2009 Registration Document

This Registration Document was filed on April 26, 2010, pursuant to Article 212-13, of the Financial Market Authority’s Regulation. It may not be used in support of a financial transaction unless it is accompanied by a transaction note endorsed by the Financial Market Authority. SUMMARY

HIGHLIGHTS & KEY FIGURES 4 4.10 REAL PROPERTY 128 4.11 INTELLECTUAL PROPERTY 129 1 PERSONS RESPONSIBLE FOR THE REGISTRATION 4.12 INSURANCE 130 DOCUMENT AND FOR THE AUDIT OF THE 4.13 LEGAL AND ARBITRATION PROCEEDINGS 131 FINANCIAL STATEMENTS 8 4.14 RISK FACTORS 133 1.1 PERSON RESPONSIBLE FOR THE REGISTRATION DOCUMENT 10 1.2 CERTIFICATION OF THE REGISTRATION DOCUMENT 10 1.3 PERSONS RESPONSIBLE FOR THE AUDIT OF THE 5 FINANCIAL REPORT 140 FINANCIAL STATEMENTS 11 5.1 CONSOLIDATED FINANCIAL DATA FOR THE LAST 1.4 INFORMATION POLICY 11 THREE YEARS 142 5.2 OVERVIEW 144 5.3 CONSOLIDATED INCOME STATEMENT 154 2 CORPORATE GOVERNANCE 12 5.4 CONSOLIDATED FINANCIAL STATEMENTS 178 5.5 INDIVIDUAL FINANCIAL STATEMENTS 222 2.1 COMPOSITION AND FUNCTIONS OF THE MANAGEMENT AND SUPERVISORY BOARDS 14 2.2 CORPORATE GOVERNANCE 22 6 RECENT DEVELOPMENT AND OUTLOOK 246 2.3 INTERESTS OF THE SENIOR EXECUTIVES 26 6.1 RECENT DEVELOPMENT 248 2.4 RELATED PARTY TRANSACTIONS 28 6.2 MARKET OUTLOOK 249 6.3 OBJECTIVES 250

3 GENERAL INFORMATION REGARDING THE 7 INFORMATION RELATING TO THE COMPANY AND ITS SHARE CAPITAL 30 3.1 GENERAL INFORMATION 32 TRANSACTIONS 252 3.2 GENERAL INFORMATION RELATING TO THE COMPANY’S SHARE CAPITAL 50 TABLE OF CONCORDANCE 254 3.3 TRADING OF THE COMPANY’S SHARES 54 3.4 DIVIDENDS AND DIVIDEND POLICY 56 2009 ANNUAL INFORMATION DOCUMENT 256 3.5 BREAKDOWN OF SHARE CAPITAL AND VOTING RIGHTS 59 STATUTORY AUDITORS FEES 257 3.6 ASSET PLEDGES 63 GENERAL SHAREHOLDERS’ MEETING OF APRIL 22, 2010 258 4 INFORMATION CONCERNING COMPANY GLOSSARY 260 BUSINESS ACTIVITIES 64 4.1 HISTORY 66 4.2 OVERVIEW OF THE GROUP’S OPERATIONS 67 4.3 MAROC TELECOM’S BUSINESS STRATEGY 70 4.4 BUSINESS ACTIVITIES IN MOROCCO 72 4.5 DESCRIPTION OF SUBSIDIARIES’ OPERATIONS 106 4.6 RESEARCH AND DEVELOPMENT 112 4.7 SEASONALITY 113 4.8 REGULATORY ENVIRONMENT AND POSSIBLE DEPENDENCIES 114 4.9 HUMAN RESOURCES 125 HIGHLIGHTS

January 2009 • Maroc Telecom again reviews its pricing terms, raising its monthly fixed-line subscription for capped rate plan customers while lowering prices on fixed-line international calls and bundles. • Maroc Telecom launches a new rate plan for international calls over VPN and a “2009 Champions League” content offering allowing subscribers to view sports events in real time February 2009 • Success of Maroc Telecom’s bid to acquire a 51% stake in the Malian incumbent operator, Sotelma. • Maroc Telecom further develops its innovative offerings with the ”Pack Pro” call plan combining fixed-line, mobile and Internet (ADSL or 3G) services, along with a PC at a subsidized rate, and an exclusive TV service for mobile subscribers, with an unlimited access to a bouquet of 18 channels for 40 different 3G compatible handsets. • Maroc Telecom launches a GPS service for top-of-the-range mobile handsets. • Bintel awarded a fourth Mobile license in Gabon. March 2009 • Maroc Telecom provides extensive support for customers during the switchover of the telephone numbering system in Morocco, with a major communications campaign and the provision of a free service for updating call-lists. A number of different promotional campaigns were also launched (TV ADSL, 3G Internet modem starter kits, Infinifix, etc.). • Results of the bid for a 20% stake in Onatel were announced: 1.4 times oversubscribed. • Launch of a “MMS Info” service allowing customers to receive news content according to their preferences April 2009 • Maroc Telecom launches an online bill payment service for customers in Morocco. It gives an additional 30 permanent minutes for customers under individual rate plans and 1 to 6 hour controlled rate plans. • Maroc Telecom cuts rates for calls made by postpaid mobile customers to international fixed-lines (zone 1). These calls are henceforth included in capped rate plans and charged at the same rate as national calls. • Maroc Telecom launches a new unlimited SMS-MMS plan, which enables prepaid customers to send unlimited SMS and MMS. • Maroc Telecom enhances its Maroc Telecom TV bouquet by adding three new channels: Ciné Cinéma Star, Ciné Cinema Frisson and Infosport. • The ANRT approves Maroc Telecom’s technical and pricing terms for interconnection to its fixed-line and mobile networks in 2009, together with the terms of Maroc Telecom’s unbundling for 2009

May 2009 • Maroc Telecom launches a triple play offering, “MT Box”. This value-for-money offering enables customers to benefit from unlimited fixed-line IP telephony, broadband Internet and IPTV, for a basic subscription of MAD229 (including tax) per month. • Maroc Telecom proposes promotional offers for El Manzil packages from MAD0 and offers customers signing up to the Phony package a 50% discount on their first three bills. • Maroc Telecom concludes with the ANRT a MAD334.6 million agreement governing the extension of universal service to 2,530 rural areas in 2009. The cost of the extensions will be offset against Maroc Telecom’s universal service contribution in respect of 2009. • Maroc Telecom concludes an investment agreement with the government of the Kingdom of Morocco. under the terms of which Maroc Telecom is required to carry out a capital expenditure program from 2009 to 2011 for MAD10.5 million, against an exemption from customs duties on imported capital goods. • Maroc Telecom was awarded a SICCAM 2009 trophy, acknowledging its decade of service to Morocco’s call center industry along with its investment in infrastructure enabling it to meet the demand of call center operators and its role in connecting Morocco with the rest of the world. • Maroc Telecom divested its equity interest in the Mobisud France subsidiary to SFR. • First listing of Onatel shares on the regional stock exchange in Abidjan.

4 Maroc Telecom - 2009 Registration Document HIGHLIGHTS

June 2009 • Maroc Telecom overhauls its unlimited call plan for fixed-line calls in Morocco, launches capped rate plans for fixed-line to mobile calls in Morocco in evenings and weekends or anytime. Rate plans are attractively priced and enable customers to choose a range of options. • Maroc Telecom expands its directory enquiries service (160) to include personal assistance, information on lei- sure activities and general information, and allows callers to receive information by SMS or email. • Maroc Telecom continued its sponsorship of the “Clean Beaches” program for Morocco’s Mediterranean coast- line. As a result, two beaches in Northern Morocco were awarded “Pavillon bleu” status for the first time. • Mauritel launches 3G+ voice and data services. July 2009 • Launch of the “Jawali” customer loyalty program for prepaid Jawal and Mobisud customers in Morocco. • On July 7, 2009, Maroc Telecom was declared the winner of the tender offer for the acquisition of a 51% equity stake in Sotelma, the incumbent telecoms operator in Mali, for €275 million. August 2009 • On the occasion of the 2009 Haj and Omra period, Moroc Telecom launches a promotional 50% discount on calls to mobiles and fixed-lines in Saudi Arabia. • Launch of an SMS Alert Service for the Berlin 2009 World Athletics Championships. September 2009 • Maroc Telecom repositions the Mobisud product, now dedicated to customers making international calls, and overhauls its national and international rates. • Mauritel markets MMS and 3G video-telephony services. • In Gabon, the telecom regulatory authority decides to lower inter-operator rates, effective retroactively as from January 1, 2009. October 2009 • Maroc Telecom launches the Mourbiha El Manzil prepaid promotion, which offers one hour of free communication on evenings and weekends to national mobiles, for all top-ups from MAD100. • In Burkina Faso, the regulatory authority lowers interconnection rates for fixed and mobile lines, and Onatel launches GPRS (MMS and mobile Internet). November 2009 • Maroc Telecom again doubles ADSL Internet speeds and introduces reduced rates for existing and new customers. • Maroc Telecom offers new customers three services at no charge for a three-month introductory period. The offering allows new customers to test the Mobile TV, News package and My Address Book services. December 2009 • Maroc Telecom launches the Jawal permanent bonus for all operators, giving customers a bonus of MAD100 or MAD200, depending on the top-up amount. • Maroc Telecom lowers rates for fixed-to-fixed and fixed-to-mobile calls in all international zones, and reduces rates for the Phony, all-inclusive international calls offering. • Maroc Telecom expands Maroc Telecom’s TV content with new TV channels (Planète Thalassa and Ma Chaîne Sport) and radio stations (Vibration, FG Radio, Radio Jazz). January 2010 • Maroc Telecom launches MobiCash, an exclusive service for mobile phone money transfers, in partnership with Banque Centrale Populaire and Attijariwafa Bank. • Maroc Telecom lowers Mobile rates by adding 30 minutes of communication to rate plans.

Maroc Telecom - 2009 Registration Document 5 KEY FIGURES

2009 2008 2007

In thousands Mobile customers 19,602 17,184 15,342

Maroc Telecom 15,272 14,456 13,327

Mauritel 1,335 1,141 905

Onatel 1,569 977 564

Sotelma 818 - -

Gabon Télécom 513 447 386

Mobisud 95 163 160

Number of Fixed-lines 1,528 1,526 1,518

Maroc Telecom 1,234 1,299 1,336

Mauritel 41 49 36

Onatel 152 145 122

Sotelma 65 - -

Gabon Télécom 36 33 24

Internet customers 527 522 503

Maroc Telecom 471 482 476

Mauritel 6 9 5

Onatel 23 17 12

Sotelma 7 - -

Gabon Télécom 20 14 10

In IFRS (in millions of Moroccan dirhams) Consolidated revenues 30,339 29,521 27,532

Mobile (gross) 22,190 21,183 19,296

Fixed-lines and Internet (gross) 11,106 11,319 11,090

Consolidated earnings from operations before amortization 18,149 17,641 15,659

Mobile 13,166 12,876 11,399

Fixed-lines and Internet 4,983 4,765 4,260

Consolidated earnings from operations 14,008 13,889 12,234

Mobile 10,712 10,720 9,557

Fixed-lines and Internet 3,297 3,169 2,677

Consolidated net earnings (group share) 9,425 9,520 8,033

Capital expenditure 5,847 5,957 5,466

Mobile 3,676 3,614 3,279

Fixed-lines and Internet 2,171 2,343 2,188

Number of employees 14,423 13,955 14,154

N.B: In Mauritania, revenues generated from international inbound and outbound Mobile traffic were accounted for directly under Mobile segment revenues in 2009, whereas in 2008 and 2007, they were accounted for as transit revenues of Mauritel’s Fixed-line operations. 2008 financial data was therefore restated to reflect this change although this of 2007 did not take into account this new presentation.

6 Maroc Telecom - 2009 Registration Document KEY FIGURES

2009 2008 2007

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

In thousands Mobile customers 17,624 17,553 19,306 19,602 15,897 16,574 17,204 17,184 12,736 13,172 14,517 15,342

Maroc Telecom 14,630 14,289 15,239 15,272 13,697 14,224 14,629 14,456 11,372 11,713 12,838 13,327

Mauritel 1,218 1,315 1,351 1,335 959 1,015 1,104 1,141 687 767 843 905

Onatel 1,162 1,316 1,402 1,569 645 756 877 977 411 388 460 564

Gabon Télécom 471 533 545 513 392 424 453 447 254 263 320 386

Sotelma - - 685 818 ------

Mobisud 143 100 84 95 204 155 141 163 21 41 56 160

Number of fixed-lines 1,524 1,533 1,576 1,528 1,526 1,536 1,530 1,526 1,477 1,490 1,496 1,518 Maroc Telecom 1,286 1,290 1,269 1,234 1,335 1,329 1,314 1,299 1,314 1,325 1,324 1,336

Mauritel 54 56 57 41 40 46 47 49 39 36 38 36

Onatel 149 151 152 152 126 130 138 145 101 107 111 122

Gabon Télécom 35 36 36 36 25 31 31 33 23 22 23 24

Sotelma - - 62 65 ------

Internet customers 536 537 529 527 517 520 518 522 447 466 473 503 Maroc Telecom 488 486 473 471 487 487 482 482 425 444 449 476

Mauritel 10 11 11 6 6 7 8 9 5 5 5 5

Onatel 19 21 22 23 13 15 16 17 8 8 10 12

Gabon Télécom 19 19 20 20 11 11 12 14 9 9 9 10

Sotelma - - 3 7 ------

In IFRS (In millions of Moroccan dirhams) Consolidated revenues 7,129 7,457 7,834 7,917 6,965 7,343 7,729 7,484 6,113 6,894 7,320 7,205 Mobile (gross) 5,078 5,374 5,836 5,901 4,901 5,266 5,618 5,391 4,162 4,727 5,260 5,148

Maroc Telecom 4,378 4,638 5,004 4,847 4,295 4,628 4,938 4,668 3,795 4,105 4,722 4,474

Mauritel 228 243 228 235 199 224 234 234 210 211 215 199

Onatel 265 292 291 313 208 213 222 238 151 178 161 229

Gabon Télécom 161 164 146 216 151 157 185 199 - 223 146 213

Sotelma - - 144 269 ------

Mobisud 46 37 22 20 48 44 38 53 6 10 16 32

Fixed-lines and Internet (gross) 2,798 2,809 2,710 2,789 2,745 2,790 2,862 2,933 2,618 2,913 2,769 2,789

Maroc Telecom 2,376 2,384 2,268 2,284 2,347 2,403 2,437 2,497 2,326 2,401 2,377 2,347

Mauritel 63 71 65 65 74 61 63 68 81 84 73 81

Onatel 202 197 182 189 187 188 180 204 212 198 192 197

Gabon Télécom 157 158 134 167 136 139 183 164 - 230 127 164

Sotelma - - 61 85 ------Elimination of intersegment trans- (748) (726) (712) (773) (681) (713) (751) (840) (667) (746) (710) (731) actions Consolidated earnings from 3,188 3,364 3,600 3,856 3,104 3,562 3,755 3,469 2,844 3,155 3,510 2,724 operations Mobile 2,312 2,458 2,869 3,073 2,343 2,795 2,958 2,618 2,162 2,426 2,777 2,191 Fixed-lines and Internet 876 906 731 783 761 766 797 851 682 729 733 533

Maroc Telecom - 2009 Registration Document 7 PERSONS RESPONSIBLE FOR THE REGISTRATION DOCUMENT AND FOR THE AUDIT OF THE FINANCIAL

STATEMENTS 1.1 PERSON RESPONSIBLE FOR THE REGISTRATION

DOCUMENT 10

1.2 CERTIFICATION OF THE REGISTRATION

DOCUMENT 10

1.3 PERSONS RESPONSIBLE FOR THE AUDIT

OF THE FINANCIAL STATEMENTS 11

1.3.1 STATUTORY AUDITORS 11

1.4 INFORMATION POLICY 11

1.4.1 PERSON RESPONSIBLE FOR INFORMATION 11 1.4.2 FINANCIAL COMMUNICATION CALENDAR 11 1.4.3 SHAREHOLDERS’ INFORMATION 11 1

In this Registration Document, "Maroc Telecom" or “the Company” refers to the company Itissalat Al-Maghrib, and “the group” refers to the group constituted by the Company and all direct and indirect subsidiaries, as described in Chapter 5.

1.1 PERSON RESPONSIBLE FOR THE REGISTRATION DOCUMENT

Mr. Abdeslam AHIZOUNE Chairman of the Management Board

1.2 CERTIFICATION OF THE REGISTRATION DOCUMENT

Having taken all reasonable care to ensure that such is the case, I certify that the information contained in this registration document accurately reflects, to the best of my knowledge, the facts and contains no omission that would be likely to affect its meaning. I attest, to my knowledge, that the accounts are established in accordance with the applicable accounting standards and give a faithful image of the financial statement and result of the company and all of the consolidated companies, and the management report (appearing in chapters 4 and 5 of this Registration document) gives a faithful presentation of the evolution of the businesses, results and financial statements of the Company and all of the consolidated companies as well as a description of the principal risks and contingences that they face. I have obtained a letter from the statutory auditors Mr. Abdelaziz Almechatt and KPMG Maroc represented by Mr. Fouad Lahgazi, confirming that they have completed their work and indicating that they have verified the financial position and the financial statements included in this Registration Document and that they have reviewed the document as a whole Historical financial information presented in the Registration Document was the subject of Statutory Auditors’ reports: • The Statutory Auditors’ report on the consolidated financial statements for the year ended December 31, 2009, presented on page 181 of this Registration Document, contains 2 observations indicates procedures for the tax audit underway for the years 2005 to 2008 and explains the Company’s position (Note 25) and the estimates used in segment data (detailed in Note 1 (section 2.5) and Note 28). • The Statutory Auditors’ report on the individual financial statements for the year ended December 31, 2009, presented on page 227 of this Registration Document, contains an observation on the B5 declaration, which indicates procedures for the tax audit underway for the years 2005 to 2008 and explains the Company’s position. • The Statutory Auditors’ report on the consolidated financial statements for the year ended December 31, 2008, presented on page 185 of Registration Document D.09-0289 filed with Autorité des Marchés Financiers (hereinafter “AMF”, the French securities regulator) on April 24, 2009, contains an observation on the estimates used in segment data (detailed in Notes 1 (Section 2.5) and Note 28). • The Statutory Auditors’ report on the individual financial statements for the year ended December 31, 2008, presented on page 231 of Registration Document D.09-0289 filed with the AMF on April 24, 2009, contains no observations. • The Statutory Auditors’ report on the consolidated financial statements for the year ended December 31, 2007, presented on page 187 of Registration Document D.08-0323 filed with the AMF on April 28, 2008, contains an observation on the estimates used in segment data (detailed in Notes 1 (Section 2.5) and 28). • The Statutory Auditors’ report on the individual financial statements for the year ended December 31, 2007, presented on page 234 of Registration Document D.08-0323 filed with the AMF on April 28, 2008, contains no observations. The Statutory auditors drew up a report on the forward-looking financial information presented in Chapter 6, Section 6.3, of this Registration Document, which appears on page 251 of this Registration Document.

Chairman of the Management Board Mr. Abdeslam Ahizoune

10 Maroc Telecom - 2009 Registration Document PERSONS RESPONSIBLE FOR THE REGISTRATION DOCUMENT AND FOR THE AUDIT OF THE FINANCIAL STATEMENTS 1.3. Persons responsible for the audit of the financial statements

1.3 PERSONS RESPONSIBLE FOR THE AUDIT OF THE FINANCIAL

STATEMENTS

1.3.1 Statutory auditors KPMG Maroc, Represented by Mr. Fouad Lahgazi 11, avenue Bir Kacem, Souissi - 10 000 Rabat, Morocco First appointed in April 12, 2007 for a three fiscal year term by the general Shareholders’ Meeting. This mandate will expire at the end of the general Shareholders’ Meeting to approve the financial statements for the fiscal year ended December 31, 2009. The renewal of KPMG Maroc’s term of office, represented by Mr. Fouad Lahgazi, is on the agenda for the Shareholders’ Meeting held on April 22, 2010 Mr. Abdelaziz Almechatt 83 avenue Hassan II - 20 100 Casablanca, Morocco First appointed in 1998 in the bylaws, his term of office was renewed in 2005. His current three-year term was renewed at the Shareholders’ Meeting held on April 17, 2008 and will expire at the close of the Shareholders’ Meeting held to approve the financial statements for the year ended December 31, 2010

1.4 INFORMATION POLICY

1.4.1 Person responsible for information Mr. Arnaud Castille Chief Financial Officer Maroc Telecom Avenue Annakhil - Hay Riad Rabat, Morocco Telephone : 00 212 (0) 537 71 90 39 E-mail : [email protected] 1.4.2 Financial communication calendar All the financial information issued by Maroc Telecom (press releases, presentations, annual reports) is available on its website www.iam.ma. An indicative calendar of Maroc Telecom’s financial communication for 2010 is provided below:

Date* Event Format Tuesday February 23, Q4-08 and full year 2008 revenues and Press releases 2010 results Press conference Analyst and investors conference

Thursday April 22, 2010 General Shareholders’ Meeting

Friday May 07, 2010 Q1-2010- revenues and results Press releases

Wednesday July 28, 2010 Q2 and H1 2010- revenues and results Press releases Press conference Analyst and investors conference

Monday November 08, Q3-2009– revenues and results Press releases 2010

* before market

1.4.3 Shareholders’ information The social, accounting and legal documents, whose communication is governed by the Moroccan and French laws and the bylaws in favor of the shareholders and third parties can be consulted at the Head Office of the Company. Registration Documents, updates of Registration Documents filed with the French Securities Regulator (AMF), presentations for investors and financial analysis made by the Company, as well as the various press releases are available on Maroc Telecom’s website: www.iam.ma. In accordance with the provisions of the Transparency Directive, which has been applicable since January 20, 2007, all regulated information is available on Maroc Telecom’s website: www.iam.ma/Groupe/Finance/Telechargements.

Maroc Telecom - 2009 Registration Document 11

CORPORATE GOVERNANCE

2.3 INTERETS OF THE SENIOR EXECUTIVES 26 2.1 COMPOSITION AND FUNCTIONS OF THE 2.3.1 COMPENSATION PAID TO MEMBERS OF THE MANAGEMENT MANAGEMENT AND SUPERVISORY BOARDS 14 AND SUPERVISORY BOARD 26 2.1.1 COMPOSITION AND FUNCTIONS OF THE 2.3.2 OWNERSHIP OF COMPANY SHARES BY MEMBERS OF MANAGEMENT BOARD 14 THE DECISION-MAKING AND SUPERVISORY BODIES 26 2.1.2 COMPOSITION AND FUNCTIONS OF THE SUPERVISORY 2.3.3 CONFLICTS OF INTERESTS 27 BOARD 17 2.3.4 INTERESTS OF SENIOR EXECUTIVES IN SIGNIFICANT CUSTOMERS AND SUPPLIERS OF THE COMPANY 27 2.3.5 SERVICE CONTRACTS 27

2.3.6 STOCK OPTIONS 27 2.2 COPORATE GOVERNANCE 22 2.3.7 LOANS AND GUARANTEES GRANTED TO SENIOR 2.2.1 AUDIT COMMITTEE 22 EXECUTIVES 27 2.2.2 CODE OF ETHICS 25

2.4 RELATED PARTY TRANSACTIONS 28 2.4.1 MANAGEMENT SERVICES’ AGREEMENT CONCLUDED BY MAROC TELECOM IN 2009 28 2.4.2 RELATED PARTY TRANSACTIONS FROM PRIOR YEARS WHICH REMAINED OUTSTANDING IN 2009 28

2.1 Composition and functions of the Management and Supervisory Boards 2.1.1 Composition and functions of the Management Board

Nom Office and duties Date Term of (age) appointed office expires Abdeslam Chairman First appointed : February 20, 2001 2013 AHIZOUNE Renewed on February 23, 2009 (54)

Larbi Managing Director First appointed : February 20, 2001 2013 GUEDIRA Services Renewed on February 23, 2009 (55)

Arnaud Managing Director First appointed : February 24, 2006 2013 CASTILLE Finance and Administra- with effect on April 1, 2006 (37) tion Renewed on February 23, 2009

Janie Managing Director First appointed : June 29, 2006 2013 LETROT Renewed on February 23, 2009 (55) Regulatory affairs, Com- munication and Interna- tional Development Rachid Managing Director First appointed: November 17,2008 2013 MECHAHOURI Networks and Systems Renewed on February 23, 2009 (43)

Biographies and other offices and duties exercised by members of the Manage- ment Board

Abdeslam AHIZOUNE

Abdeslam Ahizoune was appointed Chairman of the Management Board of Maroc Telecom in February 2001. He is also a member of the Boards of Directors of the Mohammed V Foundation for Solidarity, the Mohammed VI Founda- tion for the Environment, the Lalla Salma Association Against Cancer and Al Akhawayne University. He has been a member of the Management Board of Vivendi since April 2005. Mr. Ahizoune is also a member of the Boards of Direc- tors of Axa Assurances Maroc, Holcim Maroc and Medi 1 Sat (Moroccan satellite channel). Mr. Ahizoune serves as Chairman of the Royal Moroccan Athletics Federation (FRMA). In 2008, he was appointed Chairman of the Moroccan Association of Telecoms Professionals (MATI). Mr. Ahizoune served as Chairman and Chief Executive Officer of Maroc Telecom from February 1998 to 2001, Minis- ter of Telecommunications from August 1997 to 1998, Managing Director of the National Postal and Telecommunica- tions Board (ONPT) from February 1995 to August 1997, Minister of Posts and Telecommunications and Managing Director of the ONPT from August 1992 to February 1995, and Director of Posts and Telecommunications in the Minis- try of Postal and Communications Services from 1983 to 1992. From 1982, Mr. Ahizoune also held various positions in the Postal and Telecommunications Department and in the ONPT. Mr. Ahizoune holds an engineering degree from École Nationale Supérieure des Télécommunications (Paris) (1977).

Positions previously held that expired during the last five years • Medi 1 Sat (Morocco), Chairman and Chief Executive Officer • CMC SA (Mauritania), Chairman of the Board of Directors • Mobisud SA (France), Chairman of the Board of Directors • Mauritel SA (Mauritania), Permanent Representative of Maroc Telecom, Director • Mauritel Mobiles (Mauritania), Director • Onatel (Burkina Faso), Director • Gabon Telecom (Gabon), Director

14 Maroc Telecom - 2009 Registration Document CORPORATE GOVERNANCE 2.1. Composition and functions of the Management and Supervisory Boards

Larbi GUEDIRA

Larbi Guedira is Managing Director of Services of Maroc Telecom, and served previously as Executive Director of the Sales and Marketing Division, Executive Director of Telecommunications, and Chief Financial Officer and Regional Director for Casablanca. In addition, Mr. Guedira has served on the Boards of Directors of various companies in the Maroc Telecom Group. He was Chairman of the National Association of Telecommunications Engineers from 2000 to 2002. Mr. Guedira is a graduate of the École Nationale Supérieure des Télécommunications in Paris. He also holds a master’s degree in mathematics from Paris XI (Orsay) and a postgraduate diploma (DESS) in management from the Uni- versity of Lille.

Positions previously held that expired during the last five years None

Rachid MECHAHOURI

Rachid Mechahouri is Managing Director of the Networks and Systems division of Maroc Telecom. He joined Maroc Telecom as an engineer in 1992 and successively held positions as Project Leader for Maroc Telecom’s GSM project, Head of Strategic Planning then Head of Mobile Networks Infrastructure, Director of Purchases of Infrastructure Pro- curement, and Purchases Director. In addition, he is a member of the Board of Directors of several Maroc Telecom subsidiaries. Mr. Mechahouri is a graduate of Ecole Nationale Supérieure des Télécommunications (Paris), he also holds a postgraduate diploma (DEA) in Electronics and Automatic

Positions previously held that expired during the last five years None

Janie LETROT

Janie Letrot is Managing Director, Regulatory Affairs, Communication and International Development of Maroc Telecom. In addition, she is also a member of the Board of Directors of several Maroc Telecom subsidiaries. From January 1999 to July 2001 Ms. Letrot served as Vivendi Group’s General Delegate in Morocco, and joined Maroc Telecom as Director, of Regulatory and Public Affairs before being promoted Executive Director, Regulatory Affairs and Communication. In her previous career, Ms. Letrot had served as a senior civil servant in the French Ministry of Finance, Trade Advisor and Financial Advisor to the Economic Mission of the French Embassy in Rabat and then Economic and Financial Advisor to the French Permanent Mission of France to the United Nations in New York. Janie Letrot holds a degree in History and Geography from the Paris -Sorbonne University, and is a graduate of Ecole Nationale d’Administration in Paris. Janie Letrot has been named a Knight of the French National Order of Merit.

Positions previously held that expired during the last five years None

Arnaud CASTILLE

Arnaud Castille is Managing Director, Finance and Administration of Maroc Telecom. He joined Maroc Telecom in September 2001 as Director of Management Control. He also serves as Chairman of the Board Directors of CMC and as a member of the Boards of Directors of several Maroc Telecom subsidiaries. Previously he held positions as Direc- tor of Finance and Administration for a construction services business unit of Bouygues, then Accounts Manager in the consultancy firm CSC Peat Marwick. He began his career as an auditor with Ernst & Young. Arnaud Castille is 37 years old . Castille holds a Masters degree in Management, a postgraduate diploma (DESS) in Corporate Finance from the Uni- versity of Paris Dauphine and is a graduate of INSEAD’s International Executive Program. Positions previously held that expired during the last five years None

Maroc Telecom - 2009 Registration Document 15 2

Responsibilities and functions of the Management Board

The Management Board manages and directs the affairs of the Company under the oversight of the Supervisory Board. The Board comprises five members who collectively manage the affairs of the Company. The Board members may allocate management tasks among them, subject to the approval of the Supervisory Board. Decisions of the Management Board are taken by a majority of the votes of its members present or represented. Messrs. Larbi Guedira and Rachid Mechahouri represent the interests of the Government of the Kingdom of Morocco, while Messrs. Abde- slam Ahizoune, Arnaud Castille and Ms. Janie Letrot represent the interests of Vivendi. Within three months following the close of the fiscal year, the Management Board must prepare the financial statements and submit them to the Supervisory Board, so that the latter may exercise its powers of control. Likewise, the Management Board must submit a management report to the Supervisory Board before presenting the same to the ordinary general meeting shareholders, so that the Supervisory Board may make its observations, if any, on the report. Information relating to the composition of the Supervisory Board, the term of the office of its members and the process of deliberations is set in chapter 3 (see section 3.1.13 "Administration of the Company").

Rights and obligations of the members of the Management Board

In accordance with Moroccan law, the Management Board has the broadest powers to act in all circumstances on behalf of the Company. The Board exercises its powers within the limits of the Company’s corporate purpose and subject to those powers that are expressly attributed to the Supervisory Board and to the general meetings of shareholders. In relations with third parties, the Company remains bound even by the actions of the Management Board that do not come within the Company’s corporate purpose, unless it proves that the third party knew that the act was extraneous to this purpose or that said party could not be ignorant thereof given the circumstances, publication of the bylaws shall not in and of itself constitute proof. The provisions of the Company’s bylaws limiting the powers of its Management Board are not valid with regard to third parties. Except by an express waiver issued by the Supervisory Board upon the vote of a 75% qualified majority of its members, the members of the Management Board are required to be employees of the Company and resident in Morocco for more than 183 days each year.

16 Maroc Telecom - 2009 Registration Document CORPORATE GOVERNANCE 2.1. Composition and functions of the Management and Supervisory Boards

2.1.2 Composition and functions of the Supervisory Board

Composition of the Supervisory Board

Expiry of Current Date office Principal post or Name (age) expires office appointed occupation

Salaheddine Chairman Supervisory Board OGA called to Minister of Economy and MEZOUAR Meeting of Decem- approve the Finance (57) ber 4, 2007 financial statements for 2012 Jean-Bernard Deputy Supervisory Board OGA called to Chairman of the Manage- LEVY Chairman Meeting of Decem- approve the ment Board of Vivendi (54) ber 17, 2002 financial statements for 2012 Taïeb Member Supervisory Board OGA called to Minister of the Interior CHERQAOUI Meeting of February approve the (61) 22, 2010 * financial statements for 2012 Abdelaziz Member Supervisory Board OGA called to Former Director of Public TALBI Meeting of March 4, approve the Enterprises and Privatization (60) 2005 financial at the Ministry of statements Economy and Finance for 2012 Chairman of the permanent committee of the National Accounting Council Jean-René Member Supervisory Board OGA called to Chairman of the Supervisory FOURTOU Meeting of January approve the Board of Vivendi (70) 4, 2005 financial statements for 2012 Philippe Member Supervisory Board OGA called to Chief Financial Officer of CAPRON Meeting of March 1, approve the Vivendi (51) 2007 * financial statements Member of the Management for 2015 Board of Vivendi Jacques Member Supervisory Board OGA called to Director of companies ESPINASSE Meeting of Decem- approve the (66) ber 17, 2002 financial statements for 2012 Gérard Member Supervisory Board OGA called to Chairman and CEO of Group BREMOND Meeting of February approve the SA Pierre et Vacances (72) 22, 2010 * financial statements for 2012 Régis Member Supervisory Board OGA called to Director of Strategy and TURRINI Meeting of February approve the Development of Vivendi (50) 21, 2008 financial statements for 2012 * The appointments of Taïeb Cherqaoui and Gérard Brémond were approved at the Supervisory Board meeting of February 22, 2010, to replace Chakib Benmoussa and Frank Esser, respectively. The renewal of the term of director- ship of Philippe Capron was also submitted to the Ordinary Shareholders’ Meeting of April 22, 2010.

Maroc Telecom - 2009 Registration Document 17 2

Biographies and other offices and duties exercised by members of the Supervisory Board

Salaheddine MEZOUAR - Chairman

Salaheddine Mezouar holds an Executive Management diploma from INSEAD, Fontainebleau (France), a higher diploma in business administration from Casablanca’s Institut supérieur de commerce et d’administration des entreprises (ISCAE), a postgraduate diploma (DEA) from Grenoble University of Social Sciences (France) and a Master degree in Economic Science (development economics) from the same university. Mr. Mezouar has been Minister of Economy and Finance, since October 15, 2007. From 1986 and 1991, he was division head and policy officer for the Moroccan Ports and Harbors Authority (ODEP). Prior to this, he served as a Managing Director of a private sector textiles company. In addition, Mr. Mezouar was chairman of the Moroccan Association of Textile and Apparel Manufacturers (AMITH) and as Chairman of the Textile and Leather Goods Federation within the General Confederation for Moroccan Entrepreneurs (CGEM). In 2004, Mr. Mezouar was appointed Minister of industry, Trade and Economic Development. He is the general secretary of the Moroccan political party “Rassemblement National des Indépendants ” (RNI) and a former Deputy Chairman of Raja Club Athletic football club. As a sportsman, Mr. Mezouar was team captain of the national basketball team. Positions previously held that expired during the last five years None

Jean-Bernard LEVY – Deputy Chairman Jean-Bernard Lévy (born March 18, 1955 ) is a graduate of École Polytechnique and École Nationale Supérieure des Télécommunications. Mr. Lévy was appointed Chairman of the Management Board of Vivendi on April 28, 2005. He began working for Vivendi in August 2002 as Managing Director. Mr. Lévy was Managing Director and subsequently Managing Partner responsible for corporate finance at Oddo et Cie from 1998 to 2002. From 1995 to 1998, he was Chairman and Chief Executive Officer of Matra Communication. From 1993 to 1994, Mr. Lévy was chief of staff to Gérard Longuet, the French Minister of Industry, Posts and Telecommuni- cations, and Foreign Trade. From 1988 to 1993, Mr. Lévy was Director of Telecommunications Satellites at Matra Marconi Space. From 1986 to 1988, Mr. Lévy served as technical advisor to the cabinet of Gérard Longuet, the French Minister Delegate of Posts and Telecommunications; and from 1978 to 1986, he worked as an engineer at France Télécom. Mr. Lévy sits on the Boards of Directors of Société Générale, Vinci and Institut Pasteur. He is also a member of the Supervisory Board of Viroxis, Chairman of Institut Télécom and on member of the steering committee of Paris Europlace.

Positions previously held that expired during the last five years • VU Net, Chairman and Chief Executive Officer • VTI, Chairman and Chief Executive Officer • Vivendi Games Inc. (United States), Director • UGC, Director • Cegetel, Member of the Supervisory Board

Taïeb CHERQAOUI Taïeb Cherqaoui (born in Boujaâd on December 31, 1949; three children ) was appointed Minister of the Interior on January 4, 2010. He has a law degree from Mohammed V - Rabat University (1973), a training certificate from the E cole Nationale de la Magistrature in Paris (1976), and a postgraduate diploma (DEA) in sociology from the University of Bordeaux II (1980). He also holds a postgraduate law degree from Hassan II – Casablanca University (1996). Mr. Cherqaoui began his career as Deputy Public Prosecutor for the Crown at the Court of First Instance of Casablanca from 1973 to 1979. He worked at the Appellate Court in Casablanca from 1979 to 1988 before serving as Attorney General to the Crown at the Court of Appeal of El Jadida from 1988 to 1993 and Casablanca from 1993 to 1997. Mr. Cherqaoui also served as Director of Penal Affairs and Pardons at the Ministry of Justice from 1997 to 2007, Attorney General for the Crown at the Supreme Court from 2007 to 2008 and First President of the Supreme Court in 2008.

Positions previously held that expired during the last five years

18 Maroc Telecom - 2009 Registration Document CORPORATE GOVERNANCE 2.1. Composition and functions of the Management and Supervisory Boards

None

Abdelaziz TALBI

Abdelaziz Talbi is the former Director of the Public Enterprises and Privatization department of the Ministry of Economy and Finances. He had previously held various positions of responsibility within the Department, overseeing the accounting and audit function, and following this, audit and accounting standardization, before being appointed Deputy Director of the department. In his previous career within the private sector, Mr. Talbi was Finance and Administrative Director of a company in Rabat and regional manager for an accountancy firm in Paris. In addition to his duties as Director of the Public Enterprises and Privatization department, Abdelaziz Talbi is also Chairman of the permanent committee of the Accounting Council. Mr. Talbi is a chartered accountant certified by the French State and holds a diploma in business and public administration from the University of Nancy. Mr. Talbi, represents the Moroccan government on the Supervisory Boards of the Régie des Tabacs, Atlas Blue and Credit Agricole du Maroc. He also serves on the Boards of Directors of Morocco’s flag carrier, Royal Air Maroc, Compagnie Marocaine de Navigation (COMANAV), Société Nationale de Radio et de Télévision (SNRT) and Société Nationale d’Aménagement Communal (SONADAC).

Positions previously held that expired during the last five years

None

Jean-René FOURTOU

Jean-René Fourtou was born on June 20, 1939, in Libourne and is a graduate of the École Polytechnique. In 1963, he joined Bossard & Michel as a consultant. In 1972, he became Chief Operating Officer of Bossard Consultants, then Chairman and Chief Executive Officer of Bossard Group in 1977. In 1986, Mr. Fourtou was appointed Chairman and Chief Executive Officer of Rhône-Poulenc Group. From December 1999 to May 2002, he served as Vice Chairman and Chief Operating Officer of Aventis. He is Honorary Chairman of the International Chamber of Commerce. Mr. Fourtou co-chairs the Franco-Moroccan economic stimulus group, created in September 2005, whose mandate is to improve economic relations between the two countries. Mr. Fourtou is a member of the Supervisory Boards of Vivendi, Axa Millésimes and Axa Groupe. He is Chairman of the Supervisory Board of Canal+ Group, and sits on the Boards of Directors of NBC Universal, Cap Gemini, Sanofi Aventis and Nestlé.

Positions previously held that expired during the last five years • Vivendi, Chairman and Chief Executive Officer • Axa, Vice Chairman of the Supervisory Board • Axa Assurances IARD Mutuelle, Vice Chairman of the Board of Directors and Permanent Representative of Axa on the Board of Directors • Finaxa, Permanent Representative of Axa Assurances IARD Mutuelle

Jacques ESPINASSE

Jacques Espinasse holds an MBA from the University of Michigan. Since May 2007, he has entered semi-retirement and serves as a director of companies. He sits on the Boards of Directors and serves as Chairman of the Audit Committee of Axa Belgium and Axa Holdings Belgium (Brussels), he is member of Supervisory Board, Audit Committee and Compensation Committee of La Banque Postale Asset Management LBPAM (Paris). He is also a member of the Board of Directors and Member of Audit Committee of Hammerson Plc (London), member of the Board of Directors and member of the Audit Committee, Appointments and Compensation Committee of SES (Luxembourg). Jacques Espinasse has served in a variety of senior management positions in leading French companies, including CEP Communication and Group Larousse Nathan, where he was appointed Executive Vice-President in 1984. In 1985, he became Chief Financial Officer of the Havas group. He was appointed Senior Executive Vice-President of the Havas group when it was privatized in May 1987 and held this position until January 1994. In 1999, he was appointed Chief Executive Officer of satellite bouquet TPS, then Director and Managing Director as from 2001. Finally, he was appointed Chief Financial Officer of Vivendi Group in July 2002, then member of Management Board in April 2005.

Positions previously held that expired during the last five years

Maroc Telecom - 2009 Registration Document 19 2

Vivendi, member of the Management Board

Gérard BREMOND

Gérard Brémond was born on September 22, 1937. He holds degrees in economics and business administration from Institut d’Administration des Entreprises. He began his career at the age of 24 in the family construction business which specialized in the development of residential, office and warehouse property. Inspired by an interest in architecture and meeting Jean Vuarnet, the Olympic ski champion, Mr. Brémond designed and developed the Avoriaz ski resort. He went on to develop other alpine and coastal resorts, which led to the creation of the Pierre et Vacances Group. By successively acquiring Orion, Gran Dorado, Center Parcs and Maeva, the Pierre et Vacances Group become one of the leading tour operators in Europe. Mr. Brémond also founded two media companies (television and film production). Mr. Brémond is Chairman and Chief Executive Officer of Pierre et Vacances Group and Société d’Investissement Touristique et Immobilier (SITI); Chairman of Pierre et Vacances Tourisme, Pierre et Vacances Conseil Immobilier, Pierre et Vacances Promotion Immobilière, Pierre et Vacances Développement, Newcity Aparthotels, Adagio Holding, Société d’Investissement Touristique et Immobilier (SITI); and sits on the Supervisory Board of Vivendi.

Mandats exercés échus au cours des cinq dernières années • SA Société d’Investissement Touristique et Immobilier – SITI dans les sociétés Peterhof, SERL, Lepeudry et Grimard, C.F.I.C.A.,SITI Participation et SITI Participation 2, Permanent Representative • OG Communication dans les sociétés Marathon et Marathon International, Permanent Representative • SAS Maeva, Chairman • SA Orion Vacances, Chairman of the Board of Directors • Med Pierre et Vacances SI (Spain), Director • GB Développement SA dans la société Ciné B, Permanent Representative • Holding Green BV (Netherlands), Director • SA Pierre et Vacances Maeva Tourisme, Chairman • Groupe Maeva SAS, Director

Philippe CAPRON

Philippe Capron was born on May 25, 1958, in Paris. He is a graduate of Ecole des Hautes Etudes Commerciales (HEC) and Institut d’Etudes Politiques – Paris (IEP). He was assistant to the Chairman and Secretary of the Board of Directors of Sacilor from 1979 to 1981. After graduating from Ecole Nationale d’Administration (ENA) in 1985, he worked for the French General Inspectorate of Finance. Advisor to the Chairman and CEO of Duménil Leblé from 1989 to 1990, and Managing Director and member of the Management Board of Banque Duménil Leblé (Cérus Group) from 1990 to 1992, Mr. Capron then became a partner in the management consulting firm Bain and Company from 1992 to 1994. Director of International Development and member of the Executive Committee of Euler Group from 1994 to 1997, Mr. Capron was Chairman and Chief Executive Officer of Euler-SFAC from 1998 to 2000. In November 2000, he joined Usinor Group as Chief Financial Officer. Mr. Capron was member of the Executive Com- mittee until 2002, when he was appointed Executive Vice-President of the Arcelor Group responsible for the packaging steels division, and later for the distribution and international trading businesses. In early 2006 he became Chief Financial Officer and a member of the Management Committee of Arcelor. Philippe Capron joined Vivendi in January 2007 as Chief Administrative Officer. He was appointed member of the Management Board and Chief Financial Officer in April 2007. He also holds several positions of responsibility in various Vivendi Group companies.

Positions previously held that expired during the last five years • Arcelor Packaging International, Chairman and Chief Executive Officer • Solvi, Chairman and Chief Executive Officer • Eco Emballage, Director • Arcelor Treasury, Manager • Sollac Ambalaj (Turkey), Chairman of the Board of Directors • Arcelor International (Luxembourg), Chairman • Arcelor Projects (Luxembourg), Chairman • Skyline (United States), Chairman of the Board of Directors • Cockerill-Sambre (Belgium), Director

20 Maroc Telecom - 2009 Registration Document CORPORATE GOVERNANCE 2.1. Composition and functions of the Management and Supervisory Boards

• Achatpro, Chairman of the Supervisory Board

Régis TURRINI Régis Turrini was born in March 1959. He has served as Senior Executive Vice-President of Strategy and Development for Vivendi since January 2008. He joined Vivendi in January 2003 as Executive Vice-President in charge of mergers and acquisitions. Mr. Turrini is an attorney admitted to the Paris bar. He is a graduate of the Institut d’Etudes Politiques de Paris and an alumnus of the Ecole Nationale d’Administration. Aged 49, Mr. Turrini began his career as a consultant in the French Administrative Court and the Administrative Court of Appeal. He went on to work as a corporate lawyer at the law firms Cleary Gottlieb Steen & Hamilton (1989-1992) and Jeantet & Associés (1992- 1995). In 1995, Mr. Turrini joined Arjil & Associés Banque (Lagardère Group) as consultant then executive director. He was later appointed managing director and, in 2000, managing partner. Mr. Turrini holds several positions of responsibility in various Vivendi Group companies.

Positions previously held that expired in the last five years • Vivendinet UK Limited (United Kingdom), Director • Vivendi Net, Chairman and Chief Executive Officer • Canalnumedia, Chairman and Chief Executive Officer • UGC, Director • Carré des Champs-Elysées, Director • Scoot Europe NV (Belgium), Director • SHN (New Caledonia), Director • SAIGE, Permanent Representative of Vivendi on the Board of Directors Responsibilities and functions of the Supervisory Board In accordance with the bylaws, and since the initial public offering of the Company, the Supervisory Board comprises a minimum of eight members and a maximum of 15 members. The Board elects a Chairman and Deputy Chairman from among its members, who are in charge of convening Board meetings and conducting its discussions. The Supervisory Board has the power to appoint and remove from office members of the Management Board by a simple majority and appoint the Chairman among them In accordance with the bylaws, decisions of the Supervisory Board are taken either by simple majority or, by a qualified 75% majority of the members. The Supervisory Board exercises permanent control over the conduct of the Company’s affairs by the Management Board. Further information on the composition of the Supervisory Board, the terms of office, the duties of members, and the deliberation process, is provided in section 3.1 “General information regarding the Company - Administration of the Company - Supervisory Board”. In 2009, the Supervisory Board met three times to review the Company’s performance and its medium to long-term prospects, with an average attendance rate of close to 70%. As regards the composition of the Supervisory Board, three members — Messrs. Salaheddine Mezouar, Taïeb Cherqaoui, and Abdelaziz Talbi — were appointed upon proposal of the Government of the Kingdom of Morocco and five members — Messrs. Jean Bernard Lévy, Jean-Rene Fourtou, Gérard Brémond, Philippe Capron and Régis Tur- rini — were appointed upon proposal of Vivendi. Jacques Espinasse who was appointed upon proposal of Vivendi, stood down from the Board following his retirement in 2007 while retaining his position as a member of Supervisory Board. Each member of the Supervisory Board must hold at least one share. Rights and obligations of the members of the Supervisory Board In accordance with Moroccan law, the Supervisory Board exercises permanent control over the management decisions of the Company’s Management Board. The Company’s bylaws may require the prior authorization of the Super- visory Board for certain transactions. Where a transaction requires the authorization of the Supervisory Board and such authorization is denied, the Management Board may submit the dispute to the general meeting of shareholders for the latter to decide The disposal of real estate assets, the full or partial disposal of shareholdings and pledges of collateral, guarantees, security and warranties are subject to authorization by the Supervisory Board. The Board determines the amount for each transaction. Notwithstanding the foregoing, the Management Board may be authorized to grant, endorsements and guarantees to customs and excise and tax authorities, without any limit on the amount thereof. Whenever a transaction exceeds the amount determined as mentioned above, the authorization of the Supervisory Board is required. The Management Board may delegate the powers vested in it by the above paragraphs. The absence of authorization is not valid vis-à-vis third parties, unless the Company proves that such parties knew about such absence or could not have been ignorant thereof. Throughout the year, the Supervisory Board performs the checks and controls it considers appropriate, and may request any documents it deems useful in the accomplishment of its role. Members of the Su- pervisory Board can access all information relating to the Company’s business affairs. At least once each quarter, the Management Board makes a report to the Supervisory Board. Within three months of the fiscal year end, the Manage- ment Board submits to the Supervisory Board, for the purpose of verification and control, the documents referred to in the Moroccan Act 17-95 on joint stock companies. The Supervisory Board may provide to the shareholders’ meeting its observations on the report of the Management Board and on the financial statements for the fiscal year. The members of the Supervisory Board are not employees of the Company.

Maroc Telecom - 2009 Registration Document 21 2

2.2 CORPORATE GOVERNANCE 2.2.1 Audit committee Maroc Telecom’s Audit Committee is responsible for making recommendations and/or providing advice on accounting procedures for the financial administration of the group.

Composition

The Audit Committee is comprised as follows:

Name (age) Current Date of Principal post or occupation office appointment

Philippe CAPRON Chairman 2007 Chief Financial Officer of Vivendi (51) Member of the Management Board of Vivendi Jacques ESPINASSE Member 2003 Director of companies (66)

Noureddine BOUTAYEB Member 2003 Wali, Director of Rural Affairs in the Inte- (52) rior Ministry

Abdelaziz TALBI Member 2004 Former Director of Public Enterprises and (60) Privatization at the Ministry of Economy and Finance Chairman of the standing committee of the National Accounting Council Monkid MESTASSI Member 2007 Secretary general of the Ministry of Eco- (57) nomic and General Affairs

Pierre TROTOT Member 2003 Senior Executive Vice-President, Finance (55) and Administration of SFR Sandrine Dufour Member 2008 Deputy Chief Financial Officer of Vivendi (42) Chairman of Vivendi Mobile Entertainment (VME)

Biographies and other offices and duties exercised by members of the Audit Committee

Noureddine BOUTAYEB Noureddine Boutayeb was appointed Wali, General Secretary of the Ministry of the Interior, in February 2010. Prior to that, Mr. Boutayeb served as Wali, Director General of Local Authority Bodies in the Ministry of the Interior, Director of Rural Affairs in the Ministry of the Interior and Chief Operating Officer for Maghrébine d’Ingénierie (INGEMA SA). Prior to this, he held various engineering jobs in the Ministry of Infrastructure and in an engineering consultancy in Paris. Mr. Boutayeb is a graduate of the École Centrale (Paris). He also holds an MBA and an engineering degree from the École Nationale des Ponts et Chaussées, as well as a post graduate diploma (DEA) in Soil Mechanics.

Pierre TROTOT Pierre Trotot is Senior Executive Vice-President, Finance and Administration of SFR. He previously, served as Acting Director, then Director of Financial Management at Compagnie Générale des Eaux, after having served as an acting director reporting to the Chairman of Compagnie de Navigation Mixte (1982-1988). Prior to this, Mr. Trotot was an acting director at Arthur Andersen Audit (1978-1982). Mr. Trotot is a graduate of Hautes Etudes Commerciales (HEC).

22 Maroc Telecom - 2009 Registration Document CORPORATE GOVERNANCE 2.2. Corporate governance

Monkid MESTASSI Monkid Mestassi has been General Secretary to the Minister Delegate attached to the Prime Minister in charge of Economic and General Affairs since September 2003. Prior to this, he held positions as a deputy administrator of the bilateral economic cooperation department of the Ministry of Foreign Affairs, assistant to the Governor of the Moroc- can Central Bank, Bank Al-Maghreb, head of department in the Moroccan trade and export board, and as an advisor attached to the Prime Minister. In 1987, Mr. Mestassi was appointed advisor to the Prime Minister with responsibility for economic cooperation with USAID and for coordinating relations with the World Bank Group. As from 2000, he was also appointed to coordinate efforts to promote accountability in public life and to curb corruption and was named a special advisor attached to the Prime Minister, with responsibility for public administration reform. Monkid Mestassi is a state certified statistician economist and holds a masters degree in economic sciences.

Sandrine DUFOUR Sandrine Dufour is Deputy Chief Financial Officer of Vivendi, with responsibility for financial consolidation, financial reporting, planning, budget and management control. Ms. Dufour is also chairman of Vivendi Mobile Entertainment (VME). In her previous career, she served successively as advisor to the Chief Financial Officer of Vivendi, the Chief Financial Officer of VU Net, and then head of the Internal Audit and Special Projects department of Vivendi, based in New York. Prior to joining Vivendi in 1999, Sandrine Dufour was a financial analyst with BNP (1990-1993), and then with the brokerage firm CAI Cheuvreux (1993-1999), where she was in charge of the telecommunications sector. Sandrine Dufour is a graduate of ESSEC and holds the CFA designation.

Functions of the Audit Committee

The Audit Committee was established by the Supervisory Board in 2003, in line with efforts to enhance accountability to shareholders by adopting international standards for the corporate governance and internal control of Maroc Telecom. The Audit Committee comprises a Chairman and six permanent members, with three representatives of the Government of the Kingdom of Morocco and four representatives (including the Chairman) of Vivendi. The Audit Committee was convened for the first time in May 2004, and held three meetings in 2009 . Its role is to make recommendations and proposals to the Supervisory Board on matters such as: • the individual financial statements and consolidated financial statements, before their submission to the Supervisory Board; • the consistency, efficiency and effectiveness of the Company’s internal audit process; • supervision of the audit programs of internal and external auditors and the examination of their audit findings; • accounting principles and methods, and the consolidation scope; • the Company’s off-balance sheet risks and commitments; • supervision of the Company’s insurance policy; • The procedures for the selection of the statutory auditors, formulating an opinion on the fees requested for the performance of their audit duties, and monitoring compliance with the rules guaranteeing auditor independence; and • Issues that the committee determines to pose a risk for the Company or that could result in a decrease in audit quality.

Internal Control

The internal control procedures established within the Maroc Telecom group have the following objectives: • ensure that the management actions and the conduct of affairs, as well as employees’ behavior, comply with guidelines set by the decision-making and supervisory bodies governing the Company’s business operations and with applicable law and regulations; and • ascertain that the accounting, financial and management information provided to the Company’s decision-making and supervisory bodies provides a true and fair reflection of the Company’s operations and financial position. The objectives of the internal control process are to mitigate and control risks arising both from the company’s business affairs and from error and fraud, particularly in the areas of finance and accounting. As is the case for all audit systems, however, they cannot provide an absolute guarantee that these risks will be completely eliminated. In order to carry out its task of assessing and validating the Company’s internal control systems, the Audit Committee is supported by the Internal Audit and Inspection departments. The Audit Committee defines the Internal Audit and Inspection departments’ mandates and analyzes their findings.

Maroc Telecom - 2009 Registration Document 23 2

Internal Audit and Inspection

Internal Audit

The Internal Audit department of Maroc Telecom is an independent function that has direct access to the Audit Committee. Its functions are governed by a charter approved by the Audit Committee. The Internal Audit department’s role is to provide the Company with an assurance concerning the degree of risk control within its operations and to monitor the quality of internal control at each level of the Company’s organization. The Internal Audit department assists Management in achieving its objectives by assessing its risk management, control and corporate governance procedures. The efficacy of the internal audit process is assessed by the Internal Audit department, according to an annual audit plan approved by the Audit Committee. Summaries of the comments and recommendations formulated by the Internal Audit department are provided to the Audit Committee so that the latter can monitor its progress and guarantee its implementation. The audit plan is defined according to an analysis of company risks, which covers both financial risks, information systems risks, and risks particular to the operational units of the Company. For the purpose of meeting this twofold objective, the Internal Audit department comprises two segments which have the following complementary missions:

• financial audit (nine auditors at December 31, 2009) attached to the General Control Department (office of Chairman) for matters having a dual accounting and financial impact; and • operational audit (18 auditors at December 31, 2009) attached to the General Control department (office of the Chairman) which works in operating units (retail branches, technical centers, stores and Regional headquarters, etc.). Audit work consists of inspecting procedures for the management of resources, networks and customer services. The annual audit plan comprises a program of engagements, the implementation of which is entrusted to the Internal Audit department. The missions have the following main objectives: • verify the existence and adequacy of controls in the areas of finance, data processing and operations, to ensure that the main risks are identified and suitably covered; • review the integrity of the financial information, including the controls relating to security of communicating, recording and back-up of information; • review the operational units and systems for ensuring adequacy in respect of policies, procedures and legal and regulatory requirements; • review the means of safeguarding assets and advising management as to the efficiency and effectiveness of the utilization of resources; and • ensure that recommendations have been carried out as recommended in improvement action plans. Finally, the Internal Audit department communicates and coordinates with the Company’s external auditors, to maximize the effectiveness of the audit’s coverage scope. Internal audits performed in 2009 involved the main items of balance sheet and the consolidated income statement, i.e. revenues, fixed assets, inventories and cash flow.

Inspection

Alongside the Internal Audit department, the Inspection department (15 inspectors at December 31, 2009) is responsible for assessing and approving the Company’s internal control system. The department reports to the General Control Department (office of the chairman) and to the Audit Committee. At the request of the aforementioned bodies or on its own initiative, the Inspection department conducts periodic audits, spot checks and specific reviews, for the following purposes:

• protecting the assets, property, resources and means used; • verifying that management procedures, instructions, policies and rules are observed; • ensuring the quality, adequacy and reliability of data and optimization of the allocation of resources; and • demonstrating and determining any possible liabilities in the event that the Company becomes aware of deficiencies, irregularities or fraud.

24 Maroc Telecom - 2009 Registration Document CORPORATE GOVERNANCE 2.2. Corporate governance

The Inspection department may assist the Internal Audit department in the implementation of specific assignments, to determine a program of review and analysis, and to provide proposals on the functioning of the Company.

Sarbanes-Oxley

In 2006, Vivendi terminated the deposit agreement with Bank of New York relating to its American Depositary Receipts (ADR) as well as its obligations under the Securities Exchange Act of 1934. As required by Vivendi, which was, at the time, listed on the New York Stock exchange, Maroc Telecom, as a subsidiary of the group, initiated work in 2003 to prepare for compliance with Sarbanes-Oxley Act, by assessing the quality of processes that might affect the reliability of its financial information. Although Vivendi is now no longer bound by regulatory obligations to the US market authorities, Maroc Telecom remains committed to maintaining the highest standards of corporate governance and financial disclosure .

2.2.2 Code of Ethics Maroc Telecom has established a Code of Ethics which sets out to maintain high levels of fairness, transparency and market integrity, and to ensure the primacy of customer interests. This Code is not intended to replace existing rules, but outlines the ethical principles and rules that are generally applicable and emphasizes the need to comply with them scrupulously. It aims to make each member of the Company accountable, setting out the principal rules governing the confidentiality of privileged information, in order to increase awareness of best practices among company employees, and to assist them in adjusting their professional behavior to those best practices. This Code of Ethics includes rules for dealing with real or apparent conflicts of interest in order to avoid situations such as insider trading or the suspicion of such. Employees may also consult the chief compliance officer, who is in charge of ensuring compliance with law and the rules of the Code of Ethics.

Maroc Telecom - 2009 Registration Document 25 2

2.3 INTERESTS OF THE SENIOR EXECUTIVES

2.3.1 Compensation paid to members of the Management and Supervisory Boards The Supervisory Board determines, in conjunction with its appointment decisions, the form and amount of compensation paid to members of the Management Board. This information is then included in the employment contract of the respective member. A compensation committee comprised of the Chairman and Deputy Chairman of the Supervisory Board meets each year to examine the overall compensation of the members of the Management Board, including any variable portion, and submits its proposal to the Supervisory Board. Total gross compensation paid by the Company, its subsidiaries, and all controlling companies to members of the Management Board for their duties in Maroc Telecom Group for fiscal year 2009 came to approximately MAD36 million, of which 33% represented variable compensation and MAD3.3 million represented non-recurring compensation components. Variable compensation for 2009 was calculated by the members of the Management Board in accordance with the following criteria: (a) financial targets of Vivendi Group and/or Maroc Telecom, and (b) business segment priority actions. The following table summarizes the compensation paid in the past three fiscal years:

In millions of Moroccan dirhams 2007 2008 2009

Gross compensation 23 29 36 o/w variable compensation 28% 39% 33% Minimum compensation in the event of termination of contract 28 38 40

Some companies in Vivendi Group contribute part of these amounts to certain members of the Management Board. In addition, certain members of the Management Board are eligible to participate in Vivendi’s stock option plans. Based on compensation for 2009, the minimum amount to be paid by the Company in the event of termination of employment contracts of members of the Management Board, except in case of willful misconduct or gross negligence, would amount to approximately MAD40 million. Furthermore, the Company bears the cost of representation and travel costs incurred by members of the Management Board in the course of their duties. Members of the Management Board do not receive benefits in kind or special complementary pension plans implemented for the company officers. The General Meeting of April 23, 2009, decided to allocate the total amount of two million four hundred thousand dirhams (MAD2,400,000) in attendance fees to members of the Supervisory Board and Audit Committee. This decision remains valid until a new decision is taken by the General Meeting. The procedures and conditions for dividing the fees shall be set by the Supervisory Board. At the Supervisory Board meeting of July 28, 2009, members of the Board decided, as in the previous year, to waive payment of the attendance fees due in respect of fiscal year 2008, and opted for those fees to be awarded by Maroc Telecom to the Maroc Telecom Association for Entrepreneurship, which distributes these sums in the form of bursaries for disadvantaged students attending universities in Morocco. This waiver also concerns the members of the Audit Committee, representatives of Vivendi Group, as well a Jacques Espinasse. This decision is valid until a new decision is taken by the Supervisory Board.

2.3.2 Ownership of Company shares by members of the decision-making and Supervisory bodies As of December 31, 2009, the members of the Supervisory Board and the Management Board held respectively, directly or indirectly, 155,980 Maroc Telecom shares.

2.3.3 Conflicts of interests and other relevant considerations Over the past five years, no member of Maroc Telecom’s Management Board or Supervisory Board has been con- victed of fraud; no member of the Management Board or the Supervisory Board has been associated with a bankruptcy, receivership or liquidation; and no official public incrimination and/or sanction has been issued against these persons by statutory or regulatory authorities or by professional organizations. Similarly, no corporate officer of Maroc Telecom has been prevented by a court from acting as member of an executive, management or supervisory body of a public company, or from participating in the management or the business of a public company.

26 Maroc Telecom - 2009 Registration Document CORPORATE GOVERNANCE 2.3. Interests of the senior executives

Nevertheless, Philippe Capron, in his capacity as former permanent representative of Arcelor Packaging International and director of SAFET, is cited along with all other former members of the SAFET Board of Directors in the proceedings related to an insolvency action filed on May 26, 2008. In addition, there are no family relationships between the members of the Management Board and those of the Super- visory Board. Finally, the appointment of members of the Management Board and of the Supervisory Board is organized by a shareholders’ agreement as described in paragraph 3.5.5, "Shareholders’ Agreement."

2.3.4 Interests of senior executives in significant customers and suppliers of the Company None

2.3.5 Service contracts To date, with the exception of employment contracts between members of the Management Board and Maroc Telecom, there are no contracts between members of the Management Board or the Supervisory Board and the Company and/or any of its subsidiaries that bestow any particular benefits.

2.3.6 Stock options As of the date of this registration document, no company officer and/or employee held any Maroc Telecom stock options. Nevertheless, the seventh resolution of the Extraordinary and Ordinary Shareholders’ Meeting of April 23, 2009, renewed the authorization granted to the Management Board to award stock options under the terms provided for by law, on one or more occasions, within three years of the authorization date, to company officers, managing directors, executives or, exceptionally, non-executive employees of the Group. In addition, certain members of the Management Board and certain Company executives are eligible to participate in Vivendi’s stock option plan. The following table summarizes the Vivendi stock options and free shares granted in respect of fiscal 2008:

Grant for 2008 Acquisition and/or Year-end exercise balance Total stock options 323,200 NA NA

- Management Board 236,000 NA NA

- 10 largest beneficiaries 259,200 NA NA

Total restricted stock 26,933 NA NA

- Management Board 19,666 NA NA

- 10 largest beneficiaries 21,599 NA NA

2.3.7 Loans and guarantees granted to senior executives None

Maroc Telecom - 2009 Registration Document 27 2

2.4 RELATED PARTY TRANSACTIONS

Insofar as Maroc Telecom is incorporated under Moroccan law, it is not governed by the provisions of the French commercial code. Nevertheless , under Article 95 of Moroccan Act 17-95 as amended and completed by Act n° 20-05, any agreement entered into, between the Company and any of the Management or Supervisory Board members, or any shareholder holding directly or indirectly more than 5% of the share capital and voting rights is subject to the prior authorization of the Supervisory Board. The same applies to agreements entered into between the Company and another entity, if any member of the Management or Supervisory Board, is an owner, partner, with unlimited liability, manager, director, managing director or a member of the Management or Supervisory Board of such entity. The aforementioned regulated agreements concluded in fiscal year 2009, and the agreements concluded in prior fiscal years and whose execution continued in fiscal year 2009, are detailed in the special report of the statutory auditors (pages 242-243 of this document).

2.4.1 Management Services Agreement concluded by Maroc Telecom in 2009

Divestment of Mobisud France On February 23, 2009, the Supervisory Board authorized Maroc Telecom to divest its shareholding in Mobisud France to SFR (Vivendi Group subsidiary).

Agreement with Canal Overseas On July 28, 2009, the Supervisory Board authorized the conclusion of an agreement with Canal Overseas (subsidiary of Vivendi Group) concerning the distribution of prepaid cards for the "CANAL + Maghreb" satellite bouquet in the Maroc Telecom network. Vivendi is a shareholder of both parties.

Agreement with the Royal Moroccan Athletics Federation The agreement between Maroc Telecom and the FRMA (Abdeslam Ahizoune, chairman) expired in June 2009. The Supervisory Board of December 3, 2009, authorized a new term of 12 months, renewable three times, for MAD8 million per year plus all costs for the travel and missions of the Chairman of the FRMA.

Partnership agreement with the Club Entreprendre Association The Supervisory Board of December 3, 2009, authorized a partnership agreement with the Club Entreprendre Association (Abdeslam Ahizoune, chairman) as Platinum Sponsor (MAD1.5 million) for the inaugural edition of the Africa Entreprendre Forum. This amount is in addition to the annual MAD700,000 contribution of Maroc Telecom to Club Entreprendre for current operations.

Agreement with Sotelma In 2009, Sotelma and Maroc Telecom concluded an agreement under which Maroc Telecom provides technical assistance and services in the following areas: strategy and business development, organizational structure, networks, marketing, finance, purchasing, human resources, IT systems and regulatory matters. Members of management bodies common to both parties are Larbi GUEDIRA, Arnaud CASTILLE and Rachid MECHAHOURI.

2.4.2 Related party transactions from prior years which remained outstanding in 2009

Agreement with Onatel On September 2007, Onatel concluded an agreement with Maroc Telecom under which the latter provides services in the following fields: strategy and business development; organization; networks; marketing; finance; procurement; human resources; information systems and regulatory affairs. These services are rendered essentially by expatriate employees.

28 Maroc Telecom - 2009 Registration Document CORPORATE GOVERNANCE 2.4. Related party transactions

Members of management bodies common to both parties are Larbi GUEDIRA, Arnaud CASTILLE and Janie LETROT.

Agreement with Gabon Telecom On September 2007, Gabon Telecom concluded an agreement with Maroc Telecom under which the latter provides services in the following fields: strategy and development; organization; networks; marketing; finance; procurement; human resources; information systems and regulatory affairs. These services are rendered essentially by expatriate employees. Members of management bodies common to both parties are Larbi GUEDIRA and Arnaud CASTILLE.

Management Services Agreement with Vivendi In June 2001, Maroc Telecom and Vivendi concluded a service agreement under which Vivendi provides Maroc Telecom with technical assistance, either directly or via its subsidiaries, in the following areas: strategy and organizational structure, business development, sales and marketing, finance, purchasing, human resources, IT systems, regulatory matters, interconnection, infrastructure and networks. These services may be carried out by expatriate employees. Abdeslam AHIZOUNE is a member of the Management Board of Vivendi Group.

