33187
The
World
Bank
Morocco: Developing Competition
in Telecommunications
December 2004
GICT Global Information
and Communication
Technologies Department
GICT Policy Division
2121 Pennsylvania Ave., NW
Washington, DC 20433, USA
Phone: +1 202.473.3247
Fax: +1 202.522.3001
Email: gict@worldbank.org
www.worldbank.org/ict/policy.cfm
2
December 8, 2004
Issues Paper
Morocco: Developing Competition in Telecommunications
Competition is the cornerstone of successful telecommunications development. Morocco's
telecommunications reforms in 1995-1999, which among other changes introduced competition in mobile
phones, led to fast growth, and improved sector performance. Plans for further competition, however, did not
materialize and the sector stagnated. As a result, Morocco lost its leading regional position and the country's
overall competitiveness has been compromised. Important business opportunities await new entrants,
especially in the Internet market, fixed voice and data services, international calls, and domestic and
international leased lines. Actions being taken by the Agence Nationale de R�glementation des
T�l�communications (ANRT) to update regulations, monitor and enforce fair competition, and issue new
licenses seek to effectively restart sector development. Accelerated development of network competition,
focusing regulation on fair competition, further adjustments in the legal and regulatory framework, and
building closer ties with regional and global regulatory regimes through trade and economic agreements
would contribute to sustainable development of a competitive telecommunications sector in Morocco.1
I Introduction
Morocco successfully undertook important reforms in the telecommunications sector
between 1995 and 1999, and reaped considerable benefits. A new pro-competitive
telecommunications sector law was enacted (Law 24-96) in 1997 and a regulatory
authority (Agence Nationale de R�glementation des T�l�communications, ANRT) was
established separate from the operators. Competition was introduced in the mobile market
in 1999, with stunning results. These reforms led to major sector growth and had
considerable impact on the economy overall. For example, since 1998 the number of
phone connections (fixed and mobile) has grown fivefold (to eight million, of which over
six million are pre-paid cellular customers) and operating revenue has doubled (to
US$1.6 billion). Mobile communication charges were reduced four times in less than two
years and are now aligned with European best practice. More than 90 percent of the
population is covered by mobile communication service.
Initial success, however, was followed by stagnation. A comprehensive program to
gradually introduce competition in other market segments was proposed by ANRT to the
Government in 2000. The program was approved at first, then rejected, then modified
under political pressures, and finally implemented in a way that led to failure.
While Morocco was struggling with these unsuccessful attempts, the rest of the world
continued to move forward. Morocco has fallen behind in all market segments in which
1 This paper was drafted by a team of the World Bank's Global Information and Communication
Technologies Department (GICT), comprising Bj�rn Wellenius (Consultant), Carlo Maria Rossotto (Senior
Regulatory Economist), and Anat Lewin (Knowledge Sharing Analyst).
3
competition was not introduced, especially Internet and data services. In international
voice communication, Morocco's market is divided into two monopolies, while major
national markets worldwide, accounting for about 75 percent of global traffic, are wide
open to competition. Morocco has lost its regional leadership in telecommunications.
This has damaged Morocco's competitiveness and caused the local information and
communication technologies (ICT) industry to perform below its potential.
In July 2004, ANRT presented to its Conseil d'Administration a new and promising
strategy that would extend competition to all market segments. This program has been
approved in a second meeting of the Conseil in November 2004, and translated into a
"Note d'Orientation G�n�rale." The program comprises implementing a consistent set of
regulations that updates and complements those in place, revises and restarts the process
of issuing new licenses, and equips ANRT to more effectively monitor and enforce fair
competition.
This paper provides a backdrop against which the Government can examine where
Morocco stands today and ANRT's initiatives to move forward. The paper focuses on
changes in regulatory policy that would support the country's emerging e-agenda and
would particularly help Moroccan businesses.
Section II of this paper summarizes where Morocco stands at present, relative to its own
past achievements in telecommunications and recent progress of other countries. For this
purpose, the paper uses data from six countries in Northern Africa and the Middle East
(Algeria, Egypt, Jordan, Lebanon, Syria, and Tunisia) and five from other regions
including one high-income country (France) and five middle-income countries with
diverse approaches to developing competition (El Salvador, Estonia, Malaysia, Romania,
and Turkey). Section III discusses substantial business opportunities that could be
developed in a more competitive sector context, as well as some ways in which
Morocco's regulatory environment can enable these businesses within the current legal
framework. Section IV outlines areas of additional reform towards international best
practice, beyond the current ANRT initiative, that need to be undertaken to ensure
sustainable progress of Morocco's telecommunications sector and the e-agenda it
underpins.
II Where does Morocco stand today?
Morocco has undertaken important steps in its reform program. Opening of the mobile
sector in 1999 was seen as cutting edge and consistent with international best practice.
Further liberalization efforts, however, have had mixed results, particularly in the large
fixed line market segment and in the new GMPCS and VSAT satellite segments.2 As a
consequence, progress of Morocco's telecommunications sector has slowed down
markedly while comparable countries have continued to move ahead, leaving Morocco
2GMPCS is the acronym for Global Mobile Personal Communication by Satellite, used primarily for
mobile voice and data communication in areas lacking ground-based services. VSAT stands for Very Small
Aperture Terminal, a system for fixed voice, data, and video communications using satellites.
4
noticeably behind, especially in its remaining non-competitive segments (WEF, 2004;
Arab Advisors, 2004a,b,c). In particular, Internet services, including voice over Internet
protocol (VoIP), have revolutionized business processes elsewhere, placing Moroccan
businesses at a competitive loss. Table 1 summarizes Morocco's position relative to
regional and global benchmark countries.3
Table 1
Morocco and regional and global benchmarks
Regional Benchmarks Global Benchmarks
Mainlines Cellular Internet Hosts Mainlines Cellular Internet Hosts
2003 Country (%) (%) users (%) (%) 2003 Country (%) (%) users (%) (%)
Lebanon 19.9% 22.7% 11.7% 0.25% France 56.6% 69.6% 36.6% 4.64%
Jordan 13.0% 24.2% 8.3% 0.04% Estonia 35.1% 65.0% 32.8% 8.38%
Tunisia 11.8% 19.2% 6.4% 0.00% Turkey 27.7% 40.8% 8.1% 0.49%
Egypt 12.7% 8.5% 3.9% 0.03% Romania 20.5% 32.9% 19.1% 0.64%
Syria 12.3% 2.4% 1.3% 0.00% Malaysia 18.2% 44.2% 34.4% 0.44%
Algeria 6.9% 4.6% 1.6% 0.00% El Salvador 11.6% 17.7% 8.4% 0.06%
Morocco 4.1% 24.3% 2.7% 0.02% Morocco 4.1% 24.3% 1.3% 0.02%
Sources: ITU 2003, Arab Advisors and Operators 2003, Network Wizards Jan 2004.Mainlines data are for 2002 where 2003 figures were not available.
