Backhaul: Morocco bound

It would appear that the new regime at France Telecom are all for action.

It seems that no sooner has CEO Stephane Richard outlined the company’s five-year plan than his team have begun to execute it with an expansion in north African markets.

The company’s Conquests 2015 plan, delivered by Richard in July after four months in office, laid out four key company strategies for the next five years – deploying a $2 billion fibre-optic network, rebuilding its reputation as an employer after a series of employee suicides, improving the customer experience, and growing its business in emerging markets with its customer base increasing from 200 million to 300 million in five years.

The company was always going to look to France’s colonial past for these customers, and the stable political and economic climate in north Africa makes the countries here more attractive than other former French colonies elsewhere on the continent. Indeed in July, Pyramid Research produced a report “Morocco: New Mobile Competitors Boost Market Share”, which promised that “Morocco’s booming 3G market and improving purchasing power is a great opportunity”.

Pyramid expects increased competition in Morocco over the next five years, an expectation that we can now call a certainty with France Telecom’s stake in Meditel. The analyst also says that north African markets are much less likely to encounter problems of hyper-competition because the number of operators is limited to three.

It’s already been a busy year for Moroccan telecoms, and market dynamics are changing. Third operator Wana – a subsidiary of France Telecom till August 2004, now controlled by the Moroccan conglomerate ONA, with Zain of Kuwait holding about 30% of the equity – has made a big impression, and is the country’s market leader in 3G broadband internet and fixed telephony in terms of subscriber numbers.

The number one growth area in Morocco’s mobile market is 3G services, according to Pyramid. The broadband market had been dominated by Maroc Telecom’s ADSL service; however, as of early 2010 some 60% of broadband consumers were using 3G mobile services. Pyramid expects this growth to continue, as the mobile penetration of 80% gives a better reach than the incumbent’s fixedline network. And with mobile penetration rates of under 100%, it is a relatively straightforward market in which to make an impact.

Email: eira.hayward@capacitymedia.com

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