Cross-charging of costs related to stock options and free share allocation plans In accordance with IFRS standards, Vivendi invoices its subsidiaries for costs related to benefits granted to employees in the form of stock options and allocations of free shares. Abdeslam AHIZOUNE is a member of the Management Board of Vivendi Group.

Agreement with Mauritel In 2001, Mauritel SA concluded an agreement with Maroc Telecom for the provision of services and technical assistance and for sale of equipment to Mauritel SA. Members of management bodies common to both parties are Larbi GUEDIRA and Arnaud CASTILLE. Agreement with Casanet In fiscal year 2003, Maroc Telecom concluded several agreements with Casanet, whose corporate purpose inter alia is to maintain in operational condition the Menera Internet portal of Maroc Telecom, to provide business development and web hosting for Internet sites of Maroc Telecom, and to market Internet access by leased lines. Members of management bodies common to both parties are Larbi GUEDIRA and Rachid MECHAHOURI. Casanet - current account advance Maroc Telecom opted to delegate its business of professional directories to its Casanet subsidiary. The Supervisory Board meeting of December 4, 2007, authorized the Company to pay all necessary investment expenses, which are financed via advances into a non-interest-bearing current account.

Agreement with Media Overseas

On February 24, 2006, the Supervisory Board of Maroc Telecom approved the agreement concluded during the fiscal year with Media Overseas, a subsidiary of Canal+ Group, whose purpose is to launch a TV offer via ADSL. Operations pursuant to this agreement have been carried out with Canal Overseas Africa (e.g., Multitv Afrique), a subsidiary of Media Overseas. Vivendi holds a stake in both parties Médi-1-Sat – current-account advance In the period from 2006 to 2008, Maroc Telecom and Médi-1-Sat entered into two agreements under which Médi-1-Sat receives financing via current-account advances. Abdeslam AHIZOUNE is the only member of management bodies common to both parties.

Mobisud (France) – current-account advance

On March 1, 2007, the Supervisory Board of Maroc Telecom approved implementation of a current-account-advance agreement between Maroc Telecom and Mobisud (France) for no more than €5.28 million. On July 29, 2008, the Supervisory Board of Maroc Telecom approved the grant of current-account advances to Mobisud (France) for no more than €6.6 million. Larbi GUEDIRA and Arnaud CASTILLE were members of management bodies of Mobisud France.

Maroc Telecom - 2009 Registration Document 29 GENERAL INFORMATION REGARDING THE COMPANY AND ITS

SHARE CAPITAL 3.3 TRADING OF THE COMPANY’S SHARES 54 3.1 GENERAL INFORMATION 32 3.3.1 LISTING OF THE SHARES OF THE ISSUER 54 3.1.1 CORPORATE NAME 32 3.3.2 MAROC TELECOM SHARE PRICE 54 3.1.2 HEAD OFFICE 32 3.1.3 LEGAL FORM 32 3.1.4 LÉGISLATION APPLICABLE 32 3.1.5 COMMITMENTS OF THE COMPANY TO THE MARKET 3.4 DIVIDENDS AND DIVIDEND POLICY 56 AUTHORITIES IN FRANCE 33 3.4.1 DIVIDENDS PAID OUT OVER THE PAST FISCAL YEARS 56 3.1.6 REGISTRATION 34 3.4.2 DIVIDEND POLICY 56 3.1.7 CORPORATE TERM 34 3.4.3 TAX TREATMENT RELATING TO DIVIDENDS 56 3.1.8 CORPORATE PURPOSE 34

3.1.9 LEGAL DOCUMENTS AVAILABLE FOR VIEWING 35 3.1.10 FISCAL YEAR 35 3.5 BREAKDOWN OF SHARE CAPITAL AND VOTING 3.1.11 ALLOCATION OF PROFITS 35 RIGHTS 59 3.1.12 GENERAL SHAREHOLDERS’ MEETINGS 36 3.5.1 OWNERSHIP OF SHARE CAPITAL AND VOTING RIGHTS 3.1.13 MANAGEMENT OF THE COMPANY 38 IN THE COMPANY 59 3.1.14 STATUTORY AUDITORS 43 3.5.2 AUTHORIZED SHARE CAPITAL 59 3.1.15 TRADING OF SHARES 44 3.5.3 CHANGES IN THE SHAREHOLDING STRUCTURE OF 3.1.16 STATUTORY THRESHOLDS 44 THE COMPANY OVER LAST THREE FISCAL YEARS 59 3.1.17 PUBLIC BIDS 45 3.5.4 EMPLOYEE STOCK OWNERSHIP 60 3.2 GENERAL INFORMATION RELATING TO THE 3.5.5 SHAREHOLDERS’ AGREEMENT 60 COMPANY’S SHARE CAPITAL 50 3.2.1 SHARE CAPITAL 50 3.2.2 FORM OF SHARES 50 3.6 ASSETS PLEDGES 63 3.2.3 RIGHTS AND DUTIES ATTACHED TO SHARES 50 3.2.4 ACQUISITION BY THE COMPANY OF ITS OWN SHARES 51 3.2.5 CHANGES IN THE COMPANY’S SHARE CAPITAL SINCE ITS INCORPORATION 53

3.1 GENERAL INFORMATION

3.1.1 Corporate name The Company’s corporate name is: “Itissalat Al-Maghrib”. It also operates under the trade names “IAM” and “Maroc Telecom”.

3.1.2 Head Office The Company’s Head office is located on Avenue Annakhil (Hay Riad), Rabat, Morocco. Telephone : +212 537 71 21 21

3.1.3 Legal form Maroc Telecom is a Moroccan corporation with a Management board and Supervisory board, governed by Chapter II of Act 17- 95 relating to joint stock companies.

3.1.4 Legislation The Company is governed by Moroccan law, in particular, by Act 17-95 relating to joint stock companies as amended and extented by Act 20-05, and by the bylaws. The Company is not bound by the French Commercial code. As the Company is listed on a regulated market in Morocco, the provisions of various Moroccan rules, regulations, orders, decrees and circulars will be applicable, including in particular:

• Decree 1-93-211, dated September 21, 1993, relating to the Securities Exchange, as amended and extended by Act 45-06; • Decree 1-93-212, dated September 21, 1993, relating to the Moroccan securities regulator (CDVM) and the information required of legal entities issuing securities to the public, as amended and extended by Act 36-05 and 44-06; • Decree 35-96 relating to the creation of the central depositary and establishment of a general accounting system for certain securities as amended and extended by Act 43-02; • Decree 24-96 relating to the Postal Service and Telecommunications, dated August 7, 1997, as amended by Act 79 99, dated June 22, 2001, and by Act 55-01, dated November 4, 2004; • Decree 1-07-11, dated April 17, 2007, enacting Act 46- 06, amended and completed the Act 26-03 relating to public offers on the Moroccan stock market; the General Regulation of the central depositary approved by Order 932-98 of the Minister of the Economy and Finance, dated April 16,1998, amended and completed by Order 1961-01, dated January 3, 2002 and by order 77-05, dated March 17, 2005; • General Regulation of the Moroccan securities regulator (CDVM), approved by order 822-08 of the Minister of the Economy and Finance, dated April 14, 2008; • General Regulation of the Moroccan securities regulator (CDVM), approved by order 1268-08 of the Minister of the Economy and Finance, dated July 7, 2008; • Circular 02-03 of the Moroccan securities regulator (CDVM), dated may 23,2003, relating to required information for listed companies at the time of acquiring its own shares in view of stabilizing the share price; • Circular 01-04 of the Moroccan securities regulator (CDVM), dated June 8, 2004, relating to the thresholds for ownership of shares or voting rights of listed companies; • Circular 01-05 of the Moroccan securities regulator (CDVM), dated March 18, 2005, relating to the ethical framework for information within listed companies; • Circular 05-05 of the Ethics Council for Securities (CDVM), dated October 3, 2005, relating to publication of important information by legal entities issuing securities to the public; • Circular 07-09 of the Moroccan securities regulator (CDVM), dated June 26, 2009, relating to publication and distribution of financial information by legal entities issuing securities to the public; • Circular 01-08 of the Moroccan securities regulator (CDVM), dated March 25,2008, on the processing of securities transactions involving listed shares.

32 Maroc Telecom - 2009 Registration Document GENERAL INFORMATION REGARDING THE COMPANY AND ITS SHARE CAPITAL 3.1. General information

3.1.5 Commitments of the Company to the market authorities in France As it is also listed on the primary market of Nyse Euronext Paris, some provisions of French stock market regulations are applicable to the Company. Indeed, under the current legislation, rules concerning foreign issuers provided by the AMF General Regulation are applicable to the Company. In addition, organization and general rules of Nyse Euronext are applicable to the Company. AMF rules may also apply to public bids for the shares of the Company, except provisions concerning Compulsory standing offer procedure, the mandatory submission of a public tender offer and compulsory buyout. Since the European Transparency Directive has been transposed, it is applicable as from March 30, 2008, and the rules relating to the crossing of thresholds are now applicable as regards the Company. Other rules of French stock exchange law do not apply to the Company. This is the case of threshold rules. With regards to French law, a foreign issuer has to take the necessary steps to allow the shareholders to manage their investments, and implement their rights. Since Company securities are listed in the primary market of Nyse Euronext, and pursuant to the AMF General Regu- lation and the provisions of the European Transparency Directive, as transposed into French law by the Monetary and Financial Code and applicable since January 20, 2007, the Company is required to:

• inform the AMF of any changes in its share capital compared with previously disclosed information, particularly any declaration for the crossing of thresholds which Maroc Telecom would have received; • publish interim financial reports including condensed financial statements, an interim management report, the Statutory Auditors’ reports on the limited review of the above mentioned financial statements and a statement from the persons responsible for the half-yearly financial report within two months of the end of the first half of the Company’s fiscal year; • publish an annual financial report including the accounts, a management report, the Statutory Auditors’ report and a statement from the persons responsible for the report within four months of the end of the fiscal year; • publish quarterly statements including net revenues by business segment for the past quarter, a general description of the Company’s results and financial position and that of companies it controls, and the significant transactions and events which occurred during the quarter and their impact on the Company’s financial position, within 45 days from the end of the first and the third quarters; • publish a press release specifying the fees paid to the Statutory Auditors, to be presented on the Maroc Telecom website within four months of the end of the fiscal year ; • publish monthly statements on the total number of voting rights and shares comprising the Company’s share capital; • publish, as early as possible, any information on new facts that may significantly affect the share price and inform the AMF thereof; • inform the French public about changes in the business of the Company or its management; • make the necessary provisions to allow the persons who hold their securities through Euroclear France to exercise their rights, particularly by informing them about any annual ordinary shareholders’ meeting and by allowing them to exercise their voting rights; • notify the persons who hold their securities through Euroclear France about dividend payments, new share issues, allocation, subscription, renunciation and conversion; • update names and details of the person responsible for financial information in France; • provide the AMF with any information it may require in accordance with its mission and the laws and regulations applicable to the Company; • provide the AMF with any information it may require in accordance with its mission and the laws and regulations applicable to the Company; • comply with the AMF General Regulation relating to the obligation to inform the public; • comply with the provisions of the AMF General Regulation on disclosures • make all regulated information available on Maroc Telecom’s website and store such information for at least five years; and • inform the AMF and Nyse Euronext about any draft amendment of its bylaws.

Maroc Telecom - 2009 Registration Document 33 3

The Company will have to inform the AMF about any general shareholders’ meeting resolution authorizing the Company to trade in its own shares and send the AMF periodic reports of purchases or sales of shares made by the Company by virtue of the authorization. The Company must provide the same information simultaneously in France and in foreign countries, particularly in Morocco. Any publication and information to the public referred to in this chapter will be published in a notice or press release in a national financial daily newspaper distributed in France. The information intended for the public in France is written in French. The Company establishes, as per other French issuers, a Registration Document, providing legal and financial information relating to the issuer (shareholding structure, activities, management, financial information) however without containing any information relating to an issue of specific shares. In practice, the annual report of the Company can be used as the Registration Document, on condition that it contains all the required information. The Registration Document will then have to be filed with the AMF and distributed to the public once registered. The annual and the interim reports in French will be available for the public in France at the office of the financial intermediary in charge of financial service in France (currently: CACEIS). In addition, the Company intends to lead an active policy towards all shareholders, including those holding their shares through Euroclear France, to allow them to participate in any public offer which would, if applicable, be made on the international markets. However, due to the constraints related to stock market on international markets and in order to be able to benefit from the optimal conditions on these markets, in the interest of the Company and of all its shareholders, the Company cannot guarantee that individuals holding their shares through Euroclear France will be able to participate in any or all such transactions, as appropriate.

3.1.6 Registration The Company was founded in Rabat by a deed dated February 3, 1998. The Company was registered with the Rabat Registry of Commerce on February 10, 1998, under number 48.947.

3.1.7 Corporate term The term of the Company is 99 years from the date of its registration with the Registry of Commerce, subject to early dissolution or extension as provided for by law and the bylaws.

3.1.8 Corporate purpose The Company’s corporate purpose, in accordance with its contract specifications as an operator and pursuant to the article 2 of its statutory and regulatory rules in force, is:

• to provide all electronic communication services for domestic and international relations; • in particular, to provide universal telecommunications services; • to establish, develop and operate all electronic communications networks available to the public that are required to provide these services and ensure their interconnection with other networks available to domestic and international users; • to provide all other services, facilities, terminals, electronic communication networks and establish and operate all networks that distribute audiovisual services, including audio, television and multimedia broadcasting; For the purposes of the activities so defined, it may:

• create, purchase, own and operate any real or personal property or business necessary or appropriate for its operations, notably any property whose transfer or availability is specifically authorized by legislation; • market and, to a lesser extent, assemble and manufacture any telecommunications products or devices; • create, purchase, license and apply or sell any patents, processes or trade names;

34 Maroc Telecom - 2009 Registration Document GENERAL INFORMATION REGARDING THE COMPANY AND ITS SHARE CAPITAL 3.1. General information

• take part in any financial consortium, business concern or company that currently exists or is being created, having a purpose similar or related to its own, by any lawful means; • and more generally, carry out any commercial, financial or even industrial transactions relating to real or personal property that could be related, directly or indirectly, wholly or partially, to any part of the Company’s corporate purpose and that could advance its growth and development.

3.1.9 Legal documents available for viewing The corporate, accounting and legal documents required to be disclosed by law or the bylaws to the shareholders and third parties may be viewed at the Company’s Head Office in avenue Annakhil (Hay Riad), Rabat, Morocco

3.1.10 Fiscal year The Company’s fiscal year begins on January 1 and ends on December 31.

3.1.11 Allocation of profits At the close of each fiscal year, the Management Board draws up a statement of the various business assets and liabilities existing at that date and prepares the annual financial statements and the annual report to be submitted to the shareholders’ meeting, in accordance with the applicable law. The net profit generated by the Company, after deduction of any earlier net loss, shall be subject to a withholding of 5% to fund the statutory reserve; such withholding shall no longer be required once the amount of the statutory reserve exceeds one-tenth of the share capital. The distributable profit shall consist of the net profit for the fiscal year, after funding the statutory reserve and the allocation of net profit or loss carried from prior years. Against such profit, the shareholders’ meeting may charge such amounts as it shall see fit in order to fund any optional, ordinary or exceptional reserve funds, or to carry forward, to the extent of a maximum aggregate amount of one- half the distributable profit, subject to an exception granted by a 75% majority of the members of the Supervisory Board present or represented. The balance shall be paid out to the shareholders by way of a dividend, the aggregate amount of which shall not be less than one-half the distributable profit, subject to an exception granted by a 75% majority of the members of the Supervisory Board present or represented. Within the limits set forth by law, the shareholders’ meeting may resolve, on an exceptional basis, to pay out amounts charged against the optional reserves at its disposal (see also section 3.4 “Dividends and dividend policy”).

Dividend payments

The terms of payment of dividends are voted by the ordinary shareholders’ meeting, or failing such, by the Management Board. Such payment shall be made within nine months after the end of the fiscal year, subject to extension of that period by an order of the chief justice of the Court, acting in summary proceedings upon a petition by the Supervisory Board. If the Company holds shares of its own stock, the related dividend entitlement shall be cancelled. Dividends not collected within five years after the date of payment thereof shall be forfeited to the Company. Amounts not collected and not forfeited shall constitute a claim of the owners against the Company, not bearing interest, unless they are converted into loans on mutually agreed terms. If the shares are subject to a life interest, the dividends shall be payable to the life tenant. The proceeds of the distribution of reserves, other than the carry-forward, shall, however, be allocated to the bare owner.

Maroc Telecom - 2009 Registration Document 35 3

3.1.12 General shareholders’ meetings

Shareholders’ meetings The shareholders’ collective resolutions shall be made at meetings, which shall be ordinary or extraordinary according to the nature of the decisions that they are called upon to make. A duly convened general meeting shall be deemed to represent all the shareholders; its decisions shall be binding on all, including those who are absent, not sui juris, dissenting or deprived of voting rights.

Calling of meetings

Meetings shall be called by the Supervisory Board. An ordinary shareholders’ meeting may also be called:

• by the Statutory Auditor or Auditors, who may do so only after failure by the Supervisory Board to call a meeting and the Supervisory Board fails to do so when requested by the auditor (s); • by an agent appointed by a Court order, upon the application of any interested party in an emergency or of one or more shareholders holding at least one tenth of the share capital; or • by the liquidator or liquidators in the event of the Company’s dissolution, during the liquidation period and; • by the majority shareholders in share capital or voting rights, following a public bid or the sale of a block of shares that would result in a change of the controlling ownership of the Company Shareholders’ meetings shall be called and carried out in the manner provided for by law. The Company shall, at least 30 days before the shareholders’ meeting is convened, publish in a newspaper chosen among those contained in the list determined by the Minister of Finance and in the Official Journal, a notice containing the information required by law and the draft resolutions to be submitted to the meeting by the Management Board. The company shall be required to publish a notice containing, as applicable, the terms and conditions for voting by mail, as stipulated by the regulations in force, at least 15 days prior to the Shareholders’ Meeting, in a newspaper included in the list defined by the Minister of Finance. The Company shall be required to publish, in a newspaper authorized to carry legal advertisements, at the same time as the notice of the annual ordinary shareholders’ meeting, the summary financial statements relating to the previous fiscal year, drawn up in accordance with applicable law (which shall include the balance sheet, statement of income, statement of cash flows and statement of changes in financial position), and the report of the Statutory Auditor(s) on the financial statements. Any amendment to such documents shall be published by the Company in a newspaper authorized to carry legal advertisements within 20 days after the annual ordinary shareholders’ meeting Meetings shall be held at the head office or at any other location specified in the notice.

Agenda

The agenda of a shareholders’ meeting shall be determined by the author of the notice. One or several shareholders holding at least 2% of the share capital may, however, call for one or several draft resolutions to be tabled on the agenda. Regardless of the number of shares held, all shareholders shall be entitled, upon providing evidence of identity, to take part in shareholders’ meetings subject: • for holders of registered shares, to an entry by name in the Company’s records; • for holders of bearer shares, to the deposit, at the locations mentioned in the notice, of the bearer shares or of a certificate of deposit issued by the establishment having custody of such shares; • and if applicable, to provide the Company, in accordance with applicable law, with proof of his or hern identification. Such formalities shall be completed no later than five days before the date of the meeting, subject to any shorter period provided for in the notice or mandatory statutory rules reducing such period.

36 Maroc Telecom - 2009 Registration Document GENERAL INFORMATION REGARDING THE COMPANY AND ITS SHARE CAPITAL 3.1. General information

Participation in meetings

The shareholders’ meeting concerns all shareholders, regardless of the number of shares they hold. Corporate shareholders shall be represented by a specially appointed agent, who need not personally to be a shareholder. A shareholder may be represented by another shareholder, or by his or her guardian, spouse or an ascendant or descendant, who need not to be a shareholder in his or her personal capacities and by any company involved in securities management.. Multiple holders of undivided interests in shares shall be represented at shareholders’ meetings by one of them or by a single agent. A shareholder having pledged his or her shares shall retain the right to attend shareholders’ meetings.

Officers - Attendance sheet

Officers

The shareholders’ meeting shall be chaired by the Chairman of the Supervisory Board or the Vice Chairman of the Supervisory Board. Failing this, the meeting shall appoint its own Chairman. The Chairman of the meeting shall be assisted by the holders of the two largest interests, either personally or as agents, present and accepting such office, who shall serve as scribes. The meeting shall appoint a Secretary which does not necessarily have to be one of its members.

Attendance sheet

An attendance sheet shall be kept at each meeting, specifying the names and addresses of the shareholders, and, if applicable, those of their proxies, and the numbers of shares and voting rights they hold. Such attendance sheet shall be signed by all shareholders present and by the proxies of absent shareholders; it shall then be certified by the officers of the meeting.

Voting rights

Each member of the meeting shall have as many voting rights as he or she owns or represents, in particular as a result of voting proxies or other powers of attorney. The voting rights attached to a share shall belong to the life tenant at ordinary shareholders’ meetings and to the bare owner at extraordinary shareholders’ meetings. If the shares are pledged, the voting rights shall be exercised by the owner. The Company may not vote shares that it has acquired or accepted as security. All shareholders can vote by mail in accordance with the terms of regulations in force. Shareholders who vote by mail are deemed present or represented, provided the Company receives their voting form at least two (2) days prior to the Shareholders’ Meeting.

Minutes

Minutes of meetings shall be entered in a special register kept at the Head Office, the pages of which shall be numbered and initialed by the Registrar of the Court at the location of the Company’s registered office. Copies of/or extracts from the minutes shall be certified by the Chairman of the Supervisory Board alone, or by the Vice Chairman of the Supervisory Board signed jointly with the Secretary.

Ordinary shareholders’ meetings

Powers

Ordinary shareholders’ meeting shall act upon all matters of an administrative nature exceeding the powers of the Supervisory Board and Management Board, and which are not reserved for the extraordinary shareholders’ meeting.

Maroc Telecom - 2009 Registration Document 37 3

An ordinary shareholders’ meeting shall be held each year, within the six months after the end of the company’s fiscal year. This meeting shall hear in particular the report from the Management Board and the report from the Statutory Auditor or Auditors; it shall consider, amend and approve or refuse the financial statements; and it shall apportion and allocate profit. It shall appoint members of the Supervisory Board and the Statutory Auditor(s). It may also dismiss members of the Supervisory Board.

Quorum and majority

The ordinary shareholders’ meeting shall be duly convened and may validly act only if the shareholders present or represented hold at least 25% of the voting rights, exclusive of shares acquired or accepted as security by the Company; if such quorum is not obtained, a further meeting shall be called, for which no quorum shall be required. At an ordinary shareholders’ meeting, resolutions shall be passed by a majority of votes of the shareholders present or represented.

Extraordinary shareholders’ meetings

Powers

Extraordinary shareholders’ meetings shall have sole authority to amend any provisions of the bylaws. They may not, however, change the Company’s nationality or increase the shareholders’ liabilities without the approval of the latter. They may decide upon the conversion of the Company into a company of any other form, subject to compliance with the applicable statutory rules.

Quorum and majority

Extraordinary shareholders’ meetings shall be duly convened and may act validly only if the shareholders present or represented hold at least, upon a first call, one-half, and upon a second call, 25%, of the voting rights, exclusive of shares acquired or accepted as security by the Company. If the 25% quorum is not satisfied, the second meeting may be postponed to a date no later than two months after the date for which it had been called, and may be validly held with the presence or representation of shareholders holding at least 25% of the share capital. At an extraordinary shareholders’ meeting, resolutions shall be passed by a two-third majority of votes of the shareholders present or represented.

3.1.13 Management of the Company

Management Board

Membership

The Management Board shall administer and manage the Company, under the supervision of a Supervisory Board. The Management Board shall consist of five members. The members of the Management Board must be individuals. All members of the Management Board shall be employees of the Company and/or resident in Morocco more than 183 days per year, subject to exceptions granted by the Supervisory Board acting by a 75% majority of the members present or represented. In the event of termination of the office of a member of the Management Board during its term, the Board shall appoint his or her substitute in the manner provided for by law and the Company’s bylaws.

38 Maroc Telecom - 2009 Registration Document GENERAL INFORMATION REGARDING THE COMPANY AND ITS SHARE CAPITAL 3.1. General information

Appointment and dismissal of members of the Management Board

The members of the Management Board are appointed by the Supervisory Board, acting by a majority of the members present or represented. The Supervisory Board shall appoint one of the members to act as Chairman. It shall be possible for Board members to be dismissed by a vote of the Ordinary Shareholders’ Meeting or by the Supervisory Board, acting by a 75% qualified majority. Any dismissal without just cause may give rise to the payment of compensation. Termination of office on the Management Board shall not entail termination of the contract of employment between the person concerned and the Company.

Term of office

The members of the Management Board are appointed for a two (4) year term which may be renewed. In the event of termination of office of a member of the Management Board during its term, his or her substitute shall be appointed for the remaining duration of the term until the renewal of Management Board. All members of the Management Board shall be eligible for further office.

Operation

The Management Board shall manage the Company collectively. The members of the Management Board may, subject to the Supervisory Board’s consent, allocate among themselves the management tasks. Such allocation may in no event, however, deprive the Management Board of its collegiate character as the Company’s management Body. Management Board meetings may be held outside the head office or by videoconference or any equivalent means allowing members to be identified, as stipulated by regulations in force. Resolutions shall be passed by a majority of members present or represented in office, each of whom shall have one vote. Minutes of resolutions of the Management Board, if any are drawn up, shall be entered in a special register and signed by the Chairman of the Management Board and another member. Copies of, or extracts from such minutes shall be certified by the Chairman of the Management Board or by an Executive Officer.

Powers

The Management Board shall have full powers to act in all circumstances in the name of the Company, within the limitations of the corporate purpose and subject to those powers expressly conferred by law and the Company’s bylaws on the Supervisory Board under Articles 10.5.3 to 10.5.5 of the bylaws. In relation to third parties, the Company shall be bound even by an action of the Management Board that is not consistent with the corporate purpose and bylaws, unless it proves that the third party was aware that the action exceeded such purpose and/or the bylaws, or could not be unaware thereof in the circumstances. The provisions of the bylaws restricting the Management Board’s powers shall not be binding on third parties. The Chairman of the Management Board shall represent the Company in its dealings with third parties. The Supervisory Board may, however, confer the same representation power on one or more members of the Management Board, who shall have the title of Executive Officer. The provisions of the bylaws restricting the Chairman’s, or, if applicable, the Executive Officer ’powers to represent the Company shall not be binding on third parties. The Chairman of the Management Board and the Executive Officer (s) may grant powers of attorney to third parties. The powers thereby concerned shall, however, be limited and relate to one or more specific purpose or purposes. In relation to third parties, any action binding the Company shall be validly taken by the Chairman of the Management Board or any other member appointed by the Supervisory Board as an Executive Officer.

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Disclosure duties

The Supervisory Board may require the Management Board to submit a report relating to its management and to current transactions at any time. Such report may be supplemented, at the Supervisory Board’s request, by a provisional accounting statement for the Company. To the extent necessary, the Management Board shall forward to the Supervisory Board a report detailing the application or implementation, if applicable, of the points to be adopted by the Supervisory Board in accordance with Articles 10.5.3 to 10.5.5 of the bylaws. At least once a quarter, the Management Board shall submit to the Supervisory Board a report on the Company’s operations. Within three months after the end of each fiscal year, the Management Board shall draw up the Company’s annual financial statements (balance sheet, statement of income and notes) and provide them to the Supervisory Board, in order to enable it to perform its supervisory function. The Management Board shall also provide the Supervisory Board with the report to be submitted to the ordinary meeting of shareholders called to act upon the financial statements for the previous fiscal year.

Compensation

The Supervisory Board shall determine, in the appointing resolution, the nature and amount of compensation paid to each member of the Management Board.

Liability

Without prejudice to any specific liability arising out of the Company’s receivership or bankruptcy proceedings, the members of the Management Board shall be liable, personally or jointly as the case may be, to the Company and to third parties, for offenses against the statutory or regulatory rules applicable to joint stock companies, for breaches of the bylaws, or for misconduct in their management.

Supervisory Board

Membership

The Supervisory Board shall consist of not less than eight and not more than 12 members, which may be increased to 15 members if the Company’s shares are admitted to listing on the Casablanca stock exchange. Each member of the Supervisory Board shall hold at least one share of the Company throughout the term of office. The members of the Supervisory Board shall be appointed by the ordinary shareholders’ meeting. If, on the date of his or her appointment, a member of the Supervisory Board does not hold at least one share of the Company or, during his or her term of office, ceases to hold at least one share, he or she shall be deemed to have resigned if the situation is not fixed within three months. The statutory auditor(s) shall, under his/their sole responsibility, secure compliance with the provisions envisaged above, and shall report any breach thereof in their report to the annual shareholders’ meeting.

Term of office

The members of the Supervisory board shall be appointed for a six-year term. The office of a member of the Supervisory Board shall terminate upon adjournment of the ordinary shareholders’ meeting convened to approve the financial statements for the past fiscal year and which net during the year in which the said term expires. They shall always be eligible for further office. They may be dismissed at any time by the ordinary shareholders’ meeting. No member of the Supervisory Board may simultaneously be a member of the Management Board. If a member of the Supervisory Board is appointed to the Management Board, his or her term of office as member of the Supervisory Board shall terminate upon his or her assumption of office on the Management Board. A legal entity may be appointed to the Supervisory Board. At the time of appointment, it shall be required to appoint a permanent representative who shall be subject to the same conditions and obligations, and shall incur the same civil

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and criminal liability, as a member of the Supervisory Board in a personal capacity, without prejudice to the joint liability of the legal entity that he or she represents. When the legal entity dismisses its representative, it shall be required to appoint a substitute concomitantly. It shall immediately notify its decisions to the Company. It shall act likewise in the event of the permanent representative’s death or resignation.

Vacancy and appointment

In the event of vacancy, as a result of death or resignation or any other inability to act, of the holder of one or several seats on the Supervisory Board, the Supervisory Board may, between two shareholders’ meetings, make temporary appointments. If the number of members of the Supervisory Board falls below eight, the Supervisory Board shall be bound to make temporary appointments to restore its membership within three months of the date of vacancy. Temporary appointments by the Supervisory Board shall be subject to ratification by the next subsequent ordinary shareholders’ meetings; the member appointed to replace another shall remain in office only for the remaining duration of his or her predecessor’s term. Even if the temporary appointments are not approved, the resolutions made and actions taken previously by the Supervisory Board shall remain valid. If the number of members of the Supervisory Board falls below three, the Management Board shall be required to call, within 30 days after the date of the vacancy, an ordinary shareholders’ meeting to supplement the Supervisory Board’s membership.

Chairman and Vice-Chairman

The Supervisory Board shall appoint from among its members a Chairman and Vice Chairman who shall call meetings of the Supervisory Board and direct its proceedings, and who shall hold office during the term of office of the Supervisory Board. The Chairman and Vice-Chairman must be individuals. The Supervisory Board may appoint a Secretary for each meeting, who could not be a member of the Board.

Notice of meeting and proceedings

The Supervisory Board shall meet, upon a notice given by its Chairman or Vice-Chairman, as frequently as required by the Company’s interests, at the Head Office or any other location specified in the notice. Such notice may be given by electronic message or by fax, in both cases followed by confirmation by ordinary mail, or by registered mail with return receipt, or by letter delivered personally against a receipt, eight (8) days before the date of the meeting, unless such period is reduced upon the consent of all the members of the Supervisory Board.

The Supervisory Board shall act validly only if at least one-half the members of the Supervisory Board are present. Supervisory Board members who attend Supervisory Board meetings by videoconference or equivalent means allowing members to be identified, as stipulated by regulations in force, are taken into account in determining the quorum and majority. This provision shall not apply if the following items are included on the agenda: the appointment or dismissal of the Chairman of the Supervisory Board, the approval of the financial statements or the notice for shareholders’ meetings. Subject to the provisions of Articles 10.5.4 to 10.5.5 of the bylaws described below, decisions of the Supervisory Board are passed in accordance with the Moroccan law relating to joint stock companies (as amended or extended), by a majority. In addition to transactions subject by law to the Supervisory Board’s consent pursuant to article 10.5.3 of the bylaws, the following resolutions require prior consent from the Supervisory Board acting by a majority of members present or represented :

• Review, approval and revision of the business plan, drawn up according to the same strategic criteria and requirements in terms of productivity, profitability and competitiveness as the best international operators; • Review and approval of the budget drawn up, according to the same criteria and strategic, productivity, profitability and competitive requirements as the best international operators; • Policy with respect to compensation, training and management of human resources and creation of profit sharing schemes for the Company’s managers or employees; • Appointment of members of the Management Board; and

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• Approval of the draft resolutions to be submitted to the general meeting of the Company’s shareholders with respect to the allocation of the earnings of the Company and its subsidiaries (pay-out of dividends, reserves, etc.) in the manner provided for under Articles 16 and 10.5.4(x) of the bylaws. However, by way of exception from the provisions of Article 10.5.3 of the bylaws described above and in accordance with Article 10.5.4 of the bylaws, the following resolutions shall be matters for the Supervisory Board and require approval by a majority of at least 75% of the members of the Supervisory Board present or represented:

• Any significant change in accounting methods; • Repeal, abandon, transfer of licenses or concession of major operating facilities not provided for under the annual budget; • Any decision related to the implementation or initiation of judicial, administrative or arbitration actions or proceedings involving the Company or its subsidiaries, for which the amount of the claim in principal against or at the initiative of the Company or its subsidiaries, whether this concerns an initial claim or a counter-claim, for each of these actions or proceedings, amounts to a unitary amount of more than MAD100 million or requires judicial enforcement by the Company or its subsidiaries, as well as any decisions with the aim of obliging the Company and/or its subsidiaries to reach a settlement for such actions or proceedings involving amounts owed or due to the Company for an amount of more than MAD25 million; • Any decision concerning the conclusion, amendment and/or termination of any service provision agreement or any other agreement—other than the agreements concerning day-to-day transactions entered into under normal conditions — between the Company and (i) any shareholder holding more than 30% of the capital and/or voting rights of the Company and/or (ii) the subsidiaries whatsoever of such shareholder, for which the management and/or direction are effectively directly or indirectly controlled by the latter or by its parent company, whether through a holding in the share capital, through contractual agreements or in concert with a third party (hereinafter the “Reference Shareholder”); • Any decision related to a merger, under any form whatsoever, between the business of the Company and any businesses over which the Reference Shareholder has control which are in competition with the Company over the sectors of Fixed, Mobile, Internet and Data exchange telecommunications (and more generally all businesses connected to or arising from the Company’s corporate purpose) ; • Any decision related to the exemption of the obligation for a member of the Management Board to be an employee of the Company and/or to be present for more than 183 days a year in Morocco; • Investments or divestments and borrowings and loans exceeding more than 30% of the corresponding amounts shown in the budget; • Any creation of a subsidiary with an initial share capital or shareholders’ equity of more than MAD100 million, and any takeover(s) or assignment(s) of a holding or interest in any group or entity exceeding 20% of the Company’s net assets; • Any resolution relating to a proposed merger, spin-off, contribution of assets or management lease relating to all or part of the business of the Company or one of its subsidiaries, and any resolution relating to dissolution, liquidation or discontinuation of any substantial operation of the Company or one of its subsidiaries; • Any exceptions from the obligation provided for under Article 16 of the bylaws to pay out dividends of at least one-half the distributable profit; and • Amendment of the internal regulations of the Company’s audit committee. In addition, in accordance with the provisions of Article 10.5.5 of the bylaws described below, the Supervisory Board may not submit the following resolutions to the meeting of shareholders unless they have been made by at least 75% of the members of the Supervisory Board present of represented:

• A motion for amendment of the Company’s bylaws (including in particular a reduction or increase in the Company’s share capital or changes in the fiscal year); • A motion for issuance of new securities of the Company or its subsidiaries; a motion for amendment of the corporate purpose and/or principal business of the Company or its subsidiaries; • A motion for amendment of the rights and duties relating to shares of the Company or its subsidiaries; • A motion for amendment of the first or last day of the fiscal year of the Company or its subsidiaries; • A motion for the choice of the statutory auditors of the Company and its subsidiaries; • A motion for the nomination of one or more members of the Supervisory Board; • A motion for dismissal of the members of the Management Board; and

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• A settlement of differences between the Management Board and the Supervisory Board.

Role, responsibilities and powers of the Supervisory Board

The Supervisory Board shall exercise permanent supervision over the Company’s management by the Management Board. At any time, it shall perform such inspections as it shall see fit, and may obtain disclosure of such documents as it considers appropriate for the performance of its dutiest. The members of the Supervisory Board may obtain disclosure of any information or data relating to the Company’s operation. The Supervisory Board may, within the limits that it shall determine and subject to the provisions of Article 10.5 of the bylaws, allow the Management Board to sell real estate assets, sell all or part of investments, and issue warranties, endorsements or security in the name of the Company. It shall submit to the annual shareholders' meeting its observations on the report from the Management Board and on the financial statements for the fiscal year. The Supervisory Board may create from among its members, and if it so deems necessary, with the assistance of third parties who need not be shareholders, technical committees in charge of reviewing matters that it shall submit to them for an opinion. Such committees shall have advisory powers and act subject to the authority of the Supervisory Board, of which they are agencies and to which they shall report. The members of committees shall be appointed by the Supervisory Board. Unless otherwise resolved by the Supervisory Board, the duration of committee members’ terms of office shall be that of their terms as members of the Supervisory Board. Each committee shall draw up its own internal regulations, which shall require approval by the Supervisory Board

Compensation

The shareholders’ meeting may allocate to the members of the Supervisory Board, as compensation for their duties, a fixed annual amount in attendance fees. The Supervisory Board may also allocate exceptional compensation with respect to assignments or duties entrusted to its members.

Liability

Members of the Supervisory Board shall be liable, personally or jointly as the case may be, to the Company and to third parties, for offences against the statutory or regulatory rules relating to joint stock companies, for breaches of the bylaws or for misconduct in their management. If several members of the Supervisory Board have cooperated in the same action, the Court shall apportion liability among them in terms of payment of damages. Members of the Supervisory Board shall be liable for any negligent or tortious acts committed by them in a personal capacity in the performance of their duties. They shall incur no liability for acts of management or the result thereof. They shall be held liable in civill law for criminal offences committed by members of the Management Board if, having been aware thereof, they did not report the said offences to the General Meeting.

3.1.14 Statutory auditors The Company shall be audited by at least two statutory auditors, who shall be appointed and shall perform their duties in accordance with the law.

Appointment, removal from office and incompatibility of offices

During the term of the Company, the statutory auditors shall be appointed for three fiscal years by the ordinary shareholders’ meeting. The statutory auditors’ offices shall expire upon adjournment of the ordinary shareholders’ meeting acting upon the financial statements for the third fiscal year. The statutory auditors shall be eligible for further office. A statutory auditor appointed by the shareholders’ meeting to replace another shall remain in office only for the remaining duration of his or her predecessor’s term. If, upon expiry of a statutory auditor’s term of office, a motion is submitted to the shareholders’ meeting against extension of his or her term, the statutory auditors may address the meeting, if he or she so requests.

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One or more shareholders holding at least 5% of the share capital, and/or the Moroccan securities regulator (CDVM) may apply to the chief justice of the commercial court acting in summary proceedings for one or more statutory auditors appointed by the shareholders’ meeting to be barred from office, and apply for appointment of one or more auditors to perform their offices in their stead. Under penalty of inadmissibility, the referral to the chief justice of the commercial court shall be entered by a reasoned application made within 30 days after the challenged appointment. If the application is granted, the statutory auditor or auditors appointed by the chief justice of the commercial court shall remain in office until appointment of the new statutory auditor or auditors by the meeting of shareholders. If it becomes necessary to appoint one or more statutory auditors and the meeting of shareholders fails to do so, any shareholder may apply to the chief justice of the commercial court, acting in summary proceedings, for appointment of a statutory auditor. The statutory auditor(s) appointed by the chief justice of the court shall remain in office until appointment of the new statutory auditor or auditors by the shareholders’ meeting. The appointments of statutory auditors shall comply with the rules relating to incompatibility of offices laid down by law. In the event of resignation, the Statutory Auditors are required to report the reasons for their decision in writing. This document is submitted to the Supervisory Board at the following Shareholders’ Meeting and must be transmitted immediately to the CDVM.

Duties of the statutory auditors

The Statutory Auditor(s) shall have a permanent assignment, exclusive of any interference in the management of the Company, of inspecting the Company’s assets, books and accounting documents, and ascertaining the compliance of its financial statements with applicable rules. They shall also review the fairness and consistency relative to the summary statements of the information provided in the annual report from the Management Board and in the documents sent to the shareholders with respect to the Company’s assets and liabilities, its financial position and its earnings. The Statutory Auditor(s) shall ensure that equal treatment among the shareholders has been observed. The statutory auditor(s) shall be invited to attend the meeting of the Management Board to approve the financial statements for the past fiscal year, and all shareholders’ meetings. At any time of the year, the statutory auditor(s) shall perform such inspections as they shall consider being desirable, and may obtain disclosure on the spot of any document they consider necessary for the performance of their assignment, including without limitation any contracts, records, accounting documents and minute books. The Management Board’s annual report and summary statements shall be made available to the statutory auditor( s) at least 60 days before notice of the annual shareholders’ meeting is given.

3.1.15 Trading of shares Sales of shares shall be carried out in the manner provided for by law.

3.1.16 Statutory theresholds

In Morocco

Obligations are described by Circular 01-04 of June 8, 2004, relating to the thresholds for ownership of shares or voting rights of listed companies The following description summarizes these obligations. Holders of shares or other securities of the Company are advised to consult their legal counsel in order to ascertain whether the reporting obligations are applicable to them. Any individual or legal entity, acting alone or in concert with others, that becomes the owner, directly or indirectly, of a number of shares representing more than one twentieth (5%), one tenth (10%), one fifth (20%), one third (33.33%), one-half (50%) or two-thirds (66.66%) of the Company’s share capital or voting rights must notify the Company, the CDVM (Moroccan securities regulator) and the Casablanca Stock Exchange, within five working days of the date it crosses such threshold of the total number of the Company’s shares that he, she or it holds, and of the related number of voting rights. The date of crossing of the threshold shall be the date of execution of the reporting party’s order on the exchange. In addition to the statutory obligation mentioned above to inform the Company of the crossing of thresholds, any individual or legal entity, acting alone or in concert with another, that becomes the owner directly or indirectly of a number of shares representing more than 3%, 5%, 8%, 10%, or any threshold that is a multiple of 5% in excess of

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10%, of the share capital or voting rights of the Company, must notify the Company, by registered mail with return receipt the total number of shares or voting rights that he, she or it holds, within five trading days after the date of acquisition. The notice above is also to be given if the interest in the capital falls below the thresholds provided for above. In each aforementioned report, the reporting party shall certify that the report includes all shares or voting rights held or owned. The reporting party shall also specify the date or dates of acquisition or sale of his, her or its shares. Any individual or legal entity, acting alone or in concert with another, that becomes the owner, directly or indirectly, of a number of shares representing more than one tenth (10%) or one fifth (20%) of the Company’s share capital or voting rights must notify the Company, the CDVM and the Casablanca Stock Exchange, within five working days from the time when any such threshold is crossed, of his, her or its intended objectives within the 12 months after such threshold is crossed, specifying whether he, she or it is acting alone or in concert with another, whether he, she or it intends to discontinue or proceed with acquisition and his, her or its intention to submit the appointment of members of the corporate governing bodies and to acquire control over the Company or not. The date of crossing of the threshold referred in the previous paragraph shall be the date of execution of the reporting party’s order on the exchange. Without prejudice to and within the limits of mandatory statutory rules, in the event of failure to comply with the reporting obligations above, the shares in excess of the portion that ought to have been reported shall be deprived of voting rights at any shareholders’ meeting for a two-year period after the date of the breach. Holders of shares may also be subject to the reporting obligations provided for under statutory Decree 1- 04-21 enacting Act 26-03 relating to public bids on the stock market as amended and completed by Act 46-06.

In France

The provisions of the AMF General Regulation, relating to the method for calculating threshold crossing, notice obligations and the declaration of intent, applicable to the Company are defined as follows: To calculate the shareholding thresholds, the person required to provide information, takes into account the shares and the voting rights that he/she holds as well as the shares and voting rights assimilated thereto and determines the portion of capital and voting rights that he/she holds based on the total number of shares comprising the company’s share capital and the total number of voting rights attached to these shares. As regards the notice obligations,

• The persons required to provide information must inform the AMF at the latest within five trading days of the date of threshold crossing. A calendar of trading days of the regulated markets established or operating in France, may be found on the AMF website. • Threshold crossing declarations must be drawn up according to the standard model drafted by the AMF available on the website (www.amf-france.org). They may be transmitted to the AMF by email. The declarations are then made available to the public by the AMF within a maximum of three trading days of the date the declarations are received. The applicable thresholds are: 5%, 10%, 15%, 20%, 25%, 33%, 50%, 66%, 90% and 95%. Declaration of intent:

• Any individual or legal entity, acting alone or in concert with another, that becomes the owner, directly or indirectly, of a number of shares representing more than one tenth (10%) or one fifth (20%) of the Company’s share capital or voting rights must notify the Company, and the AMF, within ten trading days from the time when any such threshold is crossed, of his, her or its intended objectives for the 12 months following the threshold crossing, specifying whether he, she or it is acting alone or in concert with another, whether he, she or it intends to discontinue or proceed with acquisition of control of the Company and his, her or its intention to request his/ her/its appointment or that of one or several persons as members of the corporate governing bodies. The declaration must be addressed to the company whose shares have been acquired, and to the AMF within 10 trading days. This information is made public pursuant to the conditions set out in the AMF General Regulation. • In the event of failure to comply with the reporting and declaration of intent obligations above, the shares in excess of the portion that ought to have been reported shall be deprived of voting rights at any shareholders’ meeting for a two-year period after the date of the breach.

3.1.17 Public bids Under Moroccan law, public bids are governed by Act 46-06 amended and completed by Act 26-03, dated April 21, 2004. A public bid is defined as the procedure whereby an individual or legal entity, acting alone or in concert (the “bidder”), publicly discloses an intention to acquire, exchange or sell all or part of the securities entailing access to the share capital or votes of a listed company. As in French law, public bids can be voluntary or obligatory when certain conditions are met.

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Voluntary public bids

Any individual or legal entity, acting alone or in concerted fashion and wishing to report publicly that he, she or it wishes to acquire or sell shares listed on the securities exchange, may file a proposed public bid for acquisition or sale of the shares. Unlike the French law which provides the involvement of presenting banks, under Moroccan law, a public bid is to be filed by the bidder with the Moroccan securities regulator (CDVM), and must include:

• the bidder’s objectives and intentions; • the number and nature of the company’s securities; • the date and terms on which the purchase thereof has been or may be made; • the price or exchange ratio at which the bidder is offering to acquire or sell the securities, the information on which these are based and the terms of payment, settlement or exchange planned; • the number of shares to which the proposed public bid relates; and • if applicable, the percentage of votes below which the bidder reserves the option not to carry out the bid. The proposed public bid must be accompanied by an information document. The contents and performance of the offers contained in the proposed bid shall be warranted by the bidder, and if applicable, by any person acting as guarantor. The proposed public bid filed with the CDVM shall be accompanied by the prior permit or permits from the competent authorities. In the absence of this permit, the proposed bid is not admissible. Upon filing of the proposed public bid, the CDVM shall issue a notice of filing of the proposed public bid in a newspaper authorized to carry legal advertisements, which shall report the main provisions of proposal. The publication shall be the starting point for the bid period. The CDVM shall forward the main features of the proposed public bid to the public authorities, which shall be allowed two working days from the date of transmission to rule upon the admissibility of the proposal with regard to national strategic interests. If no decision is taken within two working days, it shall be deemed that the authorities have no further comments. As soon as the proposed public bid has been filed, the CDVM shall request the company managing the stock market to suspend the listing of the shares of the company to which the public bid relates. The suspension notice shall be published. The CDVM shall be allowed a period of ten working days from the publication, of the suspension notice to review the admissibility of the proposed bid and may request that the bidder provides any evidence or information required for its evaluation. Under French legislation, it is a period of five trading days following the publication of the proposed bid. As in French law, the bidder is required to modify the proposal in order to comply with the CDVM’s recommendations if the latter considers that the proposal is inconsistent with the principles of equal treatment among shareholders, full disclosure, integrity of the market or fairness of transactions and competition. In all cases, the CDVM also has authority to require from the bidder any additional warranties and to demand the deposit of a guarantee in cash or in securities. Grounds shall be stated for any ruling denying admissibility. If a public bid is ruled to be admissible, the CDVM shall notify its ruling to the bidder and publish a notice of admissibility in a newspaper authorized to carry legal advertisements. Concurrently, the CDVM requests the company managing the securities exchange to resume listing. Any proposed public bid shall be accompanied by the information documents which may be drafted jointly by the bidder and the target company if the latter concurs on the bidder’s objectives and intentions. If not, the target company may draft separately and file with the CDVM its own information document within five trading days after approval of the bidder’s information document. In this case, the bidder is bound to file a copy of his, her or its information document and proposed public bid with the target company on the day of filing of his, her or its bid proposal with the CDVM. The contents of the information document(s) shall be determined by the CDVM, which shall be allowed a maximum period of 25 working days to approve the information document(s) after the date of filing thereof. Such period may be extended by ten working days, if the CDVM considers that additional evidence or information is required. Upon expiry of such period, the CDVM shall grant or deny approval, and shall provide a justification for any denial. The managing company shall centralize the acquisition, sale or exchange orders and notify the results to the CDVM, which shall issue a notice on the outcome of the bid in a newspaper authorized to carry legal advertisements. In French law, the AMF has a period of ten days following the opening date of the bid, to perform a compliance review, which entails verifying that the bidder’s proposition complies with applicable regulations. The AMF reviews the bidder’s

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targets, intentions and information appearing in the information notice. During this period, the AMF may require additional explanations or justifications needed to review the bid and the information notice. The period is then suspended until reception of the required elements. If the proposed bid meets the required conditions, the AMF publishes a compliance report which is deemed as approval of the information notice. In French law, the information notice made available carrying the AMF’s approval visa must either be published in a national economic daily newspaper, or be notified free of charge to the public by the bidder or the targeted company and published as a summary or a press release. The approval must be published before the offer opens and at the latest on the second day of trading following the AMF’s approval.

Compulsory public bids

Cash takeover bids

Under Article 18 of Moroccan Act 26-03, amended and completed by Act 46-06 relating to public bids, the filing of a cash takeover bid is compulsory when an individual or legal entity, acting alone or in concert, holds, directly or indirectly, a given percentage of voting rights in a company listed on the Securities Exchange. Pursuant to an order of the Minister of Finance and Privatization n°1874- 04 dated Ramadan 11, 1425 (October 25, 2004) when an individual or legal entity holds 40% of the voting rights a cash takeover bid becomes compulsory. Any individual or legal entity is required, within three working days after the 40% voting rights threshold is crossed, to file with the CDVM a proposed take-over bid. Failing this, this person or legal entity and those acting in concert shall lose the voting and financial rights attached to their capacity as shareholders. Such rights shall be recovered only after a proposed cash takeover bid is filed. The CDVM may grant an exception from the filing of a compulsory cash takeover bid when:

• The crossing of the 40% threshold does not affect control over the company concerned, in particular as a result of a capital reduction or transfer of shares among companies affiliated to the same group; • the voting rights arise out of a direct transfer, a distribution of assets by a legal entity in proportion to shareholders’ rights as a result of a merger or partial contribution of assets, or a subscription to a capital increase in a company in financial difficulties. The application for an exception shall be filed with the CDVM within three working days after the voting rights threshold of 40% is crossed. It shall include covenants by that party to the CDVM not to initiate any action intended to obtain control over such company during a specific period, or to implement a recovery plan for the company concerned if it is in financial difficulties. If the CDVM grants the exception requested, its ruling shall be published in a newspaper authorized to carry legal advertisements.

Compulsory buy-out bids

Pursuant to the article 20 of Moroccan law 26-03, amended and completed by Art 46-06 relating to public bids, the filing of a compulsory buy-out bid is mandatory when one or more individual or corporate shareholders of a listed company hold, alone or in concert, a specific percentage of voting rights in that company. Pursuant to an Order of the Minister of Finance and Privatization n°1875-04 dated Ramadan 11,1425 (October 25, 2004) when an individual or legal entity holds 95% of the voting rights he/she/it must proceed with a compulsory buy-out bid. These persons are required, within three working days after the percentage of 95% threshold is crossed, to file with the CDVM a proposed compulsory buyout bid. Failing this, they shall automatically forfeit all the voting rights. These voting rights shall be recovered only after the filing of a proposed compulsory buyout bid. Filing of a proposed compulsory buy-out bid may also be required by the CDVM of the individual or individuals, or legal entity or entities, holding, alone or in concert, a majority of the share capital listed on the securities exchange, when certain requirements are met, including the requirement of a 66% holding of the voting rights concurrently. (Order of the Minister of Finance and privatization n°1873-04 dated Ramadan, 11, 1425). Filing of a proposed buy-out bid by individuals or legal entities, holding, alone or in concert , a majority of the share capital may also be compulsory if the listed shares are delisted from the securities exchange for any reason.

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Standing offer procedure

Under French law, when an individual or legal entity, acting alone or in concert, acquires or has agreed to acquire a block of shares conferring on him, her or it, the majority, of shares or voting rights falling into account which he, she or it already holds, that party is required to file an offer for a compulsory buy-out and to agree to acquire on the market, during a minimum of ten trading days, all securities tendered for sale at the price at which the securities have been or are to be sold. Such a procedure does not exist under Moroccan law.

Competing bids and improved public bids

One or more competing public bids, or improved public bids, may be launched. A competing public bid is a procedure whereby any individual or legal entity, acting alone or in concert, may, from the time of initiation of a public bid, and no later than five trading days before its closing date, files with the CDVM a competing bid of shares of the company to which the initial bid refers. Improved bidding is a procedure in which the bidder of the initial public bid improves the terms of the initial bid, either at his/her own initiative or after a competing public bid, by modifying the price or the nature or quantity of securities or the terms of payment. A bidder wishing to improve the bid files with the CDVM the changes made to the initial public bid no later than five trading days before the date closing of the initial bid. The CDVM shall determine whether the improved bid is admissible within five trading days after the filing of the proposal. The bidder shall draw up and submit to the CDVM a supplementary information document. When more than ten weeks have elapsed since the publication of an initiation of a public bid, the CDVM may, in order to expedite the competition between bids, set a deadline for the filing of successive improved bids or competing public bids. In the event of a competing bid, the initial or previous bidder must, within ten days before the close of the bid, inform the CDVM of his, her or its intentions. The bid may be maintained, withdrawn or modified by an improved bid. Under French law, the price of a competing bid or an improved public bid must be at least 2% above the price stipulated in the initial bid. It can also be declared compliant if it contains a significant improvement of the terms proposed to securities holders. It can also be declared compliant if, without modifying the terms stipulated in the previous bid, it withdraws the threshold below which the initiator would not have followed up with the bid.

Rules relating to targeted companies and public bidders

During the term of a public bid, the bidder and the parties with which he, she or it is acting in concert may not, in the case of a mixed public bid, trade in the securities of the target company or the shares of the company, tendered in exchange. In the event of a voluntary takeover bid, the bidder may withdraw the bid within five trading days after publication of the notice of admissibility of a competing or improved bid. The bidder shall inform the CDVM of the decision to withdraw, which shall be published by the latter in a newspaper authorized to carry legal advertisements. This option is also permitted under French law. During the term of the public bid, the targeted company and parties acting in concert with it, if applicable, may not intervene directly or indirectly in the shares of the targeted company. If payment for the public bid is to be made solely in cash, the targeted company may, however, proceed with a share buyback program if the resolution of the meeting of shareholders having permitted such program has expressly so provided. During the term of the public bid, the targeted company and the bidder, individuals or legal entities holding directly or indirectly at least 5% of the share capital or voting rights of the targeted company, and any other individuals or legal entities acting in concerted fashion with the foregoing, are required to report to the CDVM after each trading day the purchases and sales that they have carried out with respect to the shares concerned by the bid, and any transaction resulting in an immediate or future transfer of title to the shares or voting rights of the targeted company. Any delegation of authority to increase the share capital granted by the target company’s extraordinary shareholders’ meeting shall be held in abeyance during the term of the cash or stock takeover bid of the company’s shares, and the targeted company may not increase its holdings of its own stock. During the term of the bid, the appropriate agencies of the targeted company shall give the CDVM prior notice of any proposed resolution within their powers that would prevent performance of the public bid or of a competing bid. Under French law, the initiator of a public bid and others acting in concert may, subject to exceptions, purchase the securities of the targeted company, in accordance with certain price conditions.

48 Maroc Telecom - 2009 Registration Document GENERAL INFORMATION REGARDING THE COMPANY AND ITS SHARE CAPITAL 3.1. General information

These rules are also applicable to any agent or advisor acting on its behalf or on behalf of the initiator or of the target company. The AMF General Regulation also imposes disclosure obligations as regards the purchase and sale of shares concerned by the bid.

CDVM’s supervision and penalties

Public bidders, targeted companies and parties acting in concert with them are subject to the supervision of the CDVM, which shall ensure that the bids are carried out in orderly fashion in investors’ and the market’s interests. The CDVM may impose civil and criminal penalties.

Maroc Telecom - 2009 Registration Document 49 3

3.2 GENERAL INFORMATION RELATING TO THE COMPANY’S SHARE CAPITAL

3.2.1 Share capital The share capital of Itissalat Al-Maghrib is MAD5,274,572,040 divided into 879,095,340 shares with a par value of MAD6 each, in a single class and fully paid in. The shares’ par value may be increased or decreased as provided by the applicable laws and regulations. The share capital may be increased, decreased or redeemed by a resolution of the appropriate shareholders’ meeting in the manner provided for by the applicable laws and regulations.

3.2.2 Form of shares The shares shall be in registered or bearer form at the shareholders’ option. The Company shall keep at the registered office a register known as the “transfer register” in which are recorded, in chronological order, subscriptions for and transfers of registered shares. The pages of this register are to be numbered and it shall be initialed by the chief justice of the Court. Any holder of a registered share issued by the Company is entitled to obtain a copy thereof certified as true by the Chairman of the Management Board. If the register is lost, copies shall constitute conclusive evidence. The Company may decide not to issue shares in physical form. In accordance with the prevailing statutory rules relating to the book entries of securities, the Company’s shares must be evidenced by book entries with the central depositary.

Indivisibility of shares

Shares shall be indivisible in the view of the Company, which shall recognize only one owner for each share. Joint holders of undivided interests shall be bound to appoint a joint representative in respect of their relations with the Company in order to exercise their rights as shareholders; failing an agreement, the agent shall be appointed by the chief justice of the Court, acting in summary proceedings upon a petition from any of the holders of undivided interests. The right to obtain disclosure of the documents provided for by law shall nonetheless be held by each of the holders of interests in undivided shares, and by each life tenant and bare owner.

3.2.3 Rights and duties attached to shares Each share shall carry a right, proportional to the portion of the share capital that it represents, in the profits or corporate assets, at the time of distribution thereof during the term of the Company or upon its liquidation. Any shareholder shall be entitled to information relating to the Company’s operation and to obtain disclosure of certain corporate documents at the times and in the manner provided for by law and the bylaws. Shareholders shall be liable for corporate debts only to the extent of the par value of the shares that they own; no additional assessment shall be permitted. The rights and duties attached to a share shall be transferred to any owner thereof. Title to a share shall entail, as of right, acceptance of the Company’s bylaws and resolutions of shareholders’ meetings and of the Supervisory Board and Management Board acting upon delegations of authority from the shareholders’ meetings. Heirs, creditors, assigns or other representatives of a shareholder may not, on any grounds whatsoever, call for the affixing of seals on the assets and valuables of the Company, or call for a division or sale by auction thereof, or interfere in any manner whatsoever in the actions of its administration; for the exercise of their rights, they shall be bound by the statements of corporate assets and liabilities and resolutions of the shareholders’ meetings. Whenever it is necessary to hold a given number of shares in order to exercise any right, shareholders who do not hold the required number of shares must make their own arrangements to form a group or to purchase or sell the requisite number of shares.

50 Maroc Telecom - 2009 Registration Document GENERAL INFORMATION REGARDING THE COMPANY AND ITS SHARE CAPITAL 3.2. General information relating to the company’s share capital

3.2.4 Acquisition by the Company of its own shares

Moroccan legislation

In accordance with Moroccan legislation and the bylaws, the Company may acquire its own shares which are fully paid in, up to 10% of the total of its own shares and/or of a specific class. Pursuant to the CDVM’s circular 02/03, dated May 23, 2003, implementing Decree 2-02-556, dated February 24, 2003, any joint stock company (société anonyme), the shares of which are listed on the Securities Exchange and wishing to acquire its own shares in order to adjust the share price, shall be required to issue an information notice, which shall require approval from the CDVM prior to the holding of the shareholders’ meeting called to consider the action. The Company’s purchases of its own shares in order to adjust the price shall not interfere with the proper operation of the market. A Company trading its own shares shall inform the CDVM, no later than the fifth working day after the close of the relevant month, of the number of shares acquired and shares sold, if applicable. If the Company does not trade its own shares during a particular month, it shall so inform the CDVM within the same period. During the buyback program, any change relating to the number of shares to be acquired, the maximum purchase price and minimum selling price, or the period during which the acquisition is to be performed shall be promptly notified to the public by means of a notice published in one of the newspapers authorized to carry legal advertisements. Such changes shall remain within the scope of the authorization granted by the shareholders’ meeting.

French legislation

Since the listing of its shares on a regulated market in France, the Company is now subject to the legislation summarized below. Pursuant to the AMF General Regulation, when a company purchases its own shares it must file an information notice which does not require AMF approval. Pursuant to AMF Regulation and European Commission regulation no.2273/2003 of December 22, 2003 a company may not carry out transactions relating to its own shares in order to manipulate the market. After buying back its own shares, a company must publish the details of all its transactions at the latest by the end of the seventh trading day after their date of execution, and file with the AMF monthly reports containing specific information relating to the transactions performed.

The share buyback program

The current share buyback program implemented to adjust the stock price was approved at the Shareholders’ Meeting held on May 28, 2008, following the CDVM’s approval of the program on May 9, 2008 under number VI/EM/017/2008 in the notice published on the buyback program. The main features of the program are as follows: • Period: until November 29, 2009 • Price range: MAD150- 250 • Maximum percentage of the share capital: 1.82%, or 16 million shares. The share buyback program over the period from January 1, 2009 to November 29, 2009 breaks down as follows:

Casablanca Paris Total

Number of shares purchased 621,357 295,619 916,976 Average purchase price (MAD) MAD 149.67 € 13.67 - Number of shares sold 611,107 134,369 745,476 Average sale price (MAD) MAD 156.64 € 15.03 -

Shares held as at November 29, 2009 190,250 436,600 626,850

Maroc Telecom - 2009 Registration Document 51 3

This program expired on November 29, 2009, and a new share buyback program to stabilize the share price was put in place. This program, which remains in force, was approved at the Shareholders' Meeting held on December 3, 2009, after the Company had received the CDVM's approval of the notice relating to the buyback program on Novem- ber 16, 2009 under number VI/EM/036/2009. The main features of the program are as follows: • Period: until June 10, 2011 • Price range: MAD130- 210 • Maximum percentage of the share capital: 1.82%, or 16 million shares. The share buyback program over the period from December 10, to December 31, 2010 breaks down as follows:

Casablanca Paris Total

Number of shares purchased 34,750 3,800 38,550 Average purchase price (MAD) MAD136.27 €11.97 - Number of shares sold 0 0 0 Average sale price (MAD) - - -

Shares held as at December 31, 2009 225,000 440,400 665,400

Since October 16, 2007 and for a period of one year, renewable by tacit agreement, Rothschild & Cie Banque has been under contract by Maroc Telecom to implement: • in Casablanca, a share price regulation contract involving MAD55 million. • in Paris, a liquidity contract meeting the requirements of the Compliance Charter drawn up by the Association Française des Entreprises d’Investissement (Association of French Investment Firms) and approved by the AMF in its decision of March 22, 2005, published in the French legal gazette (BALO) on April 1, 2005. EUR5 million was allocated to the liquidity account for the application of the contract. On January 7, 2009, Maroc Telecom added €2.5 millions in cash.

The following table summarizes the resources implemented within the framework of these contracts:

December 31, December December 31, 2007 31, 2008 2009 Share price regulation contract – 55,000 Shares 180,000 Shares 225,000 Shares Casablanca MAD47,310,605.18 MAD28,368,101 MAD27,796,965.09 Liquidity contract - Paris 0 Share 275,350 Shares 440,400 Shares €4,903,490,00 €930,205 €1,402,190.00

Source : Rothschild & Cie Banque

52 Maroc Telecom - 2009 Registration Document GENERAL INFORMATION REGARDING THE COMPANY AND ITS SHARE CAPITAL 3.2. General information relating to the company’s share capital

3.2.5 Changes in the Company’s share since incorporation

The table below sets out the main changes in share capital since the Company’s incorporation in 1998:

Date Actions Amount Premium Number of Total Number Par value Share capital shares issued of shares (in MAD) (in MAD)

February Incorporation 100,000,000 - 1,000,000 1,000,000 100 100,000,000 25, 1998

March 25, Capital 8,765,953, 400 - 87,659,534 88,659,534 100 8,865,953,400 1999 increase

June 4, C a p i t a l 75,000,000 - (750,000) 87,909,534 100 8,790,953,400 1999 reduction*

October 28, Change in par - - 791,185,806 879,095,340 10 8,790,953,400 2004 value**

June 12, Capital 3,516,381,360 - - 879,095,340 6 5,274,572,040 2006 reduction by par value reduction

*: At the time of incorporation, only one quarter of the initial share capital was paid in. As a result of this capital reduction, the share capital was fully paid in.

**: by compulsory exchange of 10 new shares with a MAD10 par value against one former share with a MAD100 par value.

***: The extraordinary and ordinary shareholders’ meeting on March 30, 2006 authorized Maroc Telecom’s reduction in capital, which was not the result of losses, by reducing the par value of each share from MAD10 to MAD6.

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3.3 TRADING OF THE COMAPNY’S SHARES 3.3.1 Listing of the shares of the issuer Since December 13, 2004, Maroc Telecom has been listed on both the Casablanca Stock Exchange and Nyse Euronext.

3.3.2 Maroc Telecom share price Casablanca stock exchange

Main market, Code 8001 Average price* High** Low** Transactions (in MAD) Number of shares Trading value (in (in thousands) millions MAD) January 2009 146.94 158.00 138.20 2,599.34 381.93 February 2009 153.41 166.50 145.25 3,107.78 476.75 March 2009 158.39 163.80 152.00 2,295.28 363.54 April 2009 158.29 163.50 152.10 3,393.70 537.20 May 2009 156.92 163.10 141.00 2,107.75 330.75

June 2009 147.44 158.00 141.05 2,852.93 420.65

July 2009 148.08 152.40 144.00 1,804.50 267.22 August 2009 142.02 146.00 140.00 2,468.76 350.62 September 2009 138.70 142.00 133.55 2,875.54 398.83 October 2009 141.31 143.50 139.00 1,619.79 228.89 November 2009 139.88 144.70 135.50 2,234.76 312.60

December 2009 136.10 138.50 133.00 2,884.97 392.66

January 2010 144.44 149.15 135.00 2,985.13 431.17 February 2010 147.46 150.85 145.00 1,652.47 243.66 March 2010 151.12 162.00 147.00 3,972.93 600.40

* The average price is calculated by dividing trading value by number of shares

** Intraday

Source : Casablanca Stock Exchange

Changes in Maroc Telecom’s share price on the Casablanca Stock Exchange

Since december 2004 Since december 2008 MAROC TELECOM

MASI INDEX

In June 2009, 96% of free float was traded on the Casablanca Stock Exchange.