Overview of main market segments
The mobile segment in Morocco has experienced substantial growth and is on the
forefront of Arab telecommunications experiences, inspiring others to liberalize. Mobile
penetration rose from just over one mobile customer per hundred inhabitants in 1997 to
over 23 per hundred in 2003, primarily by adding many new customers but also capturing
some fixed phone customers from the incumbent telephone operator. The high proportion
of prepaid customers (over 90 percent) means that service now reaches many small
businesses and low-income households that otherwise would be unable to have phone
communication connections of their own.4 As a result, mobile penetration is over six
times fixed penetration (WMRC, 2004). Analysts estimate that the Moroccan mobile
market can mature up to 40-50 percent penetration. Population coverage of mobile
services in Morocco is the highest in Northern Africa, and comparable to Jordan and
Romania. Annual growth, while still considerable, is now leveling off from post-
liberalization highs of over 530 percent to just over 12 percent in 2003. Competition
between the incumbent and the new entrant resulted in frequent and substantial
reductions of domestic communication prices, and may decrease further with a third
mobile operator expected to enter the market in 2006 (Arab Advisors, 2004a). In contrast,
limited competition in international long distance service has kept prices high in that
segment (WMRC, 2004).
Fixed-line phone penetration levels have been slowly falling since the mobile market was
liberalized in 1999, and currently languishes at four main lines per hundred inhabitants
3Countries are shown in both tables ranked by fixed phone line penetration.
4The post-paid market, presently 500,000 subscribers, has still room for improvement in terms of revenue
generation, especially from new services.
5
(1.2m customers). This is down from 5.3 percent in 1999 and lagging behind regional and
global benchmarks (WMRC, 2004). See Figure 1 below.
Figure 1
Morocco's fixed sector off track in 1999-2003
stnatibahni 200
180
160
140
120
1,000repsenil 100
80
60
40
ina 20
M 0
1997 1998 1999 2000 2001 2002 2003
Morocco Middle East & North Africa (average) World (average)
Source: World Bank, WDI 2004; ITU
The Internet market is highly concentrated. While Morocco had allowed many small
Internet service providers (ISP) to enter the market, only two major ISPs remain in
operation. Menara, Maroc Telecom's ISP operation, has come to dominate the market
even after a late start.
The International Telecommunication Union (ITU) reports that only 3.3 percent of the
Moroccan population used the Internet by the end of 2003, and only 0.2 percent
subscribed to Internet connections. These results lag behind almost all regional and
global benchmarks (ITU, 2004b). Low average income levels and relatively high
illiteracy limits the prospect for individual Internet subscription growth (Arab Advisors,
2004a). Much of the focus of Internet growth may be on increasing business connections.
We now look more closely into five specific problems found in the Moroccan
telecommunications sector: the Internet market is underdeveloped, businesses cannot run
applications that require high-bandwidth connectivity, international voice communication
is very expensive, ICT businesses are running below their potential, and there is generally
low demand for ICTs.
The Moroccan Internet market is underdeveloped
This can be seen from the relatively small number of Moroccan Internet users, hosts,
websites, and Internet applications. Annex 1 compares Morocco with selected benchmark
countries. Figure 2 below illustrates how Morocco has fallen behind. The reasons for the
market's immaturity are the absence of facilities-based competition in the fixed line
sector, limited facilities-based competition in the wireless sector, the absence of cable
6
television as an alternative means to reach end customers, limited roll-out of ADSL,5 the
inability of ISPs to own their own networks, and limited support of Maroc Telecom's
fixed infrastructure to develop the Internet market.
Figure 2
Morrocco lost ground in the Internet sector
000, 70 64
10rep 60
nts
ta 50
tssoh bi 40
Morocco
nhai30
etnret Romania
20 11
In 10
0 2
0
2000 2004
Source:Network Wizards,January 2000andJanuray 2004data.www.nw.com
Businesses cannot run applications that require high-bandwidth connectivity
In the main business centers, such as Casablanca and Rabat, companies do not have
access to top quality data services and applications. They cannot offer real-time
interaction with counterparts in other countries or run bandwidth-intensive applications
often required for e-commerce. The problem is the limited availability and high cost of
Moroccan leased lines, the insufficient roll-out of ADSL, and that advanced wireless data
communications services (such as WiFi) are in their infancy. The reasons for the lack of
top quality data services and applications are the absence of specialized data services
providers, the absence of facilities-based competition in fixed and mobile data services,
the lack of specialized service providers, and the difficulty for ANRT to restrain Maroc
Telecom's anti-competitive behavior. Table 2 compares the use of leased circuits in
Morocco with selected other countries.
Table 2
Leased circuits per capita
2003 Morocco Estonia Malaysia Romania
Leased circuits per capita 0.02 0.32 0.22 0.13
Source: ITU 2004
International voice communication is very expensive
International calls are too costly for businesses due to the presence of an imperfect
duopoly, its inherent lack of competition in prices, and the fact that VoIP services are
5Asymmetric Digital Subscriber Line (ADSL) is one of the main technologies used to make high-speed
Internet service available to users through the existing telephone line network.
7
restricted to licensed operators. Table 3 illustrates the high call charges. Licenses for new
entrants, or for more effective competition among existing operators, have not been made
available by the authorities despite the end of market limitations in Morocco's
commitments under the World Trade organization (WTO). This is detrimental in
particular since VoIP is a competitive option for reducing international tariff prices,
attracting investment in fixed lines, and increasing business call volumes. Figure 3
illustrates the impact of full international competition in other countries on call prices and
traffic volumes.
Table 3
Comparisons of average fixed and mobile call charges
2002 Morocco Estonia Taiwan, China
Telephone average cost of call to US (US$ per three minutes) 1.63 0.74 0.51
Source: World Bank, WDI 2004
International call tariffs to UK (US$ per 3 peak mins)
Fixed-to- Fixed-to-Fixed via Fixed-to-Mobile via Maroc Telecom to M�ditel to UK mobile M�ditel to UK mobile
Fixed-to-Fixed Mobile Operator Operator UK mobile prepaid postpaid
1.98 2.34 1.95 2.35 1.80 4.44 3.06
Source: Maroc Telecom, ANRT, M�ditel, as reported by Arab Advisors 2004a
Figure 3
Impact of full competition on international call charges and traffic volumes
Full Competition Coincides with Price Drop Introduction of Competition in Major Markets
2.00 Coincides with Rapid Growth in Volumes
1.80
teuni 1.60 fo 160
m 1.40 sn 140
kae 1.20 120
1.00 illiob(
ff-porep 100 Global Outgoing
0.80 Traffic Generated in
non-Competitive
0.60 Monopoly icffarT es)tuni 80
$SU g Markets
0.40 Partial Competition m 60
0.20 40
Full Competition Global Outgoing
0.00 Traffic Open to
Vietnam Fiji Pakistan Indonesia Malaysia inoguOlab 20 Competition
Source: Tarifica, May 2003 loG 0
1990 1995 1998 2001 2005
Source: ITU (forecast)
ICT businesses are running below their potential
Moroccan domestic entrepreneurship in the ICT sector is lagging due to sectoral and
broader economic constraints. While there are good wireless-based applications
providers, Internet-based applications are limited and e-commerce is almost non-existent.
