North Africa Telecommunications Report Q4 2012

BMI View: The North African telecoms markets are recovering from the political and social upheavals of2011. The more mature Moroccan and Tunisian markets still offer the best opportunities in terms of risksand rewards with respect to investment, and nascent mobile value-added services markets are beginningto take off, with mobile money and gaming highlighted this quarter. Algeria is more of a risk as thegovernment appears set on taking control of all three mobile operators while continuing to persecuteforeign investors and equipment suppliers alike. Rebuilding efforts in Libya could see the two mobileoperators targeted for privatisation or an outright sale to foreign investors, but the political and businessenvironments remain challenging and prone to sudden collapse.

Key Data

Mobile growth is largely being driven by prepaid services, which does little to add value tomobile ARPUs and income relating to non-voice services. However, in Morocco and Tunisia,there are signs that operators are seeing better growth in the more lucrative postpaid market.

Fixed-line and broadband growth remains variable as demand for traditional fixed telephonelines fluctuates and affordability issues continue to hamper broadband adoption.

Key Trends & Developments

Qatar Telecom seeks to take control of Kuwait-based Wataniya Telecom, owner of mobile operators inAlgeria and Tunisia. The Algerian government wants to take control of Nedjma. However, it mayquibble over the value of the business, as it is currently doing with market leader Djezzy. We do notforesee a quick resolution, which, unfortunately, impacts on the government’s planned sale of 3Glicences.

Morocco's industry rewards fell sharply due to increasing downward pressure on ARPU levels in thecountry, partly because of regulatory policies, such as interconnection rate cuts, and increasing pricecompetition in the mobile sector as the market approaches saturation. Morocco has one of the lowestARPU rates in the region, despite the presence of advanced mobile data services.