54 Maroc Telecom - 2009 Registration Document GENERAL INFORMATION REGARDING THE COMPANY AND ITS SHARE CAPITAL 3.3. Trading of the company’s shares

Nyse Euronext Paris

Eurolist-Foreign securities, Code MA0000011488, Eligible for Euronext’s SRD deferred settlement service

Average price* High** Low** Transactions (in euro) Number of shares Trading value (in (in thousands) millions euro)

January 2009 13.03 13.90 12.55 1,162.71 15.15 February 2009 13.86 15.44 12.86 2,355.96 32.66 March 2009 14.27 14.82 13.40 532.69 7.60 April 2009 14.07 14.65 13.55 751.54 10.57 May 2009 14.18 14.83 12.52 257.68 3.65 June 2009 12.95 13.55 12.50 402.05 5.21 July 2009 13.05 13.50 12.60 271.56 3.54 August 2009 12.55 12.99 12.20 341.84 4.29 September 2009 12.23 12.71 11.80 325.35 3.98 October 2009 12.40 12.89 11.95 435.49 5.40 November 2009 12.41 12.95 11.80 379.24 4.71 December 2009 12.03 12.30 11.70 263.66 3.17 January 2010 12.64 13.21 11.92 324.28 4.10 February 2010 13.21 13.49 12.80 155.04 2.05 March 2010 13.49 14.28 13.00 252.55 3.40

* The average price is calculated by dividing trading value by number of shares

** Intraday

*** Not including off-system transactions

Source : Nyse Euronext Paris Changes in Maroc Telecom’s share price on Nyse Euronext Paris

Since december 2004 Since december 2008

MAROC TELECOM

CAC40

In June 2009, 4% of free float was traded on the Nyse Euronext Paris stock exchange.

Maroc Telecom - 2009 Registration Document 55 3

3.4 DIVIDENDS AND DIVIDEND POLICY

3.4.1 Dividend paid out over the past fiscal years The table below sets out the amount of dividends (in millions of Moroccan dirhams) paid by the Company in respect of fiscal years 2004 to 2009.

Fiscal year Distribution date Dividends 2004 May 4,2005 4,395 2005 May 2, 2006 6,119 Exceptional dividend June 12, 2006 3,516 2006 May 15, 2007 6,927 2007 May 28, 2008 8,088 2008 June 3, 2009 9,521 2009 June 2, 2010 9,063*

* Amount proposed at the shareholders’ meeting of April 22, 2010. As of December 31, 2009, the Company’s reserves amounted to MAD3,442 million (excluding results at the end of December 2008), out of which MAD2.9 million are distributable.

3.4.2 Dividends policy Maroc Telecom is particularly attentive to the twin objectives of ensuring that shareholders are rewarded appropriately while securing the resources necessary for the Company’s development. Accordingly, Maroc Telecom intends to establish a policy of regular and significant dividend distributions, according to the economic environment and the Company’s profits and funding requirements. The total amount of dividends paid shall be determined taking into account the Company’s funding requirements, return on capital and the Company’s current and future profitability. The Company cannot guarantee shareholders an identical payment every year. This objective is not therefore a commitment of the Company. The bylaws (article 16) contain an obligation to distribute annually, in the form of dividend, at least half of the Company’s distributable profits, unless otherwise decided by the Supervisory Board by a 75% majority of votes. In addition, the final provisions of Article 331 of Act 17-95 provide that “a fixed dividend may not be covenanted in favor of the shareholders; any clause to the contrary shall be deemed to be unwritten, unless the State has granted the guarantee of a minimum dividend to the shares.” Moroccan company law requires all joint stock companies, including Maroc Telecom, to fund their statutory reserve with 5% of profits until the reserve reaches 10% of the share capital. In 2004, Maroc Telecom had reached the statutory reserve, and may accordingly, since fiscal year 2005, pay out its entire distributable profit.

3.4.3 Tax treatment relating to dividends

Moroccan tax treatment Investors should be aware that the summary of tax rules applicable in Morocco set out below is provided for information only and does not constitute a complete description of all potential tax situations applicable to each investor. Accordingly, investors should obtain advice from their usual tax advisors as to the tax treatment applicable to their specific situation and in particular the consequences of the acquisition, holding or transfer of company shares. The tax rules applicable in Morocco with respect to dividend distributions are governed by the General Income Tax Code: Income tax for companies (IS) and Income tax (IR) for private persons. The proceeds of shares (dividends) collected by individuals or companies resident in Morocco or not, are subject to a 10% withholding tax. Companies involved in the payment of such proceeds shall be responsible for payment of the withholding tax to the Treasury.

56 Maroc Telecom - 2009 Registration Document GENERAL INFORMATION REGARDING THE COMPANY AND ITS SHARE CAPITAL 3.4. Dividends and dividend policy

Companies having their registered offices in Morocco are exempt from this withholding tax, provided that they deliver to the paying agent attestations of title to the shares, including the reference of the tax applicable in Morocco. It should be noted that dividends paid to residents of countries with which Morocco has entered into tax treaties can benefit from a rate of less than 10% if these treaties provide for such a rate. Further, such persons are usually entitled to credit the tax paid in Morocco with the tax authorities in their own countries according to the procedures for the elimination of double taxation.

Moroccan exchange control legislation permits foreign shareholders to transfer dividends abroad.

French tax treatment

Investors should note that the French tax treatment presented below is provided for information only, and does not constitute a complete description of all the tax situations that may apply to each investor. Accordingly, investors should obtain advice from their usual tax advisers regarding the tax treatment applicable to their specific situation and in particular to the acquisition, holding or transfer of shares of the Company.

Individuals holding shares as part of their personal assets and not performing stock exchange transactions on a regular basis

Shareholders are allowed a tax credit chargeable against the amount of French income tax relating to such income, in accordance with Article 25-2 of the Convention signed on May 29, 1970 between the French Republic and the Kingdom of Morocco (the “Convention”). The tax credit amount is set by Article 25-3 of the Convention at 25% of the amount of dividends paid out. According to information from the Director of Tax Legislation, the tax credit amounted to 33.33% of the net amount of dividends collected (after deduction of the withholding tax charged in Morocco). If the taxpayer so chooses, the net dividends collected, plus the attached tax credit, may be subject to 18% income tax plus the additional social security levy. Otherwise the net dividends collected, plus the attached tax credit are taken into account to determine the taxpayer’s overall income in the class of proceeds from securities and shall be subject to income tax on a progressive scale. However, dividends paid out by the Company pursuant to a valid resolution of the Company are taken into account for the purposes of computation of income tax, after a 40% reduction on the gross amount of the payout, (i.e. 60% of the gross dividend is taxable). In addition, they shall be eligible for an annual allowance of €3,050 (for married couples taxed jointly and for partners taxed jointly under a PACS agreement defined under Article 515-1 of the French Civil Code), and of €1,525 for taxpayers who are single, widowed, divorced or married and taxed separately. The 40% allowance shall apply before the allowance of €1,525 or €3,050. In addition, taxpayers resident in France for tax purposes, as defined under Article 4 B of the French Tax Code, may be eligible in respect of such dividends for a tax credit of 50% of the amount of taxable dividends before the allowance. Such credit shall be allowed to the extent of €230 annually for married couples taxed jointly and for partners taxed jointly starting under a PACS agreement defined under Article 515-1 of the French Civil Code, and of €115 for taxpayers who are single, widowed, divorced or married and taxed separately. Investors should note that dividends denominated in Moroccan dirhams shall be converted, for the purposes of taxation in France, into euros by applying the exchange rate in Paris on the date of collection of such dividends. If there is no listing on that day, the average trading price applied at a sufficiently close date is to be used.

Companies liable to corporate income tax

The dividend paid out by the Company shall be subject to corporate income tax in France. In accordance with Article 25-2 of the Convention, the shareholder is granted a tax credit chargeable against French corporate income tax. The tax credit amount is set by Article 25-3 of the Convention at 25% of the dividends paid out. According to information from the Director of Tax Legislation, the amount of such tax credit equals 33.33% of the net amount of dividends collected (after deduction of the withholding tax charged in Morocco). Such tax credit may not, however, exceed the amount of French corporate income tax relating to such dividends. No surplus tax credit may be used against the French taxes payable in respect of other sources of income, or be refunded or carried forward. The dividends collected, plus the related tax credit, shall be included in the income subject to corporate income tax at a rate of 33.33%.

Maroc Telecom - 2009 Registration Document 57 3

An additional contribution of 3% of the gross amount of corporate income tax and a welfare contribution of 3.3% of the gross amount of corporate income tax in excess of €763,000 per 12-month period, shall be added thereto. However, for companies with revenues of less than €7,630,000 and the share capital of which, fully paid in, has been held uninterruptedly for the duration of the fiscal year concerned to the extent of 75% at least by individuals or by a company meeting all such requirements, the rate of corporate income tax is set, to the extent of €38,120 of taxable profit per 12-month period, at 15%. Such companies are in addition exempt from the 3.3% welfare contribution mentioned above.

Companies qualifying for the French participation exemption regime

Companies meeting the requirements of Articles 145 and 216 of the French Tax Code are, if they so choose, eligible to an exemption for dividends collected pursuant to the participation exemption regime. Article 216 I of the French Tax Code, however, provides for the taxation in the taxable income of the legal entity receiving the dividends, of a portion of costs and expenses set at a fixed rate of 5% of the amount of dividends collected, including the traditional tax credit granted under a tax treaty. For each taxable period, however, such portion may not exceed the total amount of costs and expenses of all kinds incurred by the company collecting the dividends during the same period. Pursuant to the participation exemption regime, the customary tax credit attached to the dividends collected may not be used against the amount of corporate income tax. Investors should note that dividends denominated in Moroccan dirhams shall be converted, for the purposes of taxation in France, into euros by applying the exchange rate in Paris on the date of collection of such dividends. If there is no listing on that day, the average trading price applied at a sufficiently close date is to be used.

58 Maroc Telecom - 2009 Registration Document GENERAL INFORMATION REGARDING THE COMPANY AND ITS SHARE CAPITAL 3.5. Breakdown of share capital and voting rights

3.5 BREAKDOWN OF SHARE CAPITAL AND VOTING RIGHTS

3.5.1 Ownership of share capital and voting rights in the Company As of December 31, 2009, the share capital and voting rights of the Company were held as follows:

Number % of capital/ Shareholders of shares Voting rights

Vivendi Group* 465,920,477 53.00%

Kingdom of Morocco 263,728,575 30.00%

Senior executives 155,980 0.02%

Employees 1,040,459 0.12%

Public 147,584,449 16.79%

Treasury shares 665,400 0.07%

Total 879,095,340 100%

*Through its 100% subsidiary (Société de Participation dans les Télécommunications)

To the company's knowledge, no shareholder owns more than 3% of its capital or voting rights.

3.5.2 Potentiel capital At the date of this Registration Document, the Company had not issued any securities other than ordinary shares carrying direct or indirect rights, at present or in the future, to the Company's share capital. Likewise, there are no stock option plans reserved for employees. However the combined general shareholders' meeting of April 23, 2009 renewed the Management Board's authority to implement stock option plans in compliance with applicable laws. This authorization is valid for 36 months from the date of the aforementioned general shareholders' meeting, and may be used once or several times.

3.5.3 Changes in the company’s shareholding structure over last three fiscal years

Maroc Telecom shares have been listed simultaneously on the Casablanca Stock Exchange and Euronext Paris since December 13, 2004, following the sale by public tender of a 14.9% stake in Maroc Telecom by the Government of the Kingdom of Morocco. On November 18, 2004, the Kingdom of Morocco and Vivendi concluded an agreement regarding the acquisition by Vivendi of 16% of Maroc Telecom's share capital. On January 4, 2005, this agreement allowed Vivendi to increase its stake from 35% to 51% via the acquisition of 140,655,260 Maroc Telecom shares. In 2006, the Moroccan State disposed of 0.10% of Maroc Telecom's share capital, reducing its stake to 34%. On July 2, 2007, the Moroccan State sold 4% of Maroc Telecom's shares in the Casablanca Stock Exchange at MAD130 per share. This sale took the form of a placing reserved for Moroccan and international institutional investors, with bookbuilding taking place between June 26 and June 28, 2007. On completion of the transaction, the Moroccan State held 30% of the share capital and voting rights of the Company and the free float increased from 15% to 19% of the share capital. Under the terms of an agreement concluded in 2007 between Vivendi and CDG, Vivendi acquired 2% of Maroc Telecom's capital, increasing its stake from 51% to 53%. In addition, CDG acquired 0.6% of Vivendi's share capital.

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The capital and the voting rights of the Company over the past three years, have been distributed as follows:

Situation at December 31, 2009 December 31, 2008 December 31, 2007

% of Capital/ Number % Capital/ Number % Capital/ Number Shareholders voting rights of shares voting rights of shares voting rights of shares

Vivendi Group * 53.00% 465,920,477 53.00% 465,920,477 53.00% 465,920,477

Kingdom of Morocco 30.00% 263,728,575 30.00% 263,728,575 30.00% 263,728,575

Senior executives 0.02% 155,980 0.02% 155,980 0.02% 155,980

Employees 0.12% 1,040,459 0.15% 1,311,049 0.17% 1,466,653

Public 16.79% 147,584,449 16.78% 147,523,909 16.81% 147,768,655

Treasury shares 0.07% 665,400 0.05% 455,350 - 55,000

Total 100% 879,095,340 100% 879,095,340 100% 879,095,340

* Through its 100% subsidiary (Société de Participation dans les Télécommunications)

To the company's knowledge, no shareholder owns more than 3% of its capital or voting rights.

3.5.4 Employee stock ownership Maroc Telecom gave employees the opportunity to subscribe to the Initial Public Offering under preferential conditions namely a 15% discount on the subscription price, provided that they conserved the shares thus acquired over a three- year holding period ending on December 16, 2007. At December 31, 2009, the shares held by employees amounted to 0.12% of the authorized capital and the voting rights

3.5.5 Shareholders’ agreement

Amended shareholders’ agreement between the Kingdom of Morocco and Vivendi

By an amendment dated November 18, 2004 and April 6, 2007, Vivendi and the Government of the Kingdom of Morocco modified the amended shareholders’ agreement. In accordance with this amendment, the key features of the provisions governing relations between the Kingdom of Morocco and Vivendi are as follows:

Organization of powers within Maroc Telecom’s management and supervisory bodies

• Supervisory Board The amended Shareholders’ Agreement provides that the Supervisory Board, in theory, is to be composed of eight members, and that a change in the apportionment of seats on the Supervisory Board is contingent upon a change in the respective beneficial interests of Vivendi and the Government of the Kingdom of Morocco in the Company’s share capital, as follows. If the stake of the Government of the Kingdom of Morocco in the total voting rights held jointly with Vivendi becomes: • greater than or equal to 50% but less than or equal to 65%, then five members will be appointed by the Govern- ment of the Kingdom of Morocco and three members by Vivendi; • greater than or equal to 40% but less than 50%, then three members will be appointed by the Government of the Kingdom of Morocco versus five members by Vivendi; • greater than or equal to 30% but less than 40%, then two members will be appointed by the Government of the Kingdom of Morocco versus six members by Vivendi; • greater than or equal to 20% but less than 30%, then one member will be appointed by the Government of the Kingdom of Morocco versus seven members by Vivendi; • greater than or equal to 70% but less than 80%, then seven members will be appointed by the Government of the Kingdom of Morocco versus one member by Vivendi ; and • greater than 65% but less than 70%, then six members will be appointed by the Government of the Kingdom of Morocco versus two members by Vivendi.

60 Maroc Telecom - 2009 Registration Document GENERAL INFORMATION REGARDING THE COMPANY AND ITS SHARE CAPITAL 3.5. Breakdown of share capital and voting rights

In addition, if the Kingdom of Morocco holds less than 5% of the capital and at least two shares of the Company, it will be entitled to appoint two representatives of the Government of the Kingdom of Morocco who will attend the Supervisory Board without being able to vote. In order to preserve its right to appoint the Chairman of Supervisory Board, the Kingdom of Morocco has to have two seats. Pursuant to the Amended Shareholders’ Agreement, the following rules will apply to the extent that the application of such rules would result in the Kingdom of Morocco appointing a number of members of the Supervisory Board greater than the number resulting from the application of the rules described above:

• if the shareholding of the Government of the Kingdom of Morocco is more than or equal to 22% of the share capital and voting rights of the Company, three members of the Supervisory Board will be appointed by the Kingdom of Morocco and five members of the Supervisory Board by Vivendi; • if the shareholding of the Kingdom of Morocco is less than 22% and more than or equal to 9% of the share capital and voting rights of the Company, two members of the Supervisory Board will be appointed by the King- dom of Morocco and six members of the Supervisory Board by Vivendi ; and; • if the shareholding of the Kingdom of Morocco is less than 9% or more than or equal to 5% of the share capital and voting rights of the Company, one of the members of the Supervisory Board will be appointed by the Kingdom of Morocco and seven members of the Supervisory Board will be appointed by Vivendi, and the Kingdom of Morocco shall be entitled to appoint one Representative who shall have the right to attend the Supervisory Board without being able to vote. These rules governing the allocation of the seats on the Supervisory Board shall remain applicable as long as the Kingdom of Morocco holds at least 5% of the share capital and voting rights of the Company. The rules of majority applicable to the Supervisory Board are set out in the Shareholders’ Agreement and are reproduced identically and virtually in full in the bylaws. The only decisions subject to the approval of the Supervisory Board in the Amendment which are not reproduced in the bylaws are related to: (i) the agreement of the parties to submit to the Supervisory Board for approval, by a majority, any exceptions made to the commitment of Vivendi to propose the appointment of at least one Moroccan member to the Management Board and; (ii) the agreement of the parties to submit to the Supervisory Board for approval, by a majority, any decision concerning a project involving the non-competition clause in the MENA zone provided for by the Amended Shareholders’ Agreement.

• Management Board The Amended Shareholders’ Agreement provides that a change in the apportionment of seats on the Management Board is contingent upon a change in the respective beneficial interests of Vivendi and the Government of the Kingdom of Morocco in the Company’s share capital, as described below. If the pro rata share of the Government of the Kingdom of Morocco of the total amount of voting rights held jointly by it with Vivendi becomes:

• greater than or equal to 20% but less than 40%, then one member will be appointed by the Government of the Kingdom of Morocco versus four members by Vivendi; • greater than or equal to 40% but less than or equal to 65%, then two members will be appointed by the Government of the Kingdom of Morocco versus three members by Vivendi; • greater than 65% but less than or equal to 70%, then three members will be appointed by the Government of the Kingdom of Morocco versus two members by Vivendi; • greater than 70% but less than or equal to 80%, then four members will be appointed by the Government of the Kingdom of Morocco versus one member by Vivendi. In addition, as long as the Government of the Kingdom of Morocco holds at least 15% of the share capital and voting rights of the Company, two members of the Management Board will be appointed by the Government of the Kingdom of Morocco and three members of the Management Board will be nominated by Vivendi and as long as the Government of the Kingdom of Morocco holds at least 9% of the share capital and voting rights of the Company, one member of the Management Board will be appointed by the Government of the Kingdom of Morocco and four members of the Management Board will be nominated by Vivendi notwithstanding any less favorable stipulation of the Amended Shareholders’ Agreement.

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These provisions shall remain in force as long as the Government of the Kingdom of Morocco holds at least 9% of the share capital and voting rights of the Company.

• Shareholders’ meeting Vivendi holds the majority of votes at ordinary general shareholders’ meetings.

• Audit Committee As long as the Government of the Kingdom of Morocco holds at least 5% of the share capital and voting rights of the Company, at least two members of the Audit Committee of Maroc Telecom will be appointed by the Government of the Kingdom of Morocco and this committee’s internal regulations shall provide for the possibility for any member of the Audit Committee to ask the Audit Committee to carry out an audit of the Company and the obligation for the Audit Committee to rule on any formal request submitted by at least two members of the Audit Committee to carry out such an audit.

Specific rights of the Moroccan Government

The Government of the Kingdom of Morocco also holds a right to veto a proposed merger, divestment or partial contribution of assets that is likely to substantially modify the scope of the Company’s business activities or substantially modify the Company’s corporate purpose, unless Vivendi demonstrates to the Government of the Kingdom of Morocco, on objective and reasonable grounds, a strategic purpose for the Company for such a plan. This right shall remain in force, until the earliest of the two following dates: (i) the date on which the Government of the Kingdom of Morocco ceases to hold at least 14% of the share capital and voting rights of the Company or (ii) February 20, 2014.

Conditions for transfers of shares and rights of the parties

• Call option of the Government of the Kingdom of Morocco Vivendi would have to transfer to the Government of the Kingdom of Morocco its beneficial interest in the Company, held directly or through its subsidiaries, in the event of a change in the control of Vivendi having such a impact on competition on the Moroccan market, that it will incur an obligation for Vivendi, imposed by the Moroccan competition authorities, to transfer all or a portion of its beneficial interest in the Company and/or a transfer by the Company of one of its business activities representing at least 25% of its revenues. This provision will remain in force as long as the Government of the Kingdom of Morocco holds at least 20% of the total amount of voting rights held jointly with Vivendi.

• Pro rata tag-along right of the Kingdom of Morocco In the event of a transfer of shares by Vivendi between February 21, 2008 and February 20, 2010 (inclusive) that does not trigger a mandatory public tender offer, the Government of the Kingdom of Morocco shall benefit from a pro rata tag-along right. However, this tag-along right shall not apply in the event of a transfer between companies within the Vivendi group (i.e., between Vivendi and/or any company/ companies in which Vivendi holds at least two-thirds of the share capital and voting rights).

• Vivendi’s right of pre-emption Vivendi shall benefit from a right of pre-emption in the event of an assignment by the Government of the Kingdom of Morocco of all or part of its shares until February 20, 2010 (inclusive).

Mauritel SA shareholders’ agreement

On April 12, 2001, Maroc Telecom acquired a 54% stake in Mauritel SA, Mauritania's incumbent telecoms operator. At the time of this acquisition, the Islamic Republic of Mauritania and Maroc Telecom entered into a shareholders' agreement, under the terms of which Maroc Telecom obtained the right to appoint members of the Board of Directors of Mauritel SA in proportion to its stake (four members out of seven, as long as it holds more than 50% of the share capital). Until June 30, 2004, the Mauritanian State benefited from a right of veto with respect to significant operations (including, in particular, modification of the legal structure of Mauritel SA, approval of the budget and business plan, setting the annual dividend, and the conclusion of any financing). The agreement provides for a payment of dividends equal to 30% of the Mauritel group's consolidated profits, as long as such a distribution is legally possible and would

62 Maroc Telecom - 2009 Registration Document GENERAL INFORMATION REGARDING THE COMPANY AND ITS SHARE CAPITAL 3.6. Asset pledges

not compromise the fulfillment of objectives set out in the business plan or a healthy financial position. In addition, Maroc Telecom was not entitled to assign Mauritel SA shares before June 30, 2004, except for a transfer within the group or a transfer of 3% of the share capital to Mauritel's employees. In 2006, CMC acquired 0.527% of Mauritel SA's share capital from Socipam, thereby increasing its stake to 51.527%. On June 6, 2002, Maroc Telecom transferred its 54% stake in Mauritel SA to the controlling holding company Compag- nie Mauritanienne de Communications (CMC), and then transferred 20% of CMC's share capital to Mauritanian investors. At the time of this transfer, Maroc Telecom and the Mauritanian investors entered into a shareholders' agreement under which each shareholder holds management rights with respect to CMC in proportion to its stake. Following this transfer, CMC replaced Maroc Telecom in the Shareholders' Agreement. Finally, under the terms of the shareholders' agreement, CMC transferred 3% of the share capital of Mauritel SA to Mauritel's employees, thus bringing its stake down to 51%. Each of the parties holds a right of pre-emption with respect to the interest of the other party. All transfers are subject to approval by the board of directors of Mauritel SA. The agreement also contains a tag-along right (droit de suite) allowing the Government to sell to any buyer of Maroc Telecom's stake the same percentage of shares acquired from Maroc Telecom.

Médi-1-Sat shareholders’ agreement

Pursuant to the shareholders' agreement signed with the other shareholders (CDG, 39% via its subsidiary FIPAR Holding, RMI 19.5% and CIRT 2.5%), Maroc Telecom, which owned 39% of the share capital, received and/or granted certain rights (right of first refusal etc.) enabling it to protect its shareholder rights. In January 2010, as a result of the material change in Medi1Sat's ownership structure, and with Maroc Telecom only owning 4.79% of Medi1Sat, the shareholders' agreement was no longer valid.

Mobisud France shareholders’ agreement

Pursuant to the shareholders' agreement signed with the other shareholders (SFR, 16% and Saham Group, 18%), Maroc Telecom, which owns 66% of the share capital, received and/or granted certain rights (right of first refusal etc.) enabling it to protect its shareholder rights. Since Maroc Telecom sold its stake in Mobisud France in 2009, this shareholders' agreement is no longer valid.

Gabon Télécom shareholders’ agreement

According to the shareholders' agreement concluded with Gabon Telecom, Maroc Telecom, which owns 51% of the share capital, received and/or granted certain rights (right of first refusal etc.) enabling it to protect its shareholder rights.

3.6 ASSET PLEDGES

No pledge on assets of the Company has been granted. In addition, the shares in Maroc Telecom’s subsidiaries are not pledged for the benefit of third parties.

Maroc Telecom - 2009 Registration Document 63 INFORMATION CONCERNING COMPANY BUSINESS ACTIVITIES 4.1 HISTORY 66 4.8.2 REGULATORY ENVIRONMENT OF SUBSIDIARIES 122

4.9 HUMAN RESOURCES 125 4.2 OVERVIEW OF THE GROUP’S OPERATIONS 67 4.9.1 DEVELOPING SKILLS 125 4.2.1 ORGANIZATION 67 4.9.2 STAFF 125 4.2.2 ISO CERTIFICATION 69 4.9.3 STAFF TURNOVER 125 4.3 MAROC TELECOM’S BUSINESS STRATEGY 70 4.9.4 HISTORICAL WORKFORCE DATA 125 4.9.5 VIVENDI GROUP STAFF 125 4.4 BUSINESS ACTIVITIES IN MOROCCO 72 4.9.6 TRAINING 125 4.9.7 CHANGE IN STAFF COMPENSATION 125 4.4.1 MOBILE 72 4.9.8 EMPLOYEE SHARE OWNERSHIP 126 4.4.2 FIXED-LINE AND INTERNET 85 4.9.9 LABOR RELATIONS 126 4.4.3 NETWORK AND SYSTEMS INFRASTRUCTURE 97 4.9.10 LABOR AGREEMENTS AND NEGOTIATIONS 126 4.4.4 DISTRIBUTION AND ADVERTISING 99 4.9.11 EMPLOYEE BENEFITS 126 4.4.5 COMPETITIVE LANDSCAPE 103 4.5 DESCRIPTION OF SUBSIDIARIES’ 4.10 REAL PROPERTY 128 OPERATIONS 106 4.11 INTELLECTUAL PROPERTY 129 4.5.1 MAURITEL 106 4.5.2 ONATEL 108 4.12 INSURANCE 130 4.5.3 GABON TÉLÉCOM 109 4.5.4 SOTELMA 110 4.13 LEGAL AND ARBITRATION PROCEEDINGS 131 4.5.5 CASANET 111 4.5.6 MÉDI 1 SAT 111 4.14 RISK FACTORS 133 4.5.7 MOBISUD (FRANCE ANDBELGIUM) 111 4.14.1 BUSINESS RISKS 133 4.6 RESEARCH AND DEVELOPMENT 112 4.14.2 LEGAL RISKS 137 4.14.3 MARKET RISKS 139 4.7 SEASONALITY 113

4.8 REGULATORY ENVIRONMENT AND POSSIBLE DEPENDENCIES 114 4.8.1 THE LEGAL FRAMEWORK WITH RESPECT TO TELECOMMUNICATIONS IN MOROCCO 114

4.1 HISTORY

Maroc Telecom was created from the break-up of the Office National des Postes et Télécommunications pursuant to the enactment of Act 24-96 and the implementing decrees relating to telecommunications. Maroc Telecom, the incumbent telecommunications operator in the Kingdom of Morocco, operates in two business segments: Mobile services and Fixed-line & Internet services. A mobile telephone service using analog technology was introduced in Morocco as from 1987. Once the GSM digital standard was adopted, Maroc Telecom, as the incumbent operator, expanded its mobile telephone services and was the first operator in Africa, and the second in the MENA (Middle East North Africa) region, to operate a GSM network (as from April 1, 1994). Maroc Telecom soon extended coverage to the country’s main economic and political centers. In January 1995, Maroc Telecom signed its first international roaming agreement. In order to prepare for the entry of a new competitor on the market and to increase market penetration, Maroc Telecom introduced prepaid schemes and GSM packages in 1999, and launched rate plans in 2000. There are now two 2G mobile operators, three 3G mobile operators in Morocco, including Maroc Telecom (see section 4.4.5 “Competitive landscape”). There has been a fixed-line telephone service in Morocco since the first half of the twentieth century. The Company extended the range of fixed-line telecommunications services it provides with the launch of narrowband Internet in 1995 and then broadband ADSL, in 2003, and broadband TV (IPTV), in 2006. In addition, it has introduced dedicated data transmission services for business users utilizing state-of-the-art technologies. On February 20, 2001, Vivendi acquired a 35% interest in the Company pursuant to an invitation to tender organized by the government of the Kingdom of Morocco for the selection of a strategic partner. Vivendi was granted certain rights relating to the Company’s management and operations (see section 3.5.5 “Shareholders’ Agreement). Maroc Telecom, along with the SFR group, is now affiliated to the Telecommunications division of the Vivendi group. Pursuant to an agreement dated November 18, 2004 between the government of the Kingdom of Morocco and Viven- di, the Kingdom of Morocco transferred ordinary shares representing an additional 16% of Maroc Telecom’s share capital. In 2006, the government of the Kingdom of Morocco sold 0.1% of Maroc Telecom’s share capital, reducing its stake to 34%. On July 2, 2007, the Moroccan State sold 4% of Maroc Telecom’s share in the Casablanca Stock Exchange at MAD130/share. This transfer of shares was reserved for Moroccan and international institutional investors via a book order between June 26 and June 28, 2007. On completion of the transaction, the Moroccan State held 30% of the share capital and voting rights of the Company and the free float increased from 15% to 19% of share capital. In December 2007, following a share exchange with the deposit and management fund of Morocco, Vivendi acquired an additional 2%, thus carrying the free float to 17%.

As at December 31, 2009, the breakdown of Maroc Telecom’s capital was as follows:

Vivendi Group 53.0% Kingdom of Morocco 30.0% Free float 17.0%

66 Maroc Telecom - 2009 Registration Document INFORMATION CONCERNING COMPANY BUSINESS ACTIVITIES 4.1. Overview of the group’s operations

4.2 OVERVIEW OF THE GROUP’S OPERATIONS

4.2.1 Organization The group’s simplified legal structure as of December 31, 2009 was as follows:

Vivendi Kingdom of Morocco Market

53%* 30%* 17%*

Maroc Telecom

80%* 51%* 51%* 51%* 100%*

Gabon CMC Onatel Sotelma Mobisud Others** Telecom Belgique

51.5%* 100%* 100%*

Mauritel Telmob Libertis

* The percentages represent voting right percentages

** for details of the equity holdings see Section 5.5 Individual financial statements – B4

Since 2001, Maroc Telecom has been part of the Vivendi group, a leading player in entertainment, with activities in music, television, cinema, mobile telecommunications, Internet and games. All of Vivendi’s businesses, like Maroc Telecom, hold preeminent positions on their markets: • Universal Music Group, a wholly-owned subsidiary of Vivendi, is the world leader in recorded music with more than one out of every four CDs sold worldwide, and a leading position on the digital music market;

• Canal+ Group, a wholly-owned subsidiary of Vivendi, leads the French market for premium and theme TV channels and the distribution of pay TV, with 10.6 million subscriptions. It is also a major player, in France and Europe, in the production and distribution of films; • SFR, a 56%-owned subsidiary of Vivendi, is France's second-largest telecoms operator, with 20 million mobile clients, 4.4 million broadband Internet clients, the entity formed from the merger of Neuf Cegete and SFR is the leading alternative mobile and fixed-line operator in Europe; • Activision Blizzard, a 57%-owned subsidiary of Vivendi, is the world’s largest pure-play online and console game publisher, with leading positions in most segments of the fast-growing video game industry; • GVT, a Vivendi subsidiary, is Brazil's leading alternative telecoms operator. GVT offers innovative solutions and products in the telephone and internet segments. It is Brazil's best-performing broadband provider and leads the market in terms of meeting customer expectations regarding quality and range of services. In addition, Vivendi owns 20% of NBC Universal which is a major global player in media and communications with activities encompassing film and TV production, TV broadcasting and the operation of theme parks. Finally, Vivendi Mobile Entertainment (VME) was established in 2007 and is a wholly-owned subsidiary of Vivendi. VME aims to become a leading provider of entertainment services for mobile telephones. "zaOza”, its latest consumer subscription service was launched in 2008.

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Maroc Telecom holds majority equity interests in three full-service operators in Africa (see section 4.5 “Description of subsidiaries’ operations”):

• Mauritel SA, the incumbent telecommunications operator in Mauritania, which was acquired on April 12, 2001; • Onatel, Burkina Faso’s incumbent telecommunications operator, which was acquired on December 29, 2006; • Gabon Télécom, the incumbent telecommunications operator of Gabon, which was acquired on February 9, 2007 ; • Sotelma, the incumbent telecommunications operator of Mali, which was acquired on July 31, 2009. In addition, Maroc Telecom has established an MVNO (Mobile Virtual Network Operator), named Mobisud. It was launched in France using SFR’s network as of December 1, 2006 and in Belgium, using the Proximus network, as of May 2, 2007. In June 2009, Maroc Telecom sold its stake in Mobisud France to SFR. Casanet is a wholly-owned subsidiary of Maroc Telecom, and is one of the leading Internet service providers in Mo- rocco. It provides Internet access for business customers as well as portal administration services. It hosts the Menara portal. Organized into general management departments and regional departments based on its businesses and services, Maroc Telecom combines Mobile, Fixed-line and Internet operations in its Services division, alongside support functions such as Networks & Systems, Regulatory Affairs, Communication, International Business Development and Administration & Finance functions. Maroc Telecom is decentralized with eight Regional Divisions each equipped with their own operational structures and support allowing them to react quickly and to be more autonomous in the field.

As at December 31, 2009, the functional organization chart of the Group was as follows:

Abdeslam AHIZOUNE Chairman of the Management Board

Janie LETROT Larbi GUEDIRA Managing Director Managing Director Regulation,Communication and Services International Development

Rachid MECHAHOURI Arnaud CASTILLE Managing Director Managing Director Networks and systems Administration & Finance

Regional Divisions (8)

68 Maroc Telecom - 2009 Registration Document INFORMATION CONCERNING COMPANY BUSINESS ACTIVITIES 4.2. Overview of the group’s operations

4.2.2 ISO certification As part of its continuous improvement efforts, Maroc Telecom obtained ISO 9001:2000 certification for specific operations in 2003. This was extended in 2004 to encompass all of its products and services within the framework of a total quality system. This certification was renewed following the renewal audit of December 2007. Certification covers the design and development of offers, sales and marketing, commissioning and decommissioning, activation / deactivation, billing and collection, after-sales service, information and assistance for all consumer and business customers in all Maroc Telecom sites. Within the framework of its information systems security policy, Maroc Telecom obtained in January 2008 the ISO 27001 version 2005 certification for all its activities. This certification covers the design, planning, development, operation, maintenance, and after-sales fixedline, mobile and data services, added-value services and corresponding technological infrastructure.

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4.3 MAROC TELECOM’S BUSINESS STRATEGY

Against the background of a growing telecommunications market, boosted by favorable economic and demographic conditions, Maroc Telecom’s goal is to retain leadership in all its market segments (mobile, fixed-line and internet), while developing usage, innovating, maintaining profitability levels and retaining a pro-active approach to acquisitions. At the end of 2009, despite efforts made by competitors, Maroc Telecom succeeded in maintaining its leadership, in each segment of the market, relying in particular on:

• a segmented and competitive offer, tailored to consumers’ expectations; • an extensive distribution network, the densest in the country, with more than 60,000 direct and indirect retail outlets licensed by Maroc Telecom; • modern network infrastructure, offering the country’s best mobile coverage; • strong brands enjoying extensive customer recognition.

Maroc Telecom’s strategy thus consists of the following:

Stimulating growth in the mobile segment through innovation and initiatives to boost usage of mobile services Maroc Telecom stimulates the use of prepaid services, with promotional offers for voice services (offers on top-up cards and other regular promotions) and data services (reducing SMS and MMS tariffs and promotions), while striving to expand its customer base and increase customer loyalty. Maroc Telecom has introduced new value-added services, based on SMS, MMS and GPRS, to enhance its range and to increase ARPU (average revenue per user). Maroc Telecom has consistently acted as a forerunner in deploying new technologies, most recently with its launch of 3G services in 2007. The Company’s priorities are to achieve steady growth in the customer base, driven by reductions in access rates, in order to ensure tight control over customer acquisition costs and to enhance customer loyalty. The mobile penetration rate increased from 65.7% at end-2007, to 74% at end-2008, then to 81% at end-2009 (Source: ANRT), thereby illustrating the high growth potential of the market. In the medium term, the penetration rate is expected to increase to over 100% (Maroc Telecom estimate).

Reinforcing our competitive edge in fixed-line services to deal with the advent of competition The fixed-line telecommunications market has been fully liberalized since 2005 when two new licenses were awarded to Méditel and Wana. Both new entrants started marketing their new Fixed-line and Internet services in 2007. Maroc Telecom’s strategy focuses on making its offers more competitive, and in particular on providing high quality service, on its customer loyalty program and launching new innovative services. This strategy essentially aims to: • Steadily increase unlimited fixed-to-fixed rate plans (“Phony” range and “Infinifix”) granting unlimited calls and call time to all fixed lines; • Enrich telecommunications products with entertainment content, with the launch in 2006 of broadband TV and double and triple-play Internet offers, VOIP and TV in 2009; • Enhance the quality of after-sales services; • Strengthen customer loyalty programs, enabling customers to earn various gifts and benefits; • Rapidly increase ADSL penetration, which at the end of 2009 had already reached 44% of fixed lines (excluding public telephony).

70 Maroc Telecom - 2009 Registration Document INFORMATION CONCERNING COMPANY BUSINESS ACTIVITIES 4.3. Maroc Telecom’s business strategy

Remaining the principal engine of Internet development in Morocco The spectacular success of unlimited ADSL Internet services, launched in early 2004, along with the rate reductions and promotional offers launched in 2009 are indicative of the high growth potential in the market. Maroc Telecom concentrates its focus on broadband, with a marketing strategy which revolves around gradual price cuts, increasing access speeds and introducing alternative offerings such as CDMA Internet for rural areas and Mobile 3G Internet services. Maroc Telecom also develops initiatives aimed at increasing Internet penetration, in particular in schools, while developing specific plans for business users and assisting in the development of content and use of the Internet.

Capitalizing on its brands and making Maroc Telecom a reference in terms of customer service in Morocco Maroc Telecom enjoys strong public recognition and an excellent image with its brands, such as Jawal (prepaid mobile telephony), El Manzil (fixed-line telephony for residential and business users), Phony (unlimited fixed-to-fixed rate plans) and Menara (Internet access). The Company also proposes to make Maroc Telecom the reference in customer service in Morocco by continuing to improve presentation, and customer interface at the point of sale, customer services (technical start-up, after-sales service, commercial administration, call centers).

Leveraging a state-of-the art network infrastructure Maroc Telecom has the most extensive and technologically advanced network infrastructure in Morocco. With its modern high-performance network, based on a interconnected and secure optical fiber backbone, Maroc Telecom offers a wide range of high-quality telecommunications services (Fixed-line, mobile, data and broadband Internet). In order to maintain a reliable leading-edge network, providing innovative new services to its customers, Maroc Telecom intends to proceed with its policy of investment in its network, aiming to develop capacity and coverage, introduce new mobile and fixed-line technologies, develop, build and strengthen domestic and international interconnections. Maintaining rigorous financial management and a sound financial structure In recent years, Maroc Telecom has consistently demonstrated its ability to maintain robust levels of profitability by combining aggressive growth efforts with tight cost control. Its significant cash-flow generating ability enables it to maintain a sound financial structure while paying out dividends to its shareholders on a regular basis.

Making international development a key engine of growth In recent years, Maroc Telecom has opted to invest part of its financial resources to ensure its development outside of its home market. This strategy led to the acquisitions of majority equity interests in telecommunications operators based in Mauritania, Burkina Faso, Gabon and Mali. In addition, Maroc Telecom intends to seize value-creating acquisition opportunities that meet its strict investment criteria.

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4.4 BUSINESS ACTIVITIES IN MOROCCO

Maroc Telecom is the leader in the Moroccan market, offering Mobile, Fixed-line and Internet services. The Mobile segment is dedicated to providing mobile telecommunications services. It had 15.3 million customers as at end-2009 and operates a GSM network covering almost the entire Moroccan population through more than 5,870 2G base stations and 2,200 3G base stations. The Fixed-line and Internet segment provides fixed-line telephone services including public telephony, Internet services and data transmission services. It had 1.2 million Fixed-line and more then 0.6 million Internet customers (including 3G Internet). Maroc Telecom's products and services are marketed through a distribution network consisting of its own branches, covering the entire territory of Morocco, and through independent distribution channels (see section 4.4.4 "Distribution, Advertising"). The following table describes the development of Maroc Telecom’s customer base over the past three fiscal years:

At December 31, in thousands 2007 2008 2009 Mobile customers* 13,327 14,456 15,272 Fixed-line customers** 1,336 1,299 1,234 Internet customers*** 476 510 645

* Mobile customer figures include prepaid, postpaid and data customers. **customer base was calculated using the number of access points. *** Internet customers concerns IP accounts opened with Maroc Telecom (wireline and mobile customers)

4.4.1 Mobile services

Overview

Maroc Telecom is the leader in the Moroccan market for mobile communications. The Company’s market share reached 60.3% as at December 31, 2009 (Source: ANRT). This market has expanded considerably since 2000, with the number of mobile customers (all operators) rising from 2.9 million in 2000 to 25.3 million as at December 30, 2009 (Source: ANRT). Over the same period, the market penetration rate rose from 10% to 81% (Source: ANRT). The mobile market (all operators) is mainly a prepaid market. In 2009, the prepaid customer base in Morocco increased 11% from 21.9 million customers to 24.3 million customers at the end of 2009. In the postpaid segment, the total number of customers increased 9.7% in 2009, to 1 million customers. Maroc Telecom offers prepaid services (Jawal and Mobisud cards) and a range of postpaid offers. Maroc Telecom provides extensive coverage both in terms of infrastructure and commercial presence. Its network covers almost the entire population of Morocco (Maroc Telecom estimate). Internationally, with over 493 roaming agreements, Maroc Telecom’s customers have access to services in over 214 countries. This extensive commercial presence has been achieved through a direct and indirect distribution network of approximately 60,000 retail outlets licensed by Maroc Telecom (see section 4.4.4 “Distribution and advertising”). The following table describes the development of Maroc Telecom’s customer base over the past three fiscal years:

In millions of Moroccan dirhams – in IFRS 2007 2008 2009 As at December 31

Gross revenues 17,096 18,529 18,866

Revenues for Mobile communications services 16,138 17,354 17,877 Terminal equipment revenues 958 1,175 989

Earnings from operations before amortization 10,607 11,891 11,555

Earnings from operations 9,138 10,255 9,708

72 Maroc Telecom - 2009 Registration Document INFORMATION CONCERNING COMPANY BUSINESS ACTIVITIES 4.4. Business activities in Morocco

Change in customer base

The Moroccan mobile market has seen strong growth mainly due to the launch of prepaid plans in 1999. The pre- payment system allows customers to keep a check on their expenditure and helps them to stay within their rate plan limits. This formula is particularly well tailored to the Moroccan market, which has a young population, with half of the population aged under 25. The following table sets out the main data relating to prepaid and postpaid services offered for the past three years. Maroc Telecom defines the churn rate as the ratio of cards disconnected or contracts terminated to the average customer base during a given period. For prepaid customers, the validity period of a prepaid card is fixed at an initial period of six months, followed by a second six-month period during which the customer can continue to receive calls irrespective of whether or not the card is topped up. The ANRT defines a mobile subscriber as a person with a postpaid mobile subscription that is still activated, or a person with a prepaid card who has made or received at least one call (charged or free) within the past three months.

2007 2008 2009

Number of Mobile customers(1) (in thousands) 13,327 14,456 15,272 Prepaid 12,822 13,853 14,590 Postpaid(3) 505 603 682 Churn rate (%)(2) Prepaid 25.7% 35.5% 34.4% Postpaid(3) 17.9% 17.2% 15.5% Average churn rate 25.4% 34.9% 33.5% ARPU (MAD/ customer /month)(4) Prepaid 85 77 75 Postpaid(3) 701 653 605 Average ARPU 108 99 98 Incoming usage (minutes/customer/month) Prepaid 22 19 18 Postpaid(3) 73 63 57 Average incoming usage 24 21 19 Outgoing usage (minutes/customer/month) Prepaid 29 26 29 Postpaid(3) 620 632 568 Average outgoing usage 52 50 52

(1) Postpaid subscribers and prepaid cards including Data (2) see Glossary (3) Including 'pay-as-you-go rate plans’ (4) excluding Data in 2009 Prepaid services have seen sustained growth since their launch, due in particular to price cuts for SIM card only deals, subsidized packages including a GSM handset at fairly low prices, and Maroc Telecom’s many promotions for top-up phone cards and calls, which stimulated growth and developed the loyalty of the expanded customer base. Post-payment covers mainly a high-consumption customer base generating substantially higher ARPU than prepaid customers. Despite the competitive nature of the market, Maroc Telecom has succeeded in maintaining its churn rate at a satis- factory level owing to its efforts to build customer loyalty while maintaining an acquisition policy in order to extend its base (see “Offers” section below). Thus, the loyalty program offered to prepaid customers since mid-2002 has been improved through the launch of a point-based Fidelio loyalty scheme. The customer can choose from a variety of loyalty bonuses: additional time, SMS, or GSM terminal. In 2009, Maroc Telecom launched a loyalty program for its prepay customers. The churn rate rose to 33.5% in 2009, representing a 1.4 point decrease on 2008. Once again, as a consequence of the significant growth in the customer base in the prior year, ARPU declined by just 1.4% in 2009, despite an intensely competitive operating environment and the introduction of more restrictive regulations for price promotions.

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Princing

Since 2002, Maroc Telecom has charged calls by the second after the indivisible first minute for traditional subscribers and by 20-second increments for postpaid rate plans and prepaid calls. This pricing strategy focuses on:

• encouraging the use of rate plans for postpaid subscribers, by offering them a wider range of rate plans and sliding-scale prices over the duration of rate plans, as well as offering unlimited deals; • offering significant reductions based on the amount of top-ups acquired by prepaid customers; • regularly introducing promotional offers (offering double or triple minutes when topping up, one hour of free calls, bonus call time on rate plans etc.). Maroc Telecom regularly offers price cuts for international mobile calls and harmonizes tariffs. This new international tariff policy is in line with the general trend of new offers, where prices are attractive and competitive. As a result of these efforts, the average rate charged to clients is MAD1.3 (incl. tax) per minute.

The table below sets out the change in average prices per minute, prepaid and postpaid, in Moroccan dirhams (incl. tax) as at December 31 of each year.

In Moroccan dirham – at year-end 2007 2008 2009

Access costs Prepaid(1)(4) (from) 10 30 20

Postpaid 120 120 120

Subscription Postpaid (3) 150 150 150

Mobile price per minute

To Maroc Telecom mobile and fixed lines and other fixed lines Prepaid 3.60 3.60 3.60

Postpaid (3) 1.80 1.80 1.80

To other mobile lines (excl. restricted mobility)

Prepaid 4.80 4.80 4.80

Postpaid (3) 2.40 2.40 2.40

To restricted mobility lines Prepaid 4.20 4.20 4.20 Postpaid (3) 2.10 2.10 2.10

Average rate 1.50 1.50 1.30

(1) Including initial call account balance (2) Indivisible first minute; increments of one second for standard subscribers and 20 seconds for rate plan and prepaid subscribers, Standard subscription for postpaid and Jawal Classique for prepaid at peak times (3) Standard subscription formula (4) Tariffs vary depending on account balances (incl. tax)

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Mobile services

Maroc Telecom offers prepaid and postpaid services for residential and business customers. These services comprise a wide range of offers with different levels of user commitment and different terms for making calls outside the contract rate plan.

The following table shows the range of Maroc Telecom’s Mobile offers: Service Customers Commitment Calls outside Product Prepaid Consumer and business No No Jawal Classique Jawal Jeunes Mobisud Postpaid Consumer, No No Liberté rate plan Business user and Liberté rate plan SMS/MMS Business Yes No Controlled rate plans Yes Yes Standard subscription Yes Yes Individual rate plan Business Yes Yes Rate plan Business Class

Yes No Rate plan Business Control Yes No/Yes Intenso/Extenso/Extenso+/Optimis

Prepaid

At year-end 2009, the prepaid customer base consisted of 14.6 million customers, or almost 95% of the mobile customer base. Maroc Telecom strives to maintain ARPU by stimulating usage (selling a wide range of top-ups) and by developing the use of value added data services (SMS and MMS). The group has launched several promotional offers on top-ups and calls to increase customer loyalty and to stimulate usage.

Offers Maroc Telecom provides prepaid services under the “Jawal” and ‘’Mobisud’’ brands. Prepaid services are aimed primarily at residential users, who demand a broad range of access and pricing offers. Maroc Telecom’s prepaid plans are marketed as packages (handset and SIM card) and SIM card only deals, according to the following formulas:

• Jawal Classique, which offers an undifferentiated day/night tariff; • Jawal Jeunes, with special rates in the evenings, on weekends and on public holidays; • The Mobisud deal, which now includes a national tariff identical to that of Jawal Classique and international call prices in line with fixed-line prices. These three formulas are valid initially for six months, corresponding to the duration of the card’s account balance, and then a further six-month period during which the customer may recharge the phone card and receive calls. In 2009, Maroc Telecom introduced a new access fee and sales promotions on these deals are designed to stimulate sales. Promotional offers for new clients include free communications to all operators. In order to develop the use of prepaid services, Maroc Telecom markets a range of top-up phone cards from MAD5 to MAD1,200, with automatic bonuses linked to the purchase of MAD50 top-up increments. Promotions are implemented on voice and data services and on the range of top-up phone cards and are part of a policy to build customer loyalty, increase usage and develop the customer base. It has launched innovative deals such as Jawali, Morocco's first prepaid client loyalty program, aimed at all Jawal and Mobisud clients, along with the "permanent bonus", which enables all customers topping up MAD50 to receive a permanent bonus of MAD100, and customers topping up MAD100 or more to receive a bonus of MAD200, valid for calls to all destinations. The available recharging resources are also diversified, with a dual goal of reducing distribution costs and facilitating recharging for the customer. Thus, in addition to PVC scratch card recharging, Maroc Telecom offers electronic recharging and recharging through cash dispensers. Other similar solutions are also being considered.

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Price plans for prepaid services Maroc Telecom applies a differentiated pricing plan for prepaid customers according to the type of Jawal (Classique or Jeune) and Mobisud card, the call destination, as well as according to the time of the day, in the case of the Jawal Jeune and Mobisud cards. Thus standard-rate pricing (outside of promotional periods) is charged as follows:

• From MAD3.60 to MAD4.80 (incl. tax) per minute for Jawal Classique and Mobisud customers; • From MAD1.07 to MAD6.00 (incl. tax) per minute for Jawal Jeune customers. SMSs are charged at MAD0.96 (incl. tax) per message and their price range is between MAD3.60 and MAD6 (incl. tax) for sending SMS to foreign countries. Jawal prices for calls to various foreign countries were cut significantly in 2009. Pricing of international calls varies according to the call destination, and is the same for Jawal Classique and Jeune. Destination countries are divided into three zones and their rates vary from MAD7.80 to MAD25 (incl. tax) per minute. Mobisud international call prices have also been reduced, making Mobisud the benchmark call plan for all mobile customers wanting to call abroad. With these competitive prices, which are in line with fixed-line prices, Mobisud customers can now call abroad for between MAD1 and MAD7 (incl. tax), with countries divided into 3 zones and with prices varying in the evening, at weekends and on holidays. Throughout 2009, to boost usage, Maroc Telecom offered all of its prepaid customers a series of promotions, such as "Triple Recharge" (triple top-up), the Jawal international rate plan offering 30 minutes of international calls in return for a subscription, and the renewal of all promotions that proved popular in 2007 and 2008, such as "heure Jawal" (1 hour of free calls), "Recharge Mourbiha" and unlimited weekend calls.

Migration of customers from prepaid to postpaid In order to consolidate customer loyalty and raise ARPU, Maroc Telecom is implementing a strategy intended to persuade high-usage prepaid customers to migrate to postpaid offers, a two-fold strategy. First, Jawal customers can migrate their prepaid accounts free of charge to a postpaid rate plan or subscription without changing their telephone number. Similarly, Maroc Telecom offers all-inclusive postpaid rate plans, which are a basic product attractive to prepaid customers wishing to migrate to postpaid while retaining control over their communication costs. In keeping with this strategy, Maroc Telecom launched promotional Liberté 12 month rate plans which allow customers to migrate to postpaid with a 12-month contractual commitment.

Postpaid

As at December 31, 2009, the postpaid customer base amounted to 682,000 subscribers, up 13.1% versus 2008. The postpaid customers are mainly high usage customers. Maroc Telecom is seeking to increase ARPU by stimulating subscribers’ usage of its services and of new and existing voice and data services (SMS, MMS, GPRS, 3G and BlackBerry). In 2009, postpaid ARPU (excl. data) declined as a result of the increase in unlimited call plans and the introduction of new rate plans for business customers offering an increased proportion of free calls. Postpaid offers are marketed mainly via Maroc Telecom retail branches, 28 of which are dedicated to mobile services. In addition, 18 branches are specifically dedicated to businesses and four branches to key accounts. Postpaid services are also distributed through the GSM Al-Maghrib and Lineatec networks (see section 4.4.4 “Distribution and advertising”). Postpaid offers are available to both residential, professional and business clients. The business market comprises SMEs, SMIs, local government, embassies and major private and public business customers.

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Consumer market Maroc Telecom offers three plans to consumers:

• Standard subscription, which is a monthly subscription offering usage billing according to peak and off-peak times (see «Price plans for postpaid services» section below); • Individual rate plans, which offer several options based on call time and a flat rate for calls regardless of domestic destination and time of call (peak/ off peak). This rate plan is designed to boost usage by customers (see « Price plans for postpaid services»); • Capped rate plans, which allow consumers to control their communication expenses by blocking outgoing calls once they exceed their monthly allotment. If they wish to make additional calls, customers can recharge the account with Jawal top-up phone cards. This rate plan was introduced in order to build customer loyalty and encourage migration towards postpaid plans. The rate plan offers, with ten options ranging from 90 mn to 15 hours, provide for the charging of calls by 20- second increments after the first minute, and a single rate for any domestic call. These offers include a doubling of the call time for calls to Maroc Telecom numbers, automatic carry-over of unused time and free SMS, MMS and GPRS service. In the business market, Maroc Telecom has introduced a range of six “Business Class” rate plans, offering unlimited domestic calls and calls to a limited number of international destinations as well as free SMS, MMS and GPRS. Alon side this offering, it also markets a capped rate plan for business customers called “Business Control”. In order to boost recruitment of new postpaid subscribers and encourage prepaid clients to migrate to postpaid, Maroc Telecom launched “pay-as-you-go” offers which allow customers to return to their initial offer at no extra cost. Two such offers have been developed :

• “Liberté” rate plan: Maroc Telecom has developed a range of three capped rate, pay-as-you-go plans for 45 minutes, 90 minutes. and 150 minutes. for monthly subscriptions starting at MAD118.80 (incl. tax). This comprises a standard rate plan with free off-peak calls for an equivalent time period as well as a top-up account. Since 2007, a reduction was offered for customers taking out a 12-month minimum subscription. • SMS/MMS Liberté” rate plan: Maroc Telecom markets two data rate plans aimed at the youth market with 100 and 300 SMS/MMS, bonus voice airtime and a top-up, pay-as-you-go account starting at MAD89/month (incl. tax). In order to boost usage, Maroc Telecom also offers unlimited calls to a set list of two, five or seven destination numbers for a minimum monthly charge of MAD143 (incl. tax). To encourage foreign calls, Maroc Telecom launched two international rate plans involving reduced call prices and unlimited calls to fixed-line numbers in certain international destinations. In 2009, individual, capped, business control and Liberté rate plans were expanded to include calls to fixed-line numbers in Europe and North America at the same price as a national call. Lastly, Maroc Telecom began marketing two special products as from the end of 2004: an SMS rate plan for the speech and hearing impaired and a pack including special software for the visually impaired.

Business market Given the potential and strategic importance of the enterprise segment, Maroc Telecom has established a specific policy for this segment, centered on a range of offers and services and a dedicated distribution network. In addition, for major business customers, Maroc Telecom is implementing customized service solutions to meet its customers’ specific requirements, in particular in terms of control over staff calls and management of costs. In addition to the consumer rate plans detailed above, also open to businesses, Maroc Telecom has a wide range of mobile voice packages for businesses: • Intenso: a dedicated formula where GSM calls are made mainly inside the enterprise, Intenso offers ten hours of free calls per month and per line for all communications within the enterprise; • Extenso: a suitable formula when GSM calls are made mainly to outside contacts, Extenso offers competitively priced subscription fees and external call rates; and • Extenso+: it combines the two previous offers and provides business customers with additional flexibility.

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• Optimis : to round out its offerings for Business users, Maroc Telecom launched the Optimis offering in 2008. This provides all-inclusive and unlimited calls within the enterprise while enabling clients to cap usage at any time or to top up their account while continuing to benefit from the same price-per-minute designated for their rate plan. • Forfaits Optimis : this range of business-only rate plans was launched in July 2009. It offers several advantages and customizable options, including double minutes at peak times, a single price for national calls, the rolling over of unused minutes, unlimited intra-fleet calls (i.e. to the client company's fixed and mobile numbers), unlimited SMSs to the client company's mobile numbers and discounts on BlackBerry and 3G internet subscriptions. Maroc Telecom's business mobile range was enhanced in July 2009 with the launch of "Messagerie Mobile", which is a 3G service providing unlimited sending and reception of business and personal emails. In addition, Maroc Telecom has created various other services for business mobile voice services. These services are designed to enable companies to manage their mobile fleet and control usage costs. They include: • "Mouzdaouij", a subscription enabling users to have two numbers on the same SIM card, allowing them to seg- regate their personal and professional calls; • unlimited phone calls within the enterprise for Optimis customers; • capped billing; • reduced call charges based on usage volume; • exemption from subscription fees subject to conditions; • reductions for certain international calls; • EasyFact (CD-based bill service) and E-Management.

Price plans for postpaid services Activation expenses for SIM cards are identical regardless of the subscription type and are set at MAD120 (incl. tax). The price structure for postpaid services varies according to whether customers opt for a standard subscription, rate plan or specific option for business users. For standard subscriptions, the subscription charge is MAD150 (incl. tax) and the airtime price is MAD1.80 per minute for calls to Maroc Telecom fixed-line and mobile numbers and other fixed-line operators, or MAD2.40 (incl. tax) to other mobile networks at peak time and MAD2.10 (incl.tax) to fixed-line restricted mobility networks . At off-peak times a single tariff of MAD1.20 (incl. tax) applies regardless of the domestic destination. In 2005, prices for ten individual or capped rate plans were reduced. Tariffs now range between MAD180 and MAD870 (incl. tax) for individual rate plans and between MAD202.80 and MAD942 for capped rate plans. These rate plans include a predefined airtime of between 90 mn and 15 hours, free off-peak calls for the same amount of time, and free SMS, MMS and GPRS. For pay-as-you-go rate plans, charges range from MAD118.80 to MAD274.80 (incl. tax) for the Liberté rate plans, and from MAD89 to MAD199 (incl. tax) for the Liberté SMS/MMS rate plans. For business customers, Business Class rate plans range from MAD522 (incl. tax) for a 5-hour rate plan to MAD1,599 (incl. tax) for the 30-hour capped rate plan. For businesses, subscription fees and pricing structures vary according to the number of phone lines within the enterprise and whether clients opt for Intenso, Extenso or Extenso+ rate plans. Maroc Telecom overhauled its pricing structure for enterprises in 2005. In 2008, it introduced a new option for Optimis rate plan customers offering billing per second after the first minute of communication. For the visually impaired, a handset and special software are offered at a competitive price, while an SMS rate plan for MAD150/month (incl. tax) is available for the speech-and hearing-impaired. SMS and MMS are charged at MAD0.96 per message (incl. tax) and their price ranges between MAD3.60 and MAD6 (incl. tax) for SMS to foreign countries. GPRS is charged between MAD48 and MAD600 per month (incl. tax) depending on the chosen volume of data. Pay-as-you-use is also available since September 2005 and is charged at MAD0.29 incl. tax/Kb. Since November 1, 2007, and in order to stimulate traffic, the international tariffs were lowered and the number of zones was reduced. Pricing of international calls varies according to the destination country, whatever the subscription formula. The destination countries are classified in two zones and their rates vary from MAD5 to MAD10 (incl. tax) per minute. In line with this policy, Maroc Telecom in 2009 included international calls to certain destinations in national rate plans at the price of a national call.

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Loyalty rewards for customers

Building loyalty among customers has been a key area of focus for Maroc Telecom since 2000 and helped to prepare Maroc Telecom for the advent of competition. Loyalty rewards were introduced as early as January 2000, by providing customers with preferential prices for handsets A “ Gold club” for high-volume users was launched in 2001. Gold customers are awarded a free- of-charge loyalty card, a top-of-the-range mobile phone, a dedicated call center (a toll-free 999 number) and preferential treatment at retail agencies. As from July 2003, the Gold club was subsumed into the Fidelio program and customers are selected for membership according to the number of points they have accumulated. Additional customer benefits have also been introduced: VIP after-sales service and bonus points. Fidelio is the first points-based loyalty scheme introduced in Morocco. It is reserved for postpaid customers and was launched on June 1, 2002. This scheme allows points to be accumulated on the basis of bill totals and provides advantages in the form of free or cut-price handsets, and free calls and SMS messages. Since April 2003, Maroc Telecom has set up the Fidelio offer. Maroc Telecom enhanced its loyalty policy further by unifying its fixed and mobile points systems in July 2009 for consumer customers. Customers can now transfer loyalty points from fixed to mobile and vice versa. By unifying its loyalty point catalogues, Maroc Telecom is promoting convergence between customers' fixed, mobile and internet needs, in order to offer them a wider range of benefits. In 2009, Jawal and Mobisud prepaid mobile customers became part of a loyalty program on the same terms as postpaid mobile customers. This is Morocco's first loyalty program for prepaid customers, and is based on the value of customer top-ups. Customers are awarded loyalty points that can be converted into top-ups (1 point = MAD10 incl. tax). This initiative further strengthens Maroc Telecom's position as an innovative operator, promoting customer rewards and recognizing the value of each customer segment. This leads to increased customer loyalty.

Bundled services for prepaid and postpaid customers

Bundled services for prepaid customers Many supplementary services are included in the Jawal plan, including caller ID, call waiting, dual call service, all free of charge. Voicemail and SMS and MMS related services are also included in all plans. Finally, since 2003, via the introduction of the “Camel” technology (see “Glossary”), prepaid customers may use international roaming for their voice services. Other bundled services offered at no additional cost include the “My Favorite Number” offer launched in 2005, which gives the client a reduction for calls made to a designated Maroc Telecom number. This offering was extended in 2007 to include calls to Mobisud France and Mobisud Belgique customers. This offering entitles customers calling their designated Maroc Telecom number to a 50% tariff reduction after the first minute of communication or allows them to call Mobisud customers in France and Belgium at the domestic rate after the first minute.

Bundled services for postpaid customers Postpaid customers can benefit from all of the bundled services offered to prepaid customers. Additional services offered to postpaid customers include itemized billing, conference calling, and calling line identification restriction (CLIR) and call transfer all offered free of charge. Postpaid clients may obtain volume-based reductions in call tariffs. In addition, the Mouzdaouij service enables customers to carry two numbers in a single SIM card. Services available at additional cost are also marketed to satisfy the needs of customers who make calls outside their rate plan (e.g. "Offre Complice" and SMS/MMS rate plans). Maroc Telecom has also introduced unlimited calls by offering optional extras for individual rate plans, which are charged at an additional cost. The “Top-up for me or my friend” service enables customers to top up their own account if they have a capped rate plan, Liberté rate plan or Liberté rate plan SMS/MMS or to top up another person’s account “Top-up for my friend” if the friend is a customer with a capped rate plan, Liberté rate plan, Liberté rate plan SMS/MMS or Jawal account. In 2007, Maroc Telecom marketed "Favorite Mobisud Number" a free option which allows postpaid customers to call Mobisud France and Belgique customers at the domestic rate as from the second minute. Furthermore, international rate plans were introduced for the consumer market and Businesses Class customers with a competitive international voice tariff.

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Finally, Maroc Telecom’s postpaid subscribers can benefit from international roaming for voice and SMS services, as well as for data services (MMS, GPRS and 3G+). Value-added services In 2009, value-added services contributed 7% (excluding Voice Mail System (VMS)) to total revenue. The contribution of the VMS to total revenue was 4.5% in 2009. Maroc Telecom places particular emphasis on developing value-added services and on launching the latest breakthrough technologies on the Moroccan market on an exclusive basis (3G in 2007, RBT in 2007, instant messaging in 2007, mobile TV in 2009, GPS location services in 2009).

• Mobile Internet In June 2007, Maroc Telecom launched a mobile Internet service giving mobile customers using HSDPA 3G+ technology and offering unlimited wireless broadband internet access. The service was initially reserved for postpaid customers and, as from November 2008, was extended to prepaid customers. This service enables customers to access the Internet via a 3G compatible mobile, a PDA or smartphone or a laptop fitted with a PCMCIA card or USB modem. In areas not covered by the +3G network, Maroc Telecom’s GPRS network provides seamless access to the Internet. The postpaid service is available in two options (voice and data or data-only) and at three bandwidths (512 Kb/s, 1.8 Mb/s and 3.6 Mb/s). The entry-level plan is priced at a monthly fee of MAD198 (incl. tax). The prepaid plan is available on a pay-as-you-go basis with no monthly bill. Customers can use Jawal top up cards to add money to their account and the service is priced at a rate of MAD10 (incl. tax) per day/connection. In order to develop this new use for a maximum of users, Maroc Telecom proceeded to many actions, whether it is for the mobile Internet prepaid or postpaid: price drops of the modems, rises of the suggested speed without impact on the price, promotions recurring such as 50% of reductions on postpaid bills, promotions 2 months offered and 3 months offered “special students” for the new prepaid customers… Thanks to all its actions, the 3G+ customers totaled 174.000 customers, versus 30.000 in 2008.

• VMS VMS was introduced in 1998 for postpaid customers and extended to prepaid customers in 2003. It is included automatically in all prepaid and postpaid offers . VMS is used by over 90% of the mobile customer base. The service is regularly improved by the addition of new functions: automatic call-back, straight-to-voicemail and voicemail editing for those leaving messages. In 2009, Maroc Telecom introduced a free "missed call notification" service, which allows mobile customers without voicemail to be notified of missed calls via SMS. In 2009, more than 555 million voicemails were left, up 16% relative to 2008. This was due to a more user-friendly menu, improved service quality and a reduction in lost calls.

• SMS The Short Message Service (SMS) has been regularly enhanced with the launch of SMS Info in 2001 (SMS messages containing information of local interest such as TV programs, pharmacies on duty, train schedules, etc.) and SMS Chat in 2002 (a community service aimed mainly at young customers), and the first pilot trials of kiosk-type services in 2003 (SMS messages offering content or remote voting services suited to radio or TV programs), SMS International chat in 2005 (service enabling Maroc Telecom mobile customers to chat via SMS with French mobile customers), the DUO SMS/MMS service launched in April 2009 and unlimited SMS/MMS plans launched in December 2009. In 2009, almost 2.2 billion SMS messages were sent successfully, representing a 3% increase compared to 2008.

• MMS The Multimedia Messaging System (MMS) is available for postpaid and prepaid customers. It allows users to exchange of text, image and audio messages. At the end of 2009, the number of MMS subscribers rose to almost 3.379 million. They exchanged around 9 million MMS, an increase of 27% relative to 2008. Maroc Telecom's MMS service is enhanced on a regular basis. MMS "postcards" were introduced in 2004, the maximum size of an MMS sent via the Maroc Telecom network was increased from 50 to 100kb. In 2007, the e-MMS service (sending MMS to email addresses) and international sending of MMS were introduced. MMS INFO was launched in April 2009, enabling Maroc Telecom mobile customers to receive information comprising text and images (news, football results, share prices, train times etc.). MMS chat was introduced in May 2009, and the maximum size of an MMS was increased again to 300kb in July 2009.

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Since October 2006, MMS text messages have been charged at a rate of MAD0.96 (incl. tax) and photo MMS have been charged at MAD1.92 (incl. tax).