Contributing factors are the lack of adequate infrastructure and the lack of rule
8
enforcement to restrain Maroc Telecom's anti-competitive behavior as an ISP. Maroc
Telecom is simultaneously the monopoly network operator, dominant ISP, and major
content provider (Menara portal). In addition, factors such as below-potential ICT
capacity building and a sub-optimal business operating environment compound the
problem. Table 4 illustrates one of the World Economic Forum's Networked Readiness
Index rankings of computer penetration in businesses, which positions the country on a
ranking of 102, and shows that limited usage of ICTs remains an obstacle to the business
operating environment.
Table 4
Penetration of personal computers among businesses
2002 Morocco Algeria Egypt Jordan Turkey El Salvador Estonia Malaysia Romania France
Ranking (out of 102) of country's PCs in business per 1,000 inhab. 79 76 70 77 52 62 45 33 60 21
Source: WEF 2004
Low demand for ICTs
The major barriers to the uptake of ICT services in Morocco are high illiteracy rates and
the low purchasing power of many Moroccan households, especially in the ages of most
Internet users (15-30 years old). In addition, the lack of Arabic web content and the low
diffusion of government online services play a role. In the end, the most important factor
remains: price (WMRC 2004a). Table 5 compares a variety of data series to illustrate this
point, from GDP per capita in terms of purchasing power, literary rates, and three of the
above-mentioned World Economic Forum's Networked Readiness Index's rankings on
affordability and government online presence.
Table 5
Economic and social constraints on ICT demand
Morocco Algeria Jordan El Salvador Romania
GDP per capita, PPP (current international $) 2003 4,012 6,248 4,319 4,994 7,222
Literacy rate, adult (% of people ages 15+) 2002 51 69 91 80 97
Literacy rate, youth (% of people ages 15-24) 2002 70 90 99 89 98
Ranking (out of 102) of country's affordability of Internet service provider fees (% of GDP per capita) 2001 78 71 66 62 54
Ranking (out of 102) of country's affordability of Internet telephone access (% of GDP per capita) 2001 70 18 41 44 38
Ranking (out of 102) of country's government online presence 2003 83 80 94 51 46
Source: World Bank, WDI 2004, WEF 2004
III Business Opportunities and Enabling Regulatory Environment
Increased competition would lead to vigorous growth of important Moroccan market
segments currently constrained well below their potential. Revised and new
implementing regulations for the recently amended telecommunications law (Law 55-01)
would facilitate these business developments.
Business opportunities
The following market segments have considerable growth potential benefiting a wide
range of users:
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� the fixed line market, where penetration is much lower than regional averages;
� the Internet market, both at service provision and at network operator levels;
� the international calls market, where Maroc Telecom has still a monopoly except for
MediTel clients; and
� the provision of domestic and international leased lines, another area under the
monopoly of Maroc Telecom.
Fixed network At present there is no competition for fixed connections. This is not
critical for voice services, since mobile has become an effective alternative for many
users. However, insufficient investment in the fixed network in response to declining
demand for fixed phone connections is a matter of concern because it restricts access of
enterprises to high-speed Internet services. New entrants in this market segment will be
able to address demand especially from the business users in Casablanca and other major
cities. Investors and users could find the fixed segment attractive in terms of Internet
connectivity, Internet applications and services, leased lines, virtual private networks, and
VoIP offerings. This would offset the adverse effect of fixed-to-mobile substitution on
fixed line traffic and revenue. The development of alternative infrastructure networks by
other public services (ONE, ONCF) could also contribute to revive investment in the
fixed line business.
In contrast, the loss of fixed residential customers that has accompanied massive
development of mobile services is a legitimate market response and should not concern
Moroccan policy-makers. Once Moroccans were offered a choice between a mobile or a
fixed phone for access to voice services, many opted for mobile. Pre-paid mobile service,
with no fixed monthly charges and easy control of call expenditure, attracted many new
residential customers that otherwise were not eligible or willing to commit to
conventional fixed service. Some existing customers terminated their subscription to
fixed line services.
Wireless technologies have a growing potential for building out fixed networks capable
of reaching end customers for the provision of data and broadband Internet services.
Regulatory measures can be implemented to facilitate fixed wireless network
development, such as making spectrum available for commercial trials on a license-free
basis. In contrast, extending access to basic mobile services is no longer a priority in
Morocco. The vibrant competition since 1999 between Maroc Telecom and the new
operator, MediTel, has greatly increased network coverage, reduced prices, stimulated
access, and promoted some degree of technological innovation.6 After four years of
duopoly, however, the introduction of a third mobile operator would result in further
price reductions and service innovation.
6Currently GSM mobile service is available to about 94 percent of the population. Prices were reduced
three times while the new license was being processed, and several times thereafter. There are several
examples of technological innovation related to the development of the GSM market in Morocco. The
deployment of GSM-based fixed wireless PBX (so-called "yellow box") has greatly stimulated the
enterprise market. The widespread diffusion of SMS services has enabled several applications on text
messages, including the notification, via SMS, of Court proceedings and decisions.
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Internet The small number of Internet subscribers and hosts, and the limited choice
among ISPs, should also be a major concern for the Moroccan policy-makers. At present,
the Internet market is nominally open at the service level, but competition is limited in
practice. Moreover, ISPs are not allowed to have their own domestic networks or have
direct access to international networks. For years, the ISPs faced high costs of leased
circuits and there has been no regulation on unbundling the local loop. These two
limitations discouraged the development of the ISP market. In addition, some ISPs claim
that Maroc Telecom cross-subsidized its digital subscriber line (DSL) offer, providing
preferential treatment to its own subsidiary, Menara.
In response to these challenges, ANRT has recently prepared two draft decrees that
would regulate access to leased lines and discipline unbundling in the local loop. These
two decrees will facilitate and regulate access to essential infrastructure for ISPs and
stimulate the Internet market. In addition, the new Law 55-01 gives attributions to ANRT
in the area of competition, including the power to initiate investigations over anti-
competitive behavior. This is an important development, which is likely to be
accompanied by the strengthening of capacity in the area of competition law and
economics.
International calls There is minimal competition for long distance and international
calls. The only competition to Maroc Telecom in this market segment comes from
MediTel for their own mobile users. However, mobile users in practice have no choice
once they have selected a mobile company. New entrants in this market segment have a
strong potential to undercut existing rates, provided that they are given fair access to
mobile end customers (accounting for 85 percent of all phones). The entry of new
operators in this market segment should bring considerable benefits, even in the absence
of the most advanced regulatory features of a fully competitive market, such as carrier
pre-selection (expected by 2006) and a class license or authorization regime.
