North Africa is heading for a general increase in competition in the telecommunications markets. In Morocco, the third mobile licence has of course been awarded to Wana, a locally owned fixed-mobile operator, which Zain is now a minority shareholder in, and we anticipate the launch date of Wana’s fully mobile service. In Tunisia, the third mobile licence, along with a second licence to offer fixed-line services, was won by a consortium led by France Télécom. Again, no date for service launch has been set, but things are definitely set to be shaken up.

Also in Morocco, the industry in the region was somewhat disappointed when Telefónica and Portugal Telecom’s stakes in Méditel were sold to a group of Moroccan investment companies rather than to a significant new investor. Many have been interested, including Etisalat and Saudi Telecom. It is still possible that some or all of the stakes will be sold on to a foreign company, but certainly the initial excitement around the prospect has dissipated.

Overall, the first half of 2009 saw generally much slower growth than the first half of 2008. This is to be expected for two reasons. The first is that all three of these markets are approaching saturation, and as they get closer to this point, the supply of totally new mobile users starts to dwindle, and growth inevitably slows. The second reason is the economic situation in H109 that most countries are finding themselves in. Although some countries are starting to pull out of official recession, and, indeed, some never officially entered one, it is still not a good time for consumer confidence. BMI has observed many mobile markets seeing a small slowdown in H109, and North Africa seems to fall into this pattern. Still the slowdown is not likely to be permanent.

This being said, some operators are suffering from more difficult problems. Maroc Telecom, in particular, saw significant net losses in Q209, after having also seen net losses in Q408. The company itself has put this down to more intense competition, especially in the price category, but we do not think this bodes well for the operator as it awaits the introduction of more competition.

North Africa is a relatively strong area in terms of its fixed-line sector. Across the world, fixed-line markets have been suffering from mobile substitution, and in most markets in Africa the fixed-line network is so limited that it has barely any impact. In North Africa the networks are comparatively extensive, and the fixed-line markets appear to have been somewhat insulated from the effects of mobile substitution. In Morocco, fixed-wireless technologies and competition came to the rescue, and it is believed that they will shortly do the same in Tunisia. However, even with this reasonably clean bill of health, the report is expecting the decline to set in within the next five years.