• IAM Messenger In November 2007, Maroc Telecom launched IAM messenger, an instant messaging service on mobiles IAM Messenger enables Maroc Telecom mobile customers to chat using the instant messaging service mode and to see if their correspondent is switched on and available. Users can chat in text and use images with all Maroc Telecom mobile customers and even with their Google Talk contacts. A 50% price reduction has been applied to the service, so that messages cost from MAD0.36 incl. tax.

• My address book Since November 2007, Maroc Telecom launched the “My Address Book” service. This service allows customers to save the list of contacts on their SIM/USIM card onto a central server via the menu on the mobile. Customers can download this list of contacts on their SIM card at any time. Furthermore, the list of contacts saved on the central server will constantly be made more reliable as it is updated automatically or manually each time the address book is changed. In addition, customers may also manage their address book via a user-friendly Web interface on the www.iam.ma portal. Customers can subscribe to the service for a yearly subscription of MAD50 (incl. tax).

• Mobilezone multimedia WAP portal In addition to the SMS information service launched in 2001, the 500 service launched in 2002 (service for downloading ringtones and logos), and the SMS kiosk services launched in 2003, Maroc Telecom has offered a service for downloading content under the proprietary "Mobile Zone" brand since May 2005. This service enables subscribers to download ringtones, screen savers, animated pictures, games and videos to compatible handsets. Customers are provided with local, regional and international value-added content. Exclusive content is available through partnerships with internationally recognized brands (e.g. Star Wars for films, Spain's La Liga for football) and exclusive deals with other international content providers. In March 2007, to improve its Mobile Zone offer, Maroc Telecom launched a multimedia WAP portal allowing all customers with a compatible mobile to access WAP portals with a wide variety of content: logos, ring tones, Java games, news and current affairs, sports, cinema, etc. In 2009, content related to two major sporting events, i.e. Champions League football and the athletics world championship in Berlin, was particularly popular.

• A-Ghany service At the end of September 2007, to reinforce its first-mover status on the market, Maroc Telecom launched the exclusive “A-Ghany” service which is based on RBT technology (Ring Back Tones). The service enables mobile customers to customize their ring tones with songs, messages recorded by actors, humorous messages, etc. A variety of ring tones to suit all tastes are available on www.mobilezone.ma. A-Ghany can be accessed by dialing or sending an SMS to 409. The service offers more than 1,500 ringtones from major labels such as Universal, Mazzika and Sony BMG, which are available at www.mobilezone.ma. Customers can also allocate ringtones to different numbers, selecting individual tones for different friends and family members. Ringtones can also be customized according to the time of day. In March 2009, the cost of downloading a ringtone using A-Ghany was cut from MAD12 to MAD6 incl. tax

• Mobile TV Maroc Telecom bolstered its market-leading range of 3G services by launching an exclusive mobile TV service in February 2009. This enables postpaid customers to watch TV channels live on their mobile phones. The service provides unlimited access to 18 channels for a monthly fee of MAD60 incl. tax. Available channels are: Al Aoula, 2M, Arryadia, Arrabia, Al Maghribia, Assadissa, Medi1Sat, Al Jihawiya, Al Jazeera, Al Jazeera International, CNN, TV5 Monde, Mazzika, Zoom TV, Infosport, I-TELE and France24 Ar/Fr.

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• Bouquet Info In December 2005, Maroc Telecom expanded its content by launching "Bouquet d'Info" service, featuring news from Al Jazeera and MAP, for postpaid customers. The service allows customers to select and receive news direct to their mobile phones via SMS. They can choose political, economic and sports news provided by MAP (Maghreb Arabe Presse) or Al Jazeera. In 2009, prepaid customers have also had access to Bouquet Info, enabling them to receive real-time SMS alerts. Since May 2009, the subscription to Bouquet Info has cost MAD9 incl. tax.

• Video telephony Maroc Telecom customers who are located in 3G network coverage zones and who own a 3G compatible mobile handset can now communicate via video telephony. Video phone calls are charged at the same rate as voice calls.

Handset sales

Prepaid customers

A wide variety of handset models are available under Jawal prepaid starter kits at highly competitive prices. Maroc Telecom strives to offer customers ample opportunities to upgrade their handsets and access the latest associated functionalities. In 2009, in line with its competitive pricing policy, Maroc Telecom offered Jawal mobiles at prices starting at MAD199 (incl. tax) and up. Phones are bundled with a MAD10 phone credit (incl. tax).

Postpaid customers

Action taken to develop postpaid services focus upon the areas of customer acquisition, loyalty rewards and enhancing the service offering. For postpaid customers, the acquisition policy is based on providing an attractive call plans, with a variety of associated products and services, and a comprehensive range of handsets. Cobranded marketing campaigns are regularly organized to highlight handset launches or upgrades — often at the same time as handsets are premiered on other international markets. The focus for these efforts is to enable customers to benefit from state-of-the-art design and technology. Maroc Telecom offers a wide range of packages with a minimum contract period (12 or 24 months). Since 2003, Maroc Telecom has also focused on improving customer loyalty, as described above.

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Customer services

In order to facilitate the roll-out of its commercial offerings, Maroc Telecom has developed a multi-pronged customer relationship management strategy which revolves around: information for customers, customer recruitment and follow- up with prospects, with the objective of building and retaining customers. This CRM approach is designed to cater to the needs of both residential and business customers. In line with its global quality strategy, Maroc Telecom obtained ISO 9001 certification in 2003 for its mobile services billing systems and its mobile call center.

Mobile call centers

To optimize its customer relationship management, Maroc Telecom has established dedicated call centers: A consumer call center for mobile customers and an enterprise call center for business customers. To maintain close customer relations and ensure customer satisfaction: yThe mobile call center is structured to respond, through six different call numbers, to the needs of each customer segment: prepaid, postpaid, Gold customers, inbound roamers, customer prospects and Fidelio members. yThe enterprise call center for business customers provides sales and technical support via a single call number. The call center established in March 2000 was specifically created to: provide customers with information on Maroc Telecom products and services; handle their requests for activation and set-up of added-value services; inform customers about the commercial offering and pricing plan changes; enable customers to check their account balances and Fidelio program benefits; and handle customer complaints. Information of local interest is also available in Arabic, French and English. In addition, Maroc Telecom conducts monthly customer satisfaction surveys in order to measure the quality of services provided by the retail branches. Service quality is monitored using dedicated statistical indicators. Finally, Maroc Telecom informs the public about new offers through a dedicated call number for existing and prospective customers.

Customer relationship management: Complaint resolution centers

Complaint resolution centers have been established to deal with complaints that have not been settled either online or at retail branches. Centers are segmented by product to ensure optimal handling for complaints. Staff working in agencies, call centers and complaint resolution centers use CRM tools to handle, escalate and follow up customer issues.

After-sales services

Maroc Telecom provides after-sales services through its direct distribution network in order to cater to the needs of users of the entire range of mobile handsets. The service is offered free-of-charge during the warranty period. In addition, the Gold after-sales service provides Gold club members with immediate replacement of their handsets via home delivery.

Self-service customer care

Business customers can manage their mobile fleets remotely using the E-gestion service, changing between plans and activating additional services directly online. Business customers can also track their spending on mobile telecommunications via the EasyFact service. This service allows customers to receive billing data for GSM subscriptions on CD-Rom discs for a more detailed view of expenditure with easier access.

Portals

Maroc Telecom has set up three self-service portals:

• www.iam.ma describes Maroc Telecom’s services and commercial offerings and enables businesses to access the “Self Care” service; • the Maroc Telecom WAP portal, in addition to thematic information enables users to access the yellow pages, and; • the Mobile Zone portal, which allows customers to download content.

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International roaming

Roaming is a service offered by telecommunications operators enabling mobile telephone users to call and be called in a foreign country. For this purpose, the operators in various countries enter into roaming agreements, allowing their customers’ telephones to be easily connectable to a foreign network if necessary. Maroc Telecom entered into its first roaming agreement with SFR in February 1995. The agreement was concluded on an arms-length basis. At December 31, 2009, Maroc Telecom had 493 roaming agreements with associated operators in 214 countries, including in 4 countries through agreements with the GMPCS systems operators, Thuraya and Glo- balstar. Morocco’s tourism industry generates a massive influx of visitors, providing a significant potential source of roaming revenues. In order to capture the largest possible share of this traffic, Maroc Telecom has developed a customer acquisition policy through associations with foreign operators, and has entered into preferential agreements with the largest of them. In 2009, in order to ensure constant growth in roaming revenues and reinforce its competitive edge, Maroc Telecom maintained its discount agreements with its main partners and entered with new agreements with other operators. In addition, Maroc Telecom has extended its international roaming services to include 3G roaming. GPRS and MMS services have been including in the roaming service offering since end-2003. As at 31 December, 2009, Maroc Telecom had agreements with 160 operators in 90 countries for GPRS/MMS roaming (87 of these agreements relate to outbound roaming). In addition, it has concluded agreements with 93 operators to provide prepaid roaming across 58 countries. Of this total, 44 agreements relate to outbound roaming services. Maroc Telecom also provides international SMS services (268 operators in 144 countries), the use of speed-dial numbers (333 for voicemail and 777 for customer services) via agreements in 58 countries with 98 operators, and international MMS service since November 1, 2007. At December 31, 2009, Maroc Telecom provided an international MMS service via MMVD (login access), covering 622 operators. Since early 2009, Maroc Telecom has offered inbound and outbound 3G roaming services through agreements with its principal partners. At December 31, 2009, Maroc Telecom had agreements with 27 operators in 22 countries for 3G roaming. This included agreements for outbound 3G roaming with 19 operators.

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4.4.2 Fixe-line and Internet segment

Overview

Maroc Telecom is the leading provider of fixed-line telephony, Internet and data transmission services in Morocco and the only provider of broadband IPTV. All of these markets were fully liberalized in 2005 and fixed-line telecommunications licenses were awarded to two new operators. The main fixed-line telecommunications services provided by Maroc Telecom are: • telephone services; • interconnection services with domestic and international operators; • data transmission services for business users, Internet service providers, and other telecoms operators; • Internet services, which include Internet service provision and Internet-related services, such as hosting; broadband television (IPTV); and • MT Box

The following table shows the breakdown of revenues from Fixed-line and Internet operations for the relevant fiscal years.

In millions of Moroccan dirhams – in IFRS 2007 2008 2009 As at December 31 Gross revenue * 9,451 9,683 9,312 Voice 6,225 6,091 5,718 Interconnection 655 562 389 Data transmission 1,552 1,958 2,166 Internet 1,019 1,072 1,039 Earnings from operations before amortization 4,106 4,511 4,603 Earnings from operations 2,934 3,302 3,371

Fixed-line telephone services

The penetration rate for fixed-line telephony in Morocco was 11.3% as at December 31, 2009, versus 9.7% at Decem- ber 31, 2008 and 7.9% at end-2007 (source ANRT). The increase is due in particular to the introduction of restricted mobility prepaid offerings by rival operators. Excluding these offers, the penetration rate was 4%. This relatively weak penetration rate must be considered in light of the high average number of persons per household which stands at 5.3 (Source: 2004 Census- Haut Commissariat au Plan). The number of fixed lines (excluding public telephony, business users) divided by the number of households gives a penetration rate of almost 15% of households. Furthermore, some 158,000 public telephony lines do not give an accurate indication of the actual number of users of Maroc Telecom public call booths and telestores (see "Public telephony" subsection below). Owing to the competition in the residential segment from prepaid mobile telephone services, the penetration rate for fixed-line services declined substantially between 1999 and 2002. In response, Maroc Telecom has launched an aggressive action plan to boost its fixed-line services and to address increasing competition from prepaid mobile offers, in particular, as from early 2007, due to the restricted mobility fixed-line service introduced by the third-largest operator. Action taken by Maroc Telecom has included:

• developing a responsive sales and marketing policy catering to customer expectations and requirements, in particular with the creation of the “El Manzil” brand for fixed-line tariff packages for residential customers; • introducing commercial offerings designed to boost fixed-line telephone usage, in particular “Phony” and ‘’Infinifix’’, which offers residential, professional and small enterprise customers unlimited fixed-to -fixed calls; • pursuing aggressive steps to extend Internet access to the Moroccan public. regular promotional offers, price reductions and increased uptake of ADSL have greatly increased Internet usage among the wider public; • offering new services which drive fixed-line consumers to switch to triple-play offers; Maroc Telecom has launched IPTV with the aim of making this a mass-market TV product in Morocco;

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• proceeding to develop the network of public call booths, initiated in 2001, and stepping up investment in this area; • placing particular emphasis on the business market via dedicated bundles and tariff offerings for business users. As at December 31, 2009, the overall fixed-line customer base totaled 1.234 million lines (excluding Maroc Telecom’s in-house base), a level 5% lower than in 2008.

The following table shows the change in the overall number of fixed telephone lines in each segment:

Numbers of lines*** 2007 2008 2009

Residential 825 775 707

Public telephony* 160 160 158

Professional and business users 351 364 369

Customer base** 1,336 1,299 1,234

* Aggregate of phone lines used by Maroc Telecom telestores and public booths ** The customer base includes all fixed-line subscriber contracts irrespective of the technology used (PSTN or ISDN). It does not include Maroc Telecom's in- house base

*** Since January 1, 2008, the fixed-line customer base has been reported on an equivalence basis taking into account the number of lines for each access

Consumer market

The consumer market includes residential subscribers, small businesses consisting of craftsmen, tradespeople and self-employed professions, and public telephony.

Consumer offerings

• Fixed-line telephony Maroc Telecom's consumer fixed-line services have been marketed since March 2002 under the "El Manzil" brand name. With the "El Manzil" range of products and services, the Company provides capped and unlimited call plans. A new fixed-line call plan was added to the range of consumer offerings in 2006, under the "Phony" brand name. "Phony", is an unlimited flat-rate offering for calls to Maroc Telecom fixed lines with various price plans available starting at MAD156 (incl. tax) per month (including line rental). Phony offers customers the option of capped and uncapped services which enable them to call all fixed-line correspondents in Morocco with an all-inclusive monthly bill. The Phony range of call plans has been extremely successful and has helped to boost usage in the consumer fixed-line segment since the fourth quarter of 2006. The "Phony" range comprises three price plans: "Classic Phony"; "Capped Phony" and "Liberté Phony". Depending on the price plan the customer can choose to make unlimited calls outside peak time with "Phony Evening and Week- end" (EW) or "Phony Anytime" (AT). The "EW" or "AT" price plans are available with standard subscription or capped subscription options. The capped option offers unlimited calls and a capped monthly bill, and gives consumers a limited talk time allowance for calls not included in the unlimited call destination (with the possibility of topping up the account). "Liberté Phony" gives the customer a limited talk time allowance at a reduced rate for calls to all mobile numbers in Morocco as well as unlimited calls to all Maroc Telecom fixed lines. "Phony International" was launched in February 2008, and gives residential customers unlimited calls on evenings, weekends and bank holidays to fixed lines in Southern and Northern Europe and to all fixed and mobile numbers in North America. Maroc Telecom also offers "El Manzil" bundles which include free installation of a fixed-line (for new and returning customers) and a partially subsidized phone. The range of El Manzil bundles offer a wide choice of analogue and digital cordless phones and fax machines for business customers. The range is constantly being extended and is available from MAD99 (incl. tax). Maroc Telecom also regularly organizes promotional campaigns to boost sales and usage, in particular with "zero dirham" and bonus month packages. In July 2008, Maroc Telecom introduced a "Refer a Friend" scheme which rewards customers who recommend the Phony service to their friends and family through free line rental and reductions on phones for referrers and their friends.

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• IPTV Maroc Telecom TV is a service enabling fixed-line customers to access 80 digital quality national and international TV channels and 20 radio stations using ADSL technology. The offering includes four channel packages ("Access", "Discovery", "Prestige" and "Evasion") from a price of MAD48 (incl. tax) per month. The extensive range of packages covers all of the national free-to-air channels, general interest French channels, news channels in three languages (Arabic, French and English), youth and children's channels, cinema and entertainment channels, music, documenta- ries and cultural programs. In addition, the premium Canal+, Canal+ Cinéma and Canal+ Family channels are available as optional extras.

• MT BOX triple play package

In May 2009, Maroc Telecom launched Morocco's first triple-play service, called MT BOX. The innovative service is the result of several years of building expertise and preparing for the new generation of telecoms services. MT BOX customers receive all the benefits of unlimited fixed-line calls, broadband internet and digital TV at the best possible price. MT BOX enables customers to make and receive calls simultaneously on two lines (STN and VoIP), surf the internet using a broadband connection and watch their favorite TV channels without restriction. The service is aimed at the whole family. It enhances the loyalty of fixed-line customers and makes new-generation services accessible to new customers. The triple-play service costs from MAD299 per month incl. tax, and offers several benefits: • A STN telephone subscription, either standard or capped. • An additional VoIP line with a number beginning 08083, allowing unlimited calls at any time to all Maroc Telecom fixed lines. • ADSL internet access including Wi-fi as standard. • An ADSL TV service. • A single bill. • A single contract.

Value-added services for consumers Maroc Telecom offers valued-added services to consumers such as voicemail, itemized billing in Arabic or French, caller ID display, call-waiting notification and call transfer, three-way calling and more. These services also include an option for subscribers using capped rate plans, including Phony capped rate plans, to top up their accounts remotely, by simply dialing the 114 voice-operated server.

Loyalty rewards Maroc Telecom has devised loyalty rewards for customers based on the El Manzil loyalty points system. All standard fixed-line and Phony subscribers (excluding capped rate plan customers) are automatically enrolled in the fixed-line loyalty program. The loyalty program features a points-based reward system which is linked to the amount of customers' monthly bills. Points can be exchanged for a range of gifts, either at Maroc Telecom retail outlets or by calling the fixed-line call center. The gift catalogue is updated each quarter and is sent to all customers participating in the program. Gifts include analogue and digital DECT phones, fax machines, free calls via telephone cards and El Manzil cards, ADSL Wi-fi and 3G modems, mobile phones and ADSL TV packages (router and set-top box). In line with its strategy of harmonizing its offerings, Maroc Telecom unified its fixed and mobile loyalty programs in July 2009, enabling customers to transfer points gained from a fixed account to a mobile account and vice-versa. Points can be converted into gifts from either the fixed or mobile catalogue, regardless of whether the points were gained from a fixed or mobile account (1 fixed point = 1 mobile point). In January 2010, Maroc Telecom changed its El Manzil loyalty system, enhancing customer satisfaction with real-time updating of points balances, along with more flexible arrangements for managing orders and delivering gifts.

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Public telephony Maroc Telecom also provides a public telephony service with its own booths and call boxes operated by third parties, known as "telestores". As in other countries at a comparable stage of development, public telephony remains the preferred means of communication for lower-income consumers in Morocco. The number of public telephone lines managed by Maroc Telecom, directly or by telestore operators with whom the Company has entered into agreements, amounted to over 158,000 at end-2009, down 1.1% relative to December 2008.

• Public booths Maroc Telecom places particular emphasis on developing its network of public call boxes, and for this purpose, has completely renewed and extended its installed base in recent years in order to have secure boxes operated by smart card.

• Telestores The network of "telestores" has seen substantial growth in the last five years. At December 31, 2009, there were more than 141,000 telestores nationwide. Virtually all telestore operators are bound to Maroc Telecom by exclusive agreements. Their profit margins are based on the difference between the retail price and the preferential rate charged to them by Maroc Telecom. In October 2004, against a background of heightened competition (see section 4.4.5 "Competitive landscape -Public telephony market"), the so-called "chaining rule", imposing a minimum distance of 200 meters between each outlet, was removed, allowing a denser network of telestores. This led to a significant increase in new telestores opening during the final quarter of 2004 and the first quarter of 2005. In addition, in the two first quarters of 2007, Maroc Telecom introduced rate cuts to enable operators to maintain their competitive positioning in relation to new entrants.

• Prepaid phone cards Maroc Telecom first launched prepaid phone cards on January 27, 2006. The phone card, which is both a smartcard and a prepaid account card, can be used with Maroc Telecom call boxes and private residential fixed lines. Phone cards are marketed on a pay-as-you-go basis. The offering was designed to replace the previous two prepaid cards. The new concept makes it easier to use prepaid cards, by combining a variety of card formats into a single card, and has increased the use of this type of card in the public telephony segment.

Business customers

This market, which covers SMEs, local government bodies and major business customers in the public and private sector, is a key segment for Maroc Telecom, as it includes high-volume telecommunications users. The enterprise market is a key priority for Maroc Telecom. The company has established a dedicated organization and market strategy for business customers.

Offerings for business customers Marnis: In addition to classic telephony services, Maroc Telecom offers businesses all the functionalities of digital telecommunications via ISDN marketed under the Marnis brand. This solution enables businesses to use an end-to- end digital network carrying data for multimedia applications (voice, data and video) by means of either standard access, with two communication channels, or primary access with 30 communication channels. Flat-rate multi-line phone services: Maroc Telecom introduced a multi-line rate plan for enterprise and key account customers as of 2005. These rate plans, which include call time of 15 to 600 hours, cover calls to domestic fixed-line numbers with a single per-minute tariff within the rate plan ranging from MAD0.36 to MAD0.46 (incl. tax). Calls made in excess of the inclusive call time are charged at standard rates. Subscribers have the option to bundle multiple STN or ISDN lines in the same rate plan. Preferential tariffs: Maroc Telecom has also implemented a range of rate plans that enable business customers to obtain preferential tariffs for calls to a variety of destinations. PABX bundle: Maroc Telecom markets a "PABX bundle", a turnkey solution comprising a switchboard, commissioning, hardware maintenance and upgrading of the switchboard according to the customer's requirements. In April 2008, it launched a new PABX range in partnership with hardware resellers. The initiative is designed to encourage customers to connect additional fixed lines and provides incentives for them. Infinifix: Maroc Telecom launched the "Infinifix" offering in May 2007 as an unlimited call plan for calls to Maroc Telecom fixed lines.

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Added-value services for businesses Electronic billing: To facilitate cost management, Maroc Telecom offers business customers an electronic invoicing system called "Smart Fact". Maroc Telecom provides on a monthly basis a CD-ROM with an itemized list of calls and a breakdown of usage by product. Welcome numbers: Maroc Telecom has set up a range of "welcome numbers", toll-free numbers (0800 xxxxx), reduced-rate numbers (0810 xxxxx) and direct numbers (0820 xxxxx), accessible throughout Morocco at a flat rate, facilitating customers' access to business customers and including personalized call reception. Kiosk numbers: Maroc Telecom also offers customers the possibility to use surcharged numbers, such as "audiotext", including a margin for service providers. Meeting calls: In January 2007, Maroc Telecom introduced "Meeting Call", an audio conferencing service for business customers. Smart call-center solution: Maroc Telecom provides a virtual call-center solution, the so-called "smart call center", which enables standard call-center functionalities (such as voice servers and call routing based on the availability of call center operators) to be delivered via Maroc Telecom's network. This solution enables businesses to establish customer service solutions with a minimal upfront cost.

Fixed-line pricing structure

Over consecutive years, the ONPT and, subsequently, Maroc Telecom, implemented a price rebalancing policy characterized by reductions in call rates and gradual increases in line rental charges. The resulting tariff changes are designed to increase fixed-line usage while complying with regulatory obligations and preparing for the advent of competition. As from 2002, Maroc Telecom introduced time-based billing, with an indivisible first minute, and progressively simplified the pricing structure, with the introduction of three tariff levels: fixed-line, mobile and international.

• Access charges and line rental Since January 1, 2009, standard line rental charges have been MAD132 incl. tax (versus MAD120 incl. tax in 2008) for residential customers (except for the "classic" service, which remains at MAD120 incl. tax) and MAD144 (incl. tax) for business and professional customers. In order to boost the growth of the customer base, in 2002 Maroc Telecom introduced "El Manzil" bundles with a 24- month subscription commitment, including free installation, and a highly competitive pricing policy as well as regular promotional offers. Several promotions of this type were proposed in 2008 and 2009, both for residential and business users. In addition, activation costs for a new fixed lines (excluding the El Manzil bundle) have been discounted to MAD100 (incl. tax) for residential and business users since the beginning of 2007 instead of the list price of MAD600 (incl. tax) for residential users and MAD1,200 (incl. tax) for business and professional users.

• Call charges • Domestic calls Fixed-to-fixed call charges were reduced in March 2007 to MAD1 per two minutes for local and domestic calls at all times of the day. In 2008 and 2009, fixed-to-mobile call charges remained unchanged. Fixed-line call charges were last changed on September 1, 2005, following the ANRT decision to reduce fixed-to-mobile interconnection charges by 5%. This enabled Maroc Telecom to pass on to customers the reduction in traffic termination costs for mobile networks. The following table illustrates the change in the average price in Moroccan dirhams (incl. tax) per minute of a three minute domestic call at peak times from a private fixed-line phone:

In Moroccan dirhams (incl.tax) 2009

Fixed-line to Maroc Telecom fixed-line and other operators (excluding restricted mobility) 0.50 Fixed-line to other fixed lines’ operators (including restricted mobility) 1.92 Pospaid fixed-line to Mobile 2.28 Prepaid fixed-line to Mobile 2.85

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Calls from telestores and Maroc Telecom public call boxes are still priced by call charging units. Retail prices for public telephones are generally higher than for calls made from a private line.

• International calls On November 1, 2007, Maroc Telecom reorganized its international call prices, offering customers special prices for calls to fixed lines and mobiles outside Morocco. The number of tariff zones was reduced and international tariffs were reduced by up to 60% depending on the destination. As from February 2008 and, subsequently, as from January 2009 and December 2009, further reductions were introduced for international calls. This resulted in a peak-rate tariff of MAD2.5 per minute (incl. tax) and an off-peak rate tariff of MAD1 per minute (incl. tax).

Tariff (MAD/minute incl. tax) To fixed lines To mobiles

Zones Destinations Peak rate Off-peak rate Peak rate Off-peak rate

Zone 1 Southern Europe 2.50 1.00 3.60 3.00 Northern Europe North Africa Zone 2 North America 2.50 1.00 2.50 1.00

Zone 3 Rest of world 7.00 2.80 7.00 2.80

• Rate plans and other tariff options Maroc Telecom has implemented targeted pricing strategies based upon specific rate plans and tariff options. Maroc Telecom offers a range of "Preferential Business Tariffs", which allow business customers to benefit from lower rates on domestic calls based on three price options: "Preferential Group Tariff", "Preferential Volume Tariff" and "Preferential Mobile Tariff". The range also includes a "Preferential International Tariff" which offers reduced rates for international calls. In 2007, two new options were introduced for companies: "Privileged Preferential Mobile Tariff" and "Privileged Preferential International Tariff", which allow companies to benefit from lower mobile and international prices. Targeted price offers have also been developed for the consumer segment. These include a capped rate plan enabling consumers to control their spending as well as the "Phony" unlimited rate plans which allow unlimited calls to Maroc Telecom fixed-line numbers subject to a rate plan fee starting at MAD156 (incl. tax and line rental). Maroc Telecom regularly launches promotional offers for El Manzil top-up cards to stimulate use by capped-rate plan clients. Since November 1, 2007, international rate plans have been introduced to round out the range of targeted tariff offerings for consumers and to boost international call traffic. These rate plans offer a number of hours for calls to fixed lines in the main international zones: Southern Europe, Northern Europe and North America. With the launch of fixed-to-mobile rate plans in 2009, Maroc Telecom offers consumer customers reduced-rate phone calls to all national mobile numbers. The fixed-line tariff structure is available in the "Grille tarifaire" section of the www.elmanzil.ma website.

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Interconnection services

Interconnection services include interconnection with domestic and international operators.

Domestic interconnection

Domestic interconnection is regulated by the ANRT. As such, Maroc Telecom is bound to comply with interconnection requests, taking account of the reasonable requirements and capacities of other operators. The interconnection charge serves as compensation for the actual use of the network and the related costs (see section 4.8 "Regulatory environment and possible dependencies"). Interconnection with domestic mobile operators is a key cost item for fixed-line telecommunications, as the costs of traffic termination on mobile networks are far higher than the interconnection income generated by traffic entering the fixed-line network. In 2006, with the arrival of two new operators on the fixed-line market, new interconnection charges were set. In April 2008, a flat-rate interconnection charge was mandated by ANRT for Maroc Telecom's fixed-line network.

Domestic interconnection tariffs Further reductions to domestic interconnection tariffs for calls to Maroc Telecom's fixed-line network have been introduced. The following table indicates the domestic interconnection pricing applicable in 2007, 2008 and 2009 (peak times):

Calls to fixed lines Local Simple Double Tariffs (MAD excl. tax /min, peak times )* (Intra CAA) Transit Transit 2007 0.1268 0.3617 0.4742 2008 0.1252 0.3346 0.4410 2009 0.1236 0.3201 0.4220

* a reduction of 50% is applied at off-peak times Termination charges to mobile phones are as follows:

Calls to mobiles Mobile termination Tariffs (MAD excl. tax/min, peak times) charge 2007 1.3309 2008 1.2217 2009 1.1551

* a reduction of 50% is applied at off-peak times The ANRT has approved Maroc Telecom's partial unbundling offer. The following table shows the principal tariffs applicable as of April 14, 2009:

Access tariffs In MAD excl. tax Cost of access requests (per request) 70 Costs for accessing the service (per access) 255 Cancellation costs (per access) 70 Monthly fees (use and maintenance / access) Partial unbundling 35 Total unbundling 80

A catalogue of fixed-line interconnection charges, along with partial and full unbundling offers, is published online at the www.iam.ma website.

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International interconnection tariffs

Maroc Telecom has developed extensive international connectivity, with 230 interconnections to foreign operators. Competitive pressures intensified substantially in 2008.

Incoming international traffic Incoming international traffic terminating on Maroc Telecom networks decreased by 4.8% in 2009 to 1.97 billion minutes. Maroc Telecom also carries a significant proportion of incoming international traffic to competitor networks. In 2009, Maroc Telecom substantially reduced termination charges for incoming international traffic terminating on its fixed network, in order to allow Maroc Telecom fixed lines to be included in the unlimited call plans of operators in other countries.

Outgoing international traffic For outgoing traffic, Maroc Telecom negotiates with international operators to terminate outgoing international traffic at the lowest possible cost and to offer the most attractive price to end-customers.

Combating fraud The international traffic carried by Maroc Telecom has seen slower growth than expected in recent years, due to the diversion of traffic by fraudulent means. A specific action plan to fight fraud relating to incoming international traffic has been put in place. It includes the creation of a dedicated department, provided with detection equipment, and awareness building among engineering and sales teams. Maroc Telecom constantly reinforces and modifies its anti-fraud measures and considers that fraud concerning international incoming calls is currently under control.

Data services

Data services for business clients

Maroc Telecom offers its customers (mainly business customers) a comprehensive range of state-of-the-art data transmission services. Historically, the first data services launched on the market were leased analog lines, then digital lines, then packet technology (X25 network in 1991), and more recently, Frame Relay (in 2001). IP virtual private network solutions were introduced in late 2003 and the LAN to LAN solution was introduced in 2005.

The following table illustrates the changing breakdown of the company's data transmission base (excluding Maroc Telecom's in-house base):

Number of lines 2007 2008 2009 Domestic leased lines * 5,534 5, 605 5,494 International leased lines * 285 255 233 Maghripac 1,081 591 29 Frame Relay 1,350 1,198 1,243 IP VPN 4,001 5,555 6,341

* Customer leased lines, excluding lines to customer operators

The range of products and services involved in Maroc Telecom's network solutions is structured as follows: • Leased lines: Maroc Telecom offers domestic and international leased-line services, including the physical chain, modems and monitoring of leased lines. In order to meet increasing demand for call centers in Morocco, Maroc Telecom offers special prices for call centers together with a one-stop shop service for end-to-end leased lines connecting to France, which simplifies operational management. • Frame Relay: This service allows businesses to carry multimedia content (voice, data and image) within their networks at rates of up to 34 Mb/s. Frame Relay provides a high level of performance with a guaranteed minimum bandwidth associated with each permanent virtual circuit between the call's end points.

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• IP / MPLS VPNs: Maroc Telecom offers a virtual private network solution (interconnection of sites using a common infrastructure), built upon the IP/MPLS protocols and marketed under the "IP Connexion" brand name. This service is accessible via leased lines, Marnis and broadband. Maroc Telecom also offers secure wireless Internet access. In 2005, the range was rounded out with IP VPN broadband access with guaranteed bandwidth. • LAN to LAN: Using Maroc Telecom's optical fiber network, Ethernet LAN to LAN solutions enable clients to connect call center sites in the same city via high bandwidth optical fiber cable systems offering speeds of up to 1 Gb/s and non-disruptive optical fiber backup. Maroc Telecom has adapted its product and service ranges to the business market, in particular offering service level guarantees. Maroc Telecom is contractually bound to maintain a high quality of service. In particular, Maroc Telecom measures its network availability rate and complies with international standards in this regard (see "Infrastructure" section). Maroc Telecom has enhanced its international data offer with the introduction of wholesale minute rates which give call centers very competitive international tariffs.

Data transmission services for ISPs

Data transmission services are regulated by the ANRT. In this respect, Maroc Telecom, as the incumbent operator, is bound to provide internet service providers (ISPs) with non-discriminatory technical solutions and prices enabling them to deliver competitively priced offers to consumers and allowing them to compete with the same internet services provided by Maroc Telecom to its end customers under the "Menara" brand (see "Internet" section hereafter). The following offers, whose content and prices are approved by the ANRT, allow ISPs to market internet access as follows: • IP transit, for Maroc Telecom international internet bandwidth; • free PSTN collection for callers, enabling ISPs to offer rate plans; • PSTN collection with repayment to ISPs, charged to the caller, enabling ISPs to market pay-as-you-go internet access offers; • bulk ADSL, allowing ISPs to market bundled ADSL offers, including access and internet use; and • provision of internet services over leased lines for ISPs.

International data transmission services

The tariff structure for data transmission access points comprises upfront access costs and monthly subscription fees for each bandwidth range. Reductions are offered for bulk volumes and subscription commitments and are applied to monthly rental fees. Maroc Telecom has regularly reduced its tariffs for leased lines and related data services. These cuts reflect technological changes and the related cost reductions. Current prices are in line with the prices applied by international operators. For example, the basic monthly rental fee for leased lines has fallen from MAD33,000 in 2001 to MAD9,000 today. In 2004, Maroc Telecom revised its leased-line offering for telecom operators. This offering is reserved for operators of public communication networks. Pricing is based on distance categories for bandwidths of up to 155 Mb/s. Maroc Telecom strives to remain competitive, since the cost of international calls is a decisive element in companies' decisions to set up offshore call centers. Thus, the basic monthly rental fee for 2Mb/s international leased lines to France has fallen from MAD110,000 (excl. tax) in 2003 to MAD57,200 (excl. tax) from March 2007.

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Internet

The first internet connection was established in Morocco by Maroc Telecom in 1995. Between 1997 and 2000, Morocco saw the creation of many ISPs which have subsequently consolidated around two major players: Maroc Telecom and Maroc Connect. The internet market experienced slow growth until the end of 2003. However, the pace of development has accelerated significantly since the first half of 2004. The slow development of the internet market prior to 2004 was due to a combination of three factors: a low rate of computer ownership, equal to only 11% among urban households (source: ANRT, 2005), the relatively high cost of internet access for users (access and call costs), illiteracy, lack of training and a relatively limited offering of homegrown content. Maroc Telecom has a determined policy to increase internet access in Morocco and provides solutions both for access and usage. This is evidenced by the successive price cuts introduced in March 2005, May 2006, November 2007, December 2008 and November 2009 and frequent promotional offers (free modem, one month's free subscription, free bandwidth upgrade, promotion of higher-speed broadband services at the price of lower-speed services, etc.). At December 31, 2009, Maroc Telecom had more than 471,000 wireline internet access subscribers, which represents around 42% of installed fixed lines (excluding public telephony).

The following table shows the number of Menara internet customers (the Menara customer base represents people using internet access plans marketed by Maroc Telecom, excluding access for Maroc Telecom's in-house use).

Active customers as at December 31 (in thousands) 2007 2008 2009 Narrowband 5 4 1 Broadband 471 478 470 ADSL 470 477 469 Leased lines 1 1 1 Total wireline 476 482 471 3G mobile broadband - 28 174

Growth in the customer base since 2005 has been chiefly attributable to ADSL, launched in November 2003 and marketed on an unlimited basis since March 2004. At December 31, 2009, ADSL represented more than 99% of all types of internet access used by Menara customers. Maroc Telecom's market share in this segment is 99% (Source: ANRT, December 2009). The chief highlight of 2009 was the ongoing growth in the 3G mobile broadband customer base, which was partly driven by the introduction of prepaid offerings.

Internet offerings

Maroc Telecom's internet access services are marketed under the "Menara" brand. Consumer market In the narrowband segment, Maroc Telecom markets: • Menara libr@cces: dial-up access with time-based charging billed to the telephone line used; • Menara "Toucompri" internet package: all-inclusive options including a subscription and a fixed connection time limit. These offerings include value-added services, such as free hosting of personal web-pages, email services and options such as time carryover, an evening and weekend package, and capped usage allowances. • CDMA internet: a narrowband internet offering launched in 2007 for customers in localities covered by Maroc Telecom's CDMA network. • In the broadband segment, Maroc Telecom offers ADSL contracts with bandwidth ranging from 256kb/s to 20Mb/s (ADSL+ at 8 and 20Mb/s launched in November 2006), enabling users to use their fixed-line phone at the same time. These contracts have met with a great success since the launch of Unlimited ADSL in March 2004, and the price cuts in March 2005, May 2006, November 2007, December 2008 and November 2009. As part of the most recent price cut, and in order to increase speeds for its customers, Maroc Telecom withdrew the narrowband 128Kbps service . Furthermore, numerous promotions have been introduced since 2008 for ADSL bundles and subscription fees, along with sales drives and referral schemes.

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Business customers For businesses, broadband is provided via ADSL or via leased internet lines (with bandwidths of up to 155Mb/s). At present, ADSL is by far the preferred access method for business customers. The success of ADSL is not only due to the fact that it is affordable but also because it meets a number of needs that were previously met only by leased internet lines (speed, unlimited and always-on access). The ADSL Pro offer provides bandwidths ranging from 256kb/s to 20Mb/s and includes a wide range of services, in particular secure emails, a domain name and a web contact page. Internet leased lines are particularly attractive for large companies due to excellent performance (symmetrical and guaranteed ultra-high bandwidth) and the end-to-end security offered. Maroc Telecom also hosts corporate websites via two different solutions: shared hosting (on a Maroc Telecom platform) or dedicated hosting (purchase or colocation of servers), providing businesses with an internet presence at minimal cost. As well as internet access and web hosting services for businesses, Maroc Telecom also provides a complete range of added-value extras, such as fixed IP addresses, domestic and international domain names and email addresses.

Internet tariffs

Over the past four years, Maroc Telecom has steadily cut prices across its entire product range. The following table shows the principal internet access tariffs currently applicable (MAD per month):

Narrowband ADSL Unlimited Domestic leased lines 64 kbps - 3,700 128 kbps - 5,100 256 kbps 99 8,800 512 Mbps 129 9,500 1 Mbps 149 11,500 2 Mbps 199 14,000 4 Mbps 399 21,000 6 Mbps - 24,500 8 Mbps 599 37,600 20 Mbps 799 69,900 34 Mbps - 96,000 155 Mbps - 220,000

Maroc Telecom also markets an all-inclusive narrowband option (“Toutcompri”) at a monthly fee of MAD79 (incl. tax) and a narrowband Libr@ccès option at MAD0.20 per minute (incl. tax). Prices across all ADSL bandwidths have been regularly reduced, with reductions for broadband speeds of 2, 4 and 8 Mb/s and free bandwidth upgrading for existing customers in the 128 kb/s to 1 Mb/s bandwidth range.

Other products and services

In accordance with its contract specifications, Maroc Telecom is bound to provide the following services (non- exhaustive list): • a free-of-charge maritime radio-communication service to broadcast maritime safety notices; • a two-way telecommunications service for the exchange of messages between ships at sea and any termination point of the public networks; • a directory enquiries service (call number 160), provided through dedicated information centers; • the routing of calls to emergency numbers; and • an Arabic-language telephone directory. Maroc Telecom also publishes a professional "yellow pages" directory. This business is not significant in terms of revenues.

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Customer services

Customer relationships lie at the core of Maroc Telecom's business. To meet customer expectations and requirements, Maroc Telecom has developed a proactive customer relationship management policy.

Telephone directories and enquiries

Directory Enquiry Centers (Rabat, Casablanca, Marrakech and Meknes), in compliance with universal service obligations, are open 24/7 and can be accessed by calling 160. They also allocate Maroc Telecom fixed-line telephone numbers, provide the first point of contact for new fixed-line customers and update the directories' database. In 2007, the Yellow Pages business was transferred to Casanet, whose objective is to make the Yellow Pages the benchmark directory within three years. A yellow pages service is available at the www.menara.ma website.

Relations with business customers

Maroc Telecom has focused on strengthening its relationships with business customers in recent years. This is evidenced by the creation at the end of 2001 of a Business Sales department and a Key Accounts sub-division. The latter acts as a one-stop shop for key clients from the public and private sectors. Key account salespeople handle the entire sales relationship with customers, covering all of Maroc Telecom’s products and services on a nationwide basis. Dedicated SME branches within each region provide on-the-ground support to the Business Sales department (see section 4.4.4 "Distribution, Advertising"). To strengthen its sales presence among businesses, Maroc Telecom has also appointed regional distributors.

Call centers

Maroc Telecom's call-center division comprises the following operations: Consumer segment: The fixed-line call center provides incoming and outgoing customer care services.

• Handling of incoming calls (several access numbers including the main number 108): dealing with general enquiries and assistance for fixed-line customers, orders and activating value-added services. • Outgoing calls: outstanding debt collection, telesales, telemarketing, checking customer data (billing addresses, direct debit, etc.); The internet call center (single call number: 115) Information and support for internet and IPTV customers. Enterprise segment: The enterprise call center (single call number: 3030) is responsible for informing and supporting SME and key- account customers across the entire Maroc Telecom product portfolio for business customers.

Customer relations portals

Maroc Telecom uses a variety of web portals to maintain a direct line of communication with its fixed-line and internet customers: − Www.iam.ma for fixed-line residential and business customers, − www.maroctelecomtv.ma for IPTV customers − and www.menara.ma for internet users. In addition to providing information on the product and service range, functionalities such as online subscription for services or bill consultation are also available. Menara (www.menara.ma) benefits from outstanding exposure as it has the largest number of visitors of any content and services site in Morocco and North Africa (excluding international search engines and portals), along with a strong brand image. It generates over 5 million visits and 3 million visitors per day.

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4.4.3 Network and systems infrastructure On Saturday March 7, 2009 at 2am, Maroc Telecom switched its customers over to Morocco's new 10-digit phone numbers, at the request of Agence Nationale de Réglementation des Télécommunications (ANRT). This new numbering plan addresses the growing demand for phone numbers, and created several million potential new numbers.

Mobile network infrastructure

Maroc Telecom's mobile network is based on GSM technology, and has been rolled out across almost the entire territory of Morocco. The network has well-developed infrastructure, high international connectivity and a quality of service comparable to that of international operators. In order to maintain its market leadership and reinforce its competitive edge, Maroc Telecom is pressing ahead with the roll-out of its 3G/HSDPA network which offers 3G services (videoconferencing, streaming, downloads, online gam- ing, etc.) at a theoretical maximum bandwidth of 7.2Mb/s and also provides broadband internet access via a USB dongle.

Network switching subsystem - Core CS and service platforms

Maroc Telecom's network switching subsystem is equipped with next-generation network technology which provides support for IP and 2G/3G networking and enables optimal resource allocation. Packet switching and services platforms use highly redundant infrastructure in order to guarantee the highest network availability possible. The network is also equipped with technical platforms enabling the provision of high-quality services to clients in both voice and data services (voicemail, SMS, MMS, GPRS, prepaid management systems, etc.). Since 2008, all prepaid and postpaid customers have been able to use 3G technology on the Maroc Telecom network.

Coverage

Maroc Telecom's GSM network covers almost all of the Moroccan population (98% at end-2009). As part of the Pacte universal service program, Maroc Telecom will extend its coverage to an additional 7,338 rural areas by 2011. The GSM base station network is being enhanced through:

• a continuous program of infrastructure redeployment; • ongoing software upgrades to the most recent releases; • voice compression technology, which is used to cope with spikes in traffic that typically occur during public holidays and promotional periods. In 2009, Maroc Telecom extended and increased the density of its 3G/HSDPA network in Morocco's main urban centers in order to offer new-generation services to its clients. By the end of 2009, Maroc Telecom's GSM network covered virtually all of the Moroccan population via 5,870 2G base stations and almost 2,200 3G base stations.

Mobile service quality

Maintaining and enhancing mobile service quality is a key priority. The call success rate was 97.02% in 2009 while the ratio of dropped calls remained below 1.07% and the SMS success rate (excluding promotions for free SMSs) stood at 95%. Maroc Telecom pays close attention to public health concerns and abides by the guidelines for human exposure to radiofrequency electromagnetic fields issued by the International Commission for Non-Ionizing Radiation Protection (ICNIRP), a scientific body recognized by the World Health Organization (WHO).

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Fixed-line network infrastructure

Maroc Telecom has developed a state-of-the art network enabling it to deliver a wide range of services. This network is made up of a transmission backbone, switching centers, service platforms and an access network.

Domestic transmission network Maroc Telecom's transmission network incorporates NG SDH and WDM modules and mainly comprises optical fiber, covering a distance of 21,770 km for local and long-distance calls. An IP MPLS backbone has been implemented to carry voice, VoIP and ultra-fast broadband traffic. It will also support the switch to all IP networks.

Voice platforms

The next-generation network (NGN) has been deployed and enables the provision of the following services: • Voice over IP (VoIP); • Migration of time division multiplex (TDM) traffic to all-IP, thus simplifying the network optimization process.

Wireline access network and business customers To consolidate its wireline access network, which enables the provision of broadband internet access (up to 20Mb/s for customers in Morocco's principal urban centers) and IPTV, Maroc Telecom has deployed optical local loop technology with the aim of distributing broadband internet services to business customers. Pursuant to its universal service obligations, Maroc Telecom has installed code division multiple access (CDMA) base stations to deliver voice and internet services to rural areas that are not served by wireline access.

International network

Through approximately 230 agreements with foreign operators, Maroc Telecom ensures Morocco’s connections to all countries worldwide through two international transit centers (Casablanca and Rabat) and four optical fiber submarine cables (SMW3, Tetouan-Estepona and Eurafrica as well as Atlas Offshore which entered service in 2007 and is owned by Maroc Telecom), in addition to satellite connections via Intelsat and Arabsat.

Maroc Telecom also has redundant international bandwidth which increased from 25.13Gb/s at end 2008 to 48Gb/s at end-2009.

IT systems

The Information Systems department is responsible for the provision of IT infrastructure, office automation solutions and software applications for use in day-to-day operations. A number of major IT projects were completed in 2009:

• Overhaul of the mobile loyalty system and introduction of the Jawali loyalty program for Jawal prepaid mobile customers. • Adjustment of all IT systems to the new 10-digit numbering system. • Combination of the two fixed-line and internet marketing IT systems. • New internet- and terminal-based bill payment channels. • Upgrades to mobile provisioning and fixed-line mediation applications. • Introduction of tools to reconcile databases and technical procedures as part of the revenue assurance initiative. • Creation of a data warehouse for fixed-line traffic. • Extension of the business continuity plan to new systems, i.e. the mobile loyalty system, the fixed-line and internet technical IT sub-system, and the international roaming management IT system. • Support for the 2009 marketing plan and adjustment of the provisioning and collection IT systems in line with various operations carried out on technical networks.

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4.4.4 Distribution, advertising

Distribution Organization

Maroc Telecom has an extensive distribution network, with a direct sales channel and an indirect sales channel comprising more than 60,000 outlets. In 2009, the various distribution channels were as follows: • A direct sales channel comprising 335 branches; • An indirect sales channel, made up of small, local and independent resellers bound by exclusive agreements and each managed by the nearest Maroc Telecom retail branch. A significant portion of these resellers also manage a telestore business licensed by Maroc Telecom. • These distributors are structured on a nationwide basis and telecommunications is not their core business. They include supermarket retailers, Altadis Maroc and Canal Market. • Regional distributors operating in the telecoms sector and specifically serving business customers in the Rabat, Tangier, Marrakech, Settat, Casablanca and Fes regions; • Two nationwide distributors which cover all customer segments and all of Maroc Telecom’s products and services; • and four partners specialized in the sale and commissioning of PABXs.

Distribution strategy

The scale and organization of Maroc Telecom's distribution network are a key competitive advantage for the Company. The Company's distribution strategy focuses on the following objectives:

• maintaining the central role of the direct sales channel, in particular for added-value services; • developing the local reach of indirect sales channels in order to increase proximity to customers; • strengthening the role of telestores in the areas of prepaid product distribution and fixed-line sales; • harnessing synergies between the direct and indirect distribution channels; and • diversifying distribution formats (electronic top-ups, cash dispensers, rapid top-ups, etc.).

Direct distribution network

Maroc Telecom's direct sales channel comprises 335 branches organized and structured to meet the local needs of each customer segment.

Seamless coverage With its knowledge of specific regional and local features, Maroc Telecom's direct sales channel provides coverage throughout Morocco. In addition, almost all branches sell the entire range of products and services (mobile, fixed-line and internet).

Catering to a broad range of customer needs Four types of branch have been established, each specialized in serving a specific customer segment. The direct sales channel comprises four dedicated branches for key accounts (with nationwide coverage); 22 business branches; 36 reseller branches and 277 retail branches. These sites are located in most urban centers in order to provide optimal convenience for customers. 78 branches have been refurbished, including 43 in 2009, adopting a new concept that is better suited to a dynamic, proactive commercial approach. In an environment characterized by ever-increasing product and service convergence and the distribution of multifunctional communications devices, the concept is intended to create a pleasing environment for customers that allows them to experience the Company's products and services at first hand. To extend the customer reach of existing direct sales branches, ten specialized branches have been set up to serve SMEs. Similarly, seven specialized customer care centers have been created for the consumer segment.

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Indirect distribution network

Indirect regional network The telestores network, whose main business activity is the operation of a public telephony service licensed by Maroc Telecom, also distributes prepaid fixed-line and mobile cards, and subscriptions for fixed-line telecommunications. The reseller sales channel consists mainly of tobacconists, convenience stores, newsagents and other distributors of telecoms and electronics products that have entered into agreements for the distribution of Maroc Telecom products and services. The indirect sales channel comprises more than 60,000 resellers who are licensed to retail prepaid phone cards, of which almost 40,000 use the rapid top-up service. Agreements are made with each telestore in order to develop a wide-reaching distribution network and allow locally-based distribution of Maroc Telecom products and services. Telestore owners are compensated through sales commissions. In the business segment, regional distribution contracts have been signed with the following retailers: Lineatec (2006 and 2008), Canal Market (2006), Setronic (2008) and AGT Maroc (2008).

Indirect network Efforts to diversify sales channels have been boosted by partnership agreements with nationwide operators such as the tobacco firm Altadis Maroc, Canal Market and supermarket retailers Marjane and Acima. As a result, Maroc Telecom has a complementary licensed indirect distribution network with more than 24,000 retail outlets nationwide.

Independent network In 2006, Maroc Telecom signed agreements with three new distributors, in addition to GSM Al-Maghrib. In March 2006, Maroc Telecom sold its 35% stake in the distributor GSM Al-Maghrib, but is still linked to the company via distribution agreements.

Distribution agreements

At December 31, 2009, Maroc Telecom had distribution agreements with the following companies:

Company Activity Agreement date Maroc Telecom products distributed

GSM Al-Maghrib Distribution of telecom products 11/2003 Prepaid mobile and fixed-line cards

Sales of mobile, fixed-line and Internet subscriptions, electronic phone card top-ups Barid Al-Maghrib Moroccan post office 06/2003 Prepaid mobile and fixed-line cards

Cofarma Marjane hypermarkets and Acima 10/2002 Prepaid mobile and fixed-line cards supermarkets Mahatta Service stations 07/2002 Prepaid mobile and fixed-line cards (groupe Total Maroc) Altadis Maroc Manufacture and distribution of tobacco 11/2003 Prepaid mobile and fixed-line cards products in Morocco Canal Market Electronic payment service provider and 11/2002 Fixed-line and mobile electronic top-up distributor of electronic recharge platforms 11/2006 Sales of mobile, fixed-line and internet subscriptions for business customers in Marrakech and its hinterland Sicotel Distribution of telecom products 11/2006 Prepaid mobile and fixed-line cards

Lineatec Distribution of telecom products 11/2006 Prepaid mobile and fixed-line cards.

Sales of mobile, fixed-line and internet subscriptions for business customers in Rabat and Tangier and their hinterland 11/2008 Sales of mobile, fixed-line and internet subscriptions for business customers in Casablanca and Fes and their hinterland Setronic Distribution of telecom products 11/2008 Sales of mobile, fixed-line and internet subscriptions for business customers in Settat and Marrakech and their hinterland

AGT Maroc Distribution of telecom products 11/2008 Sales of mobile, fixed-line and internet subscriptions for business customers in Casablanca and its hinterland

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Advertising

As the largest advertiser in Morocco, Maroc Telecom has a significant advertising, communications and marketing budget. It uses this budget to promote its Mobile, Fixed-line, Business and Internet services, and to develop communication initiatives in the corporate, employee-relations and investor-relations fields. Communications initiatives are spearheaded by the following teams: • The Communication Department, which is responsible for: 1- Consumer and Enterprise Products advertising across all market segments, from residential to business customers; 2- Corporate Communication, through initiatives to promote Maroc Telecom's image, including sponsorship and corporate philanthropy. The Communication Department also maintains the consistency of the group’s communications strategy, logo and visual brand identity; • The Employee Relations team, which operates across the entire organization. The Employee Relations team works closely with front-line managers to escalate information within the organization and disseminate information about economic, financial and cultural events within the company. The team reports directly to the HR department. • Financial Communications, which is responsible for ensuring compliance with the group's financial communications policy as defined by General Management, and with regulatory obligations in terms of financial disclosure in Morocco and France. It also organizes events for investors and financial analysts. These entities work in close cooperation to ensure overall consistency between the various communications initiatives, in line with the objectives set by Maroc Telecom.

Product advertising

The group's market is highly competitive, and the aim of product advertising is to support product launches through communication campaigns that generate a strong impact, appeal to a wide audience, are strongly rooted in the local culture, convey a simple message and support Maroc Telecom's innovative image. The product advertising team also optimizes advertising expenditure through framework agreements and control tools. As regards prepaid mobile advertising, 2009 brought the introduction of a new communication concept called "rassid ma ykhtakoum". In 2009, there were also multiple promotions involving Consumer and Enterprise products. These promotions were accompanied by shared, horizontal media campaigns aimed at increasing their visibility (autumn promotions etc.). ADSL and 3G internet products were heavily publicized in 2009, emphasizing the strong points of Maroc Telecom's service, such as speed and quality. Specific initiatives were adopted for young people in order to promote prepaid mobile internet services, in particularly through student offers involving no line rental and discounts on modems. The reduction in international call prices was supported by a major advertising campaign. The launch of the new PRO segment was accompanied by a new visual identity and logo. A distinct communication approach has been created to develop this particular target market To support its position as a leading innovator, Maroc Telecom launched multimedia campaigns for its new MT BOX and mobile TV services. These campaigns included on-the-ground demonstrations and co-branding initiatives to inform people about compatible equipment. Value-added services were publicized through closely targeted below-the-line campaigns, such as SMS teasers sent to core target customers and events. Sponsorship of musical events enabled the group to promote sales of A-Ghany ringtones and logos relating to the artists concerned (Mawazine, ABBA Show etc.). In addition, below-the-line campaigns remained a priority in 2009, since they allow accurate targeting and genuine cost-effectiveness. They include the sending of monthly newsletters (Mobinews, Moustajadat, Hissati etc.), targeted SMSs and e-mailshots using qualified databases. The new www.iam.ma website went live in 2009. The website is regularly promoted and updated in order to boost its audience and enhance its appeal. Maroc Telecom also developed e-communication initiatives by creating dedicated mini-sites (Women's Day, MT BOX, 15-car prize draw etc.) and e-mailshots relating to products and promotions (ADSL, MT BOX etc.). The internet is used in addition to traditional media, with campaigns involving websites that generate large consumer traffic such as Facebook, Google and YouTube. To boost sales of handsets and promote new services like GPS and mobile TV, Maroc Telecom has introduced several co-branding initiatives with handset providers.

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Corporate communication

Corporate communication initiatives deployed in 2009 focused on consolidating Maroc Telecom's brand image as the undisputed full-service telecoms provider in Morocco. A variety of initiatives were organized to respond to the increase in competition across all telecoms segments – with all rivals developing 3G mobile services, for example – and efforts were made to boost international call traffic. A new style of communication was adopted, with the production of new adverts and music clips involving well-known Moroccan actors and comedians. The emphasis was placed on innovation, humor, simplicity and close ties with customers.

Sponsorship and corporate philanthropy

Maroc Telecom's sponsorship and corporate philanthropy efforts focus on the following areas: - Sport: Maroc Telecom's aim is to discover and train young Moroccan talent both locally and nationally. It is an official partner of the Fédération Royale Marocaine de Football and of the Groupement National de Football, and an official partner of Moroccan athletics via the Fédération Royale Marocaine d'Athlétisme. Maroc Telecom also supports other sports (golf, horse riding, jet skiing, etc.). - Environment: Maroc Telecom is actively involved in environmental protection efforts, through its sponsorship for projects such as the "Clean beaches" campaign organized by the Mohamed VI Foundation for Environmental Protection. Having been involved in clean-up events organized at several beaches in the Tangier area, the group received two awards for its commitment to environmental protection. The Lalla Hasnaa initiative trophy was awarded to Maroc Telecom for its efforts to increase the coverage of clean-up operations on Morocco's beaches. In addition, Princess Lalla Hasnaa awarded the Chairman of Maroc Telecom's Management Board a trophy to recognize all of the group's efforts over the last 10 years as part of its "plages propres" operation. Thanks to its involvement, Achakar beach maintained its "blue flag" status while Riffyine beach was awarded a blue flag for the second time. The Arsat Moulay Abdeslam park also hosted various exhibitions, and its signage was improved. - Culture: Maroc Telecom is actively involved in cultural events through its partnerships with cultural festivals (Mawazine, Casablanca, Marrakech, Rai, etc.). In addition, it helps to fund the Mohammed VI National Theatre and supports national artists, particularly emerging talents, by organizing concerts during the summer months. The 2009 "beach festival" included an innovative concept involving the creation of customized Maroc Telecom villages. Various events, held day and night over two months during the summer, attracted millions of visitors. The uniformity of the sites set up in Morocco's cities increased the impact and visibility of this community initiative. The 2009 Jawla musical roadshow visited several Moroccan cities. These large concerts required major logistical and human resources, and featured a diverse range of national and international artists. The roadshow attracted more than one million spectators. - Community outreach: As regards community and humanitarian actions, Maroc Telecom is active via the Maroc Telecom Association for Entrepreneurship, which awards grants to young entrepreneurs and to students from modest backgrounds. Maroc Telecom also supports foundations and charities such as the Mohamed V Foundation for Solidarity and the Lalla Salma association for the fight against cancer.

Employee relations

The Employee Relations department organizes conventions for senior managers of Maroc Telecom and disseminates internal communication tools (Newsflash, Itissal and Wissal). It also provides support for projects launched by other Maroc Telecom departments. In 2009, the Employee Relations department completed its study of internal communications within the company. This resulted in a global communication plan that defines arrangements for the ways in which employees interact with their teams and the information that they share. The department continued to produce internal publications, and to fulfill its role supporting cross-functional projects. It also took part in preparing the third version of the group intranet, which is more user-friendly, ergonomic and up-to- date.

Financial communication

In 2009, Maroc Telecom complied with all its financial disclosure obligations in Morocco and France, held several meetings with analysts and investors and organized roadshows in Europe and the Middle East to present its annual and interim results. Maroc Telecom was also nominated for the 2009 "Africa Investor Financial Reporting Awards" and was awarded a trophy in the telecommunications category. The prize was awarded in recognition of Maroc Telecom's overall financial communications and its contribution to the quality of financial reporting on the African continent.

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4.4.5 Competitive landscape At December 31, 2009, a total of 19 telecommunications licenses had been awarded to operators in Morocco: three licenses for operators of public fixed-line telecommunications network (Maroc Telecom, Meditel and Wana), three 2G mobile licenses (Maroc Telecom, Meditel and Wana), three 3G mobile licenses (Maroc Telecom, Meditel and Wana), five licenses for operators of GMPCS-type satellite telecommunications networks, three licenses for operators of VSAT-type satellite telecommunications networks, and two licenses for operators of shared resources radio-electronic networks (3RP). In 2005, the liberalization process for the fixed-line market continued, and two fixed-line telecommunications licenses were awarded: • a fixed-line license including local loop (without restricted mobility) and national and international transmission was awarded to Meditel in July 2005; • a fixed-line license including local loop (with restricted mobility) and national and international transmission was awarded to Wana in September 2005. In July 2006, three mobile licenses for 3G (UMTS) networks were awarded to Maroc Telecom, Wana and Meditel. In February 2009, ANRT awarded a 2G mobile license to Wana. Maroc Telecom's main competitors are as follows:

• Medi Télécom ("Meditel"), which has had a mobile licence since August 1999. Medi Télécom is owned 50/50 by FinanceCom and Caisse de Dépôt et de Gestion, after Telefonica and Portugal Telecom sold their 32.18% stakes in 2009. • Wana is 69%-owned by ONA/SNI and 31%-owned by a consortium consisting of Al Ajial Investment Fund Holding ("Al Ajial", 50%) and Mobile Telecommunications Company (Zain, 50%).

Mobile services

The Moroccan market for mobile telecommunications had more than 25.3 million customers at December 31, 2009. This market is predominantly prepaid, with more than 96% prepaid customers. A third 2G licence was awarded in 2009. At end-2009, Maroc Telecom had 60.3% of the overall market compared with 37.3% for Meditel and 2.4% for Wana. (Source: ANRT)

At December 31, 2009 Market status Market share (% of total customer ) Mobile prepaid Liberalized Maroc Telecom : 60.0% market Other : 40.0% Mobile postpaid Liberalized Maroc Telecom : 67.5% market Other : 32.5% Total Mobile Maroc Telecom : 60.3% Méditel : 37.3% Wana : 2.4%

(Source : ANRT) The mobile services market typically experiences a seasonal peak during the summer months. This phenomenon is essentially attributable to the large number of Moroccans living abroad, who return on vacation during the summer months. In the prepaid mobile services segment, mobile operators organize frequent promotions, thereby leading to a decline in prices. They have also introduced significant subsidies for mobile handsets, which contribute to sustained market growth. In the postpaid segment, operators compete mainly on pricing and the characteristics of their rate plans. Maroc Telecom has a broad range of rate plans to suit both consumer and business customers. Maroc Telecom continues to respond to competition with aggressive price promotions. Maroc Telecom's brand enjoys a high recognition, for postpaid as well as for prepaid services (Jawal). Maroc Telecom is also distinguished by its expertise and the performance and quality of its network (Source: survey conducted by Sofres). Maroc Telecom's chief competitive strengths are as follows: • a network that covers almost the entire population of Morocco (Maroc Telecom estimate); • a distribution network with more than 60,000 retail outlets; • innovative loyalty programs, since 2002 for postpaid customers and since 2009 for prepaid customers;

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• commissions for resellers: Maroc Telecom and Meditel reward resellers according to distinct models: Maroc Telecom rewards resellers for sales while Meditel also rewards for calls (airtime). In order to enable its customers to enjoy the most recent innovations, Maroc Telecom has pioneered the latest technologies, such as WAP in 2000, GPRS in 2002 and 3G data services in 2007. The following table lists the years in which mobile technologies were launched on the market by Maroc Telecom and Meditel:

Maroc Telecom Méditel WAP 2000 2004 SMS Info 2001 2003 GPRS 2002 2004 MMS 2003 2004 MMS and GPRS roaming 2004 2006 Push mail 2006 2006 Push to talk 2006 - 3G voice 2008 2008

Fixed-line telephony

Two new fixed-line licenses were awarded in July and September 2005. Operations using these licenses commenced in early 2007. Maroc Telecom faces competition in all segments, from residential and public telephony through to business. The fixed-line penetration rate in Morocco was 11.28% at December 31, 2009 compared with 9.70% a year earlier (source ANRT). At end-2009, Maroc Telecom held a market share of 98.6%, excluding restricted mobility.

At December 31, 2009 Market status Market share (% of total number of lines) Fixed-lines Liberalized market Maroc Telecom : 98.6% Other : 1.4% Fixed-lines , including restricted mobility Liberalized market Maroc Telecom : 35.1% Méditel : 0.3% Wana : 64.6%

Source : ANRT

Fixed-line consumer telephony market

In February 2007, Wana, the third telecoms operator launched Bayn, its fixed-line service with restricted mobility. This prepaid service is marketed on a pay-as-you-go basis, without a bill or subscription, and is similar to a prepaid mobile service. In light of its price structure and advertising strategy, Bayn appears to be attempting to compete head-to-head with Maroc Telecom in the telestores segment. To our knowledge, Wana has not launched any postpaid or without-mobility fixed-line offers in the consumer segment, and Meditel has not yet launched any fixed-line voice offers for consumers. Since 2006, Maroc Telecom has launched three fixed-line offers which differentiate it from competitors, namely: • Phony, which allows unlimited calls to all Maroc Telecom fixed-line numbers for an affordable monthly fee; • ADSL TV, through which Maroc Telecom's fixed-line customers have exclusive access to 80 national and international digital TV channels via their telephone line; • MT BOX, Morocco's first triple-play (voice, internet and TV) package. In addition, the ADSL offer, with its variety of bandwidths up to 20Mb/s and the quality of its technology, gives Maroc Telecom a strong market position relative to its competitors.

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Public telephony market

Maroc Telecom held a monopoly in this market until 2003. The advent of deregulation from 2004 saw the arrival of Meditel, which, in the spring of 2004, started setting up telestores using GSM technology. In addition, in September 2004, two operators (Globalstar and Thuraya) announced their intention to enter the market using satellite-based telephony. To Maroc Telecom's knowledge, these two operators have not yet made a commercial launch. At end-December 2009, the global fleet of public telephones (across all operators and all types of technology) was estimated at 172,000 lines, almost unchanged relative to 2007. Maroc Telecom's share of the public telephony market was estimated at 92.0% in terms of the number of lines versus 8.0% for Meditel (source: ANRT).

Fixed-line business telephony market

Competition in the fixed-line business telephony market existed well before fixed-line licenses were awarded in 2006, through Meditel's installation of "Lo-box" GSM gateways. Since 2007, new entrants have offered customized services to business customers. At the end of December 2009, the total number of business lines in Morocco stood at more than 387,000. Maroc Telecom's share of the business fixed-line market was 95.3% compared to 2.8% for Meditel and 1.9% for Wana (source: ANRT).

Interconnection of incoming international traffic

Since April 2006, when the decrees on the fixed-line licenses granted to Meditel and Wana were published, the three operators who held a fixed-line license have been authorized to offer termination services to international operators for their traffic to Morocco, irrespective of the end destination of the calls. Despite increased competition from new entrants, Maroc Telecom has maintained a market share of over 85% in the direct routing of international calls to its customers (Maroc Telecom estimate) due to price cuts introduced in response to the new conditions in the international telephony market.

Data transmission

At December 31, 2009, competition for data transmission services remained fairly limited, despite the fact that the two new fixed-line operators had launched products and services for businesses. Competition in the data transmission market can also come from ISPs offering VPN IP services, operators of VSAT satellite telecommunications networks, international operators providing international connectivity services to major customers and independent networks deployed by certain major entities that have opted to build their own data networks and that use radio solutions. Maroc Telecom believes that this competition is not material.

