In an effort to increase the speed of mobile internet in the country, Morocco is about to inaugurate 4G accessibility. After some delays, the end of 2013 might be the beginning of a new mobile internet era, with the allocation of at least the first 4G licence, most likely to one of Morocco’s already established operators, Maroc Telecom, Méditel or Wana.
The intention to introduce a high-speed mobile internet network has been on the government’s agenda for some time now. In a strategy paper published in 2010, the Prime Minister’s Office mentioned the initial allocation of 4G frequencies to operators by 2011, however, the whole process ended up being delayed. Now the National Agency for Telecommunications Regulation (Agence National de Ré glementation des Télécommunications, ANRT) is hoping to give out at least the first licence before the end of 2013; it plans to mark the beginning of commercial operations on the network in early 2014.
The impact of increased speed and accessibility is set to affect the market positively. “3G has been growing a lot, and 4G will eventually play a big role in the development of internet services in Morocco because it is a technology that allows for an impressive speed of transfer. It can quickly overtake the DSL market,” said Karim Gharbi, the head of corporate finance at CFG, a Casablanca-based capital markets firm.
FIRST ONE TO MARKET: Aiming to better determine market needs, the ANRT is conducting its preliminary market study on the implementation of 4G. Results are due to be announced in April or May 2013, when it expects to have a clearer picture of how licence allocation should proceed. “In France a licence was given to each of the operators. In Morocco we are still establishing what the best path will be,” Ahmed Khaouja, the director of the ANRT’s division of oversight and competition, told OBG.
Market analysts expect the licence to be given to one of the companies already present in the Moroccan mobile market. Maroc Telecom, the country’s largest operator and segment leader is the most probable contender, due to a strong presence in the market and because it is 30% owned by the state. This would make additional sense as the operator is also the strongest of the three in the post-paid segment, which will be the target of any 4G offer. However, the upcoming sale of Paris-based Vivendi’s 53% stake in the Moroccan operator in the first half of 2013 could see it change hands. It is unclear how this might influence Maroc Telecom’s potential bid for a 4G licence. Of the remaining two competitors, Wana has showed a natural aggressiveness to establish itself in the mobile sector. However, it might be reluctant to invest in a business that will only bring results farther down the line.
CHALLENGES: Any of the operators wanting to take a lunge at the 4G segment will need to consider cost as 4G licences and deploying the needed technology can be expensive. “Operators will need to understand if the investment on the licence and further cost can be easily recouped. But there is very little information on this at the moment,” said Gharbi. Ultimately, the total investment needed to enter the 4G market will depend on how high the cost for a licence will be set at, the eventual licensee’s negotiations with its suppliers, and how 4G will be deployed across the country.
TARGETING THE HIGHER-END: Although 4G will change the data market in Morocco, it will be initially very narrow in its target clientele: small in volume, but, bidding telecoms hope, huge in terms of its revenue value. “It will only reach a small part of the market – geared to 5% of the market that is prepaid, and within that 5% of the market, it will only be for a small proportion, maybe 1-2% of the market,” Gharbi told OBG.
In order for the market to benefit fully from the advantages of a 4G network, there is also a need for evolution in terms of handsets. Despite the fast growth in the smartphone market, most branded, high-end products are still too expensive for average Moroccans. An increase in low-cost handsets coming from Asia will play a major role in the evolution of 4G.
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