The Kingdom of Morocco is a constitutional monarchy, where the king possesses more authority than the elected government.

Morocco is a developing economy and faces problems typical to every developing nation. Some of these include issues regarding privatisation, government spending and economic growth. Morocco has rich natural mineral resources and is the world's largest exporter of phosphates. The country's manufacturing and tourism sectors have also gained prominence in local economics in the recent past.

In 2004, the government took some favourable steps to boost trade and foreign direct investment in the country, such as signing a free trade treaty with the US, partially privatising some of the largest banks and telecom companies, etc. Such steps are constantly adding to the country's economic growth and making it an attractive destination for foreign investment activity.

Table 1 provides an overview of the country's key economic parameters.

Morocco's telecom market is one of the most developed markets in Africa. It has one of the highest overall telecom penetration rates compared to other countries in the region. The sector has undergone various structural reforms in the past, such as the establishment of a separate regulatory authority (National Telecommunications Regulatory Agency (ANRT)) for the sector in 1998.

At the end of 2004, fixed-line services were provided by only one operator - Maroc Telecom, which is 34.1 percent government owned. Later, a second fixed-line licence was issued to Meditel in December 2005. A third license is expected to be granted soon.

Significantly, the country's mobile market is more developed than its fixed-line market, with wireline penetration at end-September 2005 less than 5 percent, while mobile penetration had already exceeded 33 percent at end-June 2005.

The telecom sector offers plenty of scope for growth, primarily because of the government's focus on increasing network coverage, encouraging e-commerce and adopting new technologies.

Table 2 provides an overview of the country's telecom sector in terms of segment-wise subscriber numbers and penetration rates.

Morocco's mobile sector has greatly benefited from the partial privatisation of the state owned telecommunications company and the entry of a second GSM mobile operator in the market in 2000.

Cellular services in Morocco started with the launch of NMT-based services in 1987.

The market has shown significant growth following the liberalisation of the telecom sector. The country's mobile sector greatly benefited from the partial privatisation of the state-owned telecom company and the entry of a second GSM mobile operator in the market in 2000. Soon after the second GSM operator launched its services in Morocco, the number of mobile subscribers in the country exceeded the number of fixed-line subscribers.

Currently, the country's mobile market is a duopoly with Maroc Telecom and Meditel providing 2G (GSM) services. The mobile networks of these two operators cover more than 95 percent of the country's population. One of the operators launched GPRS services in 2004, whereas the other operator began trialling these services in 2005. 3G services have not yet launched commercially in Morocco, though Maroc Telecom won a licence for 3G services in September 2005.

Besides voice services, messaging is also very popular and successful and Morocco has one of the highest SMS rates across the Arab countries of North Africa. SMS continues to be the mainstay of non-voice service revenues and has been a real success, particularly in the youth market, and the Moroccan market saw total SMS traffic of 680 million messages in 2004. After a successful trial of MMS in 2003, it was launched commercially in 2004. The launch of WAP-based content services has not enjoyed the same level of success in Morocco, probably due to limited speed and higher costs.

Market Size

The total number of mobile subscribers in Morocco at the end of September 2005 was 11.98 million, resulting in a corresponding penetration rate of approximately 36.8 percent.

The number of mobile subscribers increased by approximately 25 percent, from 7.27 million at the end of 2003 to 9.09 million at the end of 2004.

The country's mobile subscriber base is expected to increase at a CAGR of approximately 14.9 percent during the 6 years from end-2005 to end-2011, resulting in a mobile subscriber base of 29.29 million and a penetration of 81.8 percent in 2011. 3G services, which are expected to be launched in 2007, are expected to account for approximately 18 percent of the total subscribers in 2011.

Table 3 shows the forecasts for Morocco for the 10-year period from 2002 to 2011.