Leased lines The absence of competition in the provision of leased lines results in high
input costs for ISPs, call centers, and data service providers. New entrants would be able
to offer leased lines and tap the demand of heavy users. The only alternatives to Maroc
Telecom in the provision of leased lines are VSAT operators. Licensed in recent years,
VSATs are viable businesses in Morocco, and have a track record of results in rural
areas. However, VSAT connections are generally too costly as an alternative to leased
lines, especially in the densely populated areas where the data market is concentrated.
Enabling regulatory environment: moving forward again
Important improvements in the regulatory environment are now in place or underway,
which will help restart sector development.
No exclusivity All exclusivity periods have expired, paving the way for new entry and
more competition. The four years of mobile duopoly included in the license of MediTel
ended in 2003. The exclusivity period granted to the VSAT operators in 2001 expired on
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January 31, 2004. Moreover, since the end of 2002, commitments under the WTO require
Morocco to open its telecommunications market to competition. These obligations are
being reinforced by the commitments in the framework of the recent Morocco-US Free
Trade Agreement.
A legal framework encouraging new entry Although a more pro-competitive
licensing regime would be desirable, the present regime can be used to facilitate entry.
The requirement to tender each license individually created artificial scarcity in the past,
and was used to generate windfall fiscal revenue at the expense of sector efficiency.
Despite the absence of class licenses, however, the telecommunications law permits
issuing multiple licenses. This approach was used, for example, to award several GMPCS
licenses on a demand basis, and can be exploited further. Also, licenses have been
segmented by types of service, which does not support new business models. Lack of
interest in the second national operator license was partly due to the license being limited
to fixed line service.7 Broader licenses, however, or simultaneous issuance of several
narrower licenses, can help overcome this limitation.
A clear framework for telecommunications liberalization In November 2004 the
Government published guidelines for telecommunications liberalization and regulatory
development in the period 2004-2008 (ANRT 2004b). This document established a clear
strategy and a timetable for opening up all telecommunications market segments to
limited additional competition.
Two new licenses will be awarded in the first quarter of 2005 for each of the following
market segments: local, long distance, and international. Two local licenses will be
awarded in each of the major regions of Morocco. The international licenses will be
awarded only to those bidders that have obtained a local or long distance license.
Operators can bid for all three licenses. The licenses will be technologically neutral and
will allow operators to provide a wide range of services (voice, data, media). One of the
two local loop licenses will be authorized to also offer limited mobility services. The new
licenses will not have coverage obligations.
In 2005, mobile licenses using third-generation technology (3G) will also be awarded,
giving priority to the existing mobile operators. A third mobile license may be launched
in 2007 to start operations in 2008.
New licenses for VSAT and GMPCS operators will be awarded. All operators wishing to
have a VSAT and GMPCS license will be allowed to enter the market, provided that they
comply with defined license terms.
Regulatory reform to strengthen competition The current regulatory framework
originally set by Law 24-96, has been updated by Law 55-01, promulgated and published
on November 8, 2004. Law 55-01 introduces several important changes:
7Another reason for the failure of the Second National Operator license was the presence of very
demanding coverage obligations.
12
Broadens the definition of universal service so it may include value-added
services and the Internet;
Allows owners of alternative telecommunications infrastructure, such as utilities
and the railways, to lease their infrastructure to public telecommunications
operators;
Creates the obligation of operating companies to share their infrastructure with
other operators that demand it;
Establishes that ANRT will manage directly the numbering system and will
introduce number portability;
Reduces the maximum contribution to universal service from 4 percent to 2
percent of turnover net of tax and interconnection, and creates a universal service
fund; and
Strengthens ANRT's role in the area of monitoring and enforcing fair competition
provisions, and introduces sanctions for anti-competitive behavior.
As part of the implementing legislation following Law 55-01, rules will be introduced to
improve the process to resolve interconnection disputes. At the same time, a new
reference interconnection offer will be prepared. Fixed-mobile interconnection charges
will be revised in the future as part of periodic updating of the reference interconnection
offer. Starting 2006, a methodology of long-range incremental costs will be used to
calculate the interconnection costs of the Maroc Telecom. To strengthen the role of
ANRT as arbiter of interconnection disputes, the composition of the Comit� de Gestion
of ANRT (responsible for the final decision on interconnection disputes), has been
modified to make it more independent from the Government. The regulation of access to
key infrastructure is being enhanced by new draft decrees on infrastructure sharing, local
loop unbundling, and leased lines.
Further regulatory developments are likely to improve access by new entrants to Maroc
Telecom's network. ANRT expects Maroc Telecom to start the necessary technical
preparations for local loop unbundling by early 2005, and may be required to make a
reference unbundling offer for 2006. A timetable has been set for introducing unbundling
in two phases: (a) partial unbundling will be introduced within 18 months from the date
of award of the new licenses, and (b) total unbundling will follow within 36 months of
the award date of the new licenses. Fair and non-discriminatory terms and conditions will
apply to infrastructure access mandated by Law 55-01, and ANRT expects
implementation to become effective as soon as possible. In addition to classic co-
location, ANRT is considering virtual and in-span co-location. ANRT has also expressed
its preference for national roaming in a recent public document (ANRT, 2004).
Carrier selection, such as the option for a customer of one operator to choose another
operator for international calls, will be introduced within 12 months of the award date of
the new licenses.
Monitoring and enforcing fair competition in the sector is quickly becoming the main
focus of ANRT. In particular, the new law gives ANRT authority on competition, and a
draft implementing decree will detail the powers of ANRT in this area. Significant
13
market power regulations (asymmetric regulation) may be introduced, similar to the
European Union (EU) model used in the transition towards full competition.
New entrants that rely on wireless data application technologies are likely to find in
ANRT a regulator receptive to the latest technology and global regulatory trends in this
area. ANRT has finalized a new national frequency plan, approved by the Prime Minister
on July 6, 2004. In addition, two recent initiatives are likely to stimulate the development
of the wireless data market. Decision 08/04 determines the rules to be followed to
develop Wi-Fi and DECT services. ANRT has decided to open the 5.8 GHz band to
independent radio networks.
A further area in which sector regulations are being improved in anticipation of
competition is the framework for alternative infrastructures. Public utilities and transport
companies, such as ONE and ONCF, have deployed considerable telecommunications
infrastructures. The amended telecommunications law allows such public enterprises to
lease their capacity and fully participate in the telecommunications business.
Privatization of Maroc Telecom The Government has sold a further 16 percent of the
capital of Maroc Telecom to Vivendi Universal, which brings Vivendi's share to 51
percent. The Government is also making good progress toward floating 15 percent of
Maroc Telecom's shares on the Casablanca and Paris stock exchanges. The process is
expected to be concluded in December 2004, after which the State would only have a
remaining 34 percent blocking minority. This is likely to have positive repercussions on
establishing a level playing field in the sector. In particular, Maroc Telecom will now
have to follow the disclosure requirements for listing on the Casablanca Stock Exchange,
as well as those mandated by the French Commission de Bourse.
