OBG talks to Azdine El Mountassir Billah, Managing Director, National Telecommunications Regulatory Agency (ANRT)

Interview: Azdine El Mountassir Billah

What has been the impact of declining telecoms costs on the sector as a whole?

AZDINE EL MOUNTASSIR BILLAH: Over the past three years, ANRT has progressively decreased interconnection rates by 82%, allowing telecoms operators to gain more latitude in terms of retail pricing strategy. We were expecting a price reduction of around 40%, but in fact prices have decreased by 66%, from an average price per minute of Dh1.27 (€0.11) in 2008 to Dh0.45 (€0.04) in 2014. This has boosted the pre-paid segment in particular. Mobile network traffic increased from 14bn minutes in 2010 to about 40bn minutes in 2014 as the customer base enlarged and average consumption per user doubled. This resulted in a decline in turnover for the telecoms sector as this growth in traffic has not been able to offset the decreases in price.

Our strategy now, therefore, is to balance our goals of expanding mobile accessibility with lower prices, ensuring service quality, and guaranteeing steady growth in turnover for telecoms operators so that they can maintain their investments. Internet subscriptions have also posted strong growth in the past few years alongside a similarly strong fall in prices. So far, 80% are mobile subscribers, but we have a 10-year plan to boost internet access for up to 60% of the population.

To what extent can 4G and reduced telecoms costs boost the level of competitiveness?

EL MOUNTASSIR BILLAH: The licensing process for 4G in Morocco should result in an overall improvement in the quality of service. The proliferation of 4G brings with it more broadband and a denser network that will make corporations more competitive. However, there are major challenges resulting from the increased usage of new technologies among small and medium-sized enterprises. We expect that a further 10% of IT consumption could lead to additional GDP growth of 1.5%. Voice services will no longer be the driver of growth for the telecoms sector as markets all over the world are currently in decline, with the exception of Africa. The “Maroc Numeric 2014” strategy has set goals with regard to this, but more steps will be necessary to reach a higher level of competitiveness.

For example, offshoring activities have benefitted greatly from declining prices in the telecoms sector. However, the sector has only really taken off thanks to an integrated offer including air connectivity, plug-and-play facilities, fiscal incentives, the availability of human resources and one-stop-shop administration. The challenge now will be to upgrade the existing offer and to specialise in segments such as IT outsourcing or business process outsourcing so as to become a more competitive player in offshoring services.

What can be done to encourage the development EL MOUNTASSIR BILLAH: About 80% of our networks are made up of relay antennae, posing major challenges for network saturation and data transportation capacity. We are currently negotiating with operators to co-finance the development of shared infrastructure in remote areas where it is not economically viable for an operator to invest without incentives. Over the years, we have built up the telecoms market using infrastructure as a lever for competition, and in doing so we have urged all three existing operators to invest in infrastructure. A new law is being planned to impose infrastructure sharing throughout the country and ensure healthy and fair conditions for competition.

How would you assess the probability of enlarging the customer base for post-paid segments?

EL MOUNTASSIR BILLAH: The launch of portability has not yet had a significant impact, with only 50,000 mobile phone lines and 2000 post-paid subscribers. In my opinion, the post-paid segment does not really match the purchase habits of most Moroccans. We estimate the potential of the post-paid segment to be only about 5% of the total customer base, meaning we will not reach the subscription levels currently observed in Europe.