CASABLANCA, Morocco-For Morocco, 29 June 1997 marked a point of no return for the country’s telecommunications industry-a turning point that changed forever the way telephony is looked at in the country. Morocco’s lower house that day approved a bill liberalizing the telecom industry.
The bill divided telecom and postal functions and imposed a wall between the telecom operator-now the state-owned Ittisalat Al Maghrib (IAM)-and the regulator. The role of regulator, formerly held by the Ministry of Posts and Telecommunications, now is held by an independent agency known as Agence Nationale de Reglementation des Telecommunications (ANRT).
Upcoming GSM tender
“It is ANRT’s autonomy that will enable Morocco to undertake a lucid deregulation,” said Mostafa Terrab, the chief telecom regulator nominated by King Hassan II. Terrab, who holds a Ph.D. from the Massachusetts Institute of Technology in the United States, often compares ANRT to the U.S. Federal Communications Commission or the United Kingdom’s Office of Telecommunications for being completely autonomous from any pole of political influence.
Morocco’s first liberal step will be the upcoming sale of a GSM (Global System for Mobile communications) license to a foreign operator, a sale that was announced in 1995 but took nearly three years to fine tune.
However, the momentum of liberalization has picked up speed since the creation of ANRT and the nomination of its regulator last February. More than a dozen GSM operators have since put Morocco on top of their 1998 investment priorities. Such companies as AirTouch Communications Inc., France Telecom, GTE Corp., SBC Communications Inc. and Vodafone Group plc have met with the telecom regulator and expressed their firm intentions to participate in Morocco’s GSM tender, scheduled for this summer.
IAM readying for competition
Terrab sees deregulation as happening rapidly and efficiently. He told Global Wireless: “I want to transport the industry from the monopolistic position it is in to a completely liberal environment in a record time.”
Terrab is referring to the monopoly position of IAM, which operates a national wireline network with 1.4 million users, a GSM service with 79,000 users, an analog NMT (Nordic Mobile Telephone) service and a newly introduced paging service.
Sensing the waves of liberalization, IAM has taken a proactive stance, improving service and aggressively slashing prices. Making cellular affordable to the masses suddenly has become a priority for the management of IAM.
“In three years, we have lowered prices on cellular air time by 60 percent to reach levels comparable to those of advanced European countries,” said Abdesllam Ahizoune, chairman and chief executive officer of IAM.
Earlier this year, IAM flooded the market by selling cellular phones at cost, a move that brought down prices from an average of US$650 to US$250 per set.
Despite all these marketing efforts, cellular use is still low. Some 80 percent of the 79,000 GSM subscribers have monthly bills under US$40, which reflects the Moroccan population’s low purchasing power.
“But that can change as the country advances towards modern consumerism,” said Karim El Fekkak, an ABN Amro investment banker that is closely following the sale process. “As prices continue to fall under the pressure of the new GSM operator, demand will inevitably grow.”
Regional telecom hub
Terrab sees beyond the simple process of issuing licenses and regulating the environment; he wants more value-added operators in Morocco.
Terrab’s idea is to connect Morocco to a submarine fiber-optic link that covers the globe and to provide distribution to the rest of Africa. The Fiber optic Link Around the Globe (FLAG) submarine cable, which crosses the Mediterranean Sea, could be the ideal connection hub for Terrab’s grand project.
Oubey Atassi, international sales director for Northern Telecom Ltd.-a member of a consortium, led by GTE, that is bidding for Morocco’s GSM license-recognizes Terrab’s vision: “It will be less costly for countries in Africa using fiber optics technology. The idea is certainly worth looking at.”
The sentiment among foreign operators, vis-a-vis the deregulation of the telecom industry in Morocco, is a very positive one. But before they can commit further, they want to see how far Terrab can push deregulation. The GSM sale should be a good quiz.