Stability, public consultation, and regional presence In the past, conflicts between
ANRT and part of the Government increased the regulatory risk for investors potentially
interested in Morocco.8 An improved climate of cooperation between ANRT and the
Government has since developed and should help move the sector along more effectively.
ANRT's powers will be enhanced by a revised regulatory framework. Under the new
Director General, ANRT has recently taken several initiatives, including re-starting the
liberalization process and launching several studies to anticipate regulatory trends (on the
Internet, call centers, and offshoring). In addition, several proposed implementing decrees
will enhance ANRT's powers to carry out its regulatory functions in an effective and
timely manner.
Using its website, ANRT has started processes of public consultation on major regulatory
and policy matters, following the examples of major European regulators such as the
UK's Office of Communications (OFCOM). This will increase regulatory transparency
and openness and contribute to more effective mediation of conflicts (ANRT, 2004).
ANRT is playing an important role in the region among African Arab and Francophone
regulators. ANRT's excellence is recognized on a regional scale. Often, regional
8It also contributed to the departure of two Director Generals of ANRT.
14
seminars on telecommunications regulation are organized and hosted by ANRT. It is
likely that the regulatory developments in Morocco will have a regional impact. This may
help to attract investors to Morocco with regional ambitions, or with a regional presence.
IV Morocco and Global Best Practice
Telecommunications reform efforts in developing countries over the past fifteen years
have confirmed that competition is the cornerstone of successful sector development.
Competition accelerates growth, innovation, and productivity, resulting in more services,
better services, new services, and overall less expensive services. Competition, or a
credible threat of competition, forces established operating enterprises to focus attention
on customers, improve service, accelerate network expansion, reduce costs, and lower
prices. As new technologies change network cost structures and reduce the minimum
sustainable scale of operations, entry in all market segments becomes possible.
The announcement that Morocco will award new competitive licenses in the year 2005 as
the start of a new liberalization program is a substantial development, bringing Morocco
closer to global best practice. However, there is still the need to undertake reforms
beyond Morocco's current sector policy and regulatory framework, to fully incorporate
global best practices.
This final section focuses on global best practices in four areas that are especially
relevant for Morocco's long-term telecommunications development: full competition and
dismantling of all entry barriers, broad licensing regime and changes in spectrum policy,
regulating access to essential network infrastructure, and broader regulatory reforms. For
each area, the paper suggests measures that Morocco should undertake, beyond the
efforts of the current reform program already discussed.
Full competition and dismantling entry barriers
Exclusive rights or restricted competition, even if temporary, should be avoided. For a
large cross-section of developing countries in 1999, limited competition in the provision
of international service resulted in call charges typically costing more than twice than in
countries where full competition was in effect (Rossotto et al., 2004). The lengthy
exclusivity periods initially granted in Latin America at the time of privatizations in the
early 1990s resulted in high prices for domestic and international telephone service and
leased circuits, and carried over to the emerging Internet service well into the late 1990s,
even after competition was introduced (Wellenius, 2000a).
The number of licenses should not be limited even if this foregoes short-term government
revenues. Although in practice a given market can only support a finite number of
operators, this number is best determined through the market rather than second-guessed
by policy makers or regulators. An econometric analysis of 18 telecommunications
privatizations in 15 countries between 1987 and 1998 found that whereas granting
15
exclusivity can double the firm's sale price, it resulted in up to 40 percent reduction in
growth over the exclusivity period (Wallsten, 2000).
Beyond the new sets of competitive licenses to be awarded in 2005, Morocco must move
aggressively towards facilities-based competition in all market segments. Competition in
services using networks owned by Maroc Telecom, to which other operators have access
only because it is mandated and enforced by ANRT, will at best provide temporary relief
to current service shortfalls. Competitors must be free to choose whatever mix of their
own and others' facilities they find best suited to their business needs.
Opening international networks and services to full competition is urgently needed and
inevitable. It would impact Morocco's sector performance beyond these services alone
and provide a powerful driver for further sector reform. There is a strong case for opening
this market segment quickly rather than gradually (Rossotto et al., 2004). International
competition tends to work fairly well with limited regulatory intervention once the basic
rules are effectively in place. Consistent with international best practice, this will involve
Morocco issuing as many international licenses as are demanded by current or
prospective operators, and Maroc Telecom adjusting radically its business strategy to face
the loss of monopoly rents. Effective competition also requires implementing a system
whereby each customer, fixed as well as mobile, can select the international operating
company for each call irrespective of whether it has pre-subscribed to one company as its
default provider.
Economic efficiency as well as Morocco's trade obligations would be compromised by
attempts to maintain the high net settlements currently received from foreign
correspondents. As competing Moroccan operators negotiate the price of receiving and
sending international traffic with foreign partners, and increasingly route traffic outside
the international accounting rate system, the net settlements received from abroad will
decline. This adverse initial impact on the revenues of Maroc Telecom (and to a lesser
extent MediTel's) is likely to be more than offset by lower costs to the economy at large
and eventually by higher traffic from existing and new services. Moreover, Morocco is
committed under the WTO to ensure that companies with market power provide cost-
based interconnection to all competitors. The recently concluded dispute between the US
and Mexico (WTO, 2004) implies that international accounting rates are subject to the
disciplines of cost-based interconnection established in the Reference Paper, which
Morocco adopted in 1997 as an additional commitment under the General Agreement in
Trade and Services.
It would also be counterproductive, and inconsistent with international best practice and
treaties, to impose on international operators any conditions that would de facto limit the
number of possible operators, favor incumbents, or require operators to undertake
activities other than what they would do following commercial competitive business
practices.
In awarding new licenses, roll-out or coverage obligations should be avoided, because
they discourage investment in competitive markets. Instead, reaching for service
16
development goals beyond what a well-working market can provide is best dealt with
through separate government support. Public funds can be used to catalyze additional
private investment as needed to reach government targets. Subsidies are limited to what is
necessary to render socially desirable projects commercially viable, not to exceed initial
capital costs. Competition among operators for these subsidies, not a calculus of costs
and revenues, is the preferred way to determine how much subsidy is needed and who
should receive them (Wellenius 2000b). In this area, Morocco will need to develop a
coherent strategy for competitive allocation of subsidies for socially desirable projects.
Broad licensing regime and changes in spectrum policy
Licensing regimes that avoid market fragmentation have become critical enablers of
competition. The licensing regime should not divide the market along lines of business or
technologies, nor between services and networks. Licenses with broad scope allow
operators to respond more effectively to the wide range and rapidly changing mix of
services demanded by customers, resulting in efficiency gains from using common
technological platforms to provide a wide range of services, limiting market dominance
by incumbents, and avoiding unnecessary burdens on the regulator and regulated parties.