Internet

The internet market continued to develop in 2009 with the continued success of ADSL and strong growth for 3G+ mobile internet. At end-December 2009, nearly 60% of the market used wireless internet access technologies (source ANRT). Maroc Telecom has a very strong position in the ADSL market, which accounts for almost 40% of overall internet access in Morocco, with a market share of close to 99% (source: ANRT). The following table provides a breakdown of the market at December 31, 2009:

Market status Market share (% of total access points) Total number of access points Liberalized market Maroc Telecom : 54.0% Wana : 32.9% Méditel : 12.9% Autres : 0.2% Wireline broadband access points Liberalized market Maroc Telecom : 98.9% Wana : 0.8% (ADSL and leased lines) Méditel : 0.4% Mobile broadband Liberalized market Maroc Telecom : 23.7% Wana : 54.6% Méditel : 21.7%

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4.5 DESCRIPTION OF SUBSIDIARIES’ OPERATIONS 4.5.1 Mauritel

The following table summarizes the Mauritel Group's key operating and financial data:

In thousands – as at December 31 2007* 2008* 2009*

Mobile customer base 905 1,141 1,335

Number of fixed lines 36 49 41

Internet customer base 5 9 6

In millions of Moroccan dirhams– in IFRS

Net revenues** 1,063 1,086 1,105 Fixed-line (gross) 271 256 263 Mobile (gross) 866 898 935 Earnings from operations before amortization 554 572 548 Fixed-line 21 51 74 Mobile 533 521 474

Earnings from operations 388 372 355 Fixed-line (41) (18) 27 Mobile 429 390 328

*Revenues related to Mauritel's incoming and outgoing international traffic have been recognized directly in the Mobile business since 2009, whereas they were previously included in transit revenues within Mauritel's Fixed-line business. 2008 and 2007 data have been adjusted to reflect this change.

** Revenues are stated net of inter-segment revenue between subsidiaries' fixed-line and mobile operations, but include revenues generated by subsidiaries (including service commitment contracts), which are eliminated from consolidated revenues.

Mauritel SA is the incumbent Mauritanian operator, and was created following the break-up of the Mauritanian National Postal and Telecommunications Office in 1999. In 2000, Mauritel SA created Mauritel Mobiles, a wholly owned subsidiary, which obtained the second license to operate a GSM mobile telecommunications network. On April 12, 2001, in response to an international invitation to tender launched by the Mauritanian government, Maroc Telecom acquired a 54% stake in Mauritel SA. In January 2002, Maroc Telecom created the Compagnie Mauritanienne de Communication (CMC), to which it transferred the shares it held in Mauritel SA. On June 6, 2002, Maroc Telecom sold a 20% stake in CMC to a group of Mauritanian investors. In 2003, CMC sold a 3% stake in Mauritel SA to company employees for MAD17 million, in compliance with the commitments undertaken at the time of the privatization in 2001. The Mauritanian government's veto rights expired on July 1, 2004, giving Maroc Telecom exclusive control of this subsidiary which is fully consolidated in Maroc Telecom's financial statements. In 2006, the CMC Group acquired 0.527% of Mauritel SA's share capital from Socipam, a non-trading company created by employees of the Mauritanian subsidiaries. On completion of this transaction, CMC held a 51.527% stake in Mauritel SA. Article 73 of the telecoms act 99-019 was repealed in September 2007 via act 2007-049 dated September 3, 2007. This article obliged Mauritel SA to spin-off all of its business units operating in deregulated markets, including its mobile operations. Following the repeal, the Extraordinary General Shareholders' Meeting of Mauritel SA and Mauritel Mobiles approved the merger of the two companies on November 27, 2007. Since that date, Mauritel SA has operated as a full-service operator, leveraging synergies across its mobile, fixed-line and Internet operations.

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Fixed-line telecommunications, data and internet

Mauritel provides fixed-line telephony services (voice and data) together with internet access. Mauritel lost its monopoly in the core services segment (domestic fixed-line telecommunications, telex and telegraph) in June 2004. However, at the end of 2006, it was still the only fixed-line telecommunications operator in Mauritania. In November 2004, the Mauritanian telecoms regulatory authority (ARE) launched a call for interest to telecoms consultants for the purpose of obtaining assistance in the license awarding process. On completion of this process, ARE awarded fixed-line licenses to a new operator, Chinguitel, in 2006. In March 2009, a new fixed-line license was awarded to Mattel, making it a global operator like the other operators in Mauritania. At December 31, 2009, the number of fixed lines amounted to around 41,000, representing a penetration rate of 3%. The fixed-line network covers the main Mauritanian urban centers. Aside from residential clients and companies, phone shop lines account for almost 3% of the customer base, enabling broad sections of the public to access telephone services. Mauritel also offers internet access via the standard dial-up telephone network, ISDN lines, leased lines and ADSL, which was launched in 2006. Following efforts to improve reliability in the internet customer base, customer numbers fell from 9,000 at December 31, 2008 to 6,400 at end-December 2009. The fixed-line and internet market is split between two operators, i.e. Mauritel and Chinguitel (since August 2007), since Mattel has not yet launched its fixed network. At December 31, 2009, Mauritel had an estimated market share of 44.2% in the fixed-line segment, versus 55.8% for Chinguitel (Maroc Telecom estimate).

Mobile services

Mauritel provides prepaid and postpaid services and offers roaming and SMS, together with special services for businesses, such as closed user groups. In June 2009, Mauritel launched a 3G+ service in the cities of Nouakchott and Nouadhibou. To stimulate usage, Mauritel Mobiles offers volume reductions for calls and special offers for top-ups. It has developed a wide range of value-added services to suit the needs of a diverse customer base. Value-added services introduced to date include "Friends & Family", "Favorite Mobile Number", "Preferred Country", "Phony", 1-hour "Eljawal" and 1-hour "Liberté". Mauritel operates in a liberalized market alongside Compagnie Mauritano-Tunisienne de Telecommunications (Mattel) and Chinguitel (since August 2007). In 2006, ARE awarded new licenses, including a 3G license for Mauritel and 2G and 3G licenses for Chinguitel. Mattel was awarded a 3G license in March 2009, but had not started marketing its 3G services at December 31, 2009. At December 31, 2009, Mauritel had more than 1.335 million mobile customers, virtually all of whom were prepaid customers. The mobile penetration rate in Mauritania is around 81% (Maroc Telecom estimate). The market is split between three operators: Mauritel SA, Mattel and Chinguitel. According to Mauritel estimates, the market shares at December 31, 2009 were 57.3% for Mauritel, 25.4% for Mattel and 17.4% for Chinguitel. Maroc Telecom's representatives sit on the Board of Directors of CMC and Mauritel SA and none of Maroc Telecom's executive officers hold executive functions in either company. The consolidation method of the Mauritel sub-group and its contribution to Maroc Telecom's results are summarized in Notes 1, 2 and 28 to the consolidated financial statements. In addition, chapter 2.4 "Related Party Transactions" summarizes the financial flows and the nature of such flows between Maroc Telecom and the Mauritel sub-group.

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4.5.2 Onatel The following table summarizes Onatel group's key operating and financial data: In thousands – as at December 31 2007 2008 2009 Mobile customer base 564 977 1,569 Number of fixed lines 122 145 152 Internet customer base 12 17 23 In millions of Moroccan dirhams– in IFRS Net revenues* 1,371 1,467 1,693 Fixed-line (gross) 799 758 770 Mobile (gross) 719 881 1,162 Earnings from operations before amortization 588 606 758 Fixed-line 180 133 101 Mobile 408 473 657 Earnings from operations 211 210 322 Fixed-line (35) (60) (106) Mobile 246 270 428

* Revenues net of inter-segment revenue between subsidiaries' fixed-line and mobile operations, but including revenues generated by subsidiaries (including service commitment contracts) which are eliminated from consolidated revenues.

Onatel is the incumbent operator in Burkina Faso and arose out of the break-up of the Office des Postes et Télécom- munications in 1987. It was converted into a state-owned company in 1994. In October 2002, Burkina Faso's government established Telmob as a wholly-owned subsidiary of Onatel. In April 2004, Telmob was awarded the third GSM network mobile license in Burkina Faso. On December 29, 2006, Maroc Telecom acquired a 51% stake in Onatel, Burkina Faso's incumbent operator, by means of an international invitation to tender.

Fixed-line telecommunications, data and internet

Onatel provides fixed-line telephony services (voice and data) together with internet access. Onatel lost its monopoly of fixed-line services (national fixed-line telephone, telex and telegraph) on December 31, 2005. However, at the end of 2009, it remained the only fixed-line operator in Burkina Faso. In the internet market, other ISPs operate alongside Onatel. At December 31, 2009, the number of fixed lines amounted to 152,000, representing a penetration rate of around 1.1%. The fixed-line network covers the main urban centers in Burkina Faso. Aside from residential clients and companies, phone shops and public phones account for more than 10% of the customer base, enabling broad sections of the public to access telephone services. Onatel also offers internet access via the PSTN telephone network, ISDN connections, leased line and ADSL, which was launched in September 2005. The internet customer base increased by 35% in 2009, rising to almost 23,000 access points compared with just over 17,000 at end-2008

Mobile services

Telmob, a wholly-owned subsidiary of Onatel, provides prepaid and postpaid services and offers roaming and SMS, together with special services for businesses, such as closed user groups. To stimulate usage and increase customer acquisition, Telmob offers volume reductions on call charges and promotional rates for top-ups and starter kits. It operates in a liberalized market alongside Zain (Celtel) and Moov (Telecel Faso). With more than 1.569 million customers at December 31, 2009, virtually all of whom are prepaid, Telmob has an estimated market share of around 43.2%. The mobile penetration rate in Burkina Faso was 25.9% at the end of 2009 (source: Onatel), which means that there is significant room for further growth. The market is split between three operators: Telmob, Zain and Moov (Telecel). At end-2008, market share was distributed as follows: 43.0% for Zain, 43.2% for Telmob and 13.8% for Moov (Telecel) (Maroc Telecom estimate). Maroc Telecom has representatives on the Board of Directors of Onatel and Telmob, and none of Maroc Telecom's executive officers hold executive functions in either of these companies. The consolidation method of the Onatel sub-group, and its contribution to Maroc Telecom's results are summarized in Notes 1, 2, and 28 to the consolidated financial statements. In addition, section 2.4 "Related Party Transactions" gives details of the financial flows and the nature of such flows between Maroc Telecom and the Onatel sub-group.

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4.5.3 Gabon Télécom The following table summarizes Gabon Télécom group's key operating and financial data: In thousands – as at December 31 2007 2008 2009 Mobile customer base 386 447 513 Number of fixed lines 24 33 36 Internet customer base 10 14 20 In millions of Moroccan dirhams– in IFRS Net revenues* 1,001 1,187 1,220 Fixed-line (gross) 521 622 615 Mobile (gross) 583 692 688 Earnings from operations before amortization 68 260 475 Fixed-line (79) 69 229 Mobile 147 191 246 Earnings from operations (169) (11) 214 Fixed-line (214) (55) 103 Mobile 45 44 111

Gabon Telecom SA is the incumbent operator in Gabon, and arose out of the break-up of the Office des Postes et Telecommunications in 2001, in accordance with Act 004/2001 of June 27, 2001, governing the reorganization of the postal and telecommunications sectors. In March 1999, Gabon Telecom launched Libertis, its wholly owned mobile subsidiary, which was awarded the second GSM network mobile license in 2007. Until 2006, the Gabonese government held complete ownership of Gabon Telecom's share capital. In February 2007, following an international invitation to tender, the Gabonese government sold a 51% stake to Maroc Telecom.

Fixed-line telecommunications, data and internet

Gabon Telecom SA provides fixed-line telephony services (voice and data) together with internet access. Although Gabon Telecom lost its fixed-line and internet monopoly in June 2001, it will remain the sole fixed-line operator in Gabon until 2011. At December 31, 2009, the number of fixed lines amounted to more than 36,000, representing a penetration rate of 2.4%. The fixed-line network covers the main Gabonese urban centers. Gabon Telecom SA also offers internet access via the PSTN telephone network, ISDN connections, leased lines, ADSL and a fixed-line phone service based on CDMA technology (launched in December 2007). The internet customer base stood at more than 20,000 at December 31, 2009.

Mobile services

Libertis, a wholly-owned subsidiary of Gabon Telecom SA, provides prepaid and postpaid services and offers roaming and SMS, together with special services for businesses, such as closed user groups. Libertis offers volume reductions on call charges and special offers on top-ups. Libertis operates in a competitive mobile market and had more than 513,000 customers at the end of December 2009. In 2009, a fourth mobile license was awarded to Azur (Bintel), which started marketing its services in December 2009. The penetration rate was around 112% at the end of 2009. The market is split between four operators: Libertis, Zain Gabon, Moov (Telecel) and Azur (Bintel).At end-2009, market share was distributed as follows: 53.8% for Zain Gabon, 30.2% for Libertis, 15.9% for Moov and 0% for Azur (Maroc Telecom estimate). Maroc Telecom has representatives on the Board of Directors of Gabon Telecom and Libertis, and none of Maroc Telecom's executive officers hold executive functions in either of these companies. The consolidation method of the Gabon Telecom sub-group and its contribution to Maroc Telecom's results are summarized in Notes 1, 2 and 28 to the consolidated financial statements. In addition, section 2.4 "Related Party Transac- tions" gives details of the financial flows and the nature of such flows between Maroc Telecom and the Gabon Tele- com sub-group.

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4.5.4 Sotelma The following table summarizes Sotelma group's key operating and financial data: In thousands – as at December 31 2008 2009

Camparable basis

Mobile customer base 587 818 Number of fixed lines 71 65 Internet customer base 2 7 In millions of Moroccan dirhams– in Iocal standards– from August 1 to December 31, Net revenues* 534 554 Fixed-line (gross) 175 145 Mobile (gross) 363 414 Earnings from operations before amortization 197 234 Fixed-line 20 (23) Mobile 177 257 Earnings from operations 21 63 Fixed-line (66) (98) Mobile 87 162

Sotelma SA is Mali's incumbent telecoms operator, having replaced the former Office des Postes et Télécommunica- tions in 1990. It was created by Order 89-32 of 9 October 1989 and ratified by Act 90-018 ANRM of February 27, 1990.

On July 31, 2009, Maroc Telecom acquired a 51% stake in Sotelma following a privatization process involving an international invitation to tender.

Fixed-line telecommunications, data and internet

Sotelma SA provides fixed-line telephony services (voice and data) together with internet access.

At December 31, 2009, the number of fixed lines amounted to more than 64,600, representing a penetration rate of 0.6%. The fixed-line network covers Mali's main urban centers. Sotelma SA also offers internet access via the PSTN telephone network, leased lines, ADSL and a fixed-line phone service based on CDMA technology. The internet customer base stood at around 7,000 as at December 31, 2009.

Mobile services

Sotelma SA provides prepaid and postpaid services and offers roaming and SMS, together with special services for businesses, such as closed user groups. It offers volume reductions on call charges and special offers on top-ups.

Sotelma operates in a competitive mobile market and had almost 818,000 mobile customers at the end of December 2009.

The penetration rate was around 34.9% at the end of 2009. The market is split between two operators: Sotelma and Orange Mali. At end-2009, market share was distributed as follows: 19% for Sotelma and 81% for Orange Mali (Maroc Telecom estimate).

Maroc Telecom has representatives on the Board of Directors of Sotelma, and none of Maroc Telecom's executive officers hold executive functions in this company.

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4.5.5 Casanet Casanet is a wholly-owned subsidiary of Maroc Telecom, and is one of the leading internet service providers in Morocco. It provides internet access for business customers as well as portal administration services. It also hosts the Menara portal. In 2009, revenues for Casanet amounted to MAD89 million, up 33% compared to 2008. Earnings from operations reached MAD14 million, 40% higher than in 2008.

4.5.6 Médi1Sat In 2005, Maroc Telecom acquired a 24.7% stake in Médi1Sat, which it increased to 26.8% in 2006. Médi1Sat is preparing to launch a 24-hour television news channel based in Tangier and broadcasting in Arabic and French. Through its participation in this project, Maroc Telecom intends to establish closer ties with the media industry and to help develop the content of its triple play ADSL package. In December 2006, Medi1Sat began broadcasting its programs from the Hotbird satellite and via ADSL. In 2008, Maroc Telecom bought MAD6.6 million of shares in Médi1Sat's MAD18.6 million capital increase, with the shares one-quarter paid up. By doing so, it increased its stake in the company to 37%, rising to 39% once the shares are fully paid-up. At December 31, 2008, the other shareholders of Médi1Sat were Caisse de Dépôt et de Gestion, via its FIPAR Holding (39%) subsidiary, Radio Méditerranée International (19.5%) and Compagnie Internationale de Ra- dio Télévision (CIRT) (2.5%) At end-December 2009, the Maroc Telecom Group's stake in Médi1Sat was 30.5%. The stake was reduced to 4.79% in January 2010.

4.5.7 Mobisud (France and Belgium) Maroc Telecom launched Mobisud in France on December 1, 2006, then in Belgium on May 2, 2007, creating two new MVNOs in the European mobile market. It uses the radio network of SFR in France and Proximus in Belgium. Mobisud France has three shareholders: Maroc Telecom (66% stake), SFR, the number-two mobile telephone operator in France (16%) and the Moroccan group Saham (18%). Mobisud Belgium is wholly-owned by Maroc Telecom. In June 2009, Maroc Telecom sold its stake in Mobisud France to SFR for EUR1 after recapitalizing the company to the extent of Maroc Telecom's share of its negative equity. Mobisud (France and Belgium) specifically targets individuals who live in France and have ties with Morocco, Algeria and Tunisia. The offering is designed to enable customers to communicate cheaply with their friends and family in France, Belgium and North Africa. Mobisud France and Belgium create their own ranges of products and services and develop their own IT systems. They also manage their own brands, marketing and sales activities, as well as their customers. They offer prepaid formulas and pay-as-you-go subscriptions. The Mobisud MVNOs generated overall revenue of MAD125 million and an operating loss of MAD25 million in 2009. Mobisud France left Maroc Telecom's scope of consolidation on June 1, 2009. Mobisud Belgium had around 95,000 active users at end-2009.

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4.6 RESEARCH AND DEVELOPMENT

Maroc Telecom has a research and development department which works on the Company’s products. This research usually leads to the launch of new products and/or services or transformations or improvements of existing products, even though such work may not be considered as patentable inventions or processes. Maroc Telecom research and development costs are not significant.

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4.7 SEASONALITY

Morocco The summer months, with the return of Moroccans living abroad, and the fortnight preceding the Aid al-Adha holiday (November 28, 2009) traditionally see a spike in usage (primarily mobile and fixed-line public telephony), while the month of Ramadan (from August 22 to September 21) represents a seasonal trough for the fixed-line and mobile segments.

Mauritania Usage of telecommunications services in Mauritania generally peaks during the period from June to September. Other temporary increases in usage include the Aid El Al Adha, Aid El Fitr and Aid El Mawlid religious holidays. Conversely, usage of fixed-line and mobile services is particularly subdued during Ramadan.

Burkina Faso The annual rainy season (August-September) tends to depress sales in Burkina Faso and has a negative impact on network service quality. This has repercussions both for fixed-line and mobile revenues.

Gabon Business levels are very high in December and the summer months of July-September because of the end-of-year holidays (Christmas and New Year), summer holidays, the celebration of Gabon's independence and the back-to- school period. November, January and February are generally quiet months.

Mali Telecoms activity in Mali rises during the rainy season of June-September, when large numbers of Malian students return to the country for their holidays. Other short events give rise to major sales opportunities, including religious holidays like Tabaski (generally on the day itself and the following days) and end-of-year holidays in December. However, mobile and fixed traffic falls substantially in the month of Ramadan, except for the last few days.

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4.8 REGULATORY ENVIRONMENT AND POSSIBLE DEPENDENCIES

4.8.1 The regulatory framework for the Moroccan telecoms market This section provides a non-exhaustive summary of the legal environment with respect to the company's telecommunications operations in Morocco.

Overview

The focus for reforms to telecommunications regulations consists in:

- equipping the telecommunications sector with an effective and transparent regulatory framework supporting fair competition for the benefit of the consumers;

- pursuing the development of telecommunications networks and services by supporting development of new information technologies;

- providing telecommunications services for the entire Moroccan population;

- providing the Moroccan economy with state-of-the-art communications technologies in order to promote integration into the global economy. The reform of the Moroccan telecommunications sector was initiated by Act 24-96, dated August 7, 1997 (Act 24-96), which dissolved the Office National des Postes et Télécommunications (ONPT) and laid down the conditions for the liberalization of the telecommunications sector. The dissolution of the ONPT led to the creation of three separate legal entities: Itissalat Al-Maghrib (Maroc Telecom), a private joint stock company (société anonyme); Barid Al Maghrib (the post office, or BAM), a public agency organized as a financially independent legal entity; and the Moroccan telecommunications regulator (ANRT) whose primary role is to regulate the telecommunications sector. The liberalization process continued with the adoption of a series of implementing decrees concerning mainly the operation of the ANRT, the general terms of operation of the public telephony networks and the terms applicable to open telecommunications network provision. In November 2004, Act 24-96 amended and supplemented by Act 55-01 completed the liberalization process initiated in 1997 and clarified the existing statutory framework. This gave rise to a reduction of the public telecommunications network operators’ annual contribution to universal service to 2% of annual revenues (excl. tax), net of interconnection costs. Operators may opt for a conventional regime allowing them to provide universal service directly. Provision has been made for access to alternative infrastructure (i.e. facilities owned by public sector entities, private sector holders of public service concessions and other private entities) and authorization has been granted for the sharing of existing telecommunications infrastructure (see the sections on “Universal service” and “Rights of way” hereafter). Finally, the ANRT’s powers were reinforced (see “Role and responsibilities of ANRT”). In 2005, the decrees concerning interconnection and the general terms of operation of the public telephony networks were amended and supplemented, respectively by Decree no. 2-05-770 and Decree no. 2-05-771 dated July 13, 2005. A new Decree, no. 2-05-772 dated July 13, 2005, relating to ANRT’s new powers of monitoring compliance with the law on the freedom of pricing and competition, was adopted. These three decrees were published in the Moroccan legal gazette (Bulletin Officiel) no. 5336 dated July 21, 2005. The liberalization of Morocco's telecoms sector was governed by a guideline memo for the 2004-2008 period, and resulted in the awarding of two fixed-line licenses, three 3G (UMTS) mobile licenses and a third 2G mobile license. It also involved the introduction of carrier preselection, partial and total unbundling and number portability. The telecoms sector guideline memo covering the period until 2013 was approved by the ANRT's Board of Directors on January 19, 2010 and made public on February 25, 2010. The guidelines are as follows: 1- Regulations: - infrastructure sharing: the technical and pricing obligations relating to infrastructure sharing will depend on the network segment concerned, the availability of the shared infrastructure, the age of the shared infrastructure and the zone concerned. The guidelines state that operators' technical and pricing obligations must include SLAs; - unbundling: prices must be lowered - portability: the current procedure must be improved in terms of transfer time, line downtime etc. and will include penalties for non-compliance; the process will be supplemented by the creation of a centralized database.

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- interconnection tariffs: termination tariffs (fixed and mobile) will fall significantly from 2010, with the stated aim of encouraging lower retail prices. A temporary asymmetry could be introduced between the mobile termination tariffs of the three existing operators, but should be removed from 2013. - Retail prices and promotions: guidelines will be published relating to price controls, possibly including rules regarding on-net / off-net price differentiation. The current rules governing promotions on telecoms services will be reviewed. - portability: transfer times and line downtime must be shortened, and a centralized database must be created. 2- Liberalization measures: - fixed: it is intended that new-generation operators and/or infrastructure operators will arrive from 2011 (after studies have been carried out); - mobile: 4G mobile frequencies will be allocated to existing mobile operators that want them; - VSAT: the authorized revenue limit for telephony is being reviewed and the use of the wireless local loop may be authorized as part of universal service projects. 3- Development of ultra-fast broadband: a national plan of action will be launched, including the following objectives: - encouraging the deployment of ultra-fast broadband infrastructure by clarifying the rules for occupying the public domain and operator access to public sites; - preparing models for financing the relevant infrastructure; - defining models for creating and operating infrastructure depending on the zone and creating specific regimes for infrastructure managers in these zones. 4- Universal service: Guidelines will be drawn up from 2011 applying to universal service projects between 2012 and 2016. 5- Revision of the legislative and regulatory framework: There will be a review of legislation relating to telecoms, but also town planning, land management and occupation of the public domain. - the ANRT's powers will be strengthened, particularly its power to apply penalties; - the system for awarding licenses will be revised to encourage the development of broadband; - specific legislation will be enacted on infrastructure sharing.

Rules governing the establishment and operation of telecommunications networks and services in Morocco

Act 24-96, as amended and supplemented, implements different rules according to the type of telecommunications networks and services provided.

Networks and services subject to a license

General description Operators seeking to establish public telephony networks using the public domain or the radio frequency spectrum are required to obtain a license.

A license may only be issued in response to an invitation to tender. Invitations to tender are issued by the ANRT. Contract specifications define, among other items:

• conditions for deployment of the network; • the conditions for the provision of the service; • the area of coverage of that service and the timetable for completion; • the radio frequencies and numbering blocks allocated; • the duration of the license’s validity and the conditions of its renewal; • financial considerations and related terms of payment.

The applicant whose bid is deemed to be the most favorable, as indicated by an opinion issued by the ANRT, is awarded the contract. The adjudication process is documented in a public report. Licenses are issued by decree of the Prime Minister. The awarded licenses are personal and may be assigned to a third party only pursuant to a decree. In addition to complying with the contract specifications, the holder of the license is also required to comply with all applicable statutory and regulatory rules in force, including in particular the general conditions of operation of public

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telecommunications networks, the conditions of provision of technical offers, interconnection tariffs, leased lines and rules governing frequencies. The general conditions of operation of public telephony networks are defined by Decree 2-97-1026, as amended and supplemented by Decree 2-05-771 dated July 13, 2005, which establishes certain obligations, in particular compliance with the principle of fair competition, advertising retail tariffs (with prior notification to the ANRT), equal treatment among users, confidentiality and neutrality of service. The abovementioned decree also enacts the rules related to the division of the infrastructure and the allocation of numbering resources. Finally, telecommunications operators are required to contribute to certain general needs of the State. In particular, they are required to contribute to universal service programs as well as research and training in telecommunications. See “Universal service” subsection hereafter. The conditions of interconnection and the supply of leased lines are defined by Decree 2-97-1025 as amended and supplemented by Decree 2-05-770 dated July 13, 2005 and Decree 2-97-1027, dated February 25, 1998 (see "Pricing regulations” hereafter). As regards radio frequencies, Decree 2-98-157, dated February 25, 1998, provides that the fees are to be set by an order of the minister in charge of telecommunications after obtaining an opinion from the Minister of Finance. Thus, under the terms of Order 310-98, dated February 25, 1998, as amended by Order 606- 03, dated February 4, 2004, three fees are payable: Verification expenses for radio communication stations, fees for the assignment of radio frequencies and the levy for the inspection of operators’ radio communication stations.

Legal status of Maroc Telecom Pursuant to Act 24-96, the telecommunications networks and services previously operated by the ONPT, namely fixed-line telecommunications network and services, mobile telecommunications network and services and the right to use the radio frequencies allocated or assigned to the ONPT, were transferred to Maroc Telecom. In respect of its position as the incumbent operator, Maroc Telecom is subject to specific contract specifications approved by Decree 2-00-1333, dated October 9, 2000, amended by order 2-05-1455, dated April 21, 2006 which define the conditions for the operation of all the networks and services initially operated by the ONPT. These contract specifications specify the conditions in accordance with which Maroc Telecom is to establish and operate, for an unlimited duration:

• fixed landline telecommunications services (including data transmission services, leased lines and the integrated services digital network) on a local and nationwide basis; • telegraph services; • telex services; • maritime radio communications services; • mobile telecommunications services using the GSM standard; • international telecommunications services. Following the amendment of Act 24-96 by Act 55-01 and its rules according to the nature of the telecommunications networks and services provided, Maroc Telecom’s contract terms have now been adapted. Thus, for instance, provisions concerning exclusivity periods have been rescinded, while those relating to universal service and local development have been modified, and those regarding the sharing of infrastructures have been added. It should be noted that mobile telecommunications services using the NMT standard, telex and telegraph services have been discontinued. Maroc Telecom has requested permission from the ANRT to cease provision of maritime radio communication services and X25 data transmission services for which maintenance can no longer be ensured. Maroc Telecom’s services are to be provided on a permanent and continuous basis, in an objective, transparent and nondiscriminatory manner. The Company is thus required to avoid any price discrimination based on geographical location. Maroc Telecom agrees to use its best efforts to achieve levels of quality of service in line with international standards. In this respect, the ANRT may perform inspections of Maroc Telecom, and the Company is required to provide an annual report on the quality of its services. Since the promulgation of Act 55-01, the parameters of the universal service requirement encompass local development obligations while the amount of the overall contribution is set at a maximum of 2% of pre-tax revenues (net of interconnection costs). Maroc Telecom’s contract specifications have been revised accordingly. (see “Universal service” subsection hereafter). A special fund was created by the 2005 budget into which the universal service contributions are paid (see section 5.2.4 “ Significant accounting policies and estimates — Contribution to universal service”). Maroc Telecom pays a fee to the ANRT for use of the spectrum of radio frequencies, in an amount set by regulation.

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Finally, Maroc Telecom also pays an inclusive fee of MAD100 million to the Moroccan treasury for access to public land.

Other licenses awarded As regards mobile telecommunications, pursuant to an invitation to tender issued by the ANRT, a GSM type license was awarded on August 2, 1999 to Meditel for a term of 15 years. This term was extended to 25 years in 2005. In 1999 and late 2002, ten licenses for the establishment and operation of telecommunications networks were awarded in Morocco. A part from the license awarded to Meditel, five licenses were issued to operators to operate GMPCS satellite telecommunications networks, three licenses were issued to operators to operate VSAT satellite telecommunications networks, and two licenses were issued to operators to operate trunked radio communications networks (3RP) in Morocco. In 2005, two licenses were awarded for next-generation fixed-line telecommunications:

• a fixed-line license including local loop (without restricted mobility) and national and international transmission was awarded to Meditel in July 2005; • a fixed-line license including local loop (with and without restricted mobility) and domestic and international transmission was awarded to Maroc Connect (now known as Wana) in September 2005. In 2006, three 3G mobile licenses were awarded to the three existing operators (Maroc Telecom, Meditel and Wana). Lastly, a regional license for the establishment and operation of a 3RP network was allocated in February 2008 to the Cires Telecom company in the Tangier-Tetouan area. In 2008, ANRT launched a tender process for the award of a third second-generation mobile license. The license was awarded in February 2009 to Wana. In February 2009, a third 2G license was awarded to Wana. The commercial launch of the service took place on February 23, 2010.

Networks and services subject to licensing The establishment and operation of any independent network, other than corporate networks, requires a license from the ANRT. Independent networks are non-profit telecommunications networks which are reserved for private use (i.e., where use is reserved for the party establishing it) or shared use (i.e., where use is reserved for the exchange of internal communications among a single group of companies).

Services subject to prior declaration The provision of value-added services is unrestricted, subject to the provision of prior declaration to the ANRT and compliance with applicable regulations. The list of value added services is determined by regulations adopted by the ANRT. Decree 2-97-1024, dated February 25, 1998, defines the following as valueadded services: electronic messaging, voicemail, audiotext, electronic data interchange, enhanced fax, online information, access to data (including data processing and searches), file transfer, conversion of protocols and encryption and the provision of Internet service, together with the administration of the .ma domain name. Providers of value-added services are required to obtain a license to use the connection capacities of one or more public telephony networks, unless the value-added service provider is itself the holder of a license. Act 55-01 provides that such capacity is to be used solely to link customers to a point of presence and between the point of presence and the network of the public telephony operator, when the ANRT grants special permission to a value-added service provider to use any other technical means. Unrestricted networks and facilities The ANRT permits the establishment of corporate networks and radio systems consisting solely of energyefficient and short range devices without restriction. However, such networks and radio systems are subject to the same requirements as for the approval of devices (regarding the protection of the safety of users and operating staff, compatibility, etc.). The ANRT also determines the technical conditions of use of such networks and facilities. The use of the network is to be reserved for the company’s own requirements, and the network’s infrastructure must be entirely leased from one or more licensed operators of a public telephony network.

Pricing regulations

Telecom operators are free to set their own retail rates, subject to compliance with the principles of full competition and uniformity of national rates. Operators must notify the ANRT of their rates before they become applicable. Maroc Telecom as a powerful operator, is subject to reinforced preliminary notification obligations and justification of its rates relative to costs. If operators fail to comply with the competition rules and the abovementioned principle of uniformity, the ANRT may require them to amend their tariffs. As an exception to the principle that operators are free to set their rates, Maroc Telecom’s rates for maritime radio communication services must be linked to costs and safety messages must be free of charge, (i.e. emergency and distress calls).

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Interconnection charges and leased line tariffs provided to third party operators are controlled via the publication of an interconnection catalogue approved each year by the ANRT (see “Interconnection” hereafter).

Interconnection

Background Interconnection is governed by Act 24-96, as amended and supplemented by Act 55-01 and by Decree 2- 97-1025, as amended and supplemented by Decree no. 2-05-770 dated July 13, 2005, which defines the technical and pricing conditions that operators of public telephony networks are required to offer for interconnection to their own networks. Any operator of a public telephony network is required to satisfy reasonable interconnection requests made by the holder of a license to operate a public telephony network, taking into account the applicant’s requirements and the operator’s ability to satisfy them. The interconnection is subject to a contract between the operators, intended to determine the technical, administrative and financial terms of interconnection, in compliance with the principles of objectivity, full disclosure and non-discrimination. In the event of any disagreement between the parties during negotiation of the agreement, the matter is referred to the ANRT. Dominant operators Specific interconnection obligations are imposed upon operators designated by ANRT as exercising a significant influence on a given market. An operator is considered to exercise a significant influence, if, either individually or in conjunction with another, it enjoys a dominant position enabling it to behave independently with respect to its competitors, clients and consumers. Under Decree no. 2-97-1025, as amended and supplemented by decree no. 2-05-770 dated July 13, 2005, operators exercising a significant influence on a given market are required to publish technical and pricing terms for interconnection, once they have been approved by the ANRT. The pricing terms must cover only the actual costs of use of the network and related costs. For such purpose, the presentation of pricing terms must be sufficiently detailed to enable the relevant costs to be determined accurately, and the ANRT is in charge of determining the appropriate accounting methods. Maroc Telecom is thus required to offer pricing terms that comply with the principles of objectivity, full disclosure and non-discrimination, and costs orientation. As of 2006, interconnection charges are to be calculated using the "Long Run Average Incremental Costs" method in compliance with an ANRT decision dated September 1, 2005, relating to the adoption of the "Long Run Average Incremental Costs" method to set interconnection charges to the fixed-line network. The list of market segments designated by ANRT for the period 2009-2011 covers the following segments: • fixed-line termination; • mobile voice termination; • mobile SMS termination; • leased lines For 2009, Maroc Telecom has been designated as an operator exercising a significant influence on the fixed-line termination, mobile voice and SMS termination and lease lines markets. Meditel has been designated as an operator exercising a significant influence on the mobile voice and SMS termination market. Pursuant to the ANRT decision no. 05/07 of April 24, 2007, ANRT exercises multiyear supervision over interconnection charges for the mobile networks of Maroc Telecom and Meditel. The ANRT has set termination charges for Wana’s mobile network which enable it to benefit from termination rate asymmetry*. The following table sets out the operators’ mobile termination rates for 2008 and 2009 (peak time, with a 50% reduction for off-peak hours):

In Moroccan dirhams (excl. tax/minute) Maroc Telecom Méditel Wana Mobile termination (2008) 1.2217 1.2217 1.5027 Mobile termination (2009) 1.1551 1.1551 1.4207

*The new tariffs are on process of determination by the ANRT

On April 14, 2009, the ANRT approved Maroc Telecom’s technical and interconnection rates for fixed-line and mobile networks for 2009. These offers take account of the fact that Maroc Telecom was designated as exercising a significant influence on the aforementioned markets.

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The following table sets out the operators’ domestic interconnection charges to fixed-line networks as applicable on January 1, 2009 (peak time, with a 50% reduction for off-peak hours):

In Moroccan dirhams (excl. tax/minute) Maroc Telecom Méditel Wana

Fixed-line termination Intra CAA: 0.1236 Single Tariff: Single tariff: Single Transit: 0.3201 0.3548 0.4256 Double Transit: 0.4220 Limited mobility termination - - 0.9981

*The new tariffs are on process of determination by the ANRT

In addition, the ANRT exercises multiyear supervision over interconnection charges for Maroc Telecom’s fixed-line network and has set a requirement to achieve a 15% reduction in termination charges between 2007 and 2010. In April 2008, the ANRT approved Maroc Telecom’s technical and pricing proposal for interconnection by capacity to Maroc Telecom’s fixed-line network (including restricted mobility). The following tariffs were introduced as from January 1, 2009: • Intra CAA: MAD24,571 (excl. tax) per MIC per month • Single transit: MAD68,710 (excl. tax) per MIC per month • Double transit: MAD100,656 (excl. tax) per MIC per month

*The new tariffs are on process of determination by the ANRT

Leased lines

Decree 2-97-1027, dated February 25, 1998, relating to the conditions for the provision of an open telecommunications network sets the pricing and technical conditions for the provision of leased lines as well as quality (i.e., the time frame for provision of service and time for repairing malfunctions once a failure has been reported). The ANRT determines the leased lines that operators of public telecommunications networks are required to provide. This list may be supplemented, after consultation with the operator concerned, by a mandate that further services be provided. Each operator offering leased lines is required to publish the technical terms of provision in its price catalogue, including in particular the “principles and terms for compensation”. The price catalogue is to be determined on the basis of an operator’s costs.

Universal service

Universal service obligations cover telecommunications services including: a telephone service of a designated quality at an affordable price; value-added services, the contents and performance standards of which are set in the contract specifications of operators of public telephony networks (including services allowing access to the Internet); the routing of emergency calls, and the provision of an enquiries service and a telephone directory, in printed or electronic form. Act no. 55-01 instituted the “pay or play” principle and set the contribution required from public telephony network operators with respect to their universal service obligations at 2% of pretax revenues and net of interconnection charges, handset sales and income from value added services. Operators may therefore perform either the universal service duties themselves, or pay a contribution into a special allocation fund. Only the routing of emergency calls and the provision of an enquiries service and a telephone directory, in printed or electronic form, are services to be performed by the operators on a mandatory basis, the routing of the emergency calls and the telephone directory having to be provided free of charge. The terms of performance of the universal service duties for each operator are set forth in special specifications approved by decree. Commissioning, operation and maintenance of public phone booths must also be provided. Any removal of a phone booth must obtain the prior consent of the ANRT. For 2008-2011, the ANRT launched a consultation paper for all national operators for a broad-reaching universal service program entitled "Pacte". The program aims to ensure the provision of telephone services and Internet access to all white zones in Morocco. This concerns 9,263 rural areas which are not yet covered by the GSM network. The program proposed by Maroc Telecom covered all of the concerned rural areas. The Universal Service management committee commissioned Maroc Telecom to extend coverage to 7,338 areas, for an overall budget of MAD1.159 billion which will be deducted from its universal service contribution for 2008-2011. In April 2008, Maroc Telecom formalized an agreement with the ANRT covering the provision of universal services to 1,500 rural areas in the 2008 calendar year. This represents an overall investment of MAD396 million which will be deducted from its universal service contribution for 2008.

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In May 2009, Maroc Telecom formalized an agreement with the ANRT covering the provision of universal services to 2,530 rural areas in 2009. This represents an overall investment of MAD334.6 million which will be deducted from Maroc Telecom's universal service contribution for 2009.

Contribution to research, training and standardization in telecommunications

Act 55-01 sets the required contribution from operators of public telephony networks in respect of training and standardization at 0.75% of revenues (excl. tax) and net of interconnection charges generated by the telecommunications operations covered by their licenses. This fee is paid to the ANRT. The fee in respect of research is set at 0.25% of the same revenue base. This fee is paid into a special fund allocated to research. Operators providing equivalent funding for research programs under agreements with research agencies designated by the regulator are exempt from the fee.

Provision of infrastructure

Act 24/96 as amended and completed by Act 55-01 introduces a provision whereby legal entities organized under public law, public contractors and the other operators of public telephony networks must make their property (e.g., easements, major roads, conduits, high points, etc.) available to operators so requesting for the purpose of commissioning and operating transmission systems. Compliance is mandatory unless the transmission systems are likely to interfere with public use. It is to be provided on acceptable, objective and nondiscriminatory regulatory, technical and financial terms, securing an environment of fair competition. The purpose of this provision is to allow operators to make use of the infrastructure currently at the disposal of entities such as the Office National de l’Electricité, the Office National des Chemins de Fer (railroads), Autoroutes du Maroc (highways) or other operators of public infrastructure networks. The contracts must be forwarded to the ANRT for its information and the latter may resolve any related disputes. In addition, the operators of alternative infrastructure networks (public or private entities) may lease or assign to an operator the excess capacity at their disposal and/or rights of way over the public domain. The leasing agreement must be forwarded to the ANRT for its information, and may not interfere with the rights of way that other operators are entitled to obtain.

Numbering and number portability

The ANRT allocates numbers, blocks of numbers and prefixes to the operators of public telephone networks on terms which must be objective, transparent and non-discriminatory. These numbers, blocks of numbers and prefixes may not be transferred without the express prior consent of the ANRT. The conditions for number portability are set by the ANRT, in accordance with the terms of its decision no. 10/06 of October 4, 2006, relating to the framework and conditions for number portability, and decision 10/07 of July 18, 2007, setting the pricing conditions for portability of Maroc Telecom fixed-line and mobile numbers and the portability of Meditel mobile numbers. Fixed-line and mobile number portability has been in place since May 31, 2007.

Pre-selection

Carrier pre-selection (i.e., pre-selection of the operator carrying a call on the domestic and international network, as opposed to the local loop network), must be effective within twelve months of the award of licenses (namely July 8, 2006), according to the terms of the memorandum defining the guidelines for the liberalization of the telecommunications sector for the 2004-2008 period). However, to date, no third party operator has opted to make use of Maroc Telecom’s offer.

Unbundling of the local loop

The conditions for local loop unbundling are not set out in any legislation or regulations in force. Under the timetable for the 2004-2008 period, partial unbundling was expected to be implemented within a period of 18 months (i.e. by January 8, 2007), followed by complete unbundling three years from the award of fixed-line licenses (i.e. by July 8, 2008). On January 4, 2008, the ANRT approved the technical and pricing aspects relating to total and shared access to Maroc Telecom's local loop, with the following monthly rental fees:

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- partial unbundling: MAD35 excl. tax - total unbundling: MAD100 excl. tax Maroc Telecom's partial unbundling offer became effective on January 1, 2007, but to date no third party operator has opted to make use of it.

Accounting separation

In accordance with Decree no. 2-97-1026 as amended and supplemented by Decree no. 2-05-771 dated July 13, 2005, and with Decree no. 2-97-1025 as amended and supplemented by Decree no. 2-05- 770 dated July 13, 2005, operators are required to keep cost accounting records that enable clear identification of the costs, income and earnings connected with each network they operate or service they offer. The annual costs accounts are to be submitted for audit to a body designated by the ANRT.

The Moroccan telecommunications regulatory authority (ANRT)

The ANRT was established by Act 24-96 as a public agency under the authority and supervision of the Prime Minister. It is a separate legal entity that is financially independent and subject to the State’s financial supervision and direction.

Management bodies of the ANRT

Decrees 2-97-813 and 2-98-158, dated February 25, 1998, set out the composition of the ANRT’s Board of Directors and its powers. The management bodies of the ANRT comprise the board of directors, the management committee and the director general. The Board of Directors comprises a chairman and seven state representatives of ministerial rank and five individuals appointed by decree for a term of five years. It is chaired by the Prime Minister and sets the ANRT’s general policies and its annual agenda. An management committee assists the Board of Directors and has responsibility, inter alia, for resolving interconnection disputes. The director general of the ANRT has executive responsibility for the regulatory authority. Challenges on the basis of misuse of power of the ANRT’s rulings are referred to the Rabat Administrative Court.

Role and responsibilities of ANRT

The purpose of the ANRT is to define the regulatory environment for the telecommunications sector, to monitor and ensure compliance with the competition law applying to telecommunications operators, and to resolve disputes. The ANRT drafts proposals for the development of legal, economic and safety rules governing telecommunications activities. It prepares legislative bills, draft decrees and draft ministerial orders. The ANRT prepares and updates the contract specifications for operators of public telephony networks. The ANRT processes applications for licenses and establishes maximum charges for services relating to universal service needs. The ANRT sets the technical and administrative specifications for the approval of terminal equipment and radio facilities, and the technical rules applicable to telecommunications networks and services generally. The ANRT manages and monitors the spectrum of radio frequencies, and allocates these frequencies. Pursuant to its responsibility to monitor compliance with applicable legislation, the ANRT has extensive investigative rights as well as disciplinary powers. If operators fail to furnish required information or do not provide such information within the required timeframe, Act 55-01 authorizes the ANRT’s Director to impose fines (the scale of penalties ranges from MAD20,000 to MAD100,000, as appropriate). Any operator failing to comply with the applicable regulation may be subject to sanction. As a first step, the ANRT’s Director issues a written warning. Thereafter, the operator is subject to a fine which may not exceed 1% of its revenues (excl. tax) net of interconnection charges, as reported for the previous year. In such cases, the ANRT’s Director refers the matter to the Crown Prosecutor of the Rabat Court of First Instance to initiate criminal proceedings, and may bring an independent action for damages. The above fine is doubled if the operator is a repeat offender. Finally, the ANRT may suspend all or part of the operator’s license for a term not exceeding 30 days. Alternatively, it may temporarily suspend the license or reduce its duration by up to one year, or revoke the license. The license is suspended by the appropriate government body at the recommendation of the ANRT’s Director, and the license is rescinded by decree at the recommendation of the ANRT’s Director. The ANRT’s remit includes the resolution of disputes among operators and problems connected with the general operating conditions of telecommunications licenses. The management committee is authorized to resolve interconnection disputes and other matters for which it has been authorized by the Board of Directors. It should be noted that Act 55-01 has extended the scope of the ANRT’s powers to cover compliance with the

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provisions relating to competition contained in Act 6-99 on freedom of pricing and competition. The ANRT prepares the invitation to tender for the award of licenses, processes license applications and receives prior notifications for activities subject to the reporting system. It issues permits and prepares the related licenses and regulatory obligations. It also monitors the operators’ compliance with the terms of their licenses.

Dispute resolution

Decree no. 2-05-772 dated July 13, 2005 sets out the procedures required by the ANRT as regards litigation and disputes relating to anti-competitive practices and economic concentration operations. The decree also sets out the ANRT's additional powers as regards enforcing the compliance of applicable regulations on freedom of pricing and competition. In 2009, Maroc Telecom referred three matters to the ANRT for anti-competitive practices relating to offshoring and corporate establishment incentives. The aim of these referrals was to dispute the exclusive rights given to Oteo, Wana's offshoring subsidiary, in the Casanearshore and Technopolis Rabatshore zones, and the exclusive rights given to Wana in the Casablanca Tech- nopark. Only the last referral was deemed to have merit by the ANRT, since the exclusive rights given to Wana related not only to infrastructure but also services. The ANRT declined to rule that the exclusive rights given to Oteo, relating only to infrastructure, were anti-competitive, given the existence of wholesale access to this infrastructure, even though this situation infringes competition law and the right of third-party operators to set up their own infrastructure in any part of the national territory. The referral of April 27, 2009 relating to the Casablanca Technopark resulted in a conciliation process before the ANRT. This resulted in Maroc Telecom withdrawing its referral after it signed an agreement with the company managing the Technopark regarding Maroc Telecom's non-exclusive management of the Technopark's telecoms infrastructure. In 2009, Wana referred two matters to the ANRT concerning Maroc Telecom. The first, dated January 9, 2009, related to interconnection conditions for self-routing switches (SRSs) on Maroc Telecom's fixed-line network. This referral resulted in a conciliation process, which took place on March 26, 2009. The second referral, dated June 25, 2009, related to offers and price plans offered by Maroc Telecom to business customers relating to on-net voice calls to mobile phones. Maroc Telecom gave its response to the ANRT in July 2009, since when Maroc Telecom has had no further news about the matter.

Dependency

As a service provider, Maroc Telecom has no direct involvement in industrial processes. The components of its network infrastructure, and the handsets and SIM cards that it sells to its clients, are purchased from various suppliers so as not to create any form of dependency.

4.8.2 Regulatory environment of subsidiaries Mauritel Overview

Act 99.019 dated July 11, 1999 relating to telecommunications in the Islamic Republic of Mauritania defines the regulatory environment for telecommunications services in Mauritania. The Act stipulates that the regulatory authority is responsible for regulating, controlling and supervising the activities of telecommunications operators. This independent authority has full financial and management autonomy, and is governed by the bylaws set out in the telecommunications Act and placed under the supervision of the Minister in responsible for telecommunications Decree 2000-163, which defines the conditions governing network interconnection and the provision of telecommunications services, constitutes the main legislative text governing the telecommunications sector.

Main regulatory obligations applying to Mauritel

In 2005, Mauritel satisfied its contractual obligations as regards fixed-line and 2G mobile coverage. For 3G services, Mauritel is committed to covering 19 localities in four phases over a four-year period from the date the service is launched on the market. Each telecom operator is required to pay a universal service contribution equivalent to 3% of revenues net of

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interconnection charges, and a regulatory levy equivalent to 2% of revenues net of interconnection charges. The above rates are identical for all operators. Finally, Mauritel is required to pay an annual fee for the numbering plan and the use of the radio frequencies.

Competitors

Since the sector reforms that took place between 2000 and July 2006, further liberalization had been limited to allowing two companies, Mauritel Mobiles and Mattel, to offer mobile services. From July 2006, with the completion of the liberalization process and the award of new fixed-line and 2G and 3G mobile licenses, a new operator has entered the fixed-line and mobile segments. In March 2009, a new fixed-line license was awarded to Mattel.

Onatel Overview

The regulatory environment for telecommunications services in Burkina Faso is governed by the telecommunications Reform Act no. 051/98/AN dated December 4, 1998. The regulatory authority is a public sector administration placed under the supervision of the Ministry of Post and Tele- communications. It is responsible for enforcing telecommunication regulations, ensuring that operators comply with regulatory obligations, managing and controlling radio frequencies, establishing and managing the national numbering plan, and managing conciliation and arbitration proceedings between operators and between the latter and consumers. The principal laws regulating the telecommunications sector are as follows: • Decree 2000-083/PRES/PM/MC/MCIA dated March 3, 2000 concerning the establishment and supervision of pricing for telecommunications services; • Decree 2000-087/PRES/PM/MC/MCIA dated March 13, 2000 governing the conditions for network interconnection and the provision of telecommunications services.

Main regulatory obligations applying to Onatel and Telmob

Pursuant to its contracts specifications, Onatel is under an obligation to cover 143 localities before 2010, 60 of which must be covered by June 2009. Telmob’s contract specifications also set out its obligations in terms of coverage of localities and certain major roads throughout the country. Telmob’s contract specifications, like those of other GSM mobile operators, allow coverage to be completed in five (5) phases. Decree 2000-408/PRES/PM/MC dated September 13, 2000 fixes operators’ universal service contributions at 2% of collected revenues. Decree 2000-409/PRES/PM/MC fixes the regulatory fee to be paid by operators to the Regulation Authority at 1% of collected revenues. Finally, Onatel and Telmob are required to pay an annual fee for the numbering plan and the use of the radio frequencies.

Competitors

Onatel SA remains the sole fixed-line operator in Burkina Faso in spite of the fact that it lost its monopoly in the core services segment (domestic fixed-line services, telex and telegraph) on December 31, 2005. In 2000, two GSM mobile licenses were awarded to Zain (formerly Celtel) and Telecel for a period of ten years.

Gabon Télécom Overview

The regulatory environment for telecommunications services in Gabon is governed by Act no. 005/2001 dated June 27, 2001. The Gabonese regulatory authority is responsible for regulating, controlling and monitoring the telecommunications sector. The authority is placed under the supervision of the Ministry of Post and Telecommunications and the Ministry of Economy, Finance, Budget and Privatization.

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The principal laws regulating the telecommunications sector: • Decree 0540/PR/MPT on interconnection and infrastructure sharing; • Decree 0008/PR/MPT on the implementation and management of the numbering plan; • Decree 1081/PR/MPT on the approval of the public service concession agreement; • Decree 084/PR/MCPTNTI relating to fees, duties and contributions due by telecommunications operators holding a public service concession contract or a license; • Decree 0544/PR/MPT relating to the creation, financing and management of the universal service fund.

Main regulatory obligations applying to Gabon Telecom and Libertis

Pursuant to its contract specifications, Gabon Telecom is under an obligation to provide coverage for 54 rural areas before the end of 2011 at a minimal rate of 10 areas per year. In consideration for this, Gabon Telecom benefits from a five-year exclusivity period in the Fixed-line segment. Libertis’ contract specifications also set out its obligations in terms of coverage of rural areas and certain major roads throughout the country. Libertis’ contract specifications do not set out a specific timetable for coverage. This is also the case for all other GSM mobile operators. Decree 00544/PR/MPT dated July 15, 2005 relating to the financing and management of the universal service fund, fixes the contribution due by operators at 2% of net revenues. Gabon Telecom is exempt from payment during the five-year exclusivity period. Decree 0084/PR/MCPTNTI dated October 26, 2006 relating to fees, license payments and contributions due by telecommunications operators holding a concession contract or license, sets their contribution for research, training and telecommunications standardization at 2% of net revenues. Gabon Télécom and Libertis are required to pay an annual fee for the numbering plan and the use of the radio frequencies. In 2008, the Gabonese telecommunications regulatory authority introduced a new levy on mobile phone operators which is designed to help fund the obligatory health insurance scheme. This levy is equal to 10% of net revenues.

Competitors

Gabon Telecom is the sole fixed-line operator in Gabon. On February 9, 2007, it was awarded a five-year exclusivity period in the fixed-line segment. In the mobile market, a fourth mobile license was awarded in 2009 to Azur (Bintel), which started marketing its services in December 2009. Libertis' two other competitors in this segment are Zain Gabon and Moov.

Sotelma Overview

The regulatory framework for Mali's telecoms market is governed by two texts: • Order 99-043/P-RM of September 30, 1999 governing the telecoms sector in Mali • Act 01-005 of February 25, 2001 amending Order 99-043/P-RM of September 30, 1999. The regulatory authority is a public-sector entity placed under the supervision of the Ministry of Post and Telecommu- nications. It is responsible for enforcing telecommunication regulations, ensuring that operators comply with regulatory obligations, managing and controlling radio frequencies, establishing and managing the national numbering plan, and managing conciliation and arbitration proceedings between operators and between operators and consumers. The principal laws regulating the telecommunications sector are: • Decree 00-229/P-RM of May 10, 2000 relating to infrastructure sharing • Decree 00-230/P-RM of May 10, 2000 relating to interconnection

Main regulatory obligations applying to Sotelma Sotelma does not have a regulatory obligation to extend the coverage of the fixed-line network. In the mobile segment, it has an obligation in terms of coverage of rural areas and certain major roads throughout the country.

Competitors The fixed and mobile telecoms market has been shared by Sotelma and Orange Mali since 2002, when a global license was awarded to Orange Mali.

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4.9 HUMAN RESOURCES

4.9.1 Developing skills Developing the skills of its staff is of the utmost importance to Maroc Telecom. To help enhance the know-how of its workforce, more than 2,000 staff have changed jobs and furthered their career through the group's mobility program, supplemented by the staff review, introduced in 2009.

4.9.2 Staff 36% of Maroc Telecom’s workforce is aged below 40 and 37% of the workforce has seniority of between 15 and 20 years.

4.9.3 Staff turnover Staff turnover (i.e., the ratio of staff having left during the year to the staff at the beginning of the fiscal year) was 1.14% in 2009 compared with 2.3% in 2008 and 5.2% in 2007. The high rate in 2007 was due to the implementation of a voluntary redundancy plan.

4.9.4 Historical workforce data The following table shows the changes in Maroc Telecom Group’s workforce over the fiscal years ended December 31, 2007, 2008 and 2009:

2007 2008 2009 Maroc Telecom 10,949 11,093 11,100 Mauritel 502 440 432 Onatel 1,301 1,335 1,260 Gabon Télécom 1,220 452 430 Sotelma 850 Casanet 70 Mobisud Belgique 8

N.B : See Note 19 of consolidated financial statements relating to average workforce of the Maroc Telecom Group.

4.9.5 Vivendi group staff The staff numbers mentioned in the table above also include employees on secondment with Maroc Telecom from Vivendi or outside the group, either under a service contract or a local employment contract. There were 14 expatriate staff in 2009, compared with 17 in 2006, 19 in 2007 and 16 in 2008.

4.9.6 Training Training is regarded as a key aspect of the group's human resource management, and is crucial for improving the performance of staff. In 2009, 35,733 days of training were provided to 15,736 participants, giving an average of almost 3.2 days of training per employee.

4.9.7 Change in staff compensation Gross compensation granted to Maroc Telecom employees comprises both fixed and variable components. The amount of the variable component (performance bonus) is determined on a case-by-case basis according to each employee’s achievement of targets. The change in payroll costs over the past three fiscal years is as follows:

in millions of Moroccan dirhams 2007 2008 2009 Payroll costs for Maroc Telecom 2,134 2,145 2,215 Payroll costs - Maroc Telecom group 2,695 2,705 2,604

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4.9.8 Employee share ownership At the time of its IPO, Maroc Telecom gave employees the opportunity to acquire shares in the Company under preferential conditions (e.g. a 15% discount on the subscription price on condition that they conserve the shares thus acquired over a three-year holding period ending on December 16, 2007). At December 31, 2009, employees held 0.12% of the equity capital and voting rights. In addition, in 2008, employees of Maroc Telecom and Casanet were invited to take part in the Opus 08 employee share ownership plan implemented for the staff of Vivendi and its subsidiaries. A total of 1,890 employees subscribed to the plan in 2008 and 382 in 2009.

4.9.9 Labor relations

Employer-employee relations

Elections of employee representatives were held on April 19, 2009. There were also ongoing two-way discussions between employers and labor unions during 2009.

Labor unions

In the 2009 employee representative elections, the workforce participation rate was 80.98% versus 47% in 2003. Only one union had the status of "most representative labor union" following the April 19, 2009 elections, i.e. Syndicat National des Postes et Télécommunications (SNPT), which is affiliated with the Confédération Dé-mocratique du Travail (CDT).

Union representation

86 employee representatives were elected in 2009, of whom 38.37% belonged to the most representative union. The labor constituencies within Maroc Telecom consist of nine representative entities and three electoral colleges.

4.9.10 Labor agreements and negotiations Maroc Telecom's labor relations policy seeks to balance interests while achieving industrial harmony. This approach is also characterized by a emphasis on continuously improving the utility and benefits of labor relations. As such, employer-employee dialogue is a continuous process. This long-standing partnership approach gave rise to the following agreements in 2009:

• 2009: Signature of a new collective agreement Agreement regarding labor relations and equipment • 2010: Agreement regarding labor relations and equipment

4.9.11 Employee benefits

Maroc Telecom has placed human resources at the heart of its strategy. In keeping with this commitment, it has traditionally offered a wide range of employee benefits. Efforts pursued in this area involve acting to promote the welfare of employees and their families, and responding to their individual needs.

The Company's policy covers the following areas:

Supplementary pension plan :

In accordance with applicable legislation, employees can join one of three mandatory pension funds operated by the Caisse Marocaine des Retraites (CMR), Régime Collectif d’Allocation de Retraite (RCAR) and the Caisse Nationale de Sécurité Sociale (CNSS). In addition, Maroc Telecom provides a supplementary pension scheme in association with Caisse Interprofessionnelle Marocaine des Retraites (CIMR). The purpose is to enable participants to benefit from additional pension arrangements on top of the mandatory pension scheme.

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Approximately 73.79% of Maroc Telecom's workforce (8,155 employees) have joined the supplementary pension plan.

Supplementary health insurance:

Under the mandatory health insurance plan, all Maroc Telecom employees, irrespective of their employment grade, are affiliated to the Moroccan social security body, Caisse Nationale des Organismes de Prévoyance Sociale, and are therefore eligible for supplementary health insurance plan introduced in 2003. If employees wish, they may take out a policy which reimburses medical costs not covered by the social security body.

Currently, 9,033 staff have selected this supplementary cover, including 342 retired staff, equal to 78.55% of the workforce. At February 28, 2010, the plan had 9,075 members.

Home loans:

Maroc Telecom helps to negotiate subsidized lending terms with credit institutions for employees seeking to acquire, build or substantially improve their homes. This enables employees to benefit from a preferential 5% interest rate, which is subsidized by 2.5%.

In 2006, Maroc Telecom increased the maximum amount of loans available under this scheme to MAD700,000 and set the subsidized interest rate at 2.5%.

Transport allowance:

Maroc Telecom provides a subsidy for employees who acquire their own means of transport. This subsidy amounts to MAD5,000 for the purchase of a car and MAD2,000 for the purchase of a motorcycle.

In 2009, 1,303 staff took advantage of this subsidy.

Summer vacation centers:

Maroc Telecom helps to provide holiday accommodation for employees during the school holidays and annual leave periods. Maroc Telecom owns a number of residential vacation centers and has entered into agreements with private hotel operators.

The network of holiday centers has been strengthened through agreements with private-sector tour operators in the most popular holiday destinations, and 2,371 families used these centers.

Medical and social services:

Medical and social services centers are staffed by 18 contracted physicians, including 3 specialists, and social assis- tants. They provide various medical services to employees and their families. More than 2,787 people used these centers' services in 2009.

Occupational health:

Since 2005, and in addition to its medical and social services centers, Maroc Telecom has devised a preventive health care strategy which aims to achieve improvements in working conditions and to ensure compliance with the Moroccan Employment Code. The occupational health structure is staffed by five occupational health physicians, assisted by nurses and social co-ordinators, and is supervised by a consultant physician.

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4.10 REAL PROPERTY

For the purposes of operating its networks and for its retail, support and administrative functions, Maroc Telecom has more than 5,400 sites (buildings, land, etc.) throughout Morocco. Of this total, around 80% are leased sites and 20% are owned by Maroc Telecom. The sites owned by Maroc Telecom were historically owned by the Kingdom of Morocco and were legally transferred to Maroc Telecom at the time of its incorporation in 1998, in compliance with Act 24-96 via a contribution in kind. Maroc Telecom is currently in the process of obtaining formal legal title to these sites. Administrative proceedings are expected to be completed in 2010. This timetable is given as an indication, since the length of administrative procedures may vary. As at December 31, 2009, the sites owned by Maroc Telecom broke down as follows: - 56% of the sites are legally registered in Maroc Telecom's name (versus 54% in 2008 and 48% in 2007); - 34% of sites are under requisition (versus 34% in 2008 and 36% in 2007). Requisition is a claim to a property right. It is delivered by the land registrar once the application for land registration has been made. Title is awarded once the regulatory and administrative formalities have been completed, i.e. publication of the application for land registration, boundary marking, notification of requisition and, finally, registration. This procedure is subject to regulatory time limits. - Maroc Telecom is in the process of obtaining legal title to 10% of its sites, versus 12% in 2008 and 16% in 2007. One site is owned by the ONPT, 33 are the subject of legal disputes, 46 are being compulsorily purchased by Maroc Telecom and 32 are being formally registered. The sites subject to legal dispute and undergoing compulsory purchase include buildings belonging to several purported owners who are in dispute, land lacking ownership documentation and land belonging to local authorities and subject to opposition.

The estimated costs linked to these procedures (payment of land registration fees) and/or the potential financial risks likely to arise from any dispute over the legal title of ownership are deemed to be insignificant. In connection with any transfer of ownership to the Company of real or personal property assigned for charitable works falling within the private domain of the State which is required to be made in the form of a remunerated contribution through an increase in the share capital in favor of the government of the Kingdom of Morocco, the latter has undertaken to transfer to Vivendi, simultaneously with the increase in capital and at no cost, a percentage of the shares issued at the time of this increase in capital equal to the percentage of the capital of the Company held by Vivendi prior to the realization of these assets.

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4.11 INTELLECTUAL PROPERTY As at December 31,2009, Maroc Telecom owned some 818 trademarks and trade names, four patents, one industrial model and two industrial design registered with the Moroccan Office for Industrial and Commercial Property (OMPIC). “Itissalat Al-Maghrib”, “Maroc Telecom”, “Jawal”, “El Manzil”, “Kalimat”, “Menara”, “Fidelio”, “Les pages jaunes de Maroc Telecom”, “Maghribcom” and “Mouzdaouij” “Solution entreprises”, “Phony” and Mobicash are among the main trademarks and brand names owned by the group in Morocco. Maroc Telecom has four invention patents providing 20 years of protection. The first patent, registered in 1997, is related to the complete execution, with a prototype, of an NT1 device. This device is used to connect customers to Maroc Telecom’s Marnis integrated services digital network, and is the method used to carry a digital connection to each customer. The second patent, registered in 1999, regards complete execution, with a a prototype, of a remote display device through a radio paging network named Rakkas. This wireless device allows the display of banking, stock exchange or other information at any location covered by the Rakkas radio messaging network. The third patent, registered in 2006, covers an automatic cooling system which provides a backup system in the event of a failure in the air conditioning system in the areas which house the energy and telecommunications equipment. The fourth patent, registered in 2006, covers an automatic line identification system which automatically detects all the pair cables connected to telecommunications access network equipment. Industrial designs and models have a hybrid status, and are protected in two ways. Firstly, copyright protects a design or model that is new and particular to the creator. This provides protection throughout the life of the creator and for 70 years after his/her death, and does not involve any registration formalities. Industrial designs and models are also protected by intellectual property law. Those registered with OMPIC before December 18, 2004, which is when act 17- 97 relating to the protection of intellectual property came into force, are protected for 25 years. Those registered after that date are protected for a 5-year period, renewable twice, giving maximum protection of 15 years. The first model registered in 2002 mentions the implementation of a new design for phone booths to be installed in public locations. This design model was developed for the Moroccan market and takes account of, among other factors, mechanical, electrical, electromagnetic (electric sparking, radiation, storms) and sound constraints in order to provide the user with comfortable and entirely safe use of the public phone booth. This type of phone booth has now been extensively deployed by Maroc Telecom. The second model registered in 2009 also concerns the implementation of a new design for multimedia phone booths to be installed in public locations. The industrial design registered in 2006 covers the drawing of the person on the cover of the “Guidelines for the Security of Information” manual. The trademarks and brand names currently owned by Maroc Telecom, of which there are 818, are protected over the entire national territory. For the 284 trademarks registered prior to December 18, 2004, the protection period is 20 years renewable indefinitely from the date of their registration, in accordance with Act no. 17-97 which came into force on that date, concerning the protection of industrial and intellectual property rights. For the 534 registered subsequently, the protection period is 10 years. In 2006 and 2007, Maroc Telecom was awarded the national trophy by the OMPIC, for having registered the greatest number of national trademarks in 2005 and 2006. • 241 brands in 2005 • 113 brands in 2006 Since 2006, in order to preserve its industrial and intellectual property rights, Maroc Telecom has extended the protection of 40 of its trademarks (France, Benelux, Germany, Spain, Portugal, Italy, Algeria, European Community), including the Mobisud brand. In addition, Maroc Telecom is attentive to ensure that appropriate action, whether necessary or desirable, is taken to protect the trademarks, the patents and the design model that it has developed. Maroc Telecom has a research and development department which works on the Company’s products. This research usually leads to the launch of new products and/or services or transformations or improvements of existing products, even though such work may not be considered as patentable inventions or processes. These improvements made to protected inventions may be registered for protection by means of an instrument known as an additional patent, the formalities for the registration of which are identical to those for the principal patent. Maroc Telecom has launched among its employees an innovation contest intended to reward the best ideas or projects, with possible benefits for the Company in terms of registration of patents, trademarks or designs. The rights to use the trademarks and trade names granted to Maroc Telecom are described in the service agreements made with its contractors. Some contracts for the sale of services or products marketed by Maroc Telecom’s services division give resellers a right to use Maroc Telecom’s trademarks during the term of performance of the agreement, in accordance with the procedure agreed between the parties.

