Text size:

  • Small
  • Normal
  • Large
Maroc Telecom competes with Méditel, affiliated to France Telecom, and Inwi, which counts Kuwait's Zain among its main shareholders. AFP
Maroc Telecom competes with Méditel, affiliated to France Telecom, and Inwi, which counts Kuwait's Zain among its main shareholders. AFP

Rivals put squeeze on Maroc Telecom profit

What's Down: Maroc Telecom, Morroco's largest telecommunication operator, faces a shrinking marketshare as rivals and new entrants bring down prices.

Maroc Telecom, part-owned by the French telecommunications group Vivendi, is facing increased competition from rivals.

Morocco, with a population of 31.5 million, has three telecoms operators.

Maroc Telecom competes with Méditel, affiliated to France Telecom, and Inwi, which counts Kuwait's Zain among its main shareholders. Inwi started operations in February last year.

By the first quarter of this year, Inwi's market share had grown to 16.7 per cent, while Maroc Telecom's fell below 50 per cent for the first time.

"The way I'm seeing it, Maroc Telecom is becoming the STC of Morocco," said Clement Mauve, an investment analyst at ING Investment Management in Dubai. "The company is facing increased competition on all fronts - fixed line, mobile and internet."

Mr Mauve said he was bearish on the stock.

The operator in July said it no longer expected its revenue to rise this year after lower call prices in its key market cut its profit for the first half. Maroc Telecom reported a 10.3 per cent drop in net income to 3.98 billion Moroccan dirhams for the first six months of the year.

The company has had to cut prices to follow the competition, which was particularly aggressive on mobile phone pricing, Mr Mauve said.

"The main question going forward will be about elasticity," he said. "Especially as prices go down, will Maroc Telecom be able to increase volumes to bring the same level of Ebitda?"

Maroc Telecom shares have been held by hedge fund managers, emerging-markets funds and local fund managers in Morocco because of its traditionally high dividend yields, at 7.5 per cent, but that may change if operating margins go lower, Mr Mauve said.

Morocco has been troubled for months by growing popular demands for political, economic and social reform, after uprisings overthrew leaders in Tunisia, Egypt and Libya.

The company averted a scheduled three-day strike last month by reaching an agreement with unions, as employees demanded higher wages and the introduction of bonuses that reflected increases in the company's profitability.

Maroc Telecom also owns a majority stake in Mauritel, Mauritania's main telecoms company. It also has subsidiaries in Burkina Faso, Gabon and Mali.

halsayegh@thenational.ae

Back to the top

More articles


Editor's Picks

 The Greens, villas: Q1 no change. 3BR - Dh210-250,000. 4BR - Dh210-260,000. 5BR - Dh220-300,000. Q1 2013-Q1 2014 5% rise. Pawan Singh / The National

In pictures: Where Dubai rents have risen and fallen, Q1 2014

Find out how rental prices in the prime locations in Dubai have altered during the first three months of the year and the current rates you will pay according to data provided by Asteco.

 Miele coffee maker making Cappuccino at Miele Gallery in Sama Tower in Dubai. The cost of this coffee maker is around Dh 17,000. Pawan Singh / The National

Space-age coffee comes at a price from Miele

Miele have taken the coffee machine to a new level with its Dh17,000 offering that is built into your kitchen.

 The bridge of Seajacks Hydra, as the wind farm installation vessel undergoes finishing touches and testing works at Lamprell’s Hamriyah facility in Sharjah before its planned delivery on June 2, 2014. Jeffrey E Biteng / The National

In pictures: Building the Seajacks Hydra

The Seajacks Hydra, a wind farm installation vessel, is undergoing finishing touches and testing works at Lamprell’s Hamriyah facility in Sharjah before its planned delivery on June 2, 2014.

 The Wind, Energy, Technology and Environment Exhibition takes place from April 14 to April 16. Above, the Dewa showroom during last year’s Wetex. Jaime Puebla / The National

April corporate and economic calendar for the UAE and overseas

From Cityscape to Wetex to stock-market holidays to nations reporting first-quarter GDP figures, here is our helpful calendar of April's business events in the UAE and internationally.

 The rush of new supply of hotel rooms pushed Dubai occupancy rates down to 87 per cent. Sarah Dea / The National

Dubai hotel room rates rise 10 per cent

The rush of new supply pushed occupancy rates down to 87 per cent, a dip of 2.6 per cent from the previous year. Winter months are the strongest for Dubai hotels, with occupancy and prices falling to half their peaks by July.

 Get the latest information on credit cards, bank accounts and loan products in the UAE. Mark Lennihan / AP Photo

Rates report: Latest on UAE loans, accounts and credit cards

Souqamal.com brings you the latest interest rates on banking products in the UAE.

Events

To add your event to The National listings, click here

Get the most from The National