Most (if not all) networks and services could be provided today without license, even in
relatively undeveloped markets, subject only to declaration for the public record and for
statistical purposes. In El Salvador, the law of 1997 requires licenses only for using the
spectrum, but not for operating networks or services: "Operators interested in
providing...services must request...a license...which shall be granted automatically...
subject only to compliance with the requirements for registration...without any limitation
of number and location, being possible that more than one license exist in the same
geographical area" (El Salvador, 1997). Alternatively, class licenses can be automatically
granted to any applicant meeting a common set of published requirements. These
arrangements simplify and expedite the authorization process and also reduce the
opportunity for discretion, pressure, and corruption. Individual licenses, however, may be
necessary for major operators with persistent market power (the incumbent) and for the
use of large segments of scarce radio spectrum (mobile).
Beyond the licenses that will be awarded in the period 2005 to 2007, Morocco will need
to review its overall licensing regime to fully incorporate the trend towards broad
licensing and technological neutrality. In particular, even though the present regulatory
environment attempts to take into account the convergence among technologies and
services, the licensing regime established in the Law 24-96 may need to be further
revised in the next few years to facilitate such convergence. No individual licenses
should be required, perhaps with a few exceptions. Although in the short term ANRT can
issue as many individual licenses as are demanded, the process will become too
burdensome on both ANRT and the operators. Likewise, traditionally narrow license
scopes should give way to broad generic authorizations that give firms and ANRT
flexibility to respond effectively to changing technologies and business opportunities.
17
Licensing and regulations should be neutral with respect to technologies and business
models. In particular, they should not constrain the delivery of content using new media,
nor prevent content from driving investment in networks that then can deliver
conventional voice and data communication services at marginal cost.
New regulatory solutions should be developed to deal with technologies and services that
are not marginal extensions of existing conditions but have potential to alter radically the
structure and performance of the telecommunications sector. In particular, ANRT should
consider refraining from regulating competitive applications of the Internet, including
VoIP, even if these to some extent overlap with services that have traditionally been
regulated (telephony).
Wireless technologies are likely to facilitate entry of new competitors into the market.
Enough radio spectrum must be made available to accommodate a surge of demand for
wireless solutions by new entrants and incumbents. It is preferable to grant freely the use
of spectrum when available and use market mechanisms when demand exceeds supply.
Portions of the spectrum made available without license encourage innovation, such as
broadband wireless networks. Regulatory intervention should be kept at a minimum
consistent with containing interference. Traditional spectrum management practices
based on administrative rules should give way to modern solutions that make more use of
economic principles and market forces (ITU, 2004a).
Spectrum policy should become an integral part of Morocco's telecommunications
reform agenda. Spectrum management in Morocco would gain from moving towards
greater reliance on markets, deregulation, and less government administration, as it is
happening in Europe and the US. Effective markets for trading of spectrum property
rights are being developed, including leasing and selling, reconfiguring (dividing and
aggregating), and changing use (between services) of radio authorizations. At the same
time, the spectrum is being increasingly deregulated by making it freely available without
license or by developing a spectrum commons, in which qualified users manage
themselves the use of the spectrum as public property.
Regulating access to essential network infrastructure
In the recent "Note d'Orientations G�n�rales..." (ANRT, 2004b), the Government has
correctly pointed out that the transition to full liberalization in telecommunication must
be accompanied by regulatory measures that will facilitate the access of new competitors
to the essential network infrastructure of dominant telecommunications operators. These
measures are common in advanced regulatory systems and fall under three main areas:
unbundling in the local loop, sharing of infrastructure and co-location, and domestic
mobile roaming. The first two sets of measures are foreseen in the document of the
Government, the third may be necessary when the Government opts for a new mobile
license in 2007.
Unbundling of the local loop Mandatory unbundling of access to the local loop of
operators with significant market power in the fixed public telephone network market can
18
help develop competition in new services, especially broadband Internet. Local access is
still one of the least competitive segments of liberalized telecommunications markets.
While mobile services have become a competitive alternative for voice communication,
the fixed local loop remains a bottleneck for carrying high speed data and video.
Alternative infrastructures, such as cable television, satellite, and wireless local loops, for
the time being are not as widely available. New entrants so far have been unable to match
the economies of scale and the coverage of the incumbents' networks. Mandatory
unbundling of local loops provides temporary relief by allowing new service providers to
reach end users through existing networks until they develop their own networks or
alternative infrastructures become available (EC, 2000; ITU, 2001).
The economic rationale for mandating local loop unbundling is that dominant operators
developed their networks over long periods protected by exclusive rights and were able to
fund investments through monopoly rents. By the same token, new networks developed
under competition, such as optical fiber to connect end users, would not be subject to
mandatory unbundling. Mandatory unbundling would end once local access becomes
sufficiently competitive (EC, 2000).
Progress in implementing mandatory local loop unbundling has been uneven among
countries and generally slow to take off (Pyramid, 2001). Unbundled access to the local
loop is mandatory in Europe, the US, and other high-income countries as well as in an
increasing number of emerging and transition economies, especially where the fixed
network is already well developed (e.g. Chile, Mexico, Slovak Republic). Mandatory
local loop unbundling has also been adopted in some countries with less mature fixed
networks (e.g. Albania, Ecuador), but in such situations the value of unbundling is more
questionable. In Morocco, local loop unbundling is likely to have limited impact on
Internet service development while ISPs are not allowed to reach their main customers
and global networks directly.
Where local loop unbundling has been made mandatory, commercial negotiation is the
preferred method for reaching agreement on the terms and conditions of provision. In
practice, however, detailed regulatory intervention and strict enforcement of competition
rules is necessary due to the imbalance in negotiating power and the absence of
alternative infrastructures. Offers by operators with significant market power should be
sufficiently unbundled so that competitors do not need to pay for network elements or
facilities they do not need. There are several levels of possible unbundling, and some
involve co-location of competitors' equipment with the incumbent's facilities (Intven et
al., 2000). The usual rules of fair competition must apply � access to the local loop and
related facilities should be provided under transparent, fair, and non-discriminatory
conditions, and made available to competitors under similar conditions as apply to the
incumbent's own operations. Prices should be cost oriented, enable sustainable
competition as well as further investment in infrastructure, and not distort competition
such as through margin squeeze between wholesale and retail prices by the local loop
provider (EC, 2000).
19
The prospect is for sustained and intense regulatory intervention, without which the
benefits of mandatory unbundling are unlikely to materialize. In countries only now
considering mandatory unbundling, this raises the question of whether the necessary
regulatory capabilities are in place.
A case can be made, in Morocco and other developing countries, for promoting facilities-
based competition right away rather than seeking temporary relief of end-user access
constraints through mandatory unbundling of existing facilities. This reflects slow
progress implementing mandatory unbundling in other countries, permanent heavy
regulatory requirements, and risk of actually slowing down network development.
Despite a clear economic rationale, mandatory local loop unbundling may reduce the
incentives for new entrants to build networks and, for the incumbent, to expand and
modernize its own infrastructure.