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4.12 INSURANCE Since 2003, Maroc Telecom has undertaken several initiatives as part of its effort to improve the management of risks relating to its business. These include: • identifying risks likely to adversely affect the Company’s employees, property or its performance; •estimating and assessing potential risks; •determining a more suitable property risk coverage plan which has been assessed and updated by insurance experts; • optimizing the cost of insurance coverage for such risks; • covering the residual risks through insurance policies; • putting in place claims notification and claims management procedures; • Implementing prevention and protection measures against risks of fire and explosion for the largest sites; • establishing an information security policy; • establishing a backup center to ensure the continuity of the operations. Maroc Telecom reviews its insurance policies on an ongoing basis, using research to improve coverage. As regards civil liability, the group decided to increase its compensation limit and extend coverage in 2009. In January 2010, this led to the purchase of a new insurance policy, with a duration of 1 year renewable by tacit agreement up to a maximum of 3 years. In June 2003, it also took out an insurance policy covering compensation for occupational accidents and diseases. On July 1, 2004, Maroc Telecom took out an insurance policy to cover property damage and business interruption. In addition to extending cover to business interruption, the policy’s contractual insurance limits have been successively increased in order to extend the scope of coverage and to avoid any material loss that could jeopardize continued operation. In January 2006, Maroc Telecom’s insurance policies currently cover up to MAD850 million per loss for combined and cumulative property damage and business interruption. In 2008, limits were changed to MAD1,100 million for damage and business interruption combined, and MAD550 million for natural events. Deductibles were also increased to optimize costs. This policy was cancelled in late 2009 and replaced by another that took effect on January 1, 2010 with the same insurance limit, but with a much lower deductible and a lower premium for Maroc Telecom. Insurance costs in 2009 totaled around MAD30 million, relating to premiums on the following new or renewed insurance programs: damage and business interruption, civil liability (operations, directors and officers, vehicles) and accidents at work. In addition to these insurance policies, in 2005 Maroc Telecom initiated a program to enhance the protection of its sites against fire, explosions and theft. This is carried out in close collaboration with the Group's insurance partners. As regards data security and business continuity, Maroc Telecom currently has a backup center installed in Ain Aouda. Maroc Telecom's subsidiaries also benefit from its insurance experience and risk management expertise.

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4.13 LEGAL AND ARBITRATION PROCEEDINGS

To the best of the Company's knowledge, there are no pending or potential government, legal or arbitration proceedings, including proceedings of which the Company is aware, that may have or have had in the past 12 months a significant effect on the Company and/or the group's financial position, profits, business and property, with the exception of the following litigation:

Telestore litigation In a ruling dated December 28, 2004, the Commercial Court of Rabat declared that the application of the National Federation of Phone Shop Associations was not within its jurisdiction. The Federation then brought a writ before the Commercial Court of Rabat, demanding the withdrawal of all authorizations delivered by Maroc Telecom to new phone shop operators that do not respect the chaining rule imposing a minimum distance of 200 meters between each phone shop. The Court of First Instance, in a ruling dated April 6, 2005, (non-enforceable) ordered Maroc Telecom to reverse its decision to abandon the 200 meter chaining principle and to withdraw the authorizations that had been granted that did not respect the chaining rule. This judgment was accompanied by a penalty of MAD500/ day for non-execution. On June 27, 2005, Maroc Telecom appealed against this judgment before the Commercial Court of Appeal of Casablanca. In its ruling on May 9, 2006, the Court of Appeal partly accepted Maroc Telecom’s applications, rescinding the first instance judgment as regards the order to withdraw the authorizations but upheld the judgment as regards the requirement for Maroc Telecom to reverse its decision to abandon the 200 meter chaining principle and ordered the company not to grant any new authorizations that did not comply with the chaining rule subject to a penalty of MAD500 /day for non-execution. The Company considers that the claims made by the Federation are not legally founded, and appealed to the Supreme Court on July 21, 2006, seeking the annulment of the Court of Appeal’s judgment. As the Federation had also appealed to the Supreme Court, Maroc Telecom applied for the two proceedings to be joined. This application was considered by the Court at a hearing on 14 February, 2007 which referred the case to the chief court clerk for further inquiry. On March 26, 2008, the Supreme Court overturned the decision of the Court of Appeal on grounds that the Federation was not entitled to seek legal action and referred the case to the Court of Appeal for a ruling on this matter. After pleadings by both parties, the Casablanca Commercial Court of Appeal made a ruling on November 19, 2009 confirming its position stated in the previous decision delivered on May 9, 2006 overturning the part of the Rabat Com- mercial Court's judgment ordering Maroc Telecom to withdraw authorizations granted in breach of the chaining principle and confirming the part requiring Maroc Telecom to stop granting new authorizations in breach of the chaining rule, subject to a penalty of MAD500 for each day of delay. The ruling has not yet been written up, to enable Maroc Telecom to apply for a further appeal. Since 2005, Maroc Telecom has received 105 individual applications before the various commercial courts (Rabat, Fes, Oujda, etc.) from phone shops each claiming between MAD5,000 and MAD50,000 (one applicant is claiming MAD100,000) in interim damages and a legal appraisal to determine the final amount of damages. These applications are based on the aforementioned judgment and decision of the Court of Appeal. Following the decision handed down by the Supreme Court, the applications are henceforth based upon an alleged breach by Maroc Telecom of its agreement with FNASET. All claims have been decided in Maroc Telecom's favor, except for one that remains before the Supreme Court following a further appeal by Maroc Telecom. The Company challenges the notion that the chaining rule is contrary to competition rules insofar as other operators are not subject to this rule. The Company does not intend to revoke its decision to put an end to chaining, as it considers that the claims made by the Federation have no legal basis.

Total Call / Free litigation This relates to a compensation claim arising from an interruption to an international leased line. Total Call claims that its leased line was disrupted over a period of eight days thereby resulting in material losses to itself and to its client Free, for which it seeks compensation. The aggregate claim made by both companies amounts to approximately MAD58 million. Maroc Telecom has set aside a provision of MAD4 million to cover this claim, corresponding to the amount of the claim made by Total Call. No provision has been made in respect of the amount claimed by Free (MAD54 million) insofar as Maroc Telecom had no contractual relationship with the latter company . The case is still pending before the Commercial Court of Casablanca.

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Petition by Maroc Telecom concerning the transport of international traffic to Maroc Telecom subscribers via domestic interconnection arrangements between Maroc Telecom and Wana On March 12, 2008, Maroc Telecom filed a petition with the ANRT concerning the transport of international traffic to Maroc Telecom subscribers via domestic interconnection arrangements between Maroc Telecom and Wana. In its report dated August 25, 2008, the expert witness appointed by ANRT recognized the existence of the fraudulent acts as alleged by Maroc Telecom and further indicated that the nature of the fraud was such that the perpetrators had to be in collusion with members of Wana’s staff. Since the fraudulent acts remained ongoing, Maroc Telecom requested a supplementary investigation and audit of Wana’s network in order to uncover the cause of the problem and assess the volume of traffic that has been diverted. On September 12, 2009, Maroc Telecom and Wana signed a settlement intended to put an immediate halt to the diversion of international telephone traffic. The parties agreed to accept the appointment of an expert witness by the ANRT, which acceded to their request. The expert was mandated to conduct a comprehensive technical audit in the final quarter of 2008. The purpose of this audit was to determine whether the fraudulent acts concerned by the petition had effectively ceased and to detect if there was any further fraudulent activity occurring across Wana's network. The parties also agreed that a revenue assurance audit be carried out. Following this audit, which gauged the exact volume of diverted traffic, a bill of MAD5,504,514.55 (incl. tax) was sent to Wana.

Petitions by Maroc Telecom relating to anti-competitive practices in offshoring and corporate establishment incentives. In 2009, Maroc Telecom referred three matters to the ANRT for anti-competitive practices relating to offshoring and corporate establishment incentives. The aim of these referrals was to dispute the exclusive rights given to Oteo, Wana's offshoring subsidiary, in the Casanearshore and Technopolis Rabatshore zones, and the exclusive rights given to Wana in the Casablanca Technopark. Only the last referral was deemed to have merit by the ANRT, since the exclusive rights given to Wana related not only to infrastructure but also services. The ANRT declined to rule that the exclusive rights given to Oteo, relating only to infrastructure, were anti-competitive, given the existence of wholesale access to this infrastructure, even though this situation infringes competition law and the right of third-party operators to set up their own infrastructure in any part of the national territory. The referral of April 27, 2009 relating to the Casablanca Technopark resulted in a conciliation process before the ANRT. This resulted in Maroc Telecom withdrawing its referral after it signed an agreement with the company managing the Technopark regarding Maroc Telecom's non-exclusive management of the Technopark's telecoms infrastructure.

Petition by Wana relating to interconnection conditions concerning the self- routing switches (SRSs) of Maroc Telecom's fixed-line network On January 9, 2009, Wana filed a petition with the ANRT against Maroc Telecom relating to interconnection conditions concerning the self-routing switches (SRSs) of Maroc Telecom's fixed-line network. This referral resulted in conciliation, which took place on March 26, 2009.

Petition by Wana concerning offers and price plans offered to business customers in relation to on-net voice calls to mobile phones On June 25, 2009, Wana filed a petition against Maroc Telecom concerning offers and price plans offered to business customers in relation to on-net voice calls to mobile phones. Maroc Telecom gave its response to the ANRT in July 2009, since when Maroc Telecom has had no further news about the matter.

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4.14 RISK FACTORS

This chapter sets out the main risks facing the company, taking into account its activities, structure and organization. These risks can be classified in three categories:

• Business risks (section 4.14.1) • Legal risks (section 4.14.2) • Market risks (section 4.14.3) The company has reviewed the risks that may have a material adverse effect on its business, financial position or earnings, or on its ability to hit its targets, and believes that there are no material risks other than those set out below. In addition to the other information set forth herein, investors should give careful consideration to the risks described below before deciding to invest in the Company's shares. If any or all of these risks were to materialize, the activities, financial position, earnings and development of the Company could be adversely impacted.

4.14.1 Business risks

Maroc Telecom's revenues and earnings are dependent to a significant extent on the economies of countries where Maroc Telecom operates.

Maroc Telecom's core business is the provision of telecommunications services in Morocco, including the provision of international telecommunications services to and from Morocco. Accordingly, Maroc Telecom's revenues and profitability depend to a significant extent on telecommunications spending by Moroccan customers and international telephone traffic to and from Morocco. The developing usage of telecommunications services in Morocco reflects, in part, changes in the country's economic position, and more specifically, the population's disposable income and the economic activity of businesses. A contraction or slower-than-anticipated growth in the Moroccan economy could have a negative impact on the development of the customer base and the usage of fixed-line and mobile telecommunications services in Morocco. This could have a material effect on the growth and profitability of Maroc Telecom's activities, and could entail a decline in its revenues and earnings. In the event of a slowdown in the economy, particularly affecting business levels and growth in the markets where Maroc Telecom operates, the group's earnings and financial position could be materially affected. In addition, the perception of possible acts of terrorism, whether committed in Morocco or abroad, could have a significant adverse effect on the Moroccan economy in general (in particular through a decrease in tourism). As regards this risk, which is not specific to Morocco, Maroc Telecom cannot forecast the consequences of the perception, informed or otherwise, of such possible acts of terrorism.

Maroc Telecom faces growing competition in the main markets in which it operates, which could lead to a loss of market share and a reduction in its revenues.

Maroc Telecom's activities are subject to tough competition, which could intensify further with the liberalization of the main markets in which it operates. This competition is putting pressure on Maroc Telecom and its subsidiaries, which could prompt the group to carry out further price cuts, increase its spending on customer loyalty programs and introduce promotions. This could lead to a further contraction in market share and reduce the group's revenue and earnings. The group's development also partly depends on its ability to adjust its products and services to the requirements of increasingly demanding customers, in a sector that is seeing rapid technological change. To anticipate and meet these requirements, the group needs to carry out large-scale investment. In Morocco, competition may increase further following the award of a third 2G license. For more information on competition in each of the segments in which Maroc Telecom operates, see section 4.4, "Business activities in Morocco" and section 4.5, "Description of subsidiaries' operations".

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Maroc Telecom depends on reliable IT systems. failure, damage or loss affecting some or all of its systems could result in a loss of customers and reduced revenues.

Maroc Telecom can be paid for its services only insofar as it uses reliable information systems (including collection and invoicing systems), and succeeds in protecting and securing the continuity of these systems' operations. Maroc Telecom has established a security policy for its information systems allowing it to deal with ordinary disturbances in computer operations (unauthorized access, power cuts, theft, hardware crashes, etc.) and to secure uninterrupted service. Maroc Telecom now has a business continuity plan for its critical information systems, i.e. those that have a direct impact on its revenues, such as pricing data acquisition systems, and sales and billing information systems for its three product lines (Fixed-line, Mobile and Internet). The continuity plan also covers other administration systems calculating inter-operator settlements, both in Morocco and internationally, together with the purchasing and finance administration systems. An event entailing a destruction of all or part of its systems (such as natural disasters, fire or an act of vandalism) would automatically activate a backup system. Insofar as data on critical information systems produced by production platforms are regularly backed up, the risk of losing data and being unable to bill customers and recover outstanding invoices is now marginal. Since the plan began, it has been tested and assessed annually by simulating the total unavailability of IT systems. Among the subsidiaries, the risk of IT systems failure is increased by the introduction of new applications and software and by the adaptability of existing systems. Although the impact of such a failure is impossible to quantify, it would create a risk of upsetting customers, reducing traffic and reducing group revenue.

Disruption in technical networks could lead to a loss of customers and a reduction in revenue.

Maroc Telecom is able to provide services only insofar as it is able to protect its telecommunications networks from damage caused by disturbances, power cuts, computer viruses, natural disaster and unauthorized access. Any distur- bance to the system, and any accident or breach of security measures causing interruption in the group's operations could affect its ability to provide services to its customers and could have a material effect on its revenues and operating income. Such disturbances would also have a material effect in terms of image and reputation for the Company and/or its subsidiaries, which could lead to a loss of customers. In addition, the group could be required to bear additional costs in order to repair the damage caused by such disturbances.

Maroc Telecom's indirect distribution network could be jeopardized if Maroc Telecom fails to maintain it.

The Company has an extensive distribution network, with a direct sales channel comprising Maroc Telecom branches, an indirect network consisting of telestores, resellers and partners, and an independent network (see section 4.4.4 "Distribution, advertising"). If Maroc Telecom were unable to maintain close relations or to renew its distribution agreements with its indirect network participants, or if its indirect distribution network were to be jeopardized for other reasons, in particular the actions of competitors, or if the managers of telestores failed to comply with the exclusive agreements made with Maroc Telecom by distributing products competing with those of Maroc Telecom, the distribution network could be weakened and the Company's business and earnings could be significantly affected.

Continued and rapid changes in technology could intensify competition or require Maroc Telecom to make significant additional investments.

Many services offered by Maroc Telecom and its subsidiaries involve the intensive use of technology. The development of new technologies could cause some services offered by the Company to cease to be competitive. To respond to changes in the telecoms sector and the requirements of demanding customers in terms of price and quality, the group must adjust its networks and technologies, and develop new products and services at a reasonable cost, otherwise it would be unable to compete with its rivals. The new technologies in which the Company may choose to invest may affect its ability to achieve its strategic targets.

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Maroc Telecom could then lose customers, fail to succeed in attracting new customers, or be required to bear significant costs in order to maintain its customer base, which would have a negative effect on its business, revenues and earnings.

Alternative means of communication could make the fixed-line network less useful or even obsolete, which could lead to the loss of a competitive advantage and reduce the Company's revenues significantly.

The Company has already had to deal with the substitution of fixed-line customers by mobile customers, which has been intensified by the use of alternative technologies. As an illustration, GSM gateway services have begun to compete with Maroc Telecom's business fixed-line voice services. Similarly, restricted mobility services compete with telestores (see 4.4.5 "Competitive landscape"). The Company's fixed-line telecommunications activities could be affected by the development of such gateways or other alternative means of communication. Such alternative technologies could jeopardize the usefulness of Maroc Telecom's infrastructure and fixed-line network, by enabling competitors to use mobile telecommunications services competing with Maroc Telecom without having a fixed-line network. Maroc Telecom's infrastructure and extensive network would then become less useful or even obsolete. This would lead to the loss of a competitive advantage and could have a significant adverse effect on the Company's revenues and earnings.

If revenue growth generated by the mobile business were to slow as the Moroc- can market matured, if the businesses of subsidiaries did not improve and if revenue from new convergent broadband and content services did not make up the shortfall, the group's revenue could be adversely affected.

The group's revenue growth arises mainly from the expansion of its mobile business in Morocco. This market is already showing signs of maturity. If the other African markets so not continue to grow and make a material contribution to the group's revenue and earnings, the group's revenue could fail to grow and could decline, affecting the group's earnings and financial position. If revenue generated by content and broadband services do not develop sufficiently, the group's revenue, financial position and earnings could be adversely affected.

If the group does not succeed in reducing its costs, its financial position could be adversely affected.

If the group does not succeed in reducing its costs, its financial position, operating margin and earnings could be adversely affected. Maroc Telecom intends to transform its cost structure, particularly its marketing costs and its overheads, partly through the adoption of multiple voluntary redundancy plans and savings on purchases and network costs.

Health risks, whether real or perceived, or other problems connected with mobile devices or their base stations, could result in less intensive use of mobile communications.

Certain studies of mobile technology claim that the electromagnetic signals emitted by mobile devices and base stations involve health risks. Such risks, whether real or perceived, and the publicity they receive, together with any resulting legislation or litigation, could reduce the Company's base of mobile customers, make the establishment of new base stations and the maintenance of existing base stations more difficult, or prompt customers to reduce their use of mobile telephones.

Fraudulent diversion of traffic could limit the Company's revenues and adversely impact its earnings.

The Company first experienced a fraudulent diversion of its traffic in 2001. In response, Maroc Telecom has established a plan to combat such fraud. Maroc Telecom cannot anticipate, however, whether new means of fraud will develop, the sectors that potential offenders will attack, nor the effects that any such fraud could have. If Maroc Telecom fails to prevent such fraudulent acts, it could see a reduction in its traffic in the sector affected by the fraud, and its revenues and earnings could thereby be adversely impacted.

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The risks inherent in potential acquisitions of telecoms companies or licenses that Maroc Telecom may make could have an impact on Maroc Telecom's activities.

In order to extend its geographical presence, Maroc Telecom could acquire telecommunications companies or licenses in other countries. Such transactions necessarily involve risks. If Maroc Telecom does not achieve the results expected from such transactions, its business and earnings could be affected. In particular, Maroc Telecom could:

• carry out acquisitions on financial or operational terms that could subsequently be found unfavorable; • experience difficulties in integrating the companies acquired, or their networks, products or services; • fail to retain the key employees of the companies acquired or to recruit skilled personnel as may be required; • fail to achieve the expected synergies or economies of scale; • make investments in countries where the political, economic or legal situation involves particular risks, such as civil or military unrest, the absence of effective or comprehensive protection of shareholders' rights, or disagree- ments with other major shareholders, including public authorities, relating to the management of the companies acquired; and • fail to adapt to the specific features of the countries in which any such companies would be acquired.

Maroc Telecom's activities outside of Morocco could entail additional risks.

In pursuing its international activities, Maroc Telecom could experience various risks, including:

• fluctuations in exchange rates and the devaluation of certain currencies; • restrictions on the repatriation of capital; • unexpected changes to the regulatory environment; • different tax regimes that could have an adverse impact on Maroc Telecom's earnings or cash flow, particularly regarding transfer pricing regulations; • the local economic and political situation.

In all of its markets, Maroc Telecom could fail to retain its key employees or to hire highly skilled personnel, which could adversely impact the Company's operations and its ability to adapt to its environment.

Maroc Telecom's performance is dependent to a significant extent on the abilities and services provided by its management team. The management team has significant experience and knowledge of the telecommunications industry. The loss of key managers could have a significant adverse impact on Maroc Telecom's ability to implement its strategy. Maroc Telecom and its performance are also dependent on skilled personnel having the experience and engineering or sales capabilities required for the development of its business. Maroc Telecom's ability to adapt its services, products and sales offerings, whether in the area of fixed-line or mobile telecommunications, is highly dependent on the presence of competent and skilled teams in each market segment. Failure by Maroc Telecom to retain its key personnel, whether its management team or its marketing and engineering executives, could adversely affect the Company's business and its operating income could diminish substantially. The sending of staff to other countries where Maroc Telecom operates could also lead to a loss of expertise if the company failed to maintain sufficient knowledge and continuity in the management of its strategic businesses.

136 Maroc Telecom - 2009 Registration Document INFORMATION CONCERNING COMPANY BUSINESS ACTIVITIES 4.14. Risk factors

4.14.2 Legal risks

The interpretation of existing legislation and the adoption of new statutory rules could significantly affect Maroc Telecom's operations.

The regulatory framework governing the telecommunications industry in Morocco is subject to constant change. Act 55-01, which came into force in November 2004, could be interpreted in a manner that could have a significant adverse affect on Maroc Telecom's business and result in a reduction in its revenue and earnings. In addition, the reduction of unbundling tariffs and the shortening of the timeframe for introducing number portability will inevitably promote competition to the detriment of Maroc Telecom. Similarly, the injunction issued by the ANRT relating to the identification of mobile customers could lead to decisions by ANRT that cannot be anticipated by Maroc Telecom. Future regulatory changes could have a significant material impact on Maroc Telecom's operations. Regulatory pricing controls relating to retail sector offerings and promotions could be reinforced via the publication of ANRT guidelines on pricing controls in a manner that would be unfavorable for operators with a dominant influence on specific market segments. The ANRT has published a memo containing guidelines relating to the telecoms sector ("Note d’orientations générales relative au secteur des télécommunications") covering the period until 2013. The main strategic aspects of the memo are as follows: digital coverage for all of Morocco, a system of zones dedicated to certain activities (tourism, manufacturing etc.), national roaming and infrastructure sharing, lower and asymmetric interconnection tariffs to encourage lower retail prices.

The increase in the number of market players could weaken Maroc Telecom's position in the mobile telecommunications services segment.

In 2005 and 2006, the ANRT awarded a fixed-line license with restricted mobility to Wana and three 3G mobile licenses to Maroc Telecom, Meditel and Wana. In 2009, it awarded a 2G mobile license to Wana. The Company cannot forecast whether the liberalization process for the mobile sector will evolve in a favorable manner. Notwithstanding this, the award of a third 2G mobile license, with nationwide roaming rights, to Wana will have the effect of increasing competition in the domestic mobile telecommunications market. Maroc Telecom could therefore experience a reduction in its market share with a concomitant increase in client acquisition and retention costs, which could result in a reduction in revenues and profitability.

Liberalization of the fixed-line market could limit Maroc Telecom's market share and adversely affect its profitability

Maroc Telecom operates in a fixed-line telecommunication market that has recently been liberalized. Two new fixed- line licenses were awarded in 2005 for national, international and local loop services. Liberalization of the fixed-line market could reduce the base of existing or potential customers for Maroc Telecom, since customers could be lost to competitors. In addition, the entry of new operators through the award of international licenses will entail heightened competition, which could result in a decrease in international call rates. Accordingly, the liberalization of these markets could adversely affect Maroc Telecom's revenues and profitability. Maroc Telecom could be affected by regulatory decisions enabling other operators (i) to enter the telecommunications market on terms less onerous than those imposed on Maroc Telecom, and (ii) to gain access to Maroc Telecom's network on favorable terms. An operator could provide telecommunications services without having to bear the same obligations as Maroc Telecom, while enjoying the benefit of the latter's infrastructure, thereby enabling it to target highly profitable markets to the detriment of Maroc Telecom. As a dominant operator in the fixed-line, voice and data segments, the Company is bound under Act 01 to permit access to its network, in order to enable competitors to provide their own services through the use of Maroc Telecom's network. Such operators may thereby target comparatively lucrative markets, such as the business market, urban areas or the international market, which could (i) restrict the opportunities for Maroc Telecom to extend the number of its high- volume users, or (ii) divert its existing customers towards such markets.

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Maroc Telecom could be affected by the ANRT's application of competition regulations

Pursuant to the terms of Act 55-01, the ANRT's duties now include monitoring and ensuring fair competition among operators with regard to Act 6-99 relating to freedom of pricing and competition. The ANRT could thus rule on matters relating to the competitive environment in the telecommunications market. Maroc Telecom cannot forecast the extent to which the ANRT's rulings in this area might impact on its operations.

Maroc Telecom's business could be affected by regulatory pressure in the markets in which its subsidiaries operate.

In most countries where Maroc Telecom operates, it must comply with regulations relating to the conduct of its activity, the obtaining of licenses and control by authorities, which work to ensure effective competition. Major changes in the nature, interpretation or application of these regulations by the legislature or legal authorities, particularly as regards competition law, could result in additional expense for Maroc Telecom or cause it to alter its service. This could materially affect its activity, earnings and growth outlook. If Maroc Telecom were unable to obtain the licenses it needs to carry out, continue or develop its activities in good time and at a reasonable cost, and if it were unable to retain them, in particular for non-compliance with commitments made in return for obtaining those licenses, its ability to hit strategic targets could be adversely affected.

Interconnection costs that are favorable for other operators could significantly affect the Company's future earnings.

In order to provide services to its customers, Maroc Telecom is required to connect its network to that of any other operator holding a domestic license, and vice versa. The interconnection charges are approved by the ANRT. In early 2010, the ANRT published a memo containing guidelines relating to the telecoms sector ("Note d’orientations gé- nérales relative au secteur des télécommunications") covering the period until 2013. One of the memo's main strategic aspects relates to lower and asymmetric interconnection tariffs in order to reduce retail prices. At this stage, the Company cannot forecast whether the ANRT's policy with respect to fixed-line and mobile interconnection charges will be unfavorable to it.

Maroc Telecom may be punished by the market authorities for non-compliance with regulatory obligations.

Maroc Telecom is incorporated under Moroccan law, and its shares are listed in Casablanca and Paris. As a result, it must comply with regulatory obligations as regards informing the public and protecting investors, as well as the commitments it has made to the stockmarket authorities in both markets. Maroc Telecom believes that it complies with all regulations in force in both markets. In the event of non-compliance, the company would be subject to punishment and fines, which could affect its earnings and financial position.

Maroc Telecom might be unable to deduct certain allowances for doubtful accounts.

The amount of doubtful accounts for which Maroc Telecom has made allowances is deductible from its taxable profit, subject to the presentation of evidence of legal action taken against the debtors. Maroc Telecom has not initiated such legal action against all of the debtors for which it has made allowances. If the deductibility of such allowances for doubtful receivables below a certain threshold were to be challenged, the Company's earnings and profits could be adversely affected.

138 Maroc Telecom - 2009 Registration Document INFORMATION CONCERNING COMPANY BUSINESS ACTIVITIES 4.14. Risk factors

The Company could be influenced by Vivendi, which is a major shareholder whose interests may not always fit with those of the Company's other shareholders.

Vivendi holds a majority stake in the Company's share capital and voting rights. As a result, Vivendi controls all decisions requiring the approval of shareholders acting by a simple majority of votes. The interests of Vivendi with respect to these matters and the factors that it will take into account when exercising its voting rights may not be consistent with those of the Company's other shareholders. Maroc Telecom is involved in legal proceedings and disputes with rivals and other parties. The outcome of these proceedings is generally uncertain, and could materially affect the company's earnings and financial position. The disputes in which Maroc Telecom is involved are set out in section 4.13, "Legal and arbitration proceedings".

4.14.3 Market risks In accordance with its cash management policy, Maroc Telecom does not invest in equities, in equity mutual funds or derivatives. Maroc Telecom invests its cash with financial institutions either in sight deposits or term deposits. The counterparty exposure limits for each financial institution are approved by the Management Board. For market risks (foreign exchange risks, interest rate risks and stock valuation risks), see section 5.3.5 "Disclosure of qualitative and quantitative information about market risks". For liquidity risks, see note 32: "Risk management", in the notes to the consolidated financial statements. Information on interest-rate risk management and an analysis regarding the sensitivity of the Group's position to movements in interest rates are set out in note 32: "Risk management", in the notes to the consolidated financial statements.

Maroc Telecom - 2009 Registration Document 139 FINANCIAL REPORT 5.1 CONSOLIDATED FINANCIAL DATA FOR THE LAST 5.4 CONSOLIDATED FINANCIAL STATEMENTS 178

THREE YEARS 142 STATUTORY AUDITORS’ REPORTS 179 CONSOLIDATED FINANCIAL STATEMENTS 180 5.1.1 CONSOLIDATED FINANCIAL DATA IN MOROCCAN NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 184 DIRHAMS 142

5.1.2 CONSOLIDATED FINANCIAL DATA IN EURO 142 5.5 INDIVIDUAL FINANCIAL STATEMENTS 222

REPORT OF THE STATUTORY AUDITORS ON THE 5.2 OVERVIEW 144 FINANCIAL STATEMENTS 223 INDIVIDUAL FINANCIAL STATEMENTS 224 5.2.1 BACKGROUND 144 ADDITIONAL DISCLOSURES 229 5.2.2 MARKET TRENDS AND OTHER FACTORS INFLUENCING REPORT OF THE STATUTORY AUDITORS 242 EARNINGS 144 5.2.3 CONSOLIDATION SCOPE 147 5.2.4 SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES 148

5.3 CONSOLIDATED INCOME STATEMENT 154

5.3.1 COMPARISON OF 2009, 2008 AND 2007 155 5.3.2 COMPARISON OF OPERATING SEGMENT RESULTS 162 5.3.3 CASH AND CASH EQUIVALENTS 168 5.3.4 OBLIGATIONS CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS 173 5.3.5 DISCLOSURE OF QUALITATIVE AND QUANTITATIVE INFORMATION ABOUT MARKET RISKS 173 5.3.6 TRANSITION FROM INDIVIDUAL FINANCIAL STATEMENTS TO CONSOLIDATED FINANCIAL STATEMENTS 177

5.1 CONSOLIDATED FINANCIAL DATA FOR THE LAST THREE YEARS

Maroc Telecom’s consolidated financial data is summarized in the following table. The financial data for the years ended December 31, 2009, 2008 and 2007 has been taken from the Group’s consolidated financial statements, which were prepared in accordance with International Financial Reporting Standards (IFRS), and were audited by the statutory auditors Abdelaziz Almechatt and Fouad Lahgazi of KPMG Morocco. IFRS-compliant 2004 financial statements and the transition document were published by Maroc Telecom when it reported its consolidated financial statements for the six months ended June 30, 2005. The transition to IFRS had a limited impact on the Group’s financial statements at December 31, 2004 (please refer to the 2005 Registration Document for more information).

5.1.1 Consolidated financial data in Moroccan dirhams

Income statement data:

(In millions of Moroccan dirhams) 2009 2008 2007 Revenues 30,339 29,521 27,532 Operating expenses 16,331 15,632 15,298

Earnings from operations 14,008 13,889 12,234 Earnings from continuing operations 14,046 13,812 12,201 Net earnings 9,779 10,010 8,137 Attributable to equity holders of the parent 9,425 9,520 8,033

Earnings per share (in Moroccan dirhams) 10.7 10.8 9.1

Diluted earnings per share (in Moroccan dirhams) 10.7 10.8 9.1

Balance sheet data:

December 31, December 31, December 31, ASSETS (in millions of Moroccan dirhams) 2009 2008 2007

Non-current assets 33,096 25,033 23,242

Current assets 12,824 13,450 14,507

Total assets 45,920 38,483 37,749

SHAREHOLDERS’ EQUITY AND LIABILITIES (in millions of Moroccan dirhams)

Share capital 5,275 5,275 5,275 Equity attributable to equity holders of the parent 18,564 18,709 17,380

Minority interests 4,369 1,647 1,254

Total shareholders’ equity 22,934 20,356 18,634

Non-current liabilities 3,464 1,319 1,436

Current liabilities 19,522 16,808 17,679

Total shareholders’ equity and liabilities 45,920 38,483 37,749

142 Maroc Telecom - 2009 Registration Document FINANCIAL REPORT 5.1. Consolidated data for the last three years

5.1.2 Consolidated financial data in euros The company maintains its accounting records and prepares its financial statements in Moroccan dirhams. The purpose of this section is to assist investors to make comparisons in euros. The following table sets out the MAD/Euro exchange rates used for Vivendi’s consolidated financial statements for the years 2009, 2008 and 2007.

For 1 euro December 31, December 31, December 31, 2009 2008 2007 Period-end rate used for Balance sheet 11.3147 11.2599 11.3292 Average used for Income statement 11.2599 11.3520 11.2099

(Source : Vivendi) The above exchange rates are provided for convenience only. The group does not claim that the amounts denominated in Moroccan dirhams were, could have been or could be converted into euros at such exchange rates or any other rate. For information relating to the impact of foreign exchange variations on the Group’s earnings, see section 5.3.5 “Disclosure of qualitative and quantitative information on market risk”. The following table sets out selected consolidated financial data for Maroc Telecom in euros, translated at the exchange rates used for Vivendi’s consolidated financial position and earnings for the years 2009, 2008 and 2007.

Income statement data:

(euro millions) 2009 2008 2007

Revenues 2,694 2,600 2,456

Operating expenses 1,450 1,377 1,365 Earnings from operations 1,244 1,223 1,091 Earnings from continuing operations 1,247 1,217 1,088

Net earnings 868 882 726 Attributable to equity holders of the parent 837 839 717

Earnings per share (in euro) 1.0 1.0 0.8 Diluted earnings per share (in euro) 1.0 1.0 0.8

Balance sheet data:

December 31, December 31, December 31, ASSETS (euro millions) 2009 2008 2007 Non-current assets 2,925 2,223 2,052 Current assets 1,133 1,194 1,280 Total assets 4,058 3,418 3,332

SHAREHOLDERS’ EQUITY AND LIABILITIES (euro millions) Share capital 466 468 466 Equity attributable to equity holders of the parent 1,641 1,662 1,534 Minority interests 386 146 111 Total shareholders’ equity 2,027 1,808 1,645 Non-current liabilities 306 117 127 Current liabilities 1,725 1,493 1,560 Total shareholders’ equity and liabilities 4,058 3,418 3,332

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5.2 OVERVIEW

The discussion and analysis which follows are to be read in conjunction with this Registration Document as a whole including, in particular, the audited consolidated financial statements of Maroc Telecom and incorporating by reference the balance sheet, income statement, statement of cash flows, statement of changes in equity and notes to the consolidated financial statements for the years ended December 31, 2009, 2008 and 2007. The operational data included in Chapter 5.2 refers solely to business operations in Morocco and does not take into account the operational data of the Mauritel, Mobisud, Gabon Télécom and Onatel subsidiaries (see 4.5 “Description of subsidiaries’ operations”).

5.2.1 Background Maroc Telecom was created in 1998 from the break-up of the Office National des Postes et Télécommunications and is Morocco’s incumbent telecommunications operator. Maroc Telecom is the leading Moroccan operator and is active in the Fixed-line and Mobile telecommunications segments and Internet, a fast growing market. Maroc Telecom remains the domestic leader in each of these segments. The Mobile business provides mobile telecommunication services (subscriptions, rate plans, prepaid phone cards and handsets) for individuals and businesses in Morocco (see 4.4.1 “Overview of the Group’s Operations –Mobile services”). Mobile business has expanded rapidly and accounts for a growing share of Maroc Telecom’s revenues, amounting to 67% of consolidated revenues in 2009. The Fixed-line and Internet business provides fixed-line telecommunications services, Internet services, TV via ADSL and data transmission services for residential and business customers in Morocco. It also provides public telephone services through its own network of public payphones, and through an independent network of phone shops. Its services also include interconnections with other domestic and international telecommunication operators (see 4.4.2 “Overview of the Group’s operations– Fixed-line and Internet business”). In addition, Maroc Telecom, together with a group of local investors, owns a 51.5% stake in the Mauritanian incumbent telecommunications operator, Mauritel. Through this shareholding, Maroc Telecom provides telecommunications services in Mauritania. On December 29, 2006 Maroc Telecom also acquired a 51% stake in the Burkinabe operator Onatel by means of an international invitation to tender, and a 51% stake in Gabon Télécom on February 9, 2007. Maroc Telecom launched Mobisud, an MVNO (Mobile Virtual Network Operator), in May 2007 in Belgium. Finally, in July 2009, Maroc Telecom became the majority shareholder of Sotelma, the incumbent telecoms operator in Mali, acquiring a 51% stake in the capital of that company following a protracted privatization process launched by the Malian state.

5.2.2 Market trends and other factors influencing earnings

As Maroc Telecom provides telecommunications services in Morocco, including international telecommunications services to and from Morocco, the revenues and earnings of Maroc Telecom are dependent to a significant extent on Moroccan consumers’ average telecommunications expenditure and, to a lesser extent, on the volume of international telephone traffic to Morocco. Trends in the consumption of telecommunications services in Morocco need to be considered against a backdrop of fluctuations in the country’s economy and, more specifically, in the Moroccan population’s disposable income. In this regard, it should be noted that Morocco’s gross domestic product has experienced positive growth in recent years, i.e. 2.7% in 2007, 5.4% in 2008 and 5.3% in 2009. (Source: High Commission for Planning).

Main factors influencing revenues

Maroc Telecom generates revenue primarily from sales of telecommunications services in the Mobile segment and in the Fixed-line and Internet segment and, to a lesser extent, from sales of products associated with those services, consisting mainly of handsets used by customers and subscribers (mobile and fixed telephones and multimedia devices).

Mobile operations The Mobile business combines mobile telecommunications services (voice, data, inbound international and roaming) and sales of mobile handsets.

144 Maroc Telecom - 2009 Registration Document FINANCIAL REPORT 5.2. Overview

Prepaid and postpaid Revenues generated by the mobile telecommunications sector vary according to changes in the number of customers and Average Revenue Per User (ARPU). Those two factors were affected to a significant extent by the introduction of prepaid plans in 1999 and the advent of market liberalization in 2000, which led to the award of a second mobile telecommunications license in August 1999, and the subsequent award of three third-generation mobile telecommunications licenses in July 2006 and a second-generation mobile license in 2009 (see section 4.8 “Regulatory Environment and Possible Dependencies”). In terms of Mobile customers, Maroc Telecom has benefited from market expansion, as illustrated by a significant increase in the penetration rate. The penetration rate measures the ratio of users of mobile telecommunications services to Morocco’s total population. It has grown rapidly over the last decade, from 1.3% at December 31, 1999 to 81.2% at December 31, 2009 (Source: ANRT). Furthermore, the total number of mobile telecommunications users has increased from 364,000 at end-1999 to 25.3 million at end-2009 (Source: ANRT). At December 31, 2009, Maroc Telecom held a 60.3% market share of the domestic mobile telecommunications market compared with 63.4% at December 31, 2008 (Source: ANRT). Prepaid customers account for 95.5% of the Company’s total mobile services customer base (Source: Maroc Telecom).

Interconnection services Revenues generated by interconnection mainly comprise inbound international revenues arising from interconnection with international operators (and excluding revenues generated by outbound calls which are included in the revenues from mobile telephony) as well as interconnection services provided to Méditel and Wana.

Offerings Please refer to chapter IV of this document for a detailed description of customer offerings in the Mobile segment.

Tariffs Tariffs include access charges (subscription, prepaid phone cards, installation charges and the price of handsets) and usage charges. The entry of Méditel and Wana into the Moroccan mobile telecommunications market has exerted downward pressure on prices, and prompted operators to adapt their product range. They initiate frequent promotional offers on both handset subsidies and usage charges. Maroc Telecom offsets the negative impact of these price cuts on ARPU by expanding its customer base and boosting usage by customers.

Traffic In 2009, Outbound mobile traffic increased by 7% in relation to 2008, chiefly due to growth in the customer base. Morocco’s tourism industry also makes a considerable contribution to this growth, generating a large influx of visitors (including Moroccans resident abroad), and providing a strong potential source of roaming revenues. In 2009, roaming accounted for 3.0% of mobile revenues (See 4.4.1 ‘‘Business activities in Morocco– Mobile services –International roaming’’).

ARPU Mobile Average Revenue Per User (ARPU) corresponds to the revenue generated by inbound and outbound calls and value-added services in a given period (excluding roaming revenues), divided by the average number of customers over the same period and by the number of months in the period. The monthly average customer base is the average number of customers for each month in the period. ARPU is influenced by several factors, including the price and volume of mobile telecommunications related traffic (inbound calls, outbound calls and added-value services). Mixed ARPU for the 2009 fiscal year fell by 1.4% to MAD98 versus MAD99 a year earlier. This decrease was attributable to the twofold impact of a decline in inbound traffic revenues (including international inbound traffic) and a reduction in prepaid usage (due to the increased number of customers who own multiple mobile handsets). In 2009, prepaid ARPU (excluding data in 2009) amounted to MAD75 versus MAD77 in 2008, despite solid growth in the prepaid mobile customer base (up 4.5% compared to 2008). Postpaid ARPU (excluding data services in 2009) fell to MAD605 from MAD653 in 2009, as a result of the acquisition of lower-use subscribers.

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Fixed-line and Internet segment

Up to the end of 2006 Maroc Telecom was the sole provider of fixed-line telecommunication services and the main provider of Internet services and data transmission services in Morocco. These markets were fully liberalized in 2005 when fixed-line licenses were granted to Méditel. In February 2007, Wana entered the telecommunications market with a restricted mobility service. The main Fixed-line services provided by Maroc Telecom are: • telephony; • interconnection with domestic and international operators; • data transmission services for businesses and Internet service providers and other telecom operators; • Internet including Internet access services and related services such as hosting; • TV via ADSL. As in the Mobile segment, Fixed-line revenues vary according to the subscriber base, pricing policy and the usage level of each service. Revenues generated by international interconnection services are determined by volumes of inbound traffic on the fixed-line network and by changes in interconnection tariffs, which are subject to renegotiation from time to time. Revenues generated by domestic interconnection services are determined by the requirement that Maroc Telecom offer interconnection services at prices compensating the actual cost of use of the network and related costs. In 2009, revenues generated by the Fixed-line and Internet segment decreased by 3.8%, due to a 47% drop in the volume of international inbound traffic to fixed lines and declines in voice and Internet revenues of 6.1% and 4% respectively, while the amount of the average monthly bill for voice services fell by 2.4%. In 2009, voice revenues accounted for almost 61.5% of fixed-line revenues whereas Internet revenues accounted for 10.9% of revenues.

Fixed-line telecommunications services Historically, the penetration rate of fixed-line telecommunications services, which include public telephone lines, has been relatively low, owing in particular to the high average number of persons per household and the high usage rate of public telephones, which have hindered the development of residential fixed-line telecommunications. The fall in the penetration rate was primarily due to fixed-line customers switching to mobile services. Through a policy of developing new products and services, such as package deals and capped plans (El Manzil), prepaid cards, unlimited offers and the extension of public telephone coverage, the penetration rate in Morocco is still very low at 11.3% at December 31, 2009 (source: ANRT) and at 4% only, excluding limited mobility (Maroc Telecom estimates). In 2009, the fixed-line customer base fell to 1,234,000 lines, representing a 5% decrease compared with December 2008. Fixed-line offers are described in detail in Chapter IV of this Registration Document.

Data transmission services Maroc Telecom also provides data transmission services to businesses through a wide range of products and services (ISDN, Frame Relay, digital and analog leased lines, IP VPN), and a reliable, high quality network. This business is dependent on the development of the Moroccan economy and economic growth.

Internet Services The number of wireline Internet access subscribers fell by 2.2% to 471,000 at end-2009, and included 469,000 broadband customers. Thus, the number of ADSL lines accounted for almost 44% of the fixed-line installed base (excluding public telephony). Finally, in addition to its wireline Internet subscriber base, Maroc Telecom has around 174,000 broadband +3G mobile and 32,000 triple-play (ADSL, TV and fixed-line telephone) subscribers.

Interconnection services Interconnection revenues arise mainly from inbound international traffic, in particular interconnection with international operators (excluding revenues generated by outbound calls, which are included in fixed-line revenues), and interconnection with Meditel and Wana. Interconnection revenues generated by inbound international calls depend on call volume and the share of tariffs ne- gotiated with international operators.

146 Maroc Telecom - 2009 Registration Document FINANCIAL REPORT 5.2. Overview

Seasonality

The summer months, with the return of Moroccans living abroad, and the fortnight preceding the Eid al-Adha holiday (November 28 in 2009) traditionally see a peak in usage (primarily mobile and fixed-line public telephony), while the month of Ramadan (from August 22 to September 21 in 2009) is a seasonal trough for the fixed-line and mobile segments.

5.2.3 Consolidation scope • Mauritel Group Maroc Telecom holds 51.5% of the voting rights of Mauritel S.A., the incumbent operator in Mauritania and operator of a fixed-line and mobile telecommunications network, following the merger of Mauritel SA (fixed-line) and Mauritel Mo- bile. Mauritel SA is owned by the holding company Compagnie Mauritanienne de Communications (CMC), in which Maroc Telecom holds an 80% equity stake, and Maroc Telecom holds a 41.2% interest in Mauritel S.A. The Mauritel group has been consolidated by Maroc Telecom since July 1, 2004.

• Onatel On December 29, 2006, Maroc Telecom acquired 51% of the capital of the Burkinabe operator Onatel and 100% of its mobile subsidiary Telmob. Onatel has been fully consolidated by Maroc Telecom since January 1, 2007.

• Gabon Télécom On February 9, 2007, Maroc Telecom acquired 51% of the capital of the operator Gabon Télécom and 100% of its mobile subsidiary Libertis. Gabon Télécom has been fully consolidated by Maroc Telecom since March 1, 2007.

• Mobisud France On November 3, 2006 Maroc Telecom acquired a 66% stake in SFR6, renamed Mobisud, alongside the other shareholders Saham (18%) and SFR (16%). Mobisud has been operating as an MVNO (Mobile Virtual Network Operator) since December 1, in France. The subsidiary is no longer consolidated since Maroc Telecom sold its share in Mobisud France for a symbolic €1 to SFR as of June 1, 2009.

• Maroc Telecom Belgique In Belgium, Maroc Telecom launched an MVNO business via its wholly-owned subsidiary Maroc Telecom Belgique (trade name: Mobisud Belgique). This company began operating in May 2007 and has been consolidated since May 1, 2007.

• Médi1Sat Medi-1 Sat was established as a satellite news channel for North Africa and produces and broadcasts programming in French and Arabic. It commenced broadcasting on December 1, 2006. Medi-1 Sat has been accounted for by the equity method since 2006. At end-2008, Maroc Telecom held a 36.8% equity interest in the company. Following a series of transactions in the share capital of the company in 2009, Maroc Telecom’s equity interest in Medi-1 Sat fell to 30.5% and stood at 4.79% in the early part of 2010.

• Sotelma Maroc Telecom acquired a 51% stake in Sotelma, the incumbent telecoms operator in Mali, on July 31, 2009. Sotelma has been consolidated since August 1, 2009.

• Other non-consolidated investments Maroc Telecom’s other non-consolidated investments include Casanet (responsible for maintaining Maroc Telecom’s “Menara” Internet portal), an investment in Matelca (currently in liquidation), and other minority stakes. These companies are not consolidated as their results do not have a material impact on Maroc Telecom’s financial statements

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5.2.4 Significant accounting policies and estimates

Background of the preparation of 2009 consolidated financial statements

In application of the European regulation 1606/2002 dated July 19, 2002 concerning the adoption of international accounting standards, the consolidated financial statements of Maroc Telecom for the year ended December 31, 2009, were prepared in accordance with International Financial Reporting Standards (IFRS) as determined by the International Accounting Standards board (IASB) and adopted by the European Union at December 31, 2009. For the purpose of comparison, 2009 financial statements include items from 2008 and 2007. All new standards, interpretations or amendments published by the IASB and mandatory in the European Union since January 1, 2009, have been applied.

Statement of compliance

The consolidated financial statements of Maroc Telecom Group at December 31, 2009, have been prepared in accordance with all the mandatory International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee (IFRIC) interpretations adopted by the EU and mandatory at December 31, 2009. The accounting standards applied in the consolidated financial statements do not differ from the accounting standards issued by the International Accounting Standards Board (IASB). Maroc Telecom applied the following new standards and interpretations for the preparation of the 2009 consolidated financial statements: The amendments to IAS 1 Presentation of Financial Statements – A Revised Presentation, which became mandatory as from January 1, 2009. The early application of revised IAS 1 had no significant impact on the financial statements of Maroc Telecom. The revised versions of IFRS 3 Business Combinations and IAS 27 Consolidated and Separate Financial Statements as published by the IASB on January 10, 2008, and adopted by the EU on June 3, 2009 and published in the Official Journal of the European Union (EU) on June 12, 2009. Those standards became mandatory as from January 1, 2010. Maroc Telecom opted for the early application of these standards as from January 1, 2009. In accordance with the revised IAS 27, the Group’s financial statements are presented as those of a single economic entity with two categories of owners: owners of the parent company (shareholders of Maroc Telecom SA), and owners of non-controlling interests (minority shareholders of subsidiaries). A non-controlling interest is defined as an ownership interest in a subsidiary which is not attributable directly or indirectly to a parent company (hereafter “minority interests”). Under this new approach, changes in the parent company’s ownership interest in a subsidiary that do not result in the loss of control are accounted for within shareholders' equity insofar as there is no change of control within the economic entity. Thus, as from January 1, 2009, in the case of purchases of additional shares in a consolidated subsidiary, the difference between the acquisition cost and the carrying value of minority interests is accounted for in equity attributable to shareholders of Maroc Telecom SA. Conversely, Maroc Telecom recognizes any gains or losses arising from acquisitions of control by stages (step acquisitions) or from losses of control in profit and loss. Revised IFRS 3 introduces changes to the acquisition method defined by IFRS 3 prior to its revised version, in particular: • The option to measure non-controlling interests in an acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets. This option is available on a transaction by transaction basis. • Contingent consideration in a business combination to be recognized at fair value on the acquisition date. • Acquisition-related costs to be recognized as expenses when incurred. • In a business combination achieved in stages, re-measurement of the previously held equity interest in the acquiree at its acquisition-date fair value with any resulting gain or loss recognized in profit or loss. The impact of the application of revised IFRS 3 and IAS 27 is recognized in other financial income and expenses in the income statement.

The impact of the early adoption of the revised IFRS 3 and IAS 27 standards on Maroc Telecom’s consolidated financial statements at December 31, 2009, primarily concerned the measurement of goodwill acquired in connection with the acquisition of Sotelma insofar as Maroc Telecom has opted to measure minority interests at fair value. Maroc Telecom applied the amendment to IFRS 7 – Financial Instruments: Disclosures to its consolidated financial statements for the year ended December 31, 2009 and to the financial statements for the year ended December 31, 2008 which were prepared for comparison purposes. This amendment, which is effective for accounting periods beginning on or after January 1, 2009, requires enhanced disclosure about financial instruments fair value measurements and liquidity risk. It was published by the IASB on March 5, 2009, adopted by the EU on November 27, 2009,

148 Maroc Telecom - 2009 Registration Document FINANCIAL REPORT 5.2. Overview

and published in the EU Official Journal on December 1, 2009. It notably requires an entity to classify its financial instruments measured at fair value into three levels (the fair value hierarchy), to disclose a maturity analysis of all financial liabilities (derivative and non-derivative), and to provide disclosure about its management of the inherent liquidity risk arising from financial instruments.

Use of estimates and assumptions

In connection with the preparation of its financial statements, Maroc Telecom must make estimates and certain assumptions. Maroc Telecom’s management bases its estimates on past experience and on various other assumptions that it deems reasonable under the circumstances. These estimates enable an evaluation of the appropriateness of carrying value. The figures derived from such estimates and assumptions may differ if other estimates or assumptions are used. The main items calculated on the basis of estimates are provisions for litigation, restructuring provisions, writedowns of accounts receivable, impairment of inventories and deferred income. Management reviews its estimates and valuations regularly based on past experience and various other assumptions that it deems reasonable, which constitute the basis of its evaluations of the carrying value of its assets and liabilities. The impact of the change in estimates is booked in the current period and all subsequent periods.

Contribution to universal service Maroc Telecom is required to set aside 2% of its annual pretax revenues net of interconnection tariffs for its universal service obligation although it is authorized to offset this contribution with its own costs of implementing the universal service, thereby establishing the “pay or play" principle. In 2009, the Universal Services management committee of the ANRT granted a MAD332 million subsidy to Maroc Telecom for the implementation of the 2009 universal service program in connection with the so-called “Pacte” program. In consequence, Maroc Telecom paid MAD118 million to the universal service fund as part of its 2009 contribution.

Deferred income

Deferred income mainly corresponds to prepaid subscriptions; prepaid top-up cards sold to distributors and not yet activated, unused prepaid minutes sold and to provisions related to customer loyalty programs. Since 2007, Maroc Telecom has decided to derecognize deferred income linked to sales of Mobile service bundles and SIM card-only sales when the cards are not activated after nine months (versus six months previously).

Provisions

Provisions are accrued when, at the end of the period, the Group has a legal, regulatory or contractual commitment to a third party resulting from past events, and it is probable that there will be an outflow of resources to the third party, without any consideration expected from the latter, and that the amount can be evaluated accurately. If the time value effect is significant, provisions are determined by discounting expected future cash flows at a pre-tax discount rate which reflects the market’s current evaluation of the time value of money. If no reliable estimate can be made of the amount of the obligation, no provision is recorded and a disclosure is made in the notes to the consolidated financial statements.

Restructuring provisions are recorded when the Group has approved a formal and detailed restructuring program and has either started to implement the program or has published the program publicly. No provision is recorded to cover future operating expenses.

No provision for pensions and post-retirement benefits relating to the Group’s affiliates incorporated in Morocco has been recorded in the consolidated financial statements insofar as pension expenses are covered by statutory pension plans established for employees in Morocco.

Inventories

Inventories comprise:

• Goods held for sale to customers upon line activation, comprising fixed and mobile handsets and accessories. Inventories are accounted for using weighted average cost. Handsets delivered to distributors and not activated at year-end are recorded as inventories. Handsets not activated within nine months from the delivery date are recorded as revenue.

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• Equipment and supplies corresponding to non-network equipment. These inventories are measured at their average acquisition cost. Inventories are measured at the lower of cost and net realizable value. An impairment loss is recorded by comparing their fair value and their net realizable value.

Trade accounts receivable and other receivables

This item comprises accounts receivable and other receivables, which are initially recognized at fair value, then at amortized cost less impairment.

Accounts receivable include trade receivables and government receivables:

• Trade receivables: held against individuals, distributors, businesses and international operators; • Government receivables: held against local authorities and the Moroccan government. Impairment is recorded if the carrying amount of the asset under consideration exceeds the discounted value of its estimated future cash flows.

Contractual obligations and contingent assets and liabilities

Maroc Telecom and its subsidiaries prepare detailed records on all contractual obligations, commercial and financial commitments and contingent obligations, to which they are party or exposed, on a yearly basis. These detailed records are updated by the departments concerned on a regular basis and are reviewed by senior management. • The assessment of off-balance sheet commitments relating to suppliers of fixed assets is carried out in the following way: • Difference between minimum commitments and settlements relating to framework agreements and their endorsements (valued at more than MAD25 million); • Difference between firm orders and delivery for all other contracts. Commitments arising from real estate rental contracts are estimated on the basis of one month’s lease expense given that virtually all termination clauses require one month’s notice

Segment data

The Group’s business is divided into Fixed-line, Internet and Mobile segments. Revenues from each operating segment include revenues from the provision of telephone services to customers and subscribers as well as intersegment transactions. Intersegment transactions are concluded at market prices.

Earnings from operations reflect the difference between operating income and expenses. Costs are allocated directly to the relevant segments or alternatively by using cost allocation ratios based on economic criteria. Capital expenditure is directly allocated to the relevant segments. Fixed assets used by multiple segments are allocated in proportion to dedicated assets. The components that are not allocated mainly comprise taxes, cash, financial assets, borrowings and equity.

The classification of the balance sheet by operating segment was in part based on estimates. The breakdown into the components used is based on reasonable assumptions.

The following balance sheet items have been allocated proportionately between the two activities: • For items comprising components that can be allocated directly to a segment and components shared by both segments: the shared part of these items is divided proportionately in respect of the amounts allocated directly to these items.

• For items comprising solely shared elements: these amounts are allocated in a way that takes into account the type of items involved (e.g. employee-related liabilities are divided proportionally based on the number of employees in each operating segment).

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Geographical data

Information by geographical area is the second level of segment data and comprises the two geographical areas in which Maroc Telecom is present: Morocco and other.

Definition of financial statements line items

Revenues Revenues are reported when it is probable that future economic benefits will flow to the Group, and that these revenues can be reliably measured. Maroc Telecom Group generates revenues from fixed and mobile telecommunications services, Internet services, and the sale of products, which essentially comprise mobile and fixed-line handsets and multimedia equipment. Revenues from telephone subscriptions are recognized on a straight-line basis over the subscription contract period. Revenues from inbound and outbound call traffic are recognized when the service is rendered. For prepaid services, revenues are recognized when calls are made. Revenues from fixed-line and Internet and mobile services comprise:

• income from domestic and international outbound and inbound calls under postpaid plans, which is recorded when generated; • income from subscriptions; • income from prepaid services, which is recognized as calls are made; • income from data transmission services provided to professionals and Internet service providers as well as to other telecommunications operators; • income from advertising in printed and electronic directories, which is recognized when the directories are published.

Revenues from the sale of handsets, net of point-of-sale discounts and connection charges, are recognized on activation of the line. Customer acquisition and loyalty rewards expenses for mobile and fixed-line services, principally consisting of rebates on the sale of equipment to customers through distributors, are recognized as a deduction from revenues. Sales of services provided to subscribers managed by Maroc Telecom on behalf of content providers (mainly special-rate numbers), are accounted for net of related expenses. When the sale is made via a third party distributor supplied by Maroc Telecom and is discounted compared with market prices, revenue is recorded gross and the discount is recognized under operating expenses.

Operating expenses

Operating expenses include purchases, payroll costs, taxes and duties, other operating expenses and net depreciation, impairment and provisions

Cost of purchases Cost of purchases comprises the cost of purchasing handsets, interconnection tariffs charged by domestic and international operators, and other purchases (fuel and electricity, top-up cards, supplies and consumables).

Payroll and payroll-related costs Payroll and payroll-related costs include wages, salaries, payroll taxes and training costs.

Taxes and levies This item includes taxes and duties (property taxes, local authority service taxes, local business tax, taxes for occupying public land etc.).

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They also include fees paid to ANRT:

• fees relating to radiofrequency licenses pursuant to Act 24-96 and Order 310-98 of February 25, 1998; • costs related to universal service pursuant to Act 24-96 and Order 2.00.1333 of October 9, 2000 (contractual obligations applicable to Maroc Telecom); and • contributions to research, training and telecommunications standardization pursuant to Act 24-96 and Order 2.00.1333 of October 9, 2000 (contractual obligations applicable to Maroc Telecom).

Other operating income and expenses Other operating income and expenses comprise commissions, communication expenses and other expenses (network maintenance costs, audit and advisory fees, postage, vehicle leasing costs, and rental payments for land and buildings). They also include foreign currency translation adjustments arising from operations and expenses incurred in connection with voluntary redundancy plans. Advertising expenses include marketing and other promotional and multimedia public relation costs incurred to enhance Maroc Telecom’s market reach and profile.

Net charge to amortization, impairment and provisions Net charge to amortization, impairment and provisions includes:

• Amortization calculated on a straight-line basis over the useful life of the relevant assets. Amortization is calculated as from the date of entry into service of the concerned asset; • Net provisions and impairment relating to trade accounts receivable and related accounts, inventories and litigation.

Income or loss from equity affiliates

At December 31, 2009, 2008 and 2007, Medi-1-Sat was the only company accounted for using the equity method.

Cost of net financial debt

Cost of financial debt includes income from cash and cash equivalents (short-term investment income). Maroc Telecom’s cash assets are deposited with banks or with the national treasury, either through interest-bearing sight deposits or short-term deposits not exceeding three months. Maroc Telecom does not make any high-risk investments (mutual investment funds, shares, bonds or derivatives). Cost of debt mainly includes interest expense and expenses incurred for early repayment of borrowings. Cost of net financial debt is impacted by foreign exchange gains and losses as the Group receives income, pays expenses and has borrowings denominated in foreign currencies (See section 5.3.5 “Disclosure of qualitative and quantitative information about market risks”).

Income tax expense

Maroc Telecom pays income tax like any other Moroccan corporation. In 2009, the income tax rate was 30%, (compared to 30% in 2008 and 35% in 2007) in Morocco, 25% in Mauritania, 30% in Burkina Faso and 35% in Gabon and Mali. The “income tax payable” item consists of tax due and deferred taxes. Deferred taxes reflect temporary differences between the book value and taxable value of assets or liabilities.

152 Maroc Telecom - 2009 Registration Document FINANCIAL REPORT 5.2. Overview

Cash flows

Net cash from operating activities corresponds to cash earning plus or minus the change in the Group’s working capital requirement. Net cash used in investing activities corresponds to the difference between acquisitions and sales of property, plant and equipment, intangible assets and financial assets, along with cash flows of long-term borrowings. Net cash used in financing activities mainly comprises repayment of long-term debt and the payment of dividends.

Comparability of Maroc Telecom’s financial statements

The consolidated financial statements are used by the Company as a means of communicating with financial markets since its shares are listed on the Casablanca stock exchange and Euronext, Paris. In this context, Maroc Telecom’s consolidated financial statements for the years ended December 31, 2009, 2008 and 2007 are prepared in compliance with applicable International Financial Reporting Standards (IFRS).

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5.3 CONSOLIDATED INCOME STATEMENT

The following table sets out data regarding Maroc Telecom’s consolidated income statement for the years ended December 31,2007, 2008 and 2009.

(In millions of Moroccan dirhams) 2009 2008 2007

Revenues 30,339 29,521 27,532 Cost of purchases (4,874) (4,471) (4,215) Payroll costs (2,604) (2,705) (2,695) Taxes and duties (877) (754) (788) Other operating income (expenses) (3,783) (3,643) (3,562)

Net depreciation, amortization and provisions (4,193) (4,059) (4,038)

Earnings from operations 14,008 13,889 12,234 Other income and charges from ordinary activities (5) (14) 1

Income from equity affiliates 43 (62) (34)

Earnings from continuing operations 14,046 13,812 12,201

Income from cash and cash equivalents 79 112 131

Borrowing costs (228) (106) (131)

Net borrowing costs (149) 6 0

Other financial income (expense) 2 388 31

Net financial income (expense) (147) 394 31

Income tax expense (4,120) (4,196) (4,095)

Net earnings 9,779 10,010 8,137 Attributable to equity holders of the parent 9,425 9,520 8,033

Minority interests 354 490 104

EARNINGS PER SHARE (In Moroccan dirhams)

Net earnings- group share 9,425 9,520 8,033

Number of shares at December 31 879,095,340 879,095,340 879,095,340

Earnings per share 10.7 10.8 9.1

Diluted earnings per share 10.7 10.8 9.1

The various items of Maroc Telecom’s consolidated income statement and their changes during the periods under consideration are summarized in the following table.

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5.3.1 Comparison of 2009, 2008 and 2007

Revenues

The following table shows the breakdown of revenues for the years ended December 31, 2009, 2008 and 2007.

In millions of Moroccan dirhams 2009 2008 2007

Mobile gross revenues 22,190 21,183 19,328

Fixed-line and internet gross revenues 11,106 11,319 11,042 Total consolidated gross revenues 33,296 32,503 30,370 Elimination of intersegment transactions (2,957) (2,982) (2,838) Total consolidated net revenues 30,339 29,521 27,532

NB: In Mauritania, revenues generated from international inbound and outbound Mobile traffic were accounted for directly under Mobile segment revenues in 2009, whereas in 2008 and 2007, they were accounted for as transit revenues of Mauritel’s Fixed-line operations. 2008 and 2007 financial data were therefore restated to reflect this new presentation. This intercompany restatement did not have any impact on Mauritel’s net revenues. Maroc Telecom Group’s 2009 consolidated revenues amounted to MAD30,339 million, up 2.8% versus 2008 (up 1.3% on a comparable basis), underpinned, on the one hand, by results in Morocco and the solid performances of its subsidiaries, notwithstanding the impacts of a challenging economic and regulatory climate, and, on the other hand, by the promotional efforts, capital expenditure and innovations that Maroc Telecom continues to pursue. In 2008, growth in consolidated revenues was driven by sustained increases in Mobile revenues, both in Morocco and at international subsidiaries, and in Fixed-line and Internet revenues in Morocco. Thus, consolidated revenues amounted to MAD29,521 million in 2008 and were up 7.2% year on year (6.2% on a comparable basis and at constant exchange rates).

Operating expenses

The following table shows operating expenses for the years ended December 31, 2009, 2008 and 2007.

In millions of Moroccan dirhams 2009 2008 2007

Consolidated revenues 30,339 29,521 27,532 Cost of purchases 4,874 4,471 4,215 % 16% 15% 15% Payroll costs 2,604 2,705 2,695 % 9% 9% 10% Sundry taxes and duties 877 754 788 % 3% 3% 3% Other operating income and expenses 3,783 3,643 3,562 % 12% 12% 13% Net depreciation, amortization and provisions 4,193 4,059 4,038 % 14% 14% 15%

Total operating expenses 16,331 15,632 15,298

Operating expenses rose by 4.5% to MAD16.331 billion, thanks to ongoing marketing efforts aimed at stimulating usage and the increased amortization expenses arising from the capital expenditure program. Before amortization, operating expenses increased by just 0.9% on a comparable basis thanks to tight cost control and a more than 5% reduction in the operating expenses of the subsidiaries. In 2008, operating expenses rose by 2.2% to MAD15.632 billion. This increase was partially offset by cost control initiatives introduced for operations in Morocco and in the subsidiaries.

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Cost of purchases

(In millions of Moroccan dirhams) 2009 2008 2007

Cost of handsets 1,811 1,678 1,509

Domestic and international interconnection charges 2,234 1,894 2,023

Other purchases 829 899 683

Total 4,874 4,471 4,215

The “Other purchases” item includes purchases of energy (fuel and electricity), phone cards and other consumables. Cost of purchases rose by 9% to MAD4,874 million in 2009, mainly due to the increase of interconnection expenses arising from the growth in outbound traffic to other operators as well as the integration of Sotelma. Cost of purchases increased by 6% to MAD4,471 million in 2008 versus MAD4,215 million a year earlier. In Morocco, handset costs rose primarily due to a volume effect (growth in the customer base) and price effects (upselling of mobile handsets).

Payroll costs

(In millions of Moroccan dirhams) 2009 2008 2007 Wages 2,226 2,297 2,314 Payroll taxes 350 374 358 Wages and taxes 2,576 2,671 2,672 Share-based compensation 28 34 23 Payroll costs 2,604 2,705 2,695 Average headcount 14,423 13,955 14,154

This item includes the payroll costs for the period, excluding redundancy costs, which were recognized as other operating expenses. In 2009, payroll costs declined relative to 2008, as a result of the layoff plan introduced by Gabon Télécom in the third quarter of 2008 which resulted in a reduction of the workforce by up to 66%. Workforce reductions and voluntary redundancy plans were also introduced by Mauritel in 2008. In Morocco, the total payroll remained almost unchanged versus 2008 while the average number of employees remained stable. In 2009, the increase in average headcount at Group level was due to the integration of Sotelma. In 2008, payroll costs were stable relative to the prior year. In Morocco, the total payroll remained almost unchanged compared to 2007 while the average number of employees remained stable.

Taxes and levies

(In millions of Moroccan dirhams) 2009 2008 2007

Taxes and duties 286 311 319

Fees 591 443 469

Total 877 754 787

Taxes and levies include local taxes (local business tax, property tax, local authority service taxes), fees paid for occupying public land and other levies (transfer taxes, vehicle tax). License fees include amounts paid to the telecommunications regulatory authority with respect to universal service and training, research and development and license fees for radiofrequency management (2G and 3G licenses).

156 Maroc Telecom - 2009 Registration Document FINANCIAL REPORT 5.3. Consolidated income statement

In 2009, the overall amount of license fees paid was 33% higher than in 2008, chiefly as a result of the increase in the calculation base for the “Universal service” license fee (due to the growth in Maroc Telecom’s revenues) and, in particular, the reduction in the license fee exemption granted by the Moroccan telecommunications regulator, ANRT, in consideration for the capital expenditure commitment provided by Maroc Telecom with respect to the so-called “Pacte” program. In 2008, the overall amount of license fees paid was 6% lower than in 2007, chiefly as a result of the exemption received in connection with the Universal Service license fee in Morocco. This exemption was granted in consideration for the capital expenditure commitment provided by Maroc Telecom for the “Pacte” program which involved the extension of telecommunications coverage to 1,500 remote rural areas in 2008.

