Morocco’s fixed services liberalization scheme faces unplanned delays
Although the deadline for submitting proposal for the second fixed license tender in Morocco was moved from October 8 to November 5, no one from the twelve initially interested companies submitted a proposal. According to a recent Arab Advisor’s report, fixed lines declined from 1.4 million in 2000 to 1.1 million in 2001 reflecting a drop of 21.
The fixed line service seems to have lost its luster in Morocco. The subscriber base is
decreasing because of the boom in the cellular market and lack of attention by the incumbent to the segment, the report stated.
“The demand for the fixed services, at its current rates, is diminishing in the country although the market has a very low PSTN penetration rate of 3.7 percent only. This clearly causes a loss of appetite for any potential investor in the service. Another possible reason for the lack of interest in the fixed services tender is the relative underdevelopment of the Internet and datacomm segments in the country, which makes investing in fixed services even riskier,” Arab Advisors Group’s analyst, Hala Baqain wrote in the report.
“Nonetheless, the Arab Advisors Group believes that the Moroccan market can sustain a second fixed services operator. The market has a very low PSTN penetration rate and the ILD segment is indeed tempting. The country was merely a victim of the current slump in the telecom industry.” Baqain added.
The competition in the cellular market in the country has made it more feasible for users to own a mobile rather than a fixed line. The quality of service, coverage and most importantly the rates of the cellular service in Morocco has ranked the cellular service as the number one service.
“The failure of the tender in Morocco should be a warning signal for other monopoly-dominated markets. Regulators and governments in the region seeking full liberalization should pause and reconsider any more exemptions and privileges given to the current monopolies. Competition in fixed services will happen if tenders are made in an attractive manner.” — (menareport.com)
© 2002 Mena Report (www.menareport.com)