Moroccan court fines Maroc Telecom $630 million for unfair competition practices

• An appeals court in Morocco has confirmed a decision requiring Maroc Telecom, a telco in the country, to pay Inwi, its competitor, 6.3 billion dirhams ($630 million) in compensation for engaging in unfair competition practices.

• The ruling upholds the compensation ordered by a lower court in January, related to a case filed by Inwi in 2021.

In 2016, Inwi lodged a complaint with the National Agency of Telecommunications Regulation (ANRT), the body overseeing telecommunications and postal sectors in Morocco. Inwi claimed that Maroc Telecom failed to properly implement local loop unbundling, which involves providing new telecom operators access to the infrastructure connecting customers to local telephone exchanges.

In 2017, the telecoms regulator confirmed the complaint, having found that Maroc Telecom had obstructed and postponed competitors’ access to their infrastructure, thereby hindering their ability to provide landline services to customers. Consequently, in 2020, the regulator fined Maroc Telecom 3.3 billion dirhams ($330 million) for uncompetitive practices.

According to reports, this development severely impacted Maroc Telecom, potentially surpassing the company’s annual profit of 5.82 billion dirhams ($580 million) in 2022.

Besides, BMCI Capital Global Research, a market research company noted that “The ruling is anticipated to have a profound impact on Maroc Telecom’s profit margins and distribution strategy for the year 2024 unless the company has made provisions, either in the fourth quarter of 2023 or post-closure.”

In September 2022, reports had it that at the end of the first half of 2022, Maroc Telecom’s revenue dropped by an annual rate of 1.2%, totalling MAD17.5 billion ($1.6 billion). Its revenues in Morocco declined by an annual rate of 2.2%, averaging MAD 9.561 billion at the end of June 2022.

Meanwhile, over the first three months of 2023, the telco’s international revenue rose by 7.3% to reach MAD 4.6 billion ($464,169), whereas its revenue from activities in Morocco increased by only 0.6%, reaching MAD 4.7 billion ($474,260).

In May 2024, Marco Telecom was in the news for slashing traders’ profit margins on prepaid cards from 7% to 4.5%. This sparked outrage and led to a Moroccan union of traders and craftsmen, affiliated with the Moroccan Labor Union (UMT), calling for an immediate boycott of all its prepaid services until it reverses the decision.