Other operating income and expenses

(In millions of Moroccan dirhams) 2009 2008 2007

Communication 558 612 604 Commissions 1,197 1,188 1,041 Other including : 2,028 1,843 1,917 Rental expenses 599 511 467 Maintenance, repair and rental expenses 785 735 634 Audit and advisory fees 384 401 425 Postage and banking services 103 112 108 Voluntary redundancy plan 3 38 193 Other 155 45 90

Total 3,783 3,643 3,562

Other operating income and expenses increased by 3.8% to MAD3,783 million, in 2009. This increase was chiefly attributable to the following items:

• “Rental expenses” which increased by 17.2%, essentially as a result of higher expenses for international leased lines (due to the impact of increased internet traffic). • “Maintenance, repair and property service charges” which rose by 6.8% (maintenance of network infrastructure and information systems), due to the expiry of warranty periods for a sizeable proportion of the network infrastructure. • “Other”, the rise in 2009 was due primarily to a MAD145 million non-recurring gain arising from the reversal of debt due to a third party supplier, in accordance with the three-party agreement concluded between Maroc Telecom, the Gabonese State and the supplier. For reference, in 2008 :

• Commissions: which rose by 14.1% to MAD1,188 million, chiefly as a result of a volume effects (the number of activated handsets rose by 14% in Morocco) and price effects (upselling of mobile handsets, with a 9% average increase in the price of handsets sold). • Rental expenses: which increased by 9.4%, essentially as a result of the increase in circuit leasing expenses (in particular for international calls) due to the impact of increases in traffic (e.g. an increase of 7.2% in mobile network traffic). • Maintenance, repair and property service charges: which increased by 15.9% (maintenance of network infrastructure and information systems) due to the expiry of warranty periods for a sizeable proportion of the network infrastructure. • As regards the voluntary redundancy plan, expenses incurred in 2008 amounted to MAD17 million for Maroc Telecom (balance due in respect of the 2006 voluntary redundancy plan) and MAD21 million for Mauritel. In 2007, the entire amount of redundancy was incurred by Maroc Telecom.

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Net charge to depreciation, amortization , impairment and provisions

The following table sets out Maroc Telecom’s net charge to amortization, impairment and provisions for the years ended December 31, 2009, 2008 and 2007.

(In millions of Moroccan dirhams) 2009 2008 2007 Depreciation and impairment of fixed assets 4,127 3,770 3,623 Impairment of accounts receivable 161 93 557 Impairment of inventories (15) (35) 121 Impairment of other receivables (11) (42) 13 Provisions (70) 273 (274) Total 4,193 4,059 4,038

The increase in impairment losses for trade receivables and similar accounts is related to the growth of customer base and the adoption of a more restrictive policy for the impairment of trade receivables. “Provisions” mainly comprise amounts relating to provisions for retirement benefits and provisions for contingencies and losses (please refer to note 29).

Depreciation, amortization and impairment of fixed assets

The following table sets out the charges related to amortization and impairment of fixed assets recorded by Maroc Telecom group for the years ended December 31, 2009, 2008 and 2007.

(In millions of Moroccan dirhams) 2009 2008 2007

Other intangible assets 1,072 948 746 Building and civil engineering 218 177 310 Technical plant and pylons 2,571 2,359 2,337 Other property, plant and equipment 266 287 228 Total 4,127 3,770 3,623

Net charge to provisions and impairment

The following table sets out the net provisions and impairment recorded by Maroc Telecom group for the years ended December 31, 2009, 2008 and 2007.

(In millions of Moroccan dirhams) 2009 2008 2007

Impairment of accounts receivable 161 93 557 Impairment of inventories (15) (35) 121 Impairment of other receivables (11) (42) 13 Provisions (70) (273) (274) Total 65 289 416

The net charge to provisions and amortization stood at MAD65 million at December 31, 2009 versus MAD289 million a year earlier. This decline reflected the combined effect of the following factors: - “Impairment of trade receivables”, the increase in 2009 was attributable to Gabon Télécom which recorded an extraordinary provision in 2009 to recognize additional impairment losses in respect of longstanding trade receivables (MAD58 million). - “Provisions”, in 2009, the reversal of a MAD70 million provision, which was chiefly attributable to Maroc Telecom, mainly due to the reversal of an unused provision for tax liabilities (MAD93 million) accrued in 2008. In 2008, the consolidated financial statements also included a MAD180 million provision for expenses connected with the voluntary redundancy plan implemented by Gabon Télécom. In 2008, the net charge to provisions and amortization fell to MAD289 million versus MAD416 million a year earlier. This decline was due primarily to the following factors: - a MAD320 million reduction in impairment allowances for trade receivables in Morocco due to the improvement in collection efficiency and the settlement of a number of legal disputes with international operators;

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- the reversal of provisions for impairment in inventory, which resulted from the destocking efforts pursued throughout 2008 and included auction sales; - a total of MAD273 million in new provisions were accrued in 2008, mainly to cover the MAD180 million in expenses connected with the voluntary redundancy plan implemented in Gabon.

Earnings from operations

The table below shows Maroc Telecom’s earnings from operations for the years ended December 31, 2009, 2008 and 2007.

(In millions of Moroccan dirhams) 2009 2008 2007

Earnings from operations 14,008 13,889 12,234

Earnings from operations edged up by 1% to MAD14,008 million in 2009. For reference, earnings from operations increased 14% in 2008 to MAD13,889 million. In 2007, earnings from operations increased 22% to MAD12,234 million.

Income or loss from equity affiliates

(In millions of Moroccan dirhams) 2009 2008 2007

Médi-1-Sat 43 (62) (34)

In 2009, Maroc Telecom commenced the staged divestment of its equity interest in Medi-1-Sat. Its ownership interest fell from 36.8% at end-2008 to 30.5% at end-2009. In early January 2010, Maroc Telecom owned 4.79% of Medi-1 Sat’s equity capital. As a result, Maroc Telecom’s share of the accumulated losses of Medi-1 Sat is limited to the amount of its equity interest. Since Maroc Telecom no longer participates in share capital increases by Medi-1 Sat, it reversed the amount of the provision recorded in late 2008 corresponding to its share in the losses of Medi-1 Sat which exceed the amount of its investment in the company. Losses from equity affiliates amounted to MAD62 million at December 31, 2008. For reference, in December 2008, Maroc Telecom increased its equity interest in Medi-1 Sat from 28% to 36.8%, while CIRT did not participate in the share capital increase.

Net borrowing costs and other financial income and expenses

(In millions of Moroccan dirhams) 2009 2008 2007 Income from cash and cash equivalents 79 112 131 Interest expenses on loans (228) (106) (131) Net borrowing costs (149) 6 0

(In millions of Moroccan dirhams) 2009 2008 2007 Foreign exchange gains and losses (16) (31) 11 Other financial income (+) 41 837 22

Other financial expense (24) (418) (1)

Other financial income and expense 2 388 31

In 2009, the MAD149 million increase in the cost of net financial debt was attributable to the MAD3 billion bank borrowing contracted to finance the acquisition of a 51% equity interest in Sotelma. In 2008, other financial income in the amount of MAD837 million corresponded to the forgiveness of tax debts due to the Gabonese state and the assumption of payables due to banks by Gabon Télécom. As a result, in 2009, Gabon Télécom recorded a MAD725 million non-recurring financial gain in accordance with the terms of the transfer of receivables agreement signed in 2008 between Gabon Télécom and the government of Gabon. Other financial expenses (MAD418 million in 2008) included the MAD361 million impact of the price supplement to be paid by Maroc Telecom to the Gabonese state in accordance with the aforementioned agreement.

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Tax expense

The following table shows the breakdown of tax between income tax payable by Maroc Telecom and deferred taxes for the years ended December 31, 2009, 2008 and 2007:

(In millions of Moroccan dirhams) 2009 2008 2007 Income tax expense 3,845 3,915 4,062

Deferred tax (18) 281 33

Provision for tax 293

Current tax 4,120 4,196 4,095

Consolidated effective tax rate (*) 30% 30% 33%

(*) Tax expense / earnings before taxes Income tax payable and deferred tax declined year-on-year in 2009. In 2009, the reduction in income tax expense was essentially attributable to the significant tax deductions granted to Maroc Telecom (including temporary differences in the amortization periods) which were partially offset by a MAD293 million provision for tax liabilities. Maroc Telecom was subject to a tax audit for the fiscal years 2005, 2006, 2007 and 2008 and received notification on December 17, 2009 of the tax authorities’ grounds for a tax reassessment in respect of the 2005 fiscal year alone. The Company has already provided a preliminary response and has transmitted additional documentation, as requested by the tax authorities. It is continuing to provide further responses in connection with its administrative appeal of the tax adjustment which was filed within the required time period. Maroc Telecom believes that the tax reassessment will not have a material impact on the earnings, net equity or liquidity of the Company. Notwithstanding this, Maroc Telecom recorded a provision for tax reassessments covering the tax claimed by the tax authorities in connection with their audit. The reduction in deferred taxes was attributable to the fact that in 2008, the Company recorded MAD281 million in deferred tax expenses which broke down as follows:

• A MAD98 million expense recorded by Mobisud France to recognize the impairment of deferred tax assets recorded in previous years to take account of income tax losses that can be carried forward indefinitely and which may give rise to future tax rebates. The impairment of deferred tax assets was booked due to the very limited likelihood that these expenses could be carried forward against taxable profits in future years. • A MAD70 million expense corresponding to deferred tax on accounting restatements to the consolidated financial statements which arose due to the write-back of MAD225 million in provisions for impairment of equity interests in Mobisud France and Medi-1 Sat which were booked in the parent company financial statements. Conversely, a MAD70 million deferred tax gain was booked in 2009 following the deconsolidation of Mobisud France and the recovery of provisions recorded in the parent company financial statements in respect of Medi-1 Sat. • A MAD80 million expense representing deferred tax corresponding to temporary differences between the parent company financial statements and tax accounting (i.e. the amortization periods for tax amortization are longer than those for accounting amortization). The principal components of deferred taxes in 2009 were as follows: • A MAD30 million deferred tax expense relating to the activation of MAD104 million in payroll costs for staff assigned to deployment projects. • A deferred tax gain of MAD70 million which was recorded following the deconsolidation of Mobisud France and the recovery of provisions relating to Medi-1 Sat in the parent company financial statements (please refer to point b ) above). • A MAD80 million expense representing deferred tax corresponding to temporary differences between the parent company statements and tax accounting (i.e. the amortization periods for tax amortization are longer than those for accounting amortization). In 2008, the corporate income tax rate in Morocco and Burkina Faso was reduced from 35% to 30%.

160 Maroc Telecom - 2009 Registration Document FINANCIAL REPORT 5.3. Consolidated income statement

Net earnings

Net earnings rose from MAD8,137 million in 2007 to MAD10,010 million in 2008, and to MAD9,779 million in 2009, representing a 23% increase in 2008 and a 2.3% decrease in 2009.

Minority interests

Minority interests amounted to MAD354 million in 2009, MAD490 million in 2008 and MAD104 million in 2007, reflecting the interests of shareholders other than Maroc Telecom in the earnings of the group’s consolidated entities. The reduction in minority interests in 2009 was attributable essentially to the reduction in the share attributable to minority shareholders in Gabon Télécom. Since 2008, the minority interests in Gabon Télécom (MAD335 million) included the non-recurring financial gain arising from the transfer of receivables agreement signed by Gabon Télécom and the Gabonese state under which the Gabonese state forgave tax debts due to the Gabonese state and assumed payables due to banks by Gabon Télécom in an amount of MAD725 million (100% of total payables). The increase in minority interests in 2008 was driven by the share attributable to minority shareholders of Gabon Tele- com in the non-recurring financial gain arising from the agreement signed between Maroc Telecom and the Gabonese government. The following table shows the breakdown of minority interests by consolidated entity.

(In millions of Moroccan dirhams) 2009 2008 2007 Mauritel 158 165 176 Mobisud France (5) (106) (51) Onatel 87 75 79 Gabon Télécom 93 355 (99) Sotelma 21 Total minority interests 354 490 104

Earnings after minority interests

Consolidated earnings after minority interests amounted to MAD9,425 million in 2009, compared with MAD9,520 million in 2008 and MAD8,033 million in 2007. Distributable income for 2009 amounted to MAD9,063 million.

Net earnings per share

Based on the 879,095,340 shares outstanding, net earnings per share amounted to MAD10.7 for the fiscal year 2009, compared with MAD10.8 in 2008 and MAD9.1 in 2007.

Maroc Telecom - 2009 Registration Document 161 5

5.3.2 Comparison of operating segment results

Summary: In Mauritania, revenues generated from international inbound and outbound Mobile traffic were accounted for directly under Mobile segment revenues in 2009, whereas in 2008 and 2007, they were accounted for as transit revenues of Mauritel’s Fixed-line operations. 2008 and 2007 financial data were therefore restated to reflect this new presentation. This intercompany restatement did not have any impact on Mauritel’s net revenues. Furthermore, financial data presented on a comparable basis illustrate the impact of the consolidation of the Malian telecoms operator (Sotelma) as if this transaction had occurred on August 1, 2008 and assume constant exchange rates between the Moroccan dirham and the Mauritanian ouguiya, the CFA franc and the euro.

Revenues and earnings from operations for the Mobile segment

Mobile segment data broke down as follows :

(In millions of Moroccan dirhams) 2009 2008 2007

Gross revenues– Mobile 22,190 21,183 19,328

Maroc Telecom 18,866 18,529 17,096

Revenues from sale of handsets 989 1,175 958

Revenues from sale of services 17,877 17,354 16,138

Mauritel 935 898 866

Onatel 1,162 881 719

Gabon Télécom 688 692 583

Sotelma 414

Mobisud* 125 183 64

Elimination of intersegment transactions (1,214) (1,431) (1,646)

Earnings from operations- Mobile 10,712 10,720 9,589

Maroc Telecom 9,708 10,255 9,138

Mauritel 328 390 429

Onatel 428 270 246

Gabon Télécom 111 44 45

Sotelma 162

Mobisud* (25) (239) (269)

Contribution to consolidated earnings from operations 76% 77% 78%

Depreciation and impairment of fixed assets- Mobile (2,450) (2,148) (1,902)

* Includes Mobisud France and Maroc Telecom Belgique

162 Maroc Telecom - 2009 Registration Document FINANCIAL REPORT 5.3. Consolidated income statement

Comparison of 2008 and 2009 data

Gross revenues generated by Maroc Telecom’s Mobile operations increased by close to 4.8% to MAD22,190 million in 2009 and were up 3.4% on a comparable basis. The Group’s Mobile customer base rose by 14% in 2009 to 19.6 million clients, reflecting the combined impact of the integration of Sotelma, renewed growth in the Mobile customer base in Morocco and the ongoing expansion of the customer bases of the subsidiaries. Consolidated earnings from operations of the Mobile segment amounted to MAD10,712 million, down 0.1% from 2008 (down 1.4% on a comparable basis).

Maroc Telecom In an increasingly restrictive regulatory environment, gross revenues generated by Mobile operations in Morocco rose to MAD18,866 million, up 1.8% year-on-year. This performance was attributable to the 5.4% growth in outbound call revenues which was partially offset by a 4.1% reduction in inbound call revenues and declines of 5.4% and 15.8%, respectively, in roaming revenues and handset sales. Maroc Telecom experienced a sharp increase in its Mobile customer base in the fourth quarter of 2009, and recorded 5.6% growth in the customer base on an annual basis, ending the year with 15,272,000 customers. The postpaid subscriber base continued to expand significantly, rising by 13.2% to reach 682,000 subscribers at year-end. As a consequence of the attractive customer loyalty program introduced during the year, the cumulative churn rate fell by 1.4 points year-on-year and amounted to 33.5% at year-end for the overall customer base while the churn rate in the postpaid segment fell by 0.7 points to 13.2%. Combined ARPU stood at MAD97.7, down 1.4% versus 2008, reflecting a 0.9% increase in outbound ARPU, which was attributable to a 3.2% increase in outbound usage (52 minutes/customer/month), and the reduction in inbound revenues. Earnings from operations for the Mobile segment fell by 5.3% in 2009, ending the year at MAD9,708 million. The operating margin remained at 51.5%, despite the increases in interconnection costs and intercompany leased line expenses which were linked to network expansion.

Mauritel In 2009, gross revenues generated by Mobile operations in Mauritania rose by 4.2% (up 7.3% at constant exchange rates) to MAD935 million. Earnings from operations amounted to MAD328 million, down 13.1% at constant exchange rates, due to the deterioration of Mobile segment profitability in a fiercely competitive operating environment. Mauritel’s Mobile customer base climbed by 17% in 2009 to reach 1,335,000 customers at year-end.

Onatel: Gross revenues generated by Mobile operations in Burkina Faso soared to MAD1,162 million, up 32% (up 33% at constant exchange rates). Earnings from operations for the Mobile segment came to MAD428 million, up 59.9% at constant exchange rates. At end-2009, Onatel had 1,569,000 Mobile customers, a level 61% higher than at end-2008. This performance was essentially driven by extensions to mobile network coverage.

Gabon Télécom Gross revenues generated by Mobile operations in Gabon amounted to MAD668 million for 2009, down 0.7% (up 0.1% at constant exchange rates). Earnings from operations climbed to MAD111 million, versus MAD44 million a year earlier. During the year, the Mobile customer base rose by 15% to 513,000 customers.

Sotelma Gross revenues generated by Mobile operations in Mali during the final five months of 2009 amounted to MAD414 million, up 13.2% on a comparable basis. Earnings from operations amounted to MAD162 million over the same period, versus MAD87 million for the final five months of 2008. At end-2009, Sotelma had close to 818,000 Mobile customers, a level 39% higher than at end-2008.

Mobisud The Mobisud MVNO generated MAD125 million in revenues and recorded a loss from operations of MAD25 million. Mobisud France was deconsolidated as from June 1, 2009. Mobisud Belgique had 95,000 active customers at end- 2009.

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Comparison of 2007 and 2008

Gross revenues generated by Mobile operations increased significantly in 2008, rising by 9.6%. Consolidated earnings from operations of the Mobile segment climbed to MAD10,720 million, up 11.8%. This performance was achieved on the back of increased revenues, tight cost control measures and continued strong growth in the customer base.

Maroc Telecom In 2008, gross revenues generated by Mobile operations in Morocco experienced a slightly slower pace of growth, particularly in the second half of the year. The other key highlight of the year was the commercial launch of 3G mobile voice services by the number three mobile operator. Maroc Telecom maintained its leadership, while recording a net addition of 1.12 million clients to its active customer base. At year-end, the active customer base stood at 14.5 million customers, giving Maroc Telecom a 63.4% market share versus 66.5% in 2007. Gross revenues generated by Mobile operations in Morocco rose to MAD18.5 billion, representing growth of 8.4% relative to 2007. Consolidated earnings from operations for the Mobile segment in Morocco came to MAD10,255 million, representing a 12.2% increase compared to 2007. This performance was driven by revenue growth and tight control over customer acquisition costs amid an intensely competitive market environment. Although Mobile revenue growth showed signs of slowing, Maroc Telecom maintained its dominant position in the market and more particularly in the postpaid segment. Furthermore, the operating margin improved by 1.9 basis points to 55.3%. Average revenues per user (ARPU) stood at MAD99.2, down 8.4% on 2007, reflecting the fiercely competitive market context and the introduction of more restrictive regulations for price promotions. As a consequence of the sharp growth in the customer base (increase of 2.6 million customers), the churn rate rose by 9.5 basis points to 34.9% in 2008. Maroc Telecom focused on maintaining a dominant market share by continuing to roll out innovative service offerings, as evidenced by its launch of 3G video telephony services in the prepaid and postpaid segments, reductions in international call rates and the introduction of new call plans (Optimis, etc.) for business customers. Finally, at the end of 2008, Maroc Telecom launched a prepaid mobile Internet service. In terms of its infrastructure, Maroc Telecom continued to extend its mobile network coverage. At year-end, it had more than 5,400 2G base stations (versus 5,026 base stations in 2007) and more than 1,100 3G base stations (versus 400 in 2007).

Mauritel Gross revenues generated by mobile services rose to MAD898 million, up 3.7%. Despite more intense competition, the mobile customer base expanded by 26.1% to 1.14 million customers at end-2008. During the year, the entry of a third fixed-line and mobile operator placed considerable pressure on call tariffs.

Onatel Gross revenues generated by mobile services increased to MAD881 million, up 22.5% on a constant basis and up 21.1% on a comparable basis. The mobile customer base grew by 73.2% year-on-year to 977,000 customers at year- end, driven by an extension in network coverage. Despite this, the pace of revenue growth was dampened by higher cost of living expenses and a reduction in consumer spending.

Gabon Télécom Gross revenues generated by mobile services amounted to MAD692 million in 2008, an increase of 18.7% on a constant basis and 0.1% on a comparable basis. The mobile customer base grew by 15.8% during the year to 447,000 customers, largely thanks to price promotions.

164 Maroc Telecom - 2009 Registration Document FINANCIAL REPORT 5.3. Consolidated income statement

Revenues and earnings from operations for the Fixed-line and Internet segment

Fixed-line and Internet segment data broke down as follows:

(In millions of Moroccan dirhams) 2009 2008 2007

Gross revenues Fixed-line and Internet 11,106 11,319 11,042

Maroc Telecom 9,312 9,683 9,451

Voice 5,718 6,091 6,225

Interconnection 389 562 655

Data 2,166 1,958 1,552

Internet 1,039 1,072 1,019

Mauritel 263 256 271

Onatel 770 758 799

Gabon Télécom 615 622 521

Sotelma 145

Elimination of intersegment transactions (1,747) (1,551) (1,215)

Earnings from operations– Fixed-line and Internet 3,297 3,169 2,644

Maroc Telecom 3,371 3,302 2,934

Mauritel 27 (18) (41)

Onatel (106) (60) (35)

Gabon Télécom 103 (55) (214)

Sotelma (98)

Contribution to consolidated earnings from operations 24% 23% 22%

Depreciation, amortization and impairment of fixed assets – (1,677) (1,622) (1,716) Fixed-line and Internet

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Comparison 2008 and 2009 data

Gross revenues generated by Fixed-line and Internet operations amounted to MAD11,106 million, down 1.9% year-on- year (down 3.2% on a comparable basis). The Fixed-line customer base amounted to 1,528,000 customers, a level 0.1% higher than in 2008. Consolidated earnings from operations for the Fixed-line segment totaled MAD3,297 million, up 4.0% year-on-year (up 6.3% on a comparable basis).

Maroc Telecom Fixed-line and Internet operations in Morocco generated gross revenues of MAD9,312 million in 2009, down 3.8% year-on-year. This decline was chiefly attributable to a 6.1% reduction in Voice revenues and a 30.8% fall in interconnection revenues. Conversely, Data revenues increased by 10.6% during the year to MAD2,166 million. Maroc Telecom had 1,234,000 fixed lines in service at end-2009, down 5% year-on-year, due mainly to shrinkage in the Residential customer base (down 8.8%) resulting from Mobile competition. The average amount billed fell by 2.4% versus 2008 to MAD390. At end-2009, Maroc Telecom had 469,000 ADSL lines in service, a level 1.7% lower than in 2008. In addition, it had close to 174,000 3G+ Mobile Broadband customers at year-end versus less than 30,000 customers at end-2008. This brought the number of Internet customers to 645,000, up 26% from 2008. Earnings from operations in the Fixed-line and Internet segment rose to MAD3,371 million, up 2.1% compared with 2008, reflecting the positive impact of lower interconnection tariffs and the 14.3% growth in intercompany data revenues.

Mauritel Fixed-line and Internet operations in Mauritania generated gross revenues of MAD263 million in 2009, up 2.7% year- on-year (up 5.8% at constant exchange rates). Earnings from operations amounted to MAD27 million versus a loss of MAD18 million a year earlier. At end-2009, Mauritel had close to 41,000 fixed lines in service, a level 16% lower than in 2008. The number of fixed lines in service fell by 16% to 41,000 lines while the number of Internet access points fell to over 6,000 (down 33%), following a clean-up of the subscriber database which gave rise to terminations. Onatel Fixed-line and Internet operations in Burkina Faso generated gross revenues of MAD770 million in 2009, up 1.6% year-on-year (up 2.4% on a comparable basis). Losses from operations amounted to MAD106 million, versus MAD60 million a year earlier. At year-end, Onatel had 152,000 fixed lines in service, a level 5% higher than at the end of 2008 while the number of Internet subscribers increased by 35% to more than 23,000 subscribers. Gabon Télécom Fixed-line and Internet operations in Gabon generated gross revenues of MAD615 million in 2009, down 1.1% year- on-year (down 0.3% on a comparable basis). Earnings from operations stood at MAD103 million, versus a loss of MAD55 million a year earlier, notably thanks to the positive impact of the restructuring plan initiated in late 2008. At end-2009, Gabon Télécom had more than 36,000 fixed lines in services, a level 9% higher than the prior-year period, and around 20,000 Internet access points in service (up 43%).

Sotelma Fixed-line and Internet operations in Mali generated gross revenues of MAD145 million in 2009, down 17.6% on a comparable basis. At end-2009, Sotelma had more than 65,000 fixed lines in service and around 7,000 Internet access points.

166 Maroc Telecom - 2009 Registration Document FINANCIAL REPORT 5.3. Consolidated income statement

Comparison for 2007 and 2008 data

Gross revenues generated by Fixed-line and Internet services amounted to MAD11,319 million in 2008, up 2.5% compared to 2007. Consolidated earnings from operations rose to MAD3,169 million, up 19.9% compared to 2007.

Maroc Telecom At the end of 2008, Maroc Telecom had a total of 1.299 million fixed lines in service, a level 2.8% lower than in 2007. This decline was due to a reduction in the number of residential customers whereas the number of business customers increased by 3.7%. As a result, Maroc Telecom maintained its 97% market share in the Business segment. At year-end, Maroc Telecom had 482,000 Internet subscribers, including 477,000 broadband subscribers. The number of ADSL lines in service accounted for almost 42% of the total number of fixed lines in service (excluding public telephony). Outside the wireline Internet access segment, Maroc Telecom had almost 30,000 3G mobile Internet customers and more than 10,000 IPTV customers. Gross revenues generated by Fixed-line and Internet services amounted to MAD9.7 billion in 2008, representing a 2.4% increase compared to 2007. This growth was chiefly attributable to the data services segment and Internet segment which showed respective revenue growth of 26% and 5%, and which helped to offset the 1.2% decrease in the average monthly bill. Earnings from operations in the Fixed-line and Internet segment rose to MAD3,302 million, up 12.5% compared to 2007. This growth was primarily attributable to the reduction in international interconnection charges for outgoing voice traffic.

Mauritel Mauritel’s Fixed-line and Internet operations generated gross revenues of MAD256 million in 2008, down 5.5%. Thanks to the success of CDMA-based services, the number of fixed lines in service stood at 49,000 lines at the end of 2008, a level 36.1% higher than the prior year. The number of Internet access points almost doubled in 2008, reaching 9,000 access points at year-end.

Onatel Onatel’s Fixed-line and Internet operations generated gross revenues of MAD758 million in 2008, down 5.1% (6.2% on a comparable basis.) At year-end, Onatel had more than 145,000 lines in service, a level 18.9% higher than in 2007. In addition, it had more than 17,000 Internet subscribers, representing a 41.7% increase on the prior year.

Gabon Télécom Gabon Telecom’s Fixed-line and Internet operations generated gross revenues of MAD622 million in 2008, up 19.4% (4.0% on a comparable basis). At year-end, the number of fixed lines in service stood at 33,000, a level 37.5% higher than in 2007. In addition, the number of Internet access points rose by 40% to 14,000.

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5.3.3 Cash and cash equivalents The group’s main source of liquidity is net cash from operating activities. Maroc Telecom group funds all its capital expenditure with its operating cash flow.

Statement of cash flows

The following table summarizes Maroc Telecom’s consolidated cash flows for the specified periods:

(In millions of Moroccan dirhams) 2009 2008 2007

Net cash from operating activities * 14,816 11,580 11,711

Net cash used in investing activities * (8,583) (4,838) (4,409)

Net cash used in financing activities (8,002) (7,803) (6,235)

Effect of foreign currency translation adjustments (35) 13 (84)

Change in cash and cash equivalents (1,804) (1,048) 984

Cash and cash equivalents at the beginning of the period 2,678 3,725 2,741

Cash and cash equivalents at the end of the period 874 2,678 3,725

* As from 2009, net cash used in investing activities includes changes in working capital requirements linked to suppliers of fixed assets whereas in 2008 and 2007, these items were included in net cash from operating activities. Financial data for 2008 and 2007 have been restated to reflect this new presentation method.

Net cash from operating activities At December 31, 2009, net cash from operating activities amounted to MAD14,816 million, representing an increase of MAD3,236 million versus 2008. This increase was essentially attributable to the following factors: - The reduction in income tax paid in 2009 (down by MAD1,100 million), which was chiefly attributable to the reduction in 2008 of the income tax rate in Morocco and Burkina Faso from 35% to 30%. This reduction was applied to tax instalments payable in advance as from 2009. - The marked improvement in working capital requirements which represented MAD1,900 million in 2009. Net cash from operating activities amounted to MAD11,580 million in 2008. This decline was essentially attributable to an increase in tax payable in 2008, which rose by MAD1,358 million. Conversely, the Company’s cash flow from operations (cash flow before the cost of financial debt) increased by MAD2,214 million.

Net cash used in investing activities At December 31, 2009, net cash used in investing activities amounted to MAD8,583 million, versus MAD4,838 million a year earlier. This increase was chiefly driven by the acquisition of a 51% equity interest in Sotelma, in an amount of MAD3,045 million (excluding cash), and the MAD613 million increase in investment cash flows. At December 31, 2008, net cash used in investing activities amounted to MAD4,838 million versus MAD4,409 million a year earlier, representing an increase of MAD786 million.

Net cash used in financing activities At December 31, 2009, net cash used in financing activities amounted to MAD8,002 million, versus MAD7,803 million a year earlier. This change was attributable to the MAD1,400 million increase in dividends paid in 2009 which was partially offset by the MAD1,200 million bank borrowing contracted during the year. At December 31, 2008, net cash used in financing activities stood at MAD7,803 million versus MAD6,235 million a year earlier. This increase was primarily attributable to the MAD1,293 million in dividend payments made in 2008.

168 Maroc Telecom - 2009 Registration Document FINANCIAL REPORT 5.3. Consolidated income statement

Capital expenditure

The following table sets out Maroc Telecom’s capital expenditure by segment for the periods specified:

(In millions of Moroccan dirhams) 2009 2008 2007 Fixed-line and Internet 2,171 2,343 2,188 Mobile 3,676 3,613 3,279 Total 5,847 5,957 5,467

Overview

The difference between tangible and intangible capital expenditure and net cash used in investing activities is due to the latter taking into account financial investments, sales of fixed assets, the repayment of long-term loans and changes in working capital requirements linked to suppliers of fixed assets. In 2009, the difference between cash used in investing activities (excluding changes in working capital requirements) and expenditure on property, plant and equipment and intangible assets was principally attributable to the acquisition of a 51% equity interest in Sotelma for MAD3,045 million. In 2009, total capital expenditure amounted to MAD5,847 million while subsidiaries accounted for 18.5% of this total. In 2008, the difference between net cash used in investing activities and acquisitions of property, plant and equipment and intangible assets was essentially attributable to sales of equipment and land in Morocco which generated MAD228 million in proceeds. Capital expenditure amounted to MAD5,957 million while 18% of this total was incurred by subsidiaries. In 2007, the difference between net cash used in investing activities and acquisitions of property, plant and equipment and intangible assets was mainly due to the acquisition of equity investments in Gabon Telecom for MAD343 million. In 2007, investments amounted to MAD5,467 million, of which close to 24% at subsidiary level.

Investments in Morocco

Mobile In 2009, Maroc Telecom continued to upgrade service platforms for the Mobile network (IN networks, SMS and MMS servers, next-generation network core) with the objective of enabling the provision of new services and extending the coverage and capacity of its network. A total of 316 radio sites were deployed in connection with the “Pacte” universal service program and the number of base transceiver stations in service used for the 3G network was increased to 2,193, thereby covering the majority of large urban centers in Morocco. In 2008, Maroc Telecom stepped up investments aimed at extending the coverage and capacity of its network, notably through the deployment of around 700 3G base stations and the extension of the service platforms for intelligent networks (IN, SMS, MMS, voicemail servers, etc.). During the year, a large-scale project was launched to replace the legacy core network with next-generation network (NGN) infrastructure. In 2007, Maroc Telecom continued to invest in enhancing the mobile network’s coverage and capacity. The Group deployed 420 new base transceiver stations (BTS), increasing the number of BTS in service to over 5,000. Base station controller (BSC) and network switching subsystem (NSS) capacity was reinforced following an increase in traffic and in the number of customers in 2007 (2.3 million new customers). In addition to investments in 2G equipment, 400 3G base stations (NodeB) were deployed to provide for main urban centers of Morocco. The group also invested in service platforms (including IN and SMS MMS, VMS systems etc.), and brought new platforms into service.

Fixed and Internet In 2009, Maroc Telecom began marketing IP telephony service offerings via its MTbox. In addition, projects to deploy optical trunks have been initiated in order to increase Internet throughput to remote rural areas. Just under 170,000 fixed-line customers were connected to the fixed-line network for 135,000 new ADSL customers. In 2008, Maroc Telecom continued to invest to increase its network capacity while deploying a dedicated next- generation network core for the fixed-line network along with an IP/MPLS backbone network.

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In 2007, faced with ever-increasing capacity requirements, the Group carried out significant investments, namely in urban and intercity fiber optic cable capacity, increasing the domestic transmission capacity from 201,000 to 308,000 E1 connections. International transmission also involved significant investments, namely via the deployment of the "Atlas Offshore" submarine cable between Assilah and Marseilles aimed at increasing international bandwidth, with total capacity reaching 25 Gbits/s at December 31, 2007. Nearly 276,000 customers will be connected for 96,000 ADSL users.

Capital expenditure on information systems Maroc Telecom’s expenditure on information systems is intended to: • Industrialize planning, administration and management for Maroc Telecom’s telecommunications network; • optimize, integrate and increase the reliability of the Company’s engineering, sales and marketing, human resource, administrative and financial processes. During the 2006-2009 period, the principal investments on information systems were: • 2006: changes to the Fixed-line system (Fixed-line and Internet invoicing, set up and activation), continued installation of back-up sites and further upgrades to financial management systems. • 2007: continued industrialization via upgraded activation/sales systems. • 2008: upgrades to interconnection applications and the fixed-line information system, implementation of a common administration system for indirect sales; extension of the business continuity plan to new functions. • 2009: integration of the information systems for Fixed-line and Internet operations sales; overhaul of the provisioning software application for Mobile operations, the mediation application used for Fixed-line operations and of the software platform used for the Mobile customer loyalty program; implementation of a traffic data warehouse for Fixed-line operations; launch of new invoice payment channels for customers.

Investments made by the subsidiaries

Investments made by the subsidiaries accounted for nearly 18.5% of the Group's overall capital expenditure and were mainly directed towards increasing mobile network coverage and capacity, improving existing fixed-line network performance and deploying CDMA and ADSL networks. Thus, in 2009, the number of Mobile base stations of subsidiaries was increased by 18%.

Other non-current financial assets

The Group’s various financial investments and divestments over the past three years can be summarized as follows:

• In 2009, other financial assets rose by MAD234 million to MAD457 million, reflecting an increase in cash held in escrow which was attributable both to the integration of Sotelma (MAD127 million in cash held in escrow) and the MAD124 million increase in cash held in escrow by Gabon Télécom. • In 2008, Maroc Telecom sold three land parcels for an aggregate value of MAD106 million and generated an accounting gain of MAD78 million. Furthermore, Maroc Telecom participated in the share capital increases of Mobisud France (for MAD37 million), Mobisud Belgique (MAD54 million) and Medi-1 Sat (of which MAD18 million was fully paid up, representing one-quarter of the share capital increase decided by the General Shareholders’ Meeting). As a result, the Group had a 36.8% equity interest in Medi-1 Sat at December 31, 2008 as CIRT did not participate in the capital increase. Furthermore, the MAD18.6 million in interest-bearing loans granted to Medi-1 Sat generated MAD2.6 million in interest income. • In 2007, Maroc Telecom acquired a 51% stake in Gabon Télécom, Gabon's incumbent operator. The reference price was set at EUR61 million. The contractual arrangements for the acquisition include a purchase price adjustment mechanism based on the audited balance sheet in the 2006 financial statements. To date, Maroc Telecom has paid EUR26.3 million in total, which forms the basis of valuation for this equity investment. As provided in the shareholders’ agreement, Maroc Telecom participated in Medi-1 Sat's capital increase for MAD25 million, thus increasing its stake in the subsidiary to 28%. Maroc Telecom Belgique, a wholly-owned Maroc Telecom subsidiary, completed a MAD36 million recapitalization in 2007, thereby increasing its share capital to MAD53 million at year end

170 Maroc Telecom - 2009 Registration Document FINANCIAL REPORT 5.3. Consolidated income statement

Capital resources

In June 2009, Maroc Telecom made use of two overdraft facilities, each representing MAD3 billion and bearing interest at 4.68% per annum, in order to meet its dividend distribution commitments. Furthermore, in connection with the financing of its acquisition of a 51% equity interest in Sotelma, Maroc Telecom secured a MAD3 billion borrowing facility bearing interest at a preferential interest rate of 5.05%. The outstanding balance of borrowings at December 31, 2009 stood at MAD4,805 million.

The following table shows the breakdown of outstanding debt (excluding accrued interest) by currency for the periods specified:

(In millions of Moroccan dirhams) 2009 2008 2007 Euro 407 714 56 US dollar - - - Other currencies (mainly CFA Franc) 1,031 646 1,512 Moroccan Dirham 3,288 1,077 779 Outstanding debt 4,726 2,436 2,347 Accrued interest 79 15 45 Total borrowing 4,805 2,452 2,392

The Group’s positive net cash position broke down as follows:

(In millions of Moroccan dirhams) 2009 2008 2007

Outstanding debt and accrued interests (a) 4,805 2,452 2,392

Cash* (b) 874 2,678 3,725

Cash held for repayment of bank loans (c) 368 150 118

Net cash position (b) + (c) - (a) (3,564) 376 1,451

*marketable securities are considered cash equivalents when they are held for no more than three months. In its reports to the stock market regulatory authorities, Vivendi declares that certain of its bank loans and/or bond issues contain customary provisions under which Vivendi undertakes to ensure that its subsidiaries, including the Company, comply with certain commitments such as not providing security for assets in excess of threshold amounts. The thresholds below which these transactions are permitted are generally determined on an aggregate basis for all subsidiaries of the Vivendi group, and the Company may not be able to take full advantage of these exclusions if they have already been utilized by other Vivendi group subsidiaries. In addition, Vivendi’s borrowings also include financial covenants that require it to satisfy a maximum ratio of proportionate net financial debt to proportionate EBITDA and dividends received from unconsolidated companies. These ratios are determined on a consolidated basis and take into account the indebtedness, the financial position and the financial results of Vivendi subsidiaries, including the Company, proportionally to Vivendi's share in their capital. Consequently, Vivendi may exercise its power of control over the Company to prevent it from undertaking certain transactions in the event that such transactions would result in a breach of the commitments made by Vivendi with regard to its loans or would result in Vivendi breaching its financial ratio covenants. Insofar as it is not a party to these loans and/or commitments, the Company is unable to estimate the nature or the precise extent of their restrictions or terms contained therein, other than those disclosed in documents that are publicly available. Maroc Telecom cannot guarantee that the Vivendi group has made other commitments that may have an impact on the Company’s operations and financial resources (see 4.14 “Risk factors").

Maroc Telecom - 2009 Registration Document 171 5

Commitments

Maroc Telecom’s commitments include the balance of contracts made with suppliers and pledges and security deposits relating to equipment supply contracts. The following table sets out these commitments:

Commitments given

(In millions of Moroccan dirhams) 2009 2008 2007

Contract guarantees - - -

Securities receivables (Dailly receivables…) - - -

Pledges, mortgages and collateral - - -

Guarantees, security and warranties 86 78 82

Other commitments* 7,401 3,141 1,753 Total 7,487 3,219 1,835

* balances of contracts with suppliers and others In 2009, commitments given increased by close to MAD4,300 million, reflecting the renewal of the May 2009 investment agreement signed with the Moroccan state. Under this agreement, Maroc Telecom is committed to invest MAD10,571 million over a three-year period. At end-2009, the balance remaining to be disbursed in connection with this agreement amounted to MAD6,739 million. Of this total, MAD3,569 million has already been committed in the form of firm orders placed with suppliers which are currently in progress. In 2008, commitments given increased by MAD1.4 billion, chiefly as a result of the increase in Maroc Telecom’s investment commitments in connection with the Pacte program.

Commitments received

(In millions of Moroccan dirhams) 2009 2008 2007

Government guarantees on loans - -

Guarantees, security and warranties 1,788 1,674 2,109

Total 1,788 1,674 2,109

Commitments received amounted to MAD1,788 million in 2009. In connection with the “Pacte” universal service program, Maroc Telecom is committed to extending mobile coverage to 7,338 remote rural areas over the 2008-2011 period. This program will entail aggregate capital expenditure of MAD1,159 million. In consideration for its commitment, Maroc Telecom will receive a MAD334 million exemption from its contribution to the universal service fund for the 2009 fiscal year and a MAD396 million exemption in respect of the 2008 fiscal year. The increase in commitments received in 2007 mainly relates to an equipment swap contract with Nokia Siemens Network whereby the latter committed to purchase obsolete mobile network equipment (HLR, MSC, TMSC and GPRS) from Maroc Telecom for a total amount of MAD615.5 million. A rider to this contract was signed in 2008 which released Nokia Siemens Network from its obligation to repurchase the obsolete equipment without changing the net purchase price for new equipment.

172 Maroc Telecom - 2009 Registration Document FINANCIAL REPORT 5.3. Consolidated income statement

5.3.4 Contractual obligations and commercial commitments The following table sets out the contractual obligations borne by Maroc Telecom at December 31, 2009, by maturity (in millions of Moroccan dirhams):

(In millions of Moroccan dirhams) Total <1 year 1-5 years >5 years

Long-term debts 4,346 1,238 3,108

Finance lease obligations - - - -

Operating leases* 4 4 - -

Irrevocable purchase obligations - - - -

Other long-term commitments - - - -

Total 4,350 1,243 3,108

* long-term motor vehicle leases (excluding tax). The amount of long-term debts corresponds 69.5% to operations in Morocco and 30.5% to subsidiaries outside Mo- rocco. In 2009, in connection with the financing of its acquisition of a 51% equity interest in Sotelma, Maroc Telecom secured a MAD2,893 million five-year borrowing facility which bears interest at 5.1%. Maroc Telecom entered into an investment agreement with the public authorities of the Kingdom of Morocco in 2009, whereby Maroc Telecom agreed to implement a capital expenditure program over three years for MAD10.5 million. In return, the public authorities agreed to exonerate Maroc Telecom from customs duties on all imported capital goods. Maroc Telecom’s capital expenditure under the two previous agreements (2003-2008) totaled MAD20 million.

5.3.5 Disclosure of qualitative and quantitative information on market risk The groups is exposed to various market risks connected with its business.

Foreign exchange risk

Maroc Telecom is exposed to fluctuations in exchange rates as the composition of its foreign currency receipts varies considerably from that of its foreign currency disbursements. Foreign currency receipts and disbursements represent a significant portion of the company’s revenues. Maroc Telecom’s foreign currency receipts relate to revenues from international operations while foreign currency disbursements relate to payments to suppliers (in particular capital expenditure and acquisition of handsets) and payments for interconnection with foreign operators. These disbursements are mainly denominated in euros. At Decem- ber 31, 2009, the portion of euro-denominated disbursements (excluding subsidiaries) accounted for 79% of the MAD7,142 million in total foreign currency disbursements, of which MAD3,144 million related to the acquisition of the equity interest in Sotelma. Foreign currency disbursements exceeded the volume of foreign currency receipts, which amounted to MAD3,049 million in 2009. Furthermore, Maroc Telecom had overall debt of approximately MAD4,805 million at year-end. The bulk of this debt is denominated in CFA francs and Moroccan dirhams (see “Financial resources” above for more information). Maroc Telecom cannot net its foreign currency disbursements and receipts insofar as Moroccan law allows it to hold only 50% of its telecom receipts in foreign currency accounts and the remaining 50% has to be converted into Moroc- can dirhams. Consequently, Maroc Telecom’s earnings may be affected by fluctuations in exchange rates, and in particular by fluctuations in the Moroccan dirham against the US dollar or the euro. During 2009, the euro appreciated by 1.0% relative to the Moroccan dirham (one euro for MAD11.2460 at December 31, 2008 and MAD11.3160 at December 31, 2009). Over the same period, the US dollar depreciated by 3% versus the Moroccan dirham, falling from a rate of one dollar for MAD8.0983 in 2008 to MAD7.8602 in 2009. For the Group, a 1% depreciation in the dirham relative to the euro would have the following impact on the consolidated financial statements: • revenues = increase of MAD42 million • earnings from operations = increase of MAD9 million • earnings after minority interests = increase of MAD3 million

Maroc Telecom - 2009 Registration Document 173 5

The following table sets out the Company’s net foreign currency positions at December 31, 2009. Total ( In millions of Moroccan Euro / Total foreign USD Other currencies * MAD Maroc Telecom dirhams) FCFA currencies Group Total assets 14,588 48 2,122 16,758 29,161 45,920 Total liabilities (14,582) (104) (2,126) (16,812) (29,753) (46,566) Net position 6 (56) (4) (54) (592) (646) * mainly Mauritanian Ouguiyas

At the level of Maroc Telecom, currency assets essentially comprise receivables due from overseas telecoms operators. Currency liabilities are made up of payables due to suppliers and operators outside Morocco. The table below shows the net foreign currency positions of the Company (excluding subsidiaries) in euro and dollars as well as the aggregate foreign currency positions for other currencies at December 31, 2009.

Other currencies (In millions ) EURO USD (euro equivalent)* Assets 123 48 0

Liabilities (117) (104) (4)

Net position 6 (56) (4) Commitments (109) (116) (4) Net position after commitments (103) (172) (8)

*Assuming 1 euro = MAD11.3160 NB: (1) The other main currencies are the Japanese Yen (JPY), the Swiss franc (CHF) and the Swedish krona (SEK); (2) Net foreign currency positions in euro and dollars are calculated by applying the proportion of cash inflows received in 2009 to the amount of receivables and payables in special drawing rights (SDR) relating to overseas telecoms operators at December 31, 2009. (3) The breakdown by currency of the balance of commitments relating to current agreements is based on the balances observed for such contracts. For Maroc Telecom, a 1% increase in the euro and US dollar versus the Moroccan dirham would have had the following impact at December 31, 2009: a MAD18 million increase in assets denominated in foreign currencies, a MAD22 million decrease in liabilities denominated in foreign currencies, a MAD4 million decrease in net position, a MAD22 million decrease in commitments, a MAD26 million decrease in total net assets and liabilities. Conversely, a 1% decrease in the euro and US dollar versus the Moroccan dirham would have had the following impact as of December 31, 2009 : a MAD18 million decrease in assets denominated in foreign currencies, a MAD22 million increase in liabilities denominated in foreign currencies, a MAD4 million increase in net position, a MAD22 million decrease in commitments and, a MAD26 million increase in total net assets and liabilities, The group does not use currency hedging instruments.

174 Maroc Telecom - 2009 Registration Document FINANCIAL REPORT 5.3. Consolidated income statement

Interest rate risk The following table sets out outstanding debt by creditor at December 31:

Interest rate December December December (In MAD millions) Company % Maturity 31, 2009 31, 2008 31, 2007 Maroc Telecom Borrowing Attijariwafa bank 5.1% July 14 2,893 - -

Maroc Telecom Banks, IAM overdrafts 3.9% June 10 447 1,071 779

Mauritel Mobile License borrowing (October 2000) 8.0% January 08 0 0 11

Mauritel Borrowing Saudi development fund 2.5% - 1 1 1

Onatel Borrowing SBIF 2005-2011 6.7% June 11 146 216 288 Onatel CONS.BIB-ECOBANK-BICIA 7.7% July 12 101 132 140 Domestic borrowing reassigned by Onatel 7.5% December 08 0 0 9 government Onatel Borrowing BOAD 96.00 6.0% July 11 12 21 29 Onatel Borrowing EIB 2.0% December 10 7 13 20 Onatel Borrowing AFD 1109 7.7% October 09 0 2 5 Onatel Borrowing AFD110-1111 2.0% October 18 19 21 23 Onatel Borrowing SGBB 2007 6.4% November 13 87 86 87 Onatel Borrowing BOA 2007 6.4% December 14 87 86 87 Onatel Borrowing BOAD 09 00 8.0% July 10 34 51 69 Onatel Borrowing BIB 2008 6.0% December 13 33 35 0 Onatel Borrowing SFI 2008 7.6% July 13 88 87 0 Onatel Borrowing BICIAI 2008 6.3% September 15 88 87 0 Onatel Bank spot Onatel 5.7% - 110

Gabon Télécom Borrowing BEI 3.0% March 12 0 0 177

Gabon Télécom Borrowing BID 8.0% December 12 0 0 156

Gabon Télécom Borrowing AFD 5.0% October 09 2 2 2

Gabon Télécom Borrowing COMMERZBANK Euribor+0.75% December 13 56 72 80

Gabon Télécom BGFI leasing liabilities - - 0 4 12

Libertis Alcatel Phase I Euribor+3.5% November 09 0 23 46

Libertis Alcatel Phase II Euribor+0.75% March 11 70 161 266

Mobisud France Borrowing Mobisud fr - - 0 215 56

Sotelma Borrowing AFD OY/CML 1065 02 X 2.0% October 16 1 - - Sotelma Borrowing AFD OY/CML 1065 03 X 2.0% October 16 22 - - Sotelma Borrowing BOAD PR ML 2001 01 00 6.0% January 11 23 - - Sotelma Borrowing NKF N10-ORET/97114 2.0% April 11 8 - -

Sotelma Borrowing RASCOM/GPTC 0.0% - 8 - - Sotelma Borrowing DGDP/NKF 0.0% September 15 41 - - Sotelma Borrowing ECOBANK 7.0% February 11 20 - - Sotelma Borrowing BIM Fiber Optic Project 9.0% February 11 21 - - Borrowing BIM CDMA Kaves Optic Sotelma 9.0% February 11 38 - - Project MALTEL Borrowing BDM SA PHASE II 8.5% January 13 252 - - MALITEL Borrowing BDM SA PHASE II BIS 7.5% October 11 32 - - ONATEL Borrowing, ONATEL Overdrafts 8.5% - 3 54 23

Gabon Télécom Other - - 9 12 25

Total Bank loans and other financial liabilities 4,805 2,452 2,392

Maroc Telecom - 2009 Registration Document 175 5

Net cash position by maturity:

2009 :

In millions of Moroccan dirhams < 1 year 1-5 years > 5 years Total Bank loans 1,238 2,984 124 4,346 Bank overdrafts 459 - - 459

Financial liabilities 1,697 2,984 124 4,805 Cash at bank and in hand 874 - - 874 Cash held for repayment of bank loans 251 117 - 368 Total (572) (2,867) (124) (3,563)

2008 :

In millions of Moroccan dirhams < 1 year 1-5 years > 5 years Total Bank loans 277 956 83 1,316

Bank overdrafts 1,136 - - 1,136

Financial liabilities 1,412 956 83 2,452 Cash at bank and in hand 2,678 - - 2,678 Cash held for repayment of bank loans 150 - - 150 Total 1,415 (956) (83) 376

2007 :

In millions of Moroccan dirhams < 1 year 1-5 years > 5 years Total Bank loans 331 1,125 108 1,565 Bank overdrafts 828 - - 828 Financial liabilities 1,159 1,125 108 2,392 Cash at bank and in hand 3,725 - - 3,725 Cash held for repayment of bank loans 118 - - 118 Total 2,684 (1,125) (108) 1,451

Surplus cash balances are invested at market rates. Fluctuations in deposit interest rates have a significant material impact on investment income: • Based on the average cash balance at December 31, 2009, a 1% increase in interest rates would result in additional income of MAD12 million over a one year investment timeframe; • Conversely, based on the average cash balance at December 31, 2009, a 1% decrease in interest rates would result in a shortfall of MAD-12 million over a one year investment timeframe. In accordance with company policy, Maroc Telecom’s financial debt is essentially on fixed rate terms and, therefore, the Company does not have significant exposure to favorable or unfavorable interest rate movements. In addition, it does not use interest rate hedging instruments.

Equity risk

Maroc Telecom does not have a significant portfolio of listed equities. As a result, there is no risk relating to changes in the value of such securities.

176 Maroc Telecom - 2009 Registration Document FINANCIAL REPORT 5.3. Consolidated income statement

5.3.6 Transition from individual financial statements to consolidated financial statements The consolidated financial statements are derived from the individual financial statements of Maroc Telecom and its subsidiaries, as prepared under the generally accepted accounting principles of each country. A number of adjustments are made to comply with consolidation rules and to bring the individual financial statements into compliance with the format required by IFRS. For details of the transition to IFRS, please refer to part II of the financial statements below. The main adjustments to the income statement items are:

• The elimination of revenues related to cancelled subscriptions between the date of cancellation and the end of subscription period; • The recognition as consolidated operating expenses of resellers’ commissions. These costs were initially netted against revenues in the individual financial statements; • The reclassification of non-current items to earnings from operations, with the exception of variations in the value of fixed assets; • The reclassification of the Fidelio provision, which is instead netted against revenues; • The reclassification under financial income of non-current financial items. The main adjustments to the balance sheet relate to current assets:

• SIM cards: reclassification of inventories under fixed assets; • Non-activated handsets: handsets sold but not activated are restated to take into account the recognition of revenues upon activation. • Regarding trade payables, the main restatement entails recording certain operating payables as provisions for liabilities and charges. The above changes in presentation do not affect group earnings. Other consolidation adjustments include the elimination of statutory provisions, the calculation of deferred taxes, and consolidation-related operations (such as the elimination of investment securities etc.).

Maroc Telecom - 2009 Registration Document 177 5

5.4 CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to European Regulation n° 1606/2002 of July 19, 2002, the consolidated financial statements of Maroc Telecom group have been prepared in accordance with the International Financial Reporting Standards (IAS/IFRS) endorsed by the European Union at December 31, 2009.

Table of contents

• Statutory auditors’ report on the consolidated • Note 14. Provisions at December 31, 2009, 2008 and financial statements 2007 • Note 15. Borrowings and other financial liabilities at • Consolidated Balance Sheet at December 2009, December 2009, 2008 and 2007 2008 and 2007 • Note 16. Accounts payable as at December • Consolidated Income Statement for the years 2009, 31, 2009, 2008 and 2007 2008 and 2007 • Note 17. Revenues for 2009, 2008 and 2007 • Consolidated statements of cash flows for the years 2009, 2008 and 2007 • Note 18. Cost of purchases for 2009, 2008 and 2007 • Consolidated statement of changes in equity for the • Note 19. Payroll and payroll-related costs for 2009, years 2009, 2008 and 2007 2008 and 2007 • Note 20. Taxes, duties and fees for 2009, 2008 and • Notes to consolidated financial statements 2007 • Note 1. Accounting principles and valuation method • Note 21. Other operating income and expenses for 2009, 2008 and 2007 • Note 2. Scope of consolidation for 2009, 2008 and • Note 22. Depreciation, impairment and provisions for 2007 2009, 2008 and 2007 • Note 3. Goodwill at December 2009, 2008 as 2007 • Note 23. Income from equity affiliates for 2009, 2008 and 2007 • Note 4. Other Intangible assets at December 31 • Note 24. Net financial income (expense) 2009, 2008 and 2007 • Note 25. Tax expense for 2009, 2008 and 2007 • Note 5. Property, plant and equipment at December • Note 26. Minority interests for 2009, 2008 and 2007 31, 2009, 2008 and 2007 • Note 27. Earnings per share for 2009, 2008 and 2007 • Note 6. Investment in equity affiliates at December 31, 2009, 2008 and 2007 • Note 28. Segment data at December 31,2009, 2008 • Note 7. Non-current financial assets at December and 2007 31, 2009, 2008 and 2007 • Note 29. Restructuring provisions at December 31, • Note 8. Change in deferred taxes at December 2009, 2008 and 2007 2009, 2008 and 2007 • Note 30. Transactions with related parties • Note 9. Inventories at December 31, 2009, 2008 and 2007 • Note 31. Contractual obligations and contingents assets and liabilities • Note 10. Receivables and other at December 31, 2009, 2008 and 2007 • Note 32. Risk management • Note 11. Short term financial assets at December 31, • Note 33. Post-balance sheet events 2009, 2008 and 2007 • Note 12. Cash and cash equivalents at December 31, 2009, 2008 and 2007 • Note 13. Dividends

178 Maroc Telecom - 2009 Registration Document FINANCIAL REPORT 5.4. Consolidated financial statements

Statutory auditors’ reports on the Consolidated financial statements for the year ended December 31, 2009

To the Chairman To the Shareholders We have audited the accompanying financial statements of Itissalat Al-Maghrib SA (IAM), including the consolidated balance sheet as at December 31, 2009, the consolidated income statement, the statement of changes in equity and the statement of cash flows for the year then ended and a summary of significant accounting policies and other explanatory notes.

Management’s responsibility Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards. This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the consolidated financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor’s responsibility Our responsibility is to express an opinion on the consolidated financial statements based on our audit. We conducted our audit in accordance with the audit standards applicable in Morocco. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion on the financial statements In our opinion, the consolidated financial statements referred to above give, in all material aspects, a true and fair view of the financial position of the group constituted by the bodies corporate and the consolidated entities included in the consolidation scope of Itissalat Al-Maghrib SA (IAM) as of December 31, 2009, as well as the financial performance and cash flows for the year then ended, in accordance with the IFRS adopted by the European Union. Without qualifying our opinion above, we draw your attention to: - Note 25 of the notes to the consolidated financial statements relating to the tax reassessment for the fiscal periods 2005 to 2008 and outlining the stance taken by the Company. - the estimative nature of segment data (presented in the notes 1 (paragraph 2.5) and 28).

February 23, 2010

Statutory auditors KPMG Abdelaziz ALMECHATT Fouad LAHGAZI Abdelaziz ALMECHATT Partner Partner

Maroc Telecom - 2009 Registration Document 179 5

Consolidated Balance Sheet at December 31, 2009, 2008 and 2007

December 31, December 31, December 31, Note ASSETS (In millions of Moroccan dirhams) 2009 2008 2007 Goodwill 3 7,271 2,117 2,197 Other intangible assets 4 3,723 3,889 3,644

Property, plant and equipment, net 5 21,468 18,684 16,870

Investments in equity affiliates 6 0 0 1

Non-current financial assets 7 572 326 326

Deferred tax assets 8 63 17 204

Non-current assets 33,096 25,033 23,242 Inventories 9 653 744 749

Trade accounts receivable and other 10 11,196 9,827 9,897

Short-term financial assets 11 45 105 104

Cash and cash equivalents 12 874 2,678 3,725

Available-for-sale assets 56 96 32

Current assets 12,824 13,450 14,507

TOTAL ASSETS 45,920 38,483 37,749

SHAREHOLDERS’ EQUITY AND LIABILITIES December 31, December 31, December 31, Note 2009 2008 2007 (In millions of Moroccan dirhams) Share capital 5,275 5,275 5,275

Retained earnings 3,864 3,914 4,071

Net earnings 9,425 9,520 8,033

Equity attributable to equity holders of the parent 13 18,564 18,709 17,380

Minority interest 4,369 1,647 1,254

Total shareholders’ equity 22,934 20,356 18,634 Non-current provisions 14 230 180 203

Borrowings and other long-term financial liabilities 15 3,108 1,039 1,233

Deferred tax liabilities 8 126 100

Non-current liabilities 3,464 1,319 1,436

Trade accounts payable 16 17,176 14,763 15,385

Current income tax liabilities 10 146 114 992

Current provisions 14 503 519 142

Borrowings and other short-term financial liabilities 15 1,697 1,412 1,159

Current liabilities 19,522 16,808 17,679

TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES 45,920 38,483 37,749

180 Maroc Telecom- 2009 Registration Document FINANCIAL REPORT 5.4. Consolidated financial statements

Consolidated Income Statement for the years 2009, 2008 and 2007

(In millions of Moroccan dirhams) Note 2009 2008 2007

Revenues 17 30,339 29,521 27,532

Cost of purchases 18 (4,874) (4,471) (4,215)

Payroll costs 19 (2,604) (2,705) (2,695)

Taxes and duties 20 (877) (754) (788)

Other operating income (expenses) 21 (3,783) (3,643) (3,562)

Net depreciation, amortization and provisions 22 (4,193) (4,059) (4,038)

Earnings from operations 14,008 13,889 12,234

Other income and charges from ordinary activities (5) (14) 1

Income from equity affiliates 23 43 (62) (34)

Earnings from continuing operations 14 ,046 13,812 12,201

Income from cash and cash equivalents 79 112 131

Borrowing costs (228) (106) (131)

Net borrowing costs (149) 6 0

Other financial income and expenses 2 388 31

Net financial income (expense) 24 (147) 394 31

Income tax expense 25 (4,120) (4,196) (4,095)

Net earnings 9,779 10,010 8,137

Exchange gain or loss from foreign activities (57) 16 21

Other income and expenses

Earnings 9,722 10,026 8,158

Net earnings 9,779 10,010 8,137

Attributable to equity holders of the parent 9,425 9,520 8,033 Minority interests 26 354 490 104

Earnings 9,722 10,026 8,158

Attributable to equity holders of the parent 9,403 9,526 8,045 Minority interests 26 319 500 113

EARNINGS PER SHARE (In Moroccan dirhams) 2009 2008 2007 Net earnings– Group share 9,425 9,520 8,033 Number of shares as at December 31 879,095,340 879,095,340 879,095,340 Earnings per share 27 10.7 10.8 9.1 Diluted earnings per share 27 10.7 10.8 9.1

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Consolidated Statement of Cash Flows for the years 2009, 2008 and 2007

(In millions of Moroccan Note 2009 2008 2007 dirhams ) Earnings from operations 14,008 13,889 12,234 Amortization and other adjustments 4,046 3,971 3,241 Gross cash earnings 18,055 17,859 15,475 Other elements of the net change in working capital 576 (1,350) (192) Cash flow from operating before income tax expense 18,631 16,510 15,283 Tax paid (3,815) (4,930) (3,572) Net cash from operating activities (a) 14,816 11,580 11,711 Purchase of PP&E and intangible assets (5,585) (4,972) (4,186) Purchase of consolidated investments (3,045) (239) Purchase of equity affiliates (18) (25) Increase in financial assets (153) (80) (81) Disposals of PP&E and intangible assets 153 228 119 Decrease in financial assets 39 4 Dividends received from non-consolidated investments 8 1 3 Net cash used in investing activities (b) (8,583) (4,838) (4,409) Share capital increase 43 19 Dividends paid by Maroc Telecom 13 (9,516) (8,088) (6,935) Dividends paid by subsidiaries to minority shareholders (160) (146) (23) Changes in share capital (9,633) (8,215) (6,959) Borrowings and increase in other non-current financial liabilities 2,997 208 (2)

Payments on borrowings and decrease in other non-current financial liabilities (58) (9) (63)

Borrowings and increase in other current financial liabilities 67 308 837 Payments on borrowings and decrease in other current financial liabilities (1,026) (263) (99) Changes in shareholders' current accounts debtors/financial creditors (167) 162 38 Net interest (cash only) (149) 5 0 Other cash expenses (income) used in financing activities (34) 1 11

Changes in borrowings and other financial liabilities 1,631 412 724 Net cash used in financing activities (d) (8,002) (7,803) (6,235) Effect of foreign currency adjustments and other non-cash expenses (35) 13 (84) (income) (G) Change in cash and cash equivalents (a)+(b)+(d)+(g) (1,804) (1,048) 984 Cash and cash equivalents at beginning of period 2,678 3,725 2,741 Cash and cash equivalents at end of period 874 2,678 3,725 Dividends paid:

• MAD9,516 million in dividends paid by Maroc Telecom • MAD145 million paid by subsidiaries to minority shareholders (*) ONATEL has been fully consolidated since January 1, 2007. (*) Mobisud Belgium has been fully consolidated since May 1, 2007. (*) GABON TELECOM has been fully consolidated since March 1, 2007. (*) Mobisud France was removed from the scope of consolidation with effect as from June 1, 2009 (*) SOTELMA has been fully consolidated since August 1, 2009.

182 Maroc Telecom- 2009 Registration Document FINANCIAL REPORT 5.4. Consolidated financial statements

Consolidated Statement of Changes in Shareholders’ Equity for the years 2009, 2008 and 2007

Earnings Attributable Cumulative Other and to equity Minority (In millions of Moroccan dirhams ) Note Capital translation Total adjustments retained holders of interests differences earnings the parents

Balance at January 1, 2007 5,276 (12) (37) 10,986 16,261 592 16,853 Dividends (6,927) (6,927) (26) (6,953) Net earnings for the year 8,033 8,033 104 8,137

Exchange gain or loss from foreign 12 12 12 9 21 activities

Earnings 0 0 12 8,045 8,045 113 8,158

Treasury stock (8) (8) (8) (8) Cumulative translation differences 0 0 0 0 0

Other adjustments 9 9 9 (9) 0

Change in scope of consolidation (*) 584 584

Balance at December 31, 2007 5,276 (11) (25) 12,105 17,380 1,254 18,634

Dividends (8,088) (8,088) (158) (8,246)

Net earnings for the year 9,520 9,520 490 10,010

Exchange gain or loss from foreign 6 6 6 10 16 activities Earnings 0 0 6 9,526 9,526 500 10,026

Treasury stock (31) (31) (31) (31)

Other adjustments (78) (78) (78) 52 (26)

Changes in scope of consolidation (*) 0 Balance at December 31, 2008 5,276 (120) (19) 13,434 18,709 1,647 20,356 Dividends (9,516) (9,516) (145) (9,661) Net earnings for the year 9,425 9,425 354 9,779

Exchange gain or loss from foreign (22) (22) (22) (35) (57) activities Earnings 0 0 (22) 9,403 9,403 319 9,722 Treasury stock (64) (64) (64) (64) Other adjustments 32 32 32 224 256 Changes in scope of consolidation (*) 2,324 2,324 Balance at December 31, 2009 5,276 (152) (41) 13,289 18,564 4,370 22,934

As at December 31, 2009, Maroc Telecom’s share capital comprised 879,095,340 ordinary shares. Ownership of the shares was as follows: • Kingdom of Morocco: 30%; • Vivendi: 53% via its wholly-owned subsidiary Société de Participation dans les Télécommunications (SPT); • Other: 17%. (*) Change in scope of consolidation: Onatel has been fully consolidated since January 1, 2007. Gabon Telecom has been fully consolidated since March 1, 2007. Mobisud France was removed from the scope of consolidation with effect as of June 1, 2009. Sotelma has been fully consolidated since August 1, 2009. Retained earnings mainly comprise undistributed earnings from previous periods, including MAD3,424 million from December 31,2009 and net earnings from the current period attributable to equity holders of the parent. It should be noted that the nominal value of shares decreased from MAD10 to MAD6 in 2006. The shares were fully paid at December 31, 2006. There are no privileges, restrictions or rights attached to the shares

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Note 1. Accounting principles and valuation methods

1. Significant events • May 2009: Maroc Telecom divested a 10% stake in Médi 1-Sat to FIPAR Holding; • June 2009: Maroc Telecom sold its entire equity interest in Mobisud France to SFR for €1; • July 2009: Maroc Telecom acquired a 51% stake in Sotelma (the incumbent operator in Mali) for MAD3,144 million; The revised version of IFRS 3 has introduced a number of changes to the acquisition method described in IFRS 3.

(In millions of Moroccan dirhams) August 1, 2009 Adjusted net equity– group share 164 Acquisition price 3,144 Goodwill - group share 2,980 Goodwill- minority interests 2,166 Full goodwill 5,147

Sotelma’s goodwill was calculated and recognized in accordance with the revised IFRS 3 (full goodwill method: goodwill attributable to the group and to minority interests). (See note 1, paragraph 2.3.6).

Sotelma’s key indicators were as follows in 2009 and 2008:

(In millions of Moroccan dirhams) 2009 2008 Revenues 554 529 Fixed-line 146 175 Mobile 415 363 Earnings from operations 63 21 Net earnings - group share 22 (2)

Revenue figures were prepared in accordance with IFRS. However, pending the completion of the project for transition to IFRS, earnings from operations and net equity figures have not been fully restated on an IFRS basis.

2 Accounting principles and valuation methods The Group companies are consolidated on the basis of the financial statements for the year ended at December 31, 2009, with the exception of CMC whose financial statements were closed at June 30, 2009. The consolidated financial statements and notes thereto were approved by the Management Board on February 22, 2010.

2.1 Basis of preparation for the consolidated financial statements for 2009 and the financial statements for 2008 and 2007 Pursuant to European Regulation 1606/2002 of July 19, 2002 concerning the adoption of International Accounting Standards, the consolidated financial statements of Maroc Telecom for the year ended December 31, 2009 have been prepared in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) as applicable as from December 31, 2009, and as adopted by the European Union (EU). For comparison purposes, the 2009 financial statements also include financial information for the 2008 and 2007 fiscal years. The new standards, interpretations and amendments issued by the IASB whose application was mandatory in the European Union as from January 1, 2009 have been applied.