Sharing of infrastructure and co-location Sharing of infrastructure (e.g. poles, ducts,
conduits, manholes, street pedestals, towers) and co-location (two or more operators
using a common space, such as in a telephone exchange to facilitate connection of cables
and transmission equipment) is often mandatory. Infrastructure sharing and co-location
can significantly decrease barriers to competitive entry, increase revenues of the
incumbent, and contain environmental damage and public inconvenience. Acquiring
rights of way and other permits to build new infrastructure tends to be costly and time
consuming, posing additional entry barriers. Local government authorities may be
reluctant to grant authorizations to an unlimited number of operators. Breaking up streets
and roads result in large costs to communities and other services. Proliferation of
unsightly structures in residential and scenic areas is increasingly found objectionable.
The economic rationale for mandating infrastructure sharing and co-location by operators
with significant market power is similar to that of local loop unbundling. New entrants,
however, not only incumbents, may be required to give access to any infrastructure they
build, as the underlying environmental and economic costs are unlikely to abate. In
contrast with local loop unbundling, mandatory infrastructure sharing may be permanent
rather than temporary.
Commercial negotiation is the preferred way to set the terms and conditions of
infrastructure sharing and co-location, but regulatory intervention is often necessary.
Some of the issues that need to be addressed include apportioning space between current
needs of new entrants and future needs of the incumbent, pricing of facilities and
ancillary services, access and security arrangements, and leasing or licensing to third
parties (Intven et al., 2000).
Domestic mobile roaming Domestic mobile roaming is necessary for customers of
operators with limited networks to have service countrywide. In the early stages of
mobile service liberalization, new entrants are often required to build out extensive
networks of their own. This effectively places pressure on the incumbent to expand and
improve service. Subsequent entry, however, should allow new entrants to supplement
20
own network development with roaming agreements with other mobile network operators
using similar technologies.
Whether domestic roaming should be mandatory and regulated or left to commercial
negotiation among the parties is a matter to be examined case by case. In 1997, the
Australian Competition and Consumer Commission (ACCC) considered including
domestic mobile roaming services under the regulated telecommunications access
regime. This would have required access providers to supply roaming service upon
request by other operators, and would have enabled operators to seek the assistance of the
ACCC in negotiating roaming agreements. The ACCC decided not to regulate the service
on the basis that the network operators were willing and preferred to enter into
agreements on a commercial basis. Given, however, the importance of roaming for new
entry in the 1,800 MHz band, the ACCC decided that it would monitor the market and
intervene if the incumbents refused to provide roaming services on reasonable terms and
conditions and in a timely manner. The ACCC might view this as an indication of anti-
competitive conduct and seek remedies in accordance with competition law (ACCC,
1997).
Broader regulatory reform trends
In the future, Morocco will need to adopt two broader regulatory trends in modern
telecommunications regulation: increasing regulatory focus fair competition, and the
growing role of regional and global regulation.
Regulation for fair competition Accelerating market opening requires perfecting
Morocco's arrangements for monitoring and enforcing fair competition. This becomes
especially important to deal with vertical integration, including Maroc Telecom's control
of the main networks and, through Menara, the use of these networks to provide both ISP
services and content. Under Law 55-01, ANRT now has the tools to impose sanctions,
investigate cases at its own initiative, and require annual revision and approval of
reference interconnection offers. These will help ANRT deal more effectively and
promptly with fair competition issues and conflicts among operators. In developing its
capabilities as the competition authority for telecommunications, ANRT will need to
strengthen its relationships with the judicial system and build capacity in Morocco in the
area of competition law and economics. Additional measures, such as mandatory
structural separation or divestiture of vertically integrated companies, may become
necessary if market power continues to constrain effective development of competition.
As general competition law and enforcement become effective and mature, ANRT will
find itself sharing its responsibilities on fair competition. Eventually, much of the sector-
specific regulatory burden could be passed along to the general competition authority.
Effective competition cannot be fully achieved while the state retains ownership interests
in Maroc Telecom. Conflicts of interest between the government as regulatory authority
and as a shareholder of the largest regulated company are inevitable. The recent moves
towards increasing the private share in Maroc Telecom's capital reduce, but do not
eliminate, this conflict of interest. Full divestiture is necessary.
21
Global and regional ties Morocco's regulatory framework is increasingly intertwined
with those of other countries, regions, and the world through trade and economic treaties.
These treaties create a floor under Morocco's regulatory principles and practices, which
enable and require Morocco to align itself with international best practices. Morocco
committed under the WTO's General Agreement on Trade in Services (GATS) to
specific steps toward liberalizing telecommunications, including abiding by regulatory
principles established in the Reference Paper that Morocco adopted in 1997. Compliance
with these principles provide an important test to gauge new licensing initiatives
underway and any conditions that might be imposed on new licensees. Careful reading of
the WTO panel report on US vs. Mexico (WTO, 2004) illustrates how the GATS and
Reference Paper principles, deceptively simple on first reading, can be interpreted
rigorously in practice. Telecommunications figures prominently in the agenda of the US
and other countries in the current Doha round of WTO negotiations, and Morocco can
expect considerable pressure from its global and regional trading partners to agree to
further liberalization steps and stricter compliance. Conversely, the trade negotiations,
which comprise multiple sectors and pairs of countries simultaneously, can leverage
internal changes that might not have as high priority in terms of domestic political
agendas alone.
The recent amendments to the telecommunication law, implementing decrees being
prepared, and changes in market structure that would result from ANRT's proposals to
resume issuing of new licenses, are taking Morocco's regulatory framework closer to that
of the EU. Further harmonization with the EU will benefit Morocco in terms of
facilitating foreign direct investment, as investors find it easier to relate to the local
environment. Ultimately, however, foreign investment will be influenced more by how
well the regulatory regime works in practice than its formal similarities to that of Europe.
Moreover, harmonization should not prevent Morocco from moving ahead in some areas
even faster than Europe. A relevant example is that of Romania, which experimented
before EU countries with CDMA2000 as a platform for mobile data.
In conclusion, Morocco has undertaken a serious reform effort to introduce more
competition in the telecommunications market, starting in 2005. This implied a
coordinated effort to award new licenses, while upgrading the regulatory framework. It is
important that this effort is sustained in the next five years, to complete the transition of
the sector policy and regulatory framework to a fully competitive environment.
22
References
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Part XIC of the Trade Practices Act 1974", Australian Competition and Consumer
Commission, Canberra, available at
http://www.accc.gov.au/content/index.phtml/itemId/361649
ANRT, 2004, "ANRT Guidelines Project Related to Fundamental Regulatory Aspects",
available at http://www.anrt.net.ma
ANRT (2004b) "Note d'orientations g�n�rales pour la lib�ralisation du secteur des
t�l�communications pour la p�riode 2004-2008, adopt�e par le Conseil d'administration
de l'ANRT lors de sa session du 08 novembre 2004", available at:
http://www.anrt.net.ma
Arab Advisors, 2004a, Morocco Communications Projections, August 2004
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World: the Small Four maintain their lead, March 31, 2004
EC, 2000, Regulation (EC) No 2887/2000 of the European Parliament and the Council of
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http://europa.eu.int/comm/information_society/policy/framework/pdf/com2000394_en.pdf
El Salvador, 1997, Ley de Telecomunicaciones, Decreto Legislativo No. 142 of
November 6, 1997, available at www.siget.gob.sv
Ibarguen, Giancarlo, Liberating the radio spectrum in Guatemala, Telecommunications
Policy, 27, 2003, 543-554.
