixed communications market. The spectacular success of introducing effective duopoly competition in the GSM market did not replicate itself in the fixed segment, quite possibly because of the boom of the GSM market.

A newly released report, "Morocco Communications Projections Report 2003." was released to the Arab Advisors Group's ( Strategic Research Service subscribers on Jan 31, 2003. The 58-pages report fully analyses the Moroccan communications market and sheds analytical light on the regulatory landscape and investment rules and regulations and Communications market segments.

Maroc Télécom remained as the monopoly provider for almost 5 years until the second GSM licensee, MédiTélécom, entered the Moroccan market early 2000. By yearend 2000, the first year of competition, the Moroccan GSM market added 2.48 million new subscribers and Maroc Télécom attracted 79% of whom, while Meditel had 21% of the total increase. Maroc Télécom continued to win over the majority of new subscribers until 2002 when Meditel attracted 53% of the total added subscribers leaving the remaining 47% of the new subscribers to the incumbent operator, Maroc Telecom.

"The fixed line service seems to have lost its luster in Morocco. The subscriber base is decreasing because of the boom in the cellular market and lack of attention by the incumbent to the segment. The demand for the fixed services, at its current rates, is diminishing in the country although the market has a very low PSTN penetration rate. This clearly causes a loss of appetite for any potential investor in the service. Another possible reason for the lack of interest in the fixed services tender is the relative underdevelopment of the Internet and datacomm segments in the country, which makes investing in fixed services even riskier." Arab Advisors Group's analyst, Hala Baqain wrote in the report.

"Competition, between Maroc Télécom and MédiTélécom, is quite healthy. Both operators offer their services at competitive rates and provide subsidized handsets and very generous prepaid terms as well as postpaid terms (such as billing by the second after the first minute). Both operators were very successful in increasing their subscriber base nonetheless Maroc Télécom still had the largest market share of around 70% by yearend 2002." Ms. Baqain added."

The Arab Advisors Group's team of analysts in the region has already produced more than 140 reports on the Arab World's communications markets. The reports can be purchased individually or received through an annual subscription to Arab Advisors Group's ( Strategic Research Service. To date, Arab Advisors Group has served more than 60 global and regional companies by providing reliable research analysis and forecasts of Arab communications markets to these clients.


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