Intven, H., J. Oliver, and E. Sep�lveda, 2000, Telecommunications Regulation
Handbook, World Bank, Washington DC
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Telecommunication Union, Geneva
ITU, 2003, Digital Access Index, World Telecommunication Development Report 2003
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http://www.itu.int/osg/spu/ni/spectrum
ITU, 2004b, World Telecommunications Indicators Database
http://www.itu.int/ITU-D/ict/publications/world/world.html
23
Pyramid, 2001, Local Loop Unbundling: Myth, Reality and the Impact on DSL, Pyramid
Research, Cambridge
http://www.pyramidresearch.com/info/rpts/june01_eurlocalloop.asp
Rossotto, C., B. Wellenius, A. Lewin, and C. G�mez, 2004, Competition in International
Voice Communications, World Bank Discussion Paper, World Bank, Washington DC
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Response Unit, World Bank, Washington DC, available at
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24
Annex 1: Morocco is lagging behind in non-competitive sectors
Fixed Morocco Algeria Egypt Jordan Turkey El Salvador Estonia Malaysia
Fixed liberalization status Monopoly Monopoly Monopoly Monopoly Monopoly Competition Competition Competition
Fixed liberalization date .. .. .. .. .. 1996 2001 1983
Number of operators 1 1 1 1 1 4 3 2
% privatization of main operators 35% .. .. 61.5% .. 57.1% 73% 35.3%
Mainlines per 100 inhabitants 3.80 6.10 11.04 12.66 28.12 10.34 35.06 19.04
CAGR (%) 1997-2002 -4.3 4.8 14.0 7.6 2.2 11.2 1.8 -0.5
Subscriber lines per 100 inhabitants 3.84 6.10 11.04 12.66 27.85 10.34 35.06 19.33
Residential main lines per 100 households 14.9 31.6 45.7 58.3 97.4 38.1 62.9 65.2
Telephone revenue per mainline (current US$) 1,465 192 335 1,128 275 903 881 948
GITR Ranking: Mainlines (per 1,000 inhab.) 2001 78 73 64 59 40 67 35 53
GITR 2003-2004 Ranking: infrastructure quality 65 69 43 23 54 50 32 12
Mobile Morocco Algeria Egypt Jordan Turkey El Salvador Estonia Malaysia
Mobile liberalization status Partial Partial Partial Competition Competition Competition Competition Competition
Mobile liberalization date 1999 2002 1998 2004 2001 1999 1996 1989
Number of operators 2 2 2 3 4 4 3 5
Population coverage (%) 95.0 60.0 96.0 99.5 88.2 85.0 99.0 95.0
as % of total telephone subscribers 84.6 17.3 37.7 64.4 55.3 57.1 65.0 66.4
Cellular subscribers (millions) 6.9 1.2 5.3 1.3 27.8 1.0 1.0 10.3
Cellular subscribers per 100 inh. 23.4 3.8 7.9 23.6 41.3 15.2 70.6 42.0
CAGR 1997-2002 (%) 142.1 87.2 133.1 93.4 70.8 85.8 43.6 35.8
Prepaid subscribers (%) 95.2 15.4 80.6 79.4 71.7 74.6 37.0 47.2
Cost of local SMS 0.09 0.06 0.11 0.42 0.10 0.09 0.10 0.04
Prepaid cell tariff ($ per peak min) 0.27 0.25 0.33 0.25 0.49 0.30 0.26 0.14
Internet/Data Morocco Algeria Egypt Jordan Turkey El Salvador Estonia Malaysia
ISPs liberalization status Competition Competition Competition Competition Competition Competition Competition Competition
ISPs liberalization date 2000 1998 1995 1995 1996 1998 1995 1999
Number of main ISPs 20 15 8 9 5 4 7
Internet hosts per 10,000 inhabitants 2 0 3 4 49 6 838 44
DSL Internet subscribers 2,700 0 4,850 4,996 56,624 40 51,300 110,104
Cable modem Internet subscribers 0 0 0 0 42,700 93,395 28,300 0
Internet users per 100 inhabitants 3 2 4 8 8 8 44 34
Personal computers (per 1,000 people) 24 8 17 38 45 25 210 147
Internet total monthly price ($ per 20 hours of use) 25 18 5 26 20 48 14 8
Internet total monthly price (% of monthly GNI per capita) 26 12 5 18 10 28 4 3
Secure internet servers 15 4 17 9 496 23 89 174
Leased lines liberalization status Monopoly Monopoly Partial Monopoly Monopoly Competition Competition Competition
Leased lines liberalization date none none .. none none 1998 .. ..
Number of Leased Lines operators 1 1 .. 1 1 .. .. ..
VSAT liberalization status Competition Competition Competition Competition Competition Competition Competition Competition
VSAT liberalization date 2000 2001 1996 .. .. 1998 .. ..
Number of VSAT operators 4 3 4 .. 4 4+ .. ..
Data liberalization status Competition Monopoly Competition Competition Partial Competition Competition Competition
Data liberalization date 2000 none .. 1996 .. 1998 .. ..
Number of data operators 5 1 6 15 5 .. 6 4
GDP per capita, PPP (current international $) 4,012 6,248 3,950 4,319 6,749 4,994 13,348 9,696
Computer, communications and other services (% of commercial service exports) 16 .. 27 27 22 21 19 31
Communications, computer, etc. (% of service exports, BoP) 21 .. 28 29 22 25 20 32
Fixed section sources: (i) Liberalization data; No. of operators: WMRC, April 2004, ITU website. (ii) % privatization: ITU Trends in Telecommunication Reform 2003. (iii) Mainlines, CAGR, Subscriber lines, % households with telephone: ITU WT
2002. (iv) Telephone revenue per mainline: ITU WTID 2003, 2002 data. Data in italics are for 2001.
Mobile section sources: (i) Liberalization data are from WMRC 2004 and EMC 2004. (ii) Population coverage; as % of total telephone subscribers; CAGR 1997-2002; Cost of local SMS; Prepaid cellular tariff are from ITU, WTDR 2003. Data are f
operators; Cellular subs; Prepaid subs are from EMC 3Q03.
Internet/Data section sources: ISPs liberalization status and date / Number Main ISPs: WMRC June 2004 and Meeting the Competitiveness Challenge. Leased lines and VSAT liberalization status: ITU's Trends in Telecommunications Reform
Competitiveness Challenge in the Middle East and North Africa. Data liberalization status / Number of data operators: WMRC June 2004 and Meeting the Competitiveness Challenge. Internet hosts data: Network Wizards, January 2004. Internet t
subscribers, cable modem subscribers, Internet users, PCs per capita and GDP PPP data: World Development Indicators 2004, World Bank and International Telecommunications Union, 2004.
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