2.2 Statement of compliance The consolidated financial statements of Maroc Telecom Group at December 31, 2009, have been prepared in accordance with Inter- national Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee (IFRIC) interpretations adopted by the EU and mandatory for financial periods ending December 31, 2009. The accounting standards applied to the consolidated financial statements do not differ from those issued by the International Accounting Standards Board (IASB). Maroc Telecom has applied the following new standards and interpretations to the 2009 consolidated financial statements: The amendments to IAS 1 Presentation of Financial Statements. A Revised Presentation, which became mandatory as from January 1, 2009. The application of revised IAS1 had no significant impact on the financial statements of Maroc Telecom.

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In accordance with the revised IAS 27, the Group’s financial statements are presented as those of a single economic entity with two categories of owners: owners of the parent company (shareholders of Maroc Telecom SA), and owners of non-controlling interests (minority shareholders of subsidiaries). A non-controlling interest is defined as an ownership interest in a subsidiary which is not attributable directly or indirectly to a parent company (hereafter “minority interests”). Under this new approach, changes in the parent company’s ownership interest in a subsidiary that do not result in the loss of control are accounted for within shareholders' equity insofar as there is no change of control within the economic entity. Thus, as from January 1, 2009, in the case of purchases of additional shares in a consolidated subsidiary, the difference between the acquisition cost and the carrying value of minority interests is accounted for in equity attributable to shareholders of Maroc Telecom SA. Conversely, Maroc Telecom recognizes any gains or losses arising from step acquisitions or from losses of control in profit and loss The revised version of IFRS 3 introduces changes to the acquisition method defined by IFRS 3 prior to its revised version, in particular: • The option to measure non-controlling interests in an acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets. This option is available on a transaction by transaction basis. • Contingent consideration in a business combination to be recognized at fair value on the acquisition date. • Acquisition-related costs to be recognized as expenses when incurred. • In a business combination achieved in stages, re-measurement of the previously held equity interest in the acquiree at its acquisition-date fair value with any resulting gain or loss recognized in profit or loss. The impact of the application of revised IFRS 3 and IAS 27 is recognized in other financial income and expenses in the income statement. The impact of the early adoption of the revised IFRS 3 and IAS 27 standards on Maroc Telecom’s consolidated financial statements at December 31, 2009, primarily concerned the measurement of goodwill acquired in connection with the acquisition of Sotelma insofar as Maroc Telecom has opted to measure minority interests at fair value. Maroc Telecom applied the amendment to IFRS 7 – Financial Instruments: Disclosures to its consolidated financial statements for the year ended December 31, 2009 and to the financial statements for the year ended December 31, 2008 which were prepared for comparison purposes. This amendment, which is effective for accounting periods beginning on or after January 1, 2009, requires enhanced disclosure about financial instruments fair value measurements and liquidity risk. It was published by the IASB on March 5, 2009, adopted by the EU on November 27, 2009, and published in the EU Official Journal on December 1, 2009. It notably requires an entity to classify its financial instruments measured at fair value into three levels (the fair value hierarchy), to disclose a maturity analysis of all financial liabilities (derivative and non-derivative), and to provide disclosure about its management of the inherent liquidity risk arising from financial instruments.

2.3 Basis of presentation The consolidated financial statements have been prepared in accordance with the historical cost principle, with the exception of certain asset and liability categories detailed below, in accordance with IFRS. The consolidated financial statements are presented in Moroc- can dirhams and all figures are rounded up or down to the closest million, unless otherwise stated. The consolidated financial statements include Maroc Telecom’s financial statements as well as its subsidiaries’ financial statements after elimination of intra-group items and transactions.

2.3.1 Income statement Maroc Telecom prepares its consolidated income statement according to a format that provides details of revenues and expenses based on their nature. 2.3.1.1 Earnings from operations and earnings from continuing operations Earnings from operations comprises revenues, cost of purchases, payroll costs, taxes and duties, other operating income and expenses as well as amortization, depreciation, impairment and net additions to provisions. Earnings from continuing operations includes operating income from continuing operations, other income and expenses from continuing operations (including impairment of goodwill and other intangible assets) as well as income (loss) from equity affiliates.

2.3.1.2 Finance costs and other financial expenses and income Net finance costs include: • Gross finance costs, which include interest expense relating to borrowings calculated at the effective interest rate; • Interest income from investments of cash and cash equivalents. Other financial expenses and income primarily include foreign exchange gains and losses (other than those relating to operating activities classified in earnings from operations), dividends received from non-consolidated interests, and the results of consolidated operations or companies that do not qualify as discontinued operations or operations classified as held for sale.

2.3.2 Balance sheet Assets and liabilities expected to be realized in, or intended for sale or consumption in the entity’s ordinary operating cycle, usually less than 12 months, are recorded as current assets or liabilities. If their maturity exceeds this period, they are recorded as non-current assets and liabilities.

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2.3.3 Consolidated statement of cash flows Maroc Telecom prepares its consolidated statement of cash flows using the indirect method. Working capital corresponds to the change in balance sheet items related to trade receivables, inventories, provisions and accounts payable.

2.3.4 Use of estimates The preparation of consolidated financial assets in accordance with IFRS requires Maroc Telecom to make certain estimates and assumptions that it deems reasonable and realistic. Despite regular reviews of these estimates and assumptions based on past or anticipated achievements, facts and circumstances may lead to changes in these estimates and assumptions that could have an impact upon the reported amount of group assets, liabilities, equity or earnings. The main estimates and assumption used concern: - Provisions: risk estimates, performed on an individual basis, noting that the occurrence of events during the course of procedures may lead to a reassessment of the risk at any time (please refer to note 14), - Impairment of trade receivables and inventories: estimates used to measure the risk of non-recovery of trade receivables and obsolescence risk for inventories, - Employee benefits: assumptions updated annually, such as the probability of employees remaining with the Group until retirement, expected changes in future compensation, the discount rate and the inflation rate (please refer to note 14), - Revenue recognition: estimates of benefits granted in connection with customer loyalty programs to be deducted from certain revenues (please refer to note 17), - Goodwill: valuation methods adopted for the identification of intangible assets acquired through business combinations (please refer to note 3), - Goodwill, indefinite useful life intangible assets and assets in progress: assumptions updated annually following impairment tests performed on each of the group’s cash-generating units (CGU) determined by future cash flows and discount rates, - Deferred taxes: estimates concerning the recognition of deferred tax assets, updated annually with factors such as the future tax results of the Group and expected changes in accumulated temporary differences between assets and liabilities (please refer to note 8).

2.3.5 Principles of consolidation The name Maroc Telecom refers to the group of companies of which Maroc Telecom is the parent. A list of Maroc Telecom’s major subsidiaries and affiliates is presented in Note 2 “Scope of consolidation at December 31, 2009, 2008 and 2007”. The accounting methods described below were applied consistently to all the periods presented in the consolidated financial statements, as well as the opening balance sheet at January 1, 2004, which was prepared for the purposes of the IFRS transition. The accounting methods were applied in a uniform manner by all Group entities.

Full consolidation All companies in which Maroc Telecom has a controlling interest, namely those in which it has the power to govern financial and operational policies in order to obtain benefits from their operations, are fully consolidated. A controlling position is presumed to exist where Maroc Telecom holds, directly or indirectly, a voting interest exceeding 50%, and where no other shareholder or group of shareholders exercises substantive participation rights that would enable it to veto or block ordinary decisions taken by Maroc Telecom. The subsidiaries’ financial statements are included in the consolidated financial statements from the date control is obtained to the date control ceases. A controlling position also exists where Maroc Telecom holds an interest of 50% or less in an entity, controls more than 50% of the voting rights by virtue of an agreement with other investors, has the power to direct the financial and operating policies of the entity by virtue of a statute or contract, has the power to appoint or remove from office the majority of the members of the Board of Directors or other governing body, or has the power to assemble the majority of voting rights at meetings of the Board of Directors or other governing body.

Equity accounting Maroc Telecom accounts for affiliates over which it exercises significant influence by the equity method. Significant influence is presumed to exist where Maroc Telecom holds, directly or indirectly, at least 20% of the voting rights in an entity, unless it can be clearly demonstrated otherwise The existence of significant influence can be proven on the basis of other criteria, such as representation on the board of directors or equivalent governing body, participation in the process of policy definition, the existence of material transactions with the entity or interchange of management personnel.

Transactions eliminated on consolidation Revenues, expenses and balance sheet items resulting from intra-group transactions are eliminated in preparing the consolidated financial statements.

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2.3.6 Goodwill and business combinations In accordance with the provisions of IFRS 1 on the First-time adoption of IFRS, Maroc Telecom decided not to restate the business combinations entered into prior to January 1, 2004. Business combinations are recorded using the acquisition method in accordance with IFRS 3 “Business combinations “. A new version of this standard became mandatory as from January 1, 2010. However, Maroc Telecom chose to apply it by anticipation as from January 1, 2009. Revised IFRS 3 introduces changes to the acquisition method defined by IFRS 3 prior to its revised version in particular: • The option to measure non-controlling interests in an acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets. This option is available on a transaction by transaction basis, • Contingent consideration in a business combination to be recognized at fair value on the acquisition date, • Acquisition-related costs to be recognized as expenses when incurred, • In a business combination achieved in stages, re-measurement of the previously held equity interest in the acquiree at its acquisition-date fair value with any resulting gain or loss recognized in profit or loss At the acquisition date, goodwill is measured at cost, being the excess of the cost of the business combination over Maroc Telecom’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. Subsequently, goodwill is measured at its initial amount less recorded accumulated impairment losses. Goodwill is allocated to each cash-generating unit, and is then subject to impairment tests each year, or more frequently when events indicate a risk of impairment. In the event of a loss in value, impairment is recorded under “Other charges from ordinary activities”. In the event of the acquisition of an additional interest in a subsidiary, the excess of the acquisition cost over the carrying amount of the minority interest acquired is recognized as goodwill. In accordance with IFRS 3, goodwill is not amortized.

2.3.7 Foreign currency translation Foreign currency transactions are initially recorded in the functional currency at the exchange rate prevailing at the date of the transaction. At period end, monetary assets and liabilities denominated in a foreign currency are translated into the functional currency at the exchange rate prevailing on that date. All foreign currency adjustments are expensed in the period.

2.3.8 Translation of financial statements of foreign activities Assets and liabilities relating to foreign activities, including goodwill and fair value adjustments arising from consolidation, are translated into Moroccan dirhams at the exchange rate prevailing at the period-end. Income and expense items are translated into Moroccan dirhams using rates that approximate the exchange rates at the dates of the transactions. Foreign currency translation adjustments resulting from the application of these different exchange rates are recorded as a separate line item of shareholders’ equity.

2.3.9 Assets 2.3.9.1 Other intangible assets Intangible assets acquired separately are recorded at cost, and intangible assets acquired in connection with a business combination are recorded at their fair value at the acquisition date. The historical cost model is applied to intangible assets subsequent to their initial recognition. Assets with a finite useful life are amortized. Useful life is reviewed at the end of each reporting period. Useful life is estimated at between 2 and 5 years. Trade names, subscriber bases and market shares generated internally are not recognized as intangible assets. Licenses to operate telecom networks are recorded at historical cost and amortized on a straight-line basis from their effective service start date until the expiry of the corresponding license. Maroc Telecom has elected not to apply the option provided in IFRS 1 to remeasure certain intangible assets at their fair value at January 1, 2004. The 3G license held by Maroc Telecom is recorded under intangible assets for a total cost of MAD372 million, which includes the license fee (MAD300 million) and the cost of the contribution to frequency spectrum planning (MAD72 million). It is amortized over 25 years as from June 30, 2007. The 3G license held by Mauritel is recorded under intangible assets for a total cost of MAD10 million and is amortized over 15 years. Subsequent expenditure on intangible assets is only added to these assets if the probable future economic benefits specific to the asset to which they relate increase. All other expenditure is expensed in the period in which it is incurred.

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2.3.9.2 Research and development costs Research costs are expensed when incurred. Development expenses are capitalized when the feasibility and profitability of the project can reasonably be considered certain. In compliance with IAS 38 “ Intangible Assets”, development costs are capitalized only after the technical and financial feasibility of the asset for sale or use have been established, where it is probable that the future economic benefits attributable to the asset will flow to the company and where the cost of the asset can be measured reliably. Research and development costs incurred by Maroc Telecom are not significant.

2.3.9.3 Property, plant and equipment Property, plant and equipment are carried at historical cost less any accumulated depreciation and impairment losses. Historical cost includes the acquisition cost or production cost as well as the costs directly attributable to bringing the asset to its physical location and preparing it for use in operations. Borrowing costs are recorded as expenses for the period in which they are incurred. When property, plant and equipment include significant components with different useful lives, they are recorded and depreciated separately. Property comprising “land” and “buildings” is derived in part from the contribution in kind granted in 1998 by the Moroccan government in connection with the transfer from ONPT to Maroc Telecom, when the latter was established. When these assets were transferred, the property titles could not be registered with the property registry. This situation was still unresolved at the end of December 2009. Although the uncertainty over the property titles remains, the risk is limited as the Moroccan government has guaranteed that Maroc Telecom can use the transferred property and there have been no significant incidents to date. The assets transferred by the Moroccan government on February 26,1998 to set up Maroc Telecom as a public operator were recorded as a net amount in the opening balance sheet, as approved by: • the Postal Services and Information Technology Act no. 24-96, and • the joint Order no. 341-98 of the Telecommunications Minister and Minister of Finance, Commerce and Industry, approving the inventory of assets transferred to the Maroc Telecom Group. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Useful lives are reviewed at the end of each reporting period and are determined as follows: • Buildings 20 years • Civil engineering 15 years • Network equipment :

• Transmission (Mobile) 8 years

• Switching 8 years

• Transmission (Fixed-line) 10 years

• Fixtures and fittings 10 years

• Computer equipment 5 years

• Office equipment 10 years

• Transportation equipment 5 years Assets that have not yet been placed into service are recorded as work-in-progress. Assets financed by finance leases are capitalized at the lower of the value of future minimum lease payments and fair value, and the related debt is recorded in “borrowings and other financial liabilities”. These assets are depreciated on a straight-line basis over their estimated useful lives, with depreciation included as a general depreciation expense. Maroc Telecom has elected not to apply the option provided by IFRS 1 to remeasure property, plant and equipment at fair value at January 1, 2004. The carrying value of an item of property, plant, and equipment includes the replacement cost of a component of such an item if this cost is incurred, if it is probable that the future economic benefits associated with the asset will flow to Maroc Telecom and if the cost can be measured reliably. All maintenance costs are expensed when incurred.

2.3.9.4 Impairment of fixed assets Goodwill and other intangible assets with an indefinite useful life are subject to an annual impairment test and are also tested whenever there is an indication that they may be impaired. The carrying value of other fixed assets is also subject to an impairment test

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whenever there is an indication that the carrying value may not be recoverable. The impairment test compares the carrying amount with its recoverable amount, which is the greater of its fair value less selling costs and its value in use. The recoverable amount is determined for an individual asset unless the asset does not generate cash inflows that are largely independent from those of other assets or groups of assets. If this is the case, as for goodwill, the recoverable amount is determined for the cash-generating unit. Maroc Telecom has determined its fixed- line and mobile businesses as cash-generating units.

2.3.9.5 Financial assets Financial assets with a maturity of more than three months are classified in one of the following four categories: • Assets recognized at fair value through profit and loss; • Held-to-maturity financial assets; • Loans and receivables; • Available-for-sale assets.

Financial assets recognized at fair value through profit and loss This category comprises financial assets bought in order to be resold in the very near term, which are held for trading purposes. Profit and loss arising from changes in the fair value of assets in this category is recorded in the period during which they arise. The principal financial assets recognized at fair value through profit and loss are term deposits.

Held-to-maturity financial assets Held-to-maturity financial assets are non-derivative financial assets, other than loans and receivables, with fixed or determinable payments that the Group intends and is able to hold to maturity. These assets are initially recognized at their fair value including directly attributable transaction costs. After initial recognition they are measured at amortized cost using the effective interest rate method. They are subject to impairment tests in the event of objective evidence of impairment. Impairment is booked if the asset's carrying amount is greater than the estimated discounted cash flows. As at December 31, 2009, Maroc Telecom had no held-to-maturity financial assets.

Loans and receivables This category comprises non-derivative assets where payment is fixed or determinable and which are not listed on any active market. These assets are recognized at amortized cost using the effective interest rate method. These assets are subject to an impairment test if there is an indication of a loss in value. Impairment is booked if the carrying amount is greater than the present value of estimated future cash flows, using the effective interest rate. This item does not include loans to employees.

Available-for-sale financial assets These assets include non-derivative assets that are classified as being either available for sale or that are not allocated to any other category of financial assets. Available-for-sale assets are recognized at fair value. Profit and loss resulting from available-for-sale assets is taken to equity until the financial asset is sold, redeemed or removed from the balance sheet in another way, or until it can be demonstrated that the investment is impaired indefinitely, at which time the accumulated gain or loss previously recorded in equity is expensed. For financial assets actively traded in organized public markets, fair value is determined by reference to the published market price at period end. If the fair value cannot be determined accurately, available-for-sale assets are stated at cost. In the event of objective evidence that the investment is impaired indefinitely, irreversible impairment is expensed. When an available-for-sale financial asset generates interest, the interest is calculated in accordance with the effective interest method and is reported as income.

The main available-for-sale assets are non-consolidated investments in unlisted companies.

2.3.9.6 Inventories Inventories comprise: • Goods held for sale to customers upon line activation, comprising fixed and mobile handsets and accessories. Inventories are accounted for using the weighted average cost method. • Handsets delivered to distributors and not activated at year-end are recorded as inventories; • Handsets not activated within nine months from the delivery date are recorded as revenue. • Equipment and supplies corresponding to general network equipment. These inventories are measured at their average acquisition cost.

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Inventories are valued at the lower of cost and net realizable value. An impairment loss is recognized according to the prospects of selling or using the inventory items (GSM or technical assets).

2.3.9.7 Trade accounts receivable and other This item comprises accounts receivable and other receivables, which are initially recognized at fair value, then at amortized cost less impairment. Accounts receivable include trade receivables and government receivables:

• Trade receivables: held against individuals, distributors, businesses and international operators. • Government receivables: held against local authorities and the Moroccan government. Impairment is recorded if the carrying amount of the asset under consideration exceeds the present value of its estimated future cash flows.

2.3.9.8 Cash and cash equivalents Cash and cash equivalents include cash on hand, sight deposits, current accounts and short-term, highly liquid investments with a maturity of three months or less.

2.3.10. Assets held for sale and discontinued operations A non-current asset or a group of assets and liabilities qualify as held for sale when its carrying amount may be recovered principally through its divestiture and not by its continued utilization. To meet this definition, the asset must be available for immediate sale, and the divestiture must be highly probable. The assets and liabilities associated with assets held for sale are not netted. The related assets recorded as assets held for sale are stated at the lower of fair value, net of divestiture fees, and cost less accumulated depreciation and impairment losses, and are no longer depreciated. An operation is qualified as discontinued when the criteria for classification as an asset held for sale have been met, or when Maroc Telecom has sold the asset. Discontinued operations are presented as a separate line on the income statement, comprising the earnings after tax of the discontinued operations until the divestiture date and the gain or loss after tax on the sale, or the fair value measurement less the costs to sell the assets and liabilities comprising the discontinued operations. In addition, cash flows generated by discontinued operations are reported on a separate line of the consolidated statement of cash flows.

2.3.11. Financial liabilities Financial liabilities comprise borrowings, accounts payable and bank overdrafts.

Borrowings All borrowings are initially accounted for at cost, which corresponds to the fair value of the amount received, net of costs directly attributable to the borrowing. The allocation of borrowings to current liabilities or non-current liabilities is based on contractual maturity.

Derivative financial instruments Maroc Telecom does not use any derivative financial instruments or currency hedging instruments.

2.3.12. Provisions Provisions are recognized when, at the end of the reporting period, the Group has a legal, regulatory or contractual obligation as a result of past events, when it is probable that an outflow of resources (without any expected related inflow) will be required to settle the obligation, and when the obligation can be reliably estimated. Where the effect of the time value of money is material, provisions are determined by discounting expected future cash flows using a pre-tax discount rate that reflects current market assessments of the time value of money. If no reliable estimate can be made of the amount of the obligation, no provision is recorded and a disclosure is made in the Notes to the consolidated financial statements. Restructuring provisions are recorded when the Group has approved a formal and detailed restructuring program and has either started to implement the program or has announced the program publicly. Future operating expenses are not provisioned. A provision for retirement benefits has been recorded for senior executives of Maroc Telecom. For Mauritel, Onatel and Gabon Télécom a provision for retirement benefits has been estimated using the actuarial method.

2.3.13. Deferred taxes Deferred taxes result from temporary differences arising at period end between the tax basis of assets and liabilities and their carrying amount. They are accounted for using the liability method. Deferred tax liabilities are recognized for all temporary taxable differences: • except for temporary differences generated by the initial recognition of goodwill; and

190 Maroc Telecom- 2009 Registration Document FINANCIAL REPORT 5.4. Consolidated financial statements

• for taxable temporary differences arising from investments in subsidiaries, affiliates and joint ventures, deferred tax assets are recorded to the extent that it is probable that the temporary difference will reverse in the foreseeable future, and that taxable profit will be available against which the temporary difference can be utilized. Deferred tax assets are recognized for all deductible temporary differences and for carry-forwards of tax losses and unused tax credits, if it is probable that a taxable profit will be available, or when a current tax liability exists, to make use of those deductible temporary differences, tax loss carry forwards and unused tax credits: • except where the deferred tax asset associated with the deductible temporary difference is generated by initial recognition of an asset or liability in a transaction which is not a business combination, and which, at the transaction date, does not impact either accounting earnings, taxable earnings or taxable losses; • for deductible temporary differences arising from investments in subsidiaries, affiliates and joint ventures, deferred tax assets are recorded to the extent that it is probable that the temporary difference will reverse in the foreseeable future, and that taxable profit will be available against which the temporary difference can be utilized. The carrying amount of deferred tax assets is reviewed at each period end, and reduced to the extent that it is no longer probable that a taxable profit will be available to allow the deferred tax asset to be utilized. Deferred tax assets and liabilities are measured at the expected tax rates for the year during which the asset will be realized or the liability settled, based on tax rates (and tax regulations) in force or substantially in force at the period end. Current tax and deferred tax is charged or credited directly to equity if the tax relates to items that are credited or charged directly to equity.

2.3.14. Trade accounts payable Trade accounts payable include other accounts payable. They are initially measured at fair value and subsequently at amortized cost.

2.3.15. Share-based compensation In accordance with IFRS 2, share-based compensation is recorded as a payroll cost at the value of the equity instruments granted, which is measured using a binomial model. However, depending on whether the equity instruments granted are equity-settled through the issuance of shares or cash-settled, the valuation and recognition of the expense differs: • If the instrument is settled through the issuance of Maroc Telecom shares, the value of the instruments granted is measured and fixed at the grant date, then spread over the vesting period, according to the characteristics of equity-settled instruments. The obligation is recorded as a corresponding increase in equity. • If the share-based payment transaction is settled in cash, the value of the instruments granted is measured and fixed at the initial grant date, then re-estimated at each reporting date and adjusted for subsequent changes in the value of the vested rights. The expense is spread over the vesting period in accordance with the characteristics of the instruments. The corresponding obligation is booked as a non-current provision. Pursuant to the transitional provisions of the IFRS 1, IFRS 2, Maroc Telecom elected to retrospectively apply IFRS 2 as from January 1, 2004.

2.3.16. Revenues Revenues are reported when it is probable that future economic benefits will flow to the Group, and the revenues can be measured reliably. Maroc Telecom Group generates revenues from fixed and mobile telecommunications services, internet services, and the sale of products, which essentially comprise mobile and fixed-line handsets and multimedia equipment. Revenues from telephone subscriptions are recognized on a straight-line basis over the subscription contract period. Revenues from inbound and outbound call traffic are recognized when the service is rendered. For prepaid services, revenues are recognized when calls are made. Revenues from fixed-line and internet and mobile services comprise: • income from domestic and international outbound and inbound calls under postpaid plans, which is recorded when generated; • income from subscriptions; • income from prepaid services, which is recognized as calls are made; • income from data transmission services provided to professionals and internet service providers as well as to other telecommunications operators; • income from advertising in printed and electronic directories, which is recognized when the directories are published.

Revenues from the sale of handsets, net of point-of-sale discounts and connection charges, are recognized on activation of the line. Customer acquisition and loyalty costs for mobile and fixed-line services, principally consisting of rebates on the sale of equipment to customers through distributors, are recognized as a deduction from revenues.

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Sales of services provided to subscribers managed by Maroc Telecom on behalf of content providers (mainly special-rate numbers), are accounted for net of related expenses. When sales are made via a third party distributor supplied by Maroc Telecom and involve a discount compared with the public sale price, revenues are recorded as gross revenues and commissions granted are booked as operating expenses. Awards granted by Maroc Telecom and its subsidiary companies to their customers in connection with consumer loyalty programs in the form of free or discounted goods or services, are recorded according to IFRIC 13 and IAS 18. IFRIC 13 interpretation is based on the principle of measuring loyalty awards by reference to their fair value. Fair value is defined as the excess price over the sales incentive that would be granted to any new customer, and, should any such excess price exist, would result in deferring the recognition of the revenue associated with the subscription in the amount of such excess price.

2.3.17. Cost of purchases Cost of purchases comprises the purchase of Mobile and Fixed-line handsets and interconnection costs.

2.3.18. Other income /(expenses) This item comprises commissions to distributors, network maintenance expenses, advertising, marketing and promotion costs and expenses related to the voluntary redundancy plan.

2.3.19. Net finance cost Net finance cost includes interest payable on loans calculated using the effective interest rate method and interest on investments. Investment income is recognized in the consolidated income statement when earned.

2.3.20. Income tax expense Income tax expense includes income tax payable and deferred tax expense (or income). Tax is expensed unless it applies to items recognized as equity.

2.4. Contractual obligations and contingent assets and liabilities Once a year, Maroc Telecom and its subsidiaries prepare detailed records on all contractual obligations, commercial and financial commitments and contingent obligations, for which it is jointly and severally liable. These detailed records are updated by the relevant departments on a regular basis and are reviewed by senior management. The assessment of off-balance sheet commitments relating to suppliers of fixed assets is carried out as follows: • Difference between minimum commitments and commitments actually fulfilled relating to master service agreements and associated supplemental agreements (valued at more than MAD25 million); • Difference between firm orders and delivery for all other contracts. Commitments arising from real estate leases are estimated on the basis of one month’s lease expense given that virtually all termination clauses require one month’s notice.

2.5. Segment data A segment is a distinguishable component of the Group that is engaged in providing a product or service or a group of related products or services (business segment), or in providing a product or service in a specific economic environment (geographical segment) that generates significant revenue from external customers, and that is subject to risks and rewards that are different from those of other business segments.

2.5.1 Business segment data The Group’s business is divided into fixed-line, internet and mobile segments. Revenues from each business segment include revenues from the provision of telephone services to customers and subscribers as well as intersegment transactions. Intersegment transactions are conducted at market prices. Earnings from operations reflects the difference between operating income and expenses. Costs are allocated directly to the relevant segments or alternatively by using cost allocation ratios based on economic criteria. Capital expenditure is directly allocated to the relevant segments. Fixed assets used by several segments are allocated in proportion to dedicated assets. The components that are not allocated mainly comprise taxes, cash, financial assets, borrowings and equity. The classification of the balance sheet by business segment was in part based on estimates. The breakdown into the components used is based on reasonable assumptions.

192 Maroc Telecom- 2009 Registration Document FINANCIAL REPORT 5.4. Consolidated financial statements

The following balance sheet items have been allocated proportionately between the two business segments: • For items comprising components that can be allocated directly to a segment and components shared by both segments: the shared part of these items is divided proportionately in respect of the amounts allocated directly to these items, • For items consisting exclusively of shared elements: these amounts are allocated in a manner that takes into account the type of items involved (e.g. employee-related liabilities are divided proportionally based on the number of employees in each business segment).

2.5.2 Geographical data Information by geographical area is the second level of segment data and comprises the two geographical areas in which Maroc Tele- com is present: Morocco and other countries.

2.6 Net cash This item includes cash and cash equivalents less borrowings, and excludes short-term financial assets (term deposits) with a maturity exceeding three months.

2.7 Earnings per share Earnings per share, as presented in the consolidated income statement, are calculated by dividing earnings for the period by the average number of shares outstanding over the period.

Diluted earnings per share are calculated by dividing: • the earnings attributable to the equity holders of the parent ;and • the average number of shares outstanding over the period, plus the average number of shares that would have been issued upon conversion of all instruments that can potentially be converted into ordinary shares.

As at December 31, 2009, there were no instruments that could potentially be converted into ordinary shares.

Maroc Telecom - 2009 Registration Document 193 5

Note 2. Scope of consolidation at December 31, 2009, 2008 and 2007

% Group Consolidation Company name Legal form % Capital held interest method Maroc Telecom SA 100% 100% FC Avenue Annakhil Hay Riad Rabat - Morocco Compagnie Mauritanienne de Communication (CMC) SA 2009 80% 80% FC December 31, 2008 80% 80% FC December 31, 2007 80% 80% FC Avenue Roi Fayçal Nouakchott - Mauritania Mauritel SA SA 2009 41% 52% FC December 31, 2008 41% 52% FC December 31, 2007 41% 52% FC Avenue Roi Fayçal 7000 Nouakchott - Mauritania Mauritel Mobiles (*) SA 2009 December 31, 2008 December 31, 2007 41% 52% FC Av Charles de Gaulle ilot 37-38 Nouakchott -Mauritania Onatel SA 2009 51% 51% FC December 31, 2008 51% 51% FC December 31, 2007 51% 51% FC 705, av de la Nation 01 BP 10000 Ouagadougou Telmob SA 2009 51% 51% FC December 31, 2008 51% 51% FC December 31, 2007 51% 51% FC 705, av de la Nation 01 BP 10000 Ouagadougou Gabon Télécom SA 2009 51% 51% FC December 31, 2008 51% 51% FC December 31, 2007 51% 51% FC B.P.40 000 Libreville – Gabon Libertis SA 2009 51% 51% FC December 31, 2008 51% 51% FC December 31, 2007 51% 51% FC BP8900 immeuble 9 étages Libreville- Gabon Médi-1- Sat SA 2009 31% 31% EM December 31, 2008 37% 37% EM December 31, 2007 28% 28% EM Zone franche, lot n°31 BP 2397 - Tanger - Morocco Mobisud France SA 2009 0% 0% December 31, 2008 66% 66% FC December 31, 2007 66% 66% FC 86, avenue de Saint-Ouen 75018 Paris - France Mobisud Belgique SA 2009 100% 100% FC December 31, 2008 100% 100% FC December 31, 2007 100% 100% FC Avenue Louise 283 Bte 4 1050 Brussels - - - Sotelma SA 2009 51% 51% FC December 31, 2008 December 31, 2007 Route de Koulikoro, quartier Hippodrome, BP 740, Bamako-Mali

(*) Mauritel Mobiles was consolidated by Mauritel SA in 2007. 194 Maroc Telecom- 2009 Registration Document FINANCIAL REPORT 5.4. Consolidated financial statements

Maroc Telecom is a Moroccan-law corporation. Its principal activity is the sale and provision of telecommunications goods and services. Its registered office is located at Avenue Annakhil Hay Riad Rabat, Morocco. Maroc Telecom is fully consolidated by Vivendi Universal. Onatel has been fully consolidated by Maroc Telecom since January 1, 2007. Gabon Télécom has been fully consolidated by Maroc Telecom since March 1, 2007. Mobisud Belgique has been fully consolidated by Maroc Telecom since May 1, 2007. Mobisud France was removed from the scope of consolidation with effect as from June 1, 2009. Sotelma has been fully consolidated by Maroc Telecom since August 1, 2009. At the end of December 2009, Maroc Telecom held a 31% equity interest in Medi-1-Sat compared with 37% at the end of December 2008. Note 3. Goodwill at December 31, 2009, 2008 and 2007

December 31, December 31, December 31, (In millions of Moroccan dirhams) 2009 2008 2007 Mauritel 137 137 137 Mobisud France 0 0 9 Onatel 1,838 1,838 1,838 Gabon Télécom 142 142 213 Sotelma * 5,154 Net total 7,271 2,117 2,197

(*) Goodwill of Sotelma was calculated by applying the revised IFRS 3 (full goodwill method). (See note 1, paragraph 2.3.6). Goodwill is subject to impairment tests at least once a year when events indicate a risk of impairment. Each identifiable cash generating unit (CGU) of goodwill is tested for impairment. The impairment of goodwill test compares the carrying amount of each CGU with discounted expected future cash flows. CGUs correspond to businesses within each business segment (fixed-line and mobile). Valuations are based on the following main assumptions: • The impairment of goodwill test is based on a five-year business plan • The growth rate of cash flows from the CGUs corresponding to the goodwill of Mauritel, Onatel, Gabon Télécom is estimated at: • 2.5% for Mauritel ; • 4.5% for Onatel ; • 2.5% for Gabon Télécom ; • 4.5% for Sotelma. This assumption takes into account the inflation rate in each country, and the growth potential of the telecommunications market and national economy based on oil revenues. • The discount rate, which is calculated using the weighted average cost of capital, is estimated at: • 14% for Mauritel ; • 14.5% for Onatel ; • 15.5% for Gabon Télécom ; • 14.0% for Sotelma.

(In millions of Moroccan Beginning of Impairment Translation Change in scope End of period dirhams) period adjustments of consolidation 2007 146 0 0 2,051 2,197 Mauritel 137 137 Mobisud France 9 9 Onatel 1,838 1,838 Gabon Télécom 213 213 2008 2,197 (9) 0 (71) 2 117 Mauritel 137 137 Mobisud France 9 (9) 0 Onatel 1,838 1,838 Gabon Télécom 213 (71) 142 2009 2,117 0 7 5,147 7,271 Mauritel 137 137 Mobisud France 1,838 1,838 Onatel 142 142 Gabon Télécom 7 5,147 5,154

In 2009, goodwill increased by MAD5,154 million pursuant to the acquisition of Société des Télécommunications du Mali (Sotelma). Sotelma’s goodwill was calculated and recognized in accordance with the revised IFRS 3 (full goodwill method). (See note 1 paragraph 2.3.6). Maroc Telecom - 2009 Registration Document 195 5

Note 4. Other intangible assets at December 31, 2009, 2008 and 2007

December 31, December 31, December 31, (In millions of Moroccan dirhams) 2009 2008 2007

Patents, trademarks and similar rights 1,271 1,271 1,268 Mobile license 603 668 727 Other intangible assets 1,849 1,950 1,649 Net total 3,723 3,889 3,644

The item “Mobile license“ includes the 2G licenses of Mauritel, Onatel and Gabon Télécom, and two 3G licenses acquired respectively by Maroc Telecom and Mauritel. "Other intangible assets" primarily includes telecommunications network equipment software and work in progress. Intangible assets decreased slightly in 2009 due to a decrease of investments in intangibles relating to: • mobile network (IN platform; new value-added services; network software upgrades); • fixed-line network (ADSL; optical fiber; corporate networks); and • information systems (GISR Lot2 and WIAM). 2009 Change in Acquisitions Disposals and Translation (In millions of Moroccan dirhams) 2008 scope of Reclassification 2009 withdrawals adjustment and additions consolidation Gross 7,969 693 0 (27) 12 (279) 8,368 Patents, trademarks and similar rights 2,397 1 0 0 0 0 2,398 Mobile license 896 0 0 (17) 5 0 883 Other intangible assets 4,676 693 0 (10) 7 (279) 5,088 Amortization and impairment (4,080) (1,077) 0 15 (8) 504 (4,646) Patents, trademarks and similar rights (1,126) (1) 0 0 0 0 (1,127) Mobile license (228) (60) 0 9 (2) 0 (280) Other intangible assets (2,726) (1,016) 0 6 (6) 504 (3,238) Net total 3,889 (384) 0 (12) 4 225 3,723 2008

Change in Acquisitions Disposals and Translation (In millions of Moroccan dirhams) 2007 scope of Reclassification 2008 withdrawals adjustment and additions consolidation

Gross 6,776 834 0 6 7 346 7,969 Patents, trademarks and similar rights 2,424 8 0 0 0 (35) 2,397 Mobile license 893 0 0 3 0 0 896 Other intangible assets 3,459 827 0 2 7 381 4,676 Amortization and impairment (3,131) (954) 0 (2) 0 7 (4,080) Patents, trademarks and similar rights (1,156) 0 0 0 0 30 (1,126) Mobile license (166) (59) 0 (2) 0 (2) (228)

(1,810) 0 (1) 0 (22) (2,726) Other intangible assets (894) Net total 3,644 (119) 0 3 7 353 3,889 2007

Change in Acquisitions Disposals and Translation (In millions of Moroccan dirhams) 2006 scope of Reclassification 2007 withdrawals adjustment and additions consolidation

Gross 4,625 1,302 0 8 372 468 6,776 Patents, trademarks and similar rights 812 116 0 3 193 1,300 2,424 Mobile license 591 188 0 4 109 0 893 Other intangible assets 3,222 998 0 2 70 (832) 3,459 Amortization and impairment (2,210) (746) 0 (3) (182) 10 (3,131) Patents, trademarks and similar rights (396) (645) 0 (2) (123) 10 (1,156) Mobile license (88) (44) 0 (1) (33) 0 (166) Other intangible assets (1,726) (57) 0 (1) (26) 0 (1,810) Net total 2,415 556 0 5 190 478 3,644

The reclassification column concerns transfers of intangible assets between line items and the restatement of asset retirements not recorded in the individual financial statements. 196 Maroc Telecom- 2009 Registration Document FINANCIAL REPORT 5.4. Consolidated financial statements

Note 5. Property, plant and equipment at December 31, 2009, 2008 and 2007 December December December (In millions of Moroccan dirhams) 31,2009 31,2008 31,2007 Land 1,395 1,354 1,305 Buildings 1,909 2,000 2,010 Technical plant,machinery and equipment 13,080 10,888 10,358 Transportation equipment 151 63 62 Office equipment furniture and fittings 846 789 726 Other property plant and equipment 4,087 3,590 2,410 Net total 21,468 18,684 16,870

The majority of “Other property, plant and equipment” includes technical installations in progress relating to the telecommunications network.

2009

Acquisitions Disposals and Translation Change in scope (In millions of Moroccan dirhams) 2008 Reclassification Assets held for sale 2009 additions withdrawals adjustments of consolidation Gross 48,062 5,153 (892) (41) 4,671 (310) 44 56,687 Land 1,362 6 (35) 1 33 0 36 1,403 Buildings 5,706 176 (6) (1) 122 (166) 8 5,839 Technical plant, machinery and equipment 34,157 3,739 (549) (27) 4,449 (112) 0 41,657 Transportation equipment 266 104 (1) (1) 43 (3) 0 409 Office equipment furniture and fittings 2,810 310 0 (1) 0 (1) 0 3,117 Other property plant and equipment 3,761 818 (301) (12) 24 (28) 0 4,262 Amortization and impairment (29,378) (3,036) 553 (54) (3,566) 266 (4) (35,220) Land (8) 0 0 0 0 0 0 (8) Buildings (3,706) (218) 4 (2) (73) 69 (4) (3,930) Technical plant, machinery and equipment (23,269) (2,541) 549 (55) (3,452) 190 0 (28,577) Transportation equipment (203) (18) 1 1 (41) 3 0 (258) Office equipment furniture and fittings (2,021) (257) 0 1 0 3 0 (2,271) Other property plant and equipment (171) (5) 0 0 0 0 0 (175) Net total 18,684 2,116 (339) (95) 1 105 (44) 40 21,468 2008

Acquisitions Disposals and Translation Change in scope (In millions of Moroccan dirhams) 2007 Reclassification Assets held for sale 2008 additions withdrawals adjustments of consolidation Gross 43,595 5,122 (121) (33) 121 (541) (81) 48,062 Land 1,311 17 (28) (3) 121 0 (57) 1,362 Buildings 5,557 147 0 (7) 0 (1) 11 5,706 Technical plant, machinery and equipment 31,398 2,964 (82) (25) 0 (63) (35) 34,157 Transportation equipment 265 16 (9) (1) 0 (6) 0 266 Office equipment furniture and fittings 2,517 287 0 (1) 0 7 0 2,810 Other property plant and equipment 2,547 1,691 (2) 3 0 (478) 0 3,761 Amortization and impairment (26,724) (2,822) 91 26 0 43 10 (29,378) Land (6) 0 0 0 0 0 (1) (8) Buildings (3,546) (177) 0 5 0 1 11 (3,706) Technical plant, machinery and equipment (21,040) (2,359) 82 19 0 29 0 (23,269) Transportation equipment (204) (21) 9 0 0 13 0 (203) Office equipment furniture and fittings (1,790) (232) 0 1 0 0 0 (2,021) Other property plant and equipment (137) (34) 0 0 0 0 0 (171) Net total 16,870 2,299 (30) (7) 121 (499) (70) 18,684 2007

Acquisitions Disposals and Translation Change in scope (In millions of Moroccan dirhams) 2006 Reclassification Assets held for sale 2007 additions withdrawals adjustments of consolidation Gross 31,858 4,164 (40) 133 8,353 (833) (40) 43,595 Land 989 8 (17) 5 290 68 (32) 1,311 Buildings 4,048 19 (2) 19 1,253 228 (8) 5,557 Technical plant, machinery and equipment 22,015 812 (19) 104 6,502 1,984 0 31,398 Transportation equipment 101 13 (2) 2 151 0 0 265 Office equipment furniture and fittings 2,127 20 0 2 116 252 0 2,517 Other property plant and equipment 2,578 3,292 0 1 42 (3,366) 0 2,547 Amortization and impairment (19,398) (2,875) 6 (76) (4,705) 315 7 (26,724) Land 0 (1) 0 0 (6) 0 0 (6) Buildings (2,503) (310) 1 (11) (731) 1 7 (3,546) Technical plant, machinery and equipment (15,205) (2,337) 4 (61) (3,753) 313 0 (21,040) Transportation equipment (60) (19) 2 (2) (126) 1 0 (204) Office equipment furniture and fittings (1,476) (227) 0 (2) (85) 0 0 (1,790) Other property plant and equipment (153) 19 0 0 (3) 0 0 (137) Net total 12,460 1,289 (33) 58 3,648 (518) (32) 16,870

The “Reclassification” column concerns transfers of property, plant and equipment between line items.

Maroc Telecom - 2009 Registration Document 197 5

Note 6: Investments in equity affiliates at December 31, 2009, 2008 and 2007

6.1 Principal investments in equity affiliates at December 31, 2009, 2008 and 2007

(In millions of Moroccan % of interest Value of equity affiliates dirhams)

December 31, December December 31, December 31, December 31, December

2009 31, 2008 2007 2009 2008 31, 2007 Médi-1- Sat 31% 37% 28% 0 0 1

Net total 31% 37% 28% 1 0 0

6.2 Financial information relating to equity affiliates at December 31, 2009, 2008 and 2007

(In millions of Moroccan dirhams) Médi -1 - Sat December 31, December 31, December 31, 2009 2008 2007

Revenues 4 6 1 Earnings from operations (127) (142) (113) Net earnings (139) (153) (116)

Total assets and liabilities 100 124 153

The information relating to equity affiliates is derived from the individual financial statements prepared in accordance with Moroccan generally accepted accounting principles (GAAP).

Note 7. Non-current financial assets at December 31, 2009, 2008 and 2007

December 31, December 31, December 31, Note (In millions of Moroccan dirhams) 2009 2008 2007 Non-consolidated investments 7.1 115 104 93

Other financial assets (a) 457 222 233 Net total 572 326 326

(a) “Other financial assets” mainly include the cash at bank in escrow against borrowings to Onatel for MAD93 million, Gabon Télécom for MAD148 million and Sotelma for MAD127 million. At December 31, 2009 “Other financial assets” had the following maturities:

December 31, December 31, December 31,

(In millions of Moroccan dirhams) 2009 2008 2007

Due within one year 282 12 14

Due between 1 and 5 years 156 156 184

Due beyond 5 years 20 54 35

Net total 457 222 233

198 Maroc Telecom- 2009 Registration Document FINANCIAL REPORT 5.4. Consolidated financial statements

7.1 Non-consolidated investments

2009 Net carrying (In millions of Moroccan dirhams) % Interest Gross Impairment Earnings Total equity amount Casanet (1) 100% 18 0 18 ND ND Matelca (2) 50% NS NS NS ND ND Arabsat NS 13 0 13 ND ND Autoroute du Maroc NS 20 4 16 ND ND Thuraya NS 10 0 10 ND ND Sindbad seed fund 10% 5 5 0 ND ND Rascom NS 47 10 37 ND ND Sonatel NS 6 0 6 ND ND CMTL NS 6 4 2 ND ND INMASAT NS 13 0 13 ND ND Total 138 23 115 ND ND

2008 Net carrying (In millions of Moroccan dirhams) % Interest Gross Impairment Earnings Total equity amount Casanet (1) 100% 18 0 18 ND ND Matelca (2) 50% NS NS NS ND ND Arabsat NS 13 0 13 ND ND Autoroute du Maroc NS 20 4 16 ND ND Thuraya NS 10 0 10 ND ND Sindbad seed fund 10% 5 5 0 ND ND Rascom NS 34 8 26 ND ND Sonatel NS 5 0 5 ND ND CMTL NS 6 4 2 ND ND INMASAT NS 12 0 12 ND ND Other NS 1 0 1 ND ND Total 125 21 104 ND ND

2007 Net carrying (In millions of Moroccan dirhams) % Interest Gross Impairment Earnings Total equity amount Casanet (1) 100% 18 18 8 30 Matelca (2) 50% NS NS NS ND ND Arabsat NS 13 0 13 ND ND Autoroute du Maroc NS 20 4 16 ND ND Thuraya NS 10 0 10 ND ND

Sindbad seed fund 10% 3 3 0 ND ND Rascom NS 34 10 25 ND ND Sonatel NS 5 5 ND ND CMTL NS 6 4 2 ND ND INMASAT NS 4 4 ND ND Other NS 1 1 0 ND ND Total 114 22 93 8 30

(1) Casanet’s main business activity is the maintenance of Maroc Telecom’s internet portal (Menara). Casanet invoices the related costs incurred to Maroc Telecom. (2) Matelca was not included in the scope of consolidation, as it is in liquidation. In 2009, the share of listed non-consolidated companies was not material (low exposure of share price to market risk).

Maroc Telecom - 2009 Registration Document 199 5

Note 8. Change in deferred taxes at December 31, 2009, 2008 and 2007

(In millions of Moroccan dirhams) December 31, 2009 December 31, 2008 December 31, 2007

Assets 63 18 204 Liabilities 127 100 Net asset position (63) (82) 204

8.1 Change in deferred taxes

2009 Statement Change in December December Equity Translation December (In millions of MAD) of income scope of Reclassification 31, 2007 31, 2008 impact adjustments 31, 2009 impact consolidation Assets 204 18 25 1 20 (1) 63

Liabilities 0 100 6 20 0 127 Net asset position 204 (82) 18 0 1 0 (1) (63) 2008

Statement Change in December December Equity Translation December (In millions of MAD) of income scope of Reclassification 31, 2006 31, 2007 impact adjustments 31, 2008 impact consolidation Assets 445 204 (30) (158) 1 18 Liabilities 177 0 252 6 (158) 100 Net asset position 268 204 (281) 0 (6) 0 1 (82)

2007 Statement Change in January 1, December Equity Translation December (In millions of MAD) of income scope of Reclassification 2006 31, 2006 impact adjustments 31, 2007 impact consolidation Assets 525 445 (32) (32) (177) 1 204 Liabilities 172 177 (177) 0 Net asset position 353 268 (32) 0 (32) 0 1 204

8.2 Components of deferred tax assets and liabilities

December 31, (In millions of Moroccan dirhams) December 31, 2009 December 31, 2008 2007 Deferred tax assets 63 18 204 - Impairment deductible in later period 180 262 341 - Restatements of revenues 54 (76) (68) - Other (171) (169) (69) Deferred tax liabilities 127 100 - Other 127 100

Net asset position (63) (82) 204

200 Maroc Telecom- 2009 Registration Document FINANCIAL REPORT 5.4. Consolidated financial statements

Note 9. Inventories at December 31, 2009, 2008 and 2007 December 31, December 31, December 31, (In millions of Moroccan dirhams) 2009 2008 2007 Inventories 814 919 970 Impairment (-) (162) (175) (221) Net total 653 744 749 Inventories at December 31, 2009 essentially comprised: - MAD230 million of mobile handsets; - MAD72 million of multimedia handsets; - MAD30 million of fixed-line handsets; - MAD195 million of consumable goods; Changes in current asset inventories are recorded as cost of purchases; The impairment of inventories is recorded in “Amortization, depreciation and provisions”.

Note 10. Trade accounts receivables and other at December 31, 2009, 2008 and 2007 December 31, December 31, December 31, (In millions of Moroccan dirhams) 2009 2008 2007 Accounts receivable 8,901 7,858 8,062 Other receivables and accruals 2,295 1,969 1,835 Net total 11,196 9,827 9,897

10.1. Accounts receivable

December 31, December 31, December 31, (In millions of Moroccan dirhams) 2009 2008 2007 Trade receivables 11,179 10,650 14,200 Government receivables 3,406 2,314 1,998 Impairment of receivables (-) (5,684) (5,106) (8,136) Net total 8,901 7,858 8,062 Trade receivables include receivables collected from SFR and Casanet. The details of these transactions are set out in Note 30 on related parties. In 2009, the outstanding receivable subject to partial provision amounted to MAD4,545 million, compared with MAD1,135 million in 2008 and MAD1,010 million in 2007*. * 2008 and 2007 concern only Maroc Telecom SA.

10.2 Other receivables and accruals

December 31, December 31, December 31, (In millions of Moroccan dirhams) 2009 2008 2007 Trade payables, advances and downpayments 288 323 171 Employee accounts 68 41 40 Tax receivables 1,067 1,102 1,234 Other receivables 774 382 219 Accruals 98 121 171 Net total 2,295 1,969 1,835

Advances, downpayments, trade payables, receivables from employees, government receivables and other receivables are due in less than one year. Employee accounts comprise advances granted to employees, net of write-downs. As these loans are granted to many employees under particular conditions, and do not represent material amounts, Maroc Telecom deemed that it was not relevant to provide specific details (repayment date, early repayment options, conditions of the instruments, interest rates). Tax receivables mainly comprise VAT items. Accruals essentially relate to prepaid expenses for transport operating leases and insurance policies.

Maroc Telecom - 2009 Registration Document 201 5

Note 11. Short term financial assets at December 31, 2009, 2008 and 2007

December 31, December 31, December 31, 2008 (In millions of Moroccan dirhams) 2009 2007

Term deposit > 90 days Escrow accounts (1) 45 105 104 Short term investments Total 45 105 104

(1) Maroc Telecom mandated Rothschild & Cie to enter into a liquidity agreement on the Paris stock exchange and a share price stabi- lization arrangement with the Casablanca stock exchange.

Note 12. Cash and cash equivalents at December 31, 2009, 2008 and 2007

December 31, December 31, December 31, (In millions of Moroccan dirhams) 2009 2008 2007 Cash 560 675 633 Cash equivalents 314 2,003 3,092 874 2,678 3,725 Cash and cash equivalents

Change in cash and cash equivalents December 31, December 31, December 31, (In millions of Moroccan dirhams) 2009 2008 2007 Net cash from operating activities 14,816 11,580 11,711 Net cash used in investing activities (8,583) (4,838) (4,409) Net cash used in financing activities (8,002) (7,803) (6,235) Foreign currency translation adjustments (35) 13 (84) Change in cash and cash equivalents (1,804) (1,048) 984 Cash and cash equivalent at beginning of period 2,678 3,725 2,741 Cash and cash equivalent at end of period 874 2,678 3,725

Change in cash and cash equivalents (1,804) (1,048) 984 Net cash from operating activities The increase in net cash from operating activities in 2009 compared to 2008 was mainly related to an improvement in net income and working capital. The decrease in net cash from operating activities in 2008 compared to 2007 was mainly related to the decrease in working capital.

Net cash used in investing activities The increase of net cash used in investing activities in 2009 compared to 2008 was mainly due to the investment plan for 2009 which was 77% higher than in 2008. The increase of net cash used in investing activities in 2008 compared to 2007 was mainly due to the investment plan for 2008 which was 9% higher than in 2007.

202 Maroc Telecom- 2009 Registration Document FINANCIAL REPORT 5.4. Consolidated financial statements

Net cash used in financing activities The increase in net cash used in financing activities in 2009 compared to 2008 was mainly due the ordinary dividend payment, which was 17% higher in 2009 at an aggregate MAD9,661 million than the aggregate dividend payment of MAD8,246 million in 2008. The increase in net cash used in financing activities in 2008 compared to 2007 was mainly due the ordinary dividend payment, which was 19% higher in 2008 at an aggregate MAD8,246 million than the aggregate dividend payment of MAD6,953 million in 2007.

Note 13. Dividends

13.1 Dividends

Year ended at December 31, December 31, December 31,

(In millions of Moroccan dirhams) 2009 2008 2007 Dividends received from equity affiliates - Médi-1– Sat ------Dividends paid by subsidiaries to minority shareholders (a) - Mauritel 145 158 26 - Onatel - - - - Gabon Télécom - - - - Other - - - 145 158 26 Dividends paid by Maroc Telecom to shareholders (b) - Moroccan government 2,855 2,426 2,078 - Vivendi 5,043 4,287 3,533 - Other 1,618 1,375 1,316 9,516 8,088 6,927 Total dividends paid (a) + (b) 9,661 8,246 6,953

The timeframe for distribution of dividends by Mauritel is relatively lengthy due to the currency exchange difficulties affecting the central bank of Mauritania

13.2 Dividend proposed for the year 2009

At the board meeting convened on February 22, 2010 for the purpose of approving the financial statements for 2009 and appropriating net earnings, the Supervisory Board decided to propose to shareholders a dividend payment of MAD10.7 per share, or an aggregate payment of MAD9,425 million.

Maroc Telecom - 2009 Registration Document 203 5

Note 14. Provisions at December 31, 2009, 2008 and 2007

Provisions for liabilities mainly relate to disputes with employees and third parties. They are evaluated on a case-by-case basis. Provisions for contingent liabilities are analyzed as follows:

(In millions of Moroccan dirhams) December 31, 2009 December 31, 2008 December 31, 2007

Non-current provisions 229 179 203 Provisions for life annuities 25 26 27 Provisions for termination benefits 140 90 172 Provisions for disputes with third parties 16 4 3 Other provisions 48 59 - Current provisions 504 519 143 Provisions for voluntary redundancy plan 0 179 11 Provisions for employee - related expenses 30 22 23 Provisions for disputes with third parties 165 182 108 Other provisions 309 137 - Total 733 698 345

2009

Change in Translation (In millions of Moroccan dirhams) 2008 Charges Utilized scope of Releases Reclassification 2009 adjustment consolidation

Non-current provisions 179 21 (4) 44 0 0 (11) 229

Provisions for life annuities 26 - (1) - - - - 25 Provisions for termination benefits 90 8 (2) 44 0 - - 140

Provisions for disputes with third parties 4 13 (1) - 0 - - 16

Other provisions 59 0 - - 0 - (11) 48 Current provisions 519 321 0 0 (1) (156) (179) 504

Provisions for voluntary redundancy plan 179 - - - 0 - (179) 0 Provisions for employee - related expenses 22 11 - - (2) - - 30 Provisions for disputes with third parties 182 17 - - 0 (20) (15) 165

Other provisions 137 293 - - - (136) 15 309

Total 698 342 (4) 44 (1) (156) (191) 733

The provision for employee-related expenses corresponds to Maroc Telecom’s commitment to pay life annuities to its current and former employees for work-related accidents, and other related expenses. The reserve of MAD179 million relating to restructuring provisions corresponds to the voluntary redundancy plan initiated by Gabon Télécom in 2008 which was recorded in accounts payable following the agreement signed with the Gabonese state. Other current provisions correspond mainly to litigation proceedings with third parties, the tax authorities and the telecommunications regulatory authority.

204 Maroc Telecom- 2009 Registration Document FINANCIAL REPORT 5.4. Consolidated financial statements

2008

Change in Translation (In millions of Moroccan dirhams) 2007 Charges Utilized scope of Releases Reclassification 2008 adjustment consolidation

Non-current provisions 203 19 (75) (17) 0 (1) 51 179 Provisions for life annuities 27 - - - - (1) - 26 Provisions for termination benefits 172 10 (75) (17) 0 - - 90 Provisions for disputes with third parties 3 1 - - - - - 4 Other provisions - 8 - - 0 - 51 59 Current provisions 143 362 (25) 0 (1) (2) 43 519 Provisions for voluntary redundancy plan 11 180 (11) - (1) - - 179 Provisions for employee - related expenses 23 12 (12) - 0 (2) - 22 Provisions for disputes with third parties 108 76 (2) - 0 - - 182

Other provisions - 94 - - - - 43 137

Total 345 381 (100) (17) (1) (3) 94 698 The provision for employee-related expenses corresponds to Maroc Telecom’s commitment to pay life annuities to its current and former employees for work-related accidents, and other related expenses. The reserve of MAD180 million relating to restructuring provisions corresponds to the voluntary redundancy plan initiated by Gabon Télécom in 2008. Other current provisions correspond mainly to litigation proceedings with third parties, the tax authorities and the telecommunications regulatory authority.

2007

Change in Translation (In millions of Moroccan dirhams) 2006 Charges Utilized scope of Releases Reclassification 2007 adjustment consolidation

Non-current provisions 36 13 (10) 163 2 (3) 0 203

Provisions for life annuities 28 - (1) - - - - 27

Provisions for termination benefits 8 13 - 152 2 (3) - 172

Other provisions - - (9) 11 - - - 3 Current provisions 388 51 (223) 28 1 (101) 0 143

Provisions for voluntary redundancy plan 304 - (193) - - (100) - 11

Provisions for employee - related expenses 26 14 (17) 1 - (1) - 23

Provisions for disputes with third parties 35 37 (13) 27 1 - 23 108 Other provisions 23 - - - - - (23) 0 Total 424 64 (233) 191 3 -104 0 345

The provision for employee-related expenses corresponds to Maroc Telecom’s commitment to pay life annuities to its current and former employees for work-related accidents, and other related expenses. The provision for retirement benefits mainly concerned Onatel and Gabon Télécom. The reversal of MAD293 million relating to restructuring provisions corresponds to the voluntary redundancy plan initiated by Maroc Telecom in 2006. Other current provisions correspond mainly to litigation with third parties, the tax authorities and the telecommunications regulatory authority.

Maroc Telecom - 2009 Registration Document 205 5

Note 15. Borrowings and other financial liabilities at December 31, 2009, 2008 and 2007

15.1. Net cash position

December 31, December 31, December 31, (In millions of Moroccan dirhams) 2009 2008 2007 Borrowings due in less than one year 1,238 277 331 Borrowings due in more than one year 3,108 1,039 1,233 Facilities and overdrafts 459 1,136 828 Borrowings and financial liabilities 4,805 2,452 2,392 Cash and cash equivalents 874 2,678 3,725 Escrow accounts 368 150 118 Net cash position (3,564) 376 1,451

15.2. Net cash by maturity

The breakdown by maturity is based on the repayment terms and conditions of the borrowings.

2009 (In millions of Moroccan dirhams) < 1 year 1 to 5 years > 5 years Total Borrowings from credit institutions 1,238 2,984 124 4,346 Facilities and overdrafts 459 459 Borrowings and financial liabilities 1,697 2,984 124 4,805 Cash and cash equivalents 874 874 Escrow accounts 251 117 368 Net cash position (572) (2,867) (124) (3,563)

2008 (In millions of Moroccan dirhams) < 1 year 1 to 5 years > 5 years Total Borrowings from credit institutions 277 956 83 1,316 Facilities and overdrafts 1,136 1,136 Borrowings and financial liabilities 1,412 956 83 2,452 Cash and cash equivalents 2,678 2,678 Escrow accounts 126 24 150 Net cash position 1,265 (830) (59) 376

2007 (In millions of Moroccan dirhams) < 1 year 1 to 5 years > 5 years Total Borrowings from credit institutions 331 1 125 108 1,565 Facilities and overdrafts 828 828 Borrowings and financial liabilities 1,159 1 125 108 2,392 Cash and cash equivalents 3,725 3,725 Escrow accounts 118 118 Net cash position 2,684 (1 125) (108) 1,451

206 Maroc Telecom- 2009 Registration Document FINANCIAL REPORT 5.4. Consolidated financial statements

15.3 Table of analysis

December 31, December 31, December 31, Companies % Interest rate Maturity (In millions of Moroccan dirhams) 2009 2008 2007 Maroc Telecom Borrowing Attijariwafa bank 5.1% July 14 2,893 - -

Maroc Telecom Banks, overdrafts 3.9% June 10 447 1,071 779

Mauritel Mobile license borrowing (October 2000) 8.0% January 08 0 0 11

Mauritel Borrowing Saudi development fund 2.5% - 1 1 1

Onatel Borrowing SBIF 2005-2011 6.7% June 11 146 216 288 Onatel CONS.BIB-ECOBANK-BICIA 7.7% Jully 12 101 132 140

Onatel Interior borrowing reassigned by government 7.5% December 08 0 0 9

Onatel Borrowing BOAD 96.00 6.0% July 11 12 21 29 Onatel Borrowing EIB 2.0% December 10 7 13 20 Onatel Borrowing AFD 1109 7.7% October 09 0 2 5 Onatel Borrowing AFD110-1111 2.0% October 18 19 21 23 Onatel Borrowing SGBB 2007 6.4% November 13 87 86 87 Onatel Borrowing BOA 2007 6.4% December 14 87 86 87 Onatel Borrowing BOAD 09 00 8.0% July 10 34 51 69 Onatel Borrowing BIB 2008 6.0% December 13 33 35 0 Onatel Borrowing SFI 2008 7.6% July 13 88 87 0 Onatel Borrowing BICIAI 2008 6.3% September 15 88 87 0 Onatel Borrowing spot Onatel 5.7% - 110

Gabon Télécom Borrowing EIB 3.0% March 12 0 0 177

Gabon Télécom Borrowing BID 8.0% December 12 0 0 156

Gabon Télécom Borrowing AFD 5.0% October 09 2 2 2

Gabon Télécom Borrowing COMMERZBANK Euribor+0.75% December 13 56 72 80

Gabon Télécom BGFI Leasing liabilities - - 0 4 12

Libertis Alcatel Phase I Euribor+3.5% November 09 0 23 46

Libertis Alcatel Phase II Euribor+0.75% March 11 70 161 266

Mobisud France Borrowing Mobisud fr - - 0 215 56

Sotelma Borrowing DGDP/CFD OP 2.0% April 20 2 - - Sotelma Borrowing DGDP/CFD OY 5.0% October 10 2 - - Sotelma Borrowing DGDP/CFD OD 2.0% October 14 15 - - Sotelma Borrowing AFD OE/CML 1026 01 S 3.0% April 18 28 - - Sotelma Borrowing AFD OR/CML 1047 01 W 2.0% April 12 1 - - Sotelma Borrowing AFD OY/CML 1065 02 X 2.0% October 16 1 - - Sotelma Borrowing AFD OY/CML 1065 03 X 2.0% October 16 22 - - Sotelma Borrowing BOAD PR ML 2001 01 00 6.0% January 11 23 - - Sotelma Borrowing NKF N10-ORET/97114 2.0% April 11 8 - -

Sotelma Borrowing BIM CDMA Kaves Optic Project 9.0% February 11 38 - -

MALTEL Borrowing BDM SA PHASE II 8.5% January 13 252 - - MALITEL Borrowing BDM SA PHASE II BIS 7.5% October 11 32 - - ONATEL Banks Onatel overdrafts 8.5% - 3 54 23

Gabon Télécom Other - - 9 12 25

Total Borrowings and other financial liabilities 4,805 2,452 2,392

Maroc Telecom - 2009 Registration Document 207 5

Note 16. Accounts payable at December 31, 2009, 2008 and 2007

(In millions of Moroccan dirhams) December 31, 2009 December 31, 2008 December 31, 2007

Trade accounts payable 8,491 7,264 7,209 Employee-related liabilities 900 880 758 Tax liabilities and other payables 5,841 5,064 5,685 Accruals 1,945 1,555 1,734 Total 17,176 14,763 15,386 Trade accounts payable and related accounts include payables due to SFR, Vivendi, Vivendi Telecom International, Canal+ Group and Casanet. Details of these transactions are presented in Note 30 on related parties. ”Tax liabilities and other payables’’ includes tax and VAT payables. It also includes payables relating to obligations arising from Maroc Telecom’s operating terms and conditions. Accruals mainly include prepaid income, corresponding to subscriptions invoiced in advance, SIM cards sold but not used (whether activated or not), handsets sold but not activated and provisions relating to loyalty programs for MAD1,945 million.

Note 17. Revenues for 2009, 2008 and 2007

(In millions of Moroccan dirhams) 2009 2008 2007

Mobile gross revenues* 22,190 21,183 19,328 Sales of goods 1,015 1,196 989

Sales of services 21,175 19,988 18,339

Fixed-line and internet gross revenues* 11,106 11,319 11,042 Sales of goods 50 59 76

Sales of services 11,057 11,260 10,966

Total consolidated gross revenues 33,296 32,503 30,370

Elimination of intersegment transactions* (2,957) (2,982) (2,839)

Total consolidated net revenues 30,339 29,521 27,532

Maroc Telecom reported 2009 revenues of MAD30,339 million, up 2.8% due to continuing strong growth in Mobile business activities.

(In millions of Moroccan dirhams) 2009 2008 2007

Gross revenues 33,296 32,503 30,370 Maroc Telecom 28,178 28,212 26,547

Mauritel* 1,198 1,154 1,137

Onatel 1,932 1,639 1,517

Mobisud 125 183 65

Gabon Télécom 1,303 1,315 1,104

Sotelma 559

Total consolidated gross revenues 33,296 32,503 30,370

Elimination of intersegment transactions (2,957) (2,982) (2,839)

Total consolidated net revenues 30,339 29,521 27,532 Consolidated revenues at December 31, 2009 increased, on the one hand due to the rise in mobile activity and on the other hand due to growth in broadband internet activities, and the consolidation of Sotelma as from August 1, 2009. (*) As from 2009, revenues generated by Mauritel from international inbound and outbound Mobile traffic were accounted for directly under Mobile segment revenues whereas up until the end of 2008, they were accounted for as transit revenues of Mauritel’s Fixed-line operations. 2008 and 2007 financial data were therefore restated to take into account this change.

208 Maroc Telecom- 2009 Registration Document FINANCIAL REPORT 5.4. Consolidated financial statements

Note 18. Cost of purchases for the years ended December 31, 2009, 2008 and 2007

(In millions of Moroccan dirhams) 2009 2008 2007

Cost of handsets 1,811 1,678 1,509

Domestic and international interconnection charges 2,234 1,894 2,023

Other purchases 829 899 683

Total 4,874 4,471 4,215

The item “Other purchases’’ mainly includes fuel and electricity, phone cards and other consumables.

Note 19. Payroll and payroll-related costs for the years 2009, 2008 and 2007

(In millions of Moroccan dirhams) 2009 2008 2007

Wages 2,226 2,297 2,314

Payroll taxes 350 374 358

Wages and taxes 2,576 2,671 2,672

Share-based compensation 28 34 23

Payroll costs 2,604 2,705 2,695

Average headcount 14,423 13,955 14,154

This item includes payroll costs for the period, excluding redundancy costs, which are recognized as other operating income and expenses.

Note 20. Taxes, duties and fees for 2009, 2008 and 2007

(In millions of Moroccan dirhams) 2009 2008 2007

Taxes and duties 286 311 319

Fees 591 443 469

Total 877 754 787

Taxes, duties and fees include local taxes (business registration fees, urban taxes, etc.), fees for public rights-of-way and other taxes (stamp duty, motor tax). Fees correspond to amounts paid to the telecommunications regulatory authority with respect to universal service and training.

Maroc Telecom - 2009 Registration Document 209 5

Note 21. Other operating income and expenses for 2009, 2008 and 2007

(In millions of Moroccan dirhams) 2009 2008 2007

Communication 558 612 604

Commissions 1,197 1,188 1,041 Other including : 2,028 1,843 1,917 Rental expenses 599 511 467 Maintenance, repair and property service charges 785 735 634 Remuneration for intermediaries and consulting fees 384 401 425 Postage and banking services 103 112 108 Voluntary redundancy plan 3 38 193 Other 155 45 90 Total 3,783 3,643 3,562

Communication expenses were down 8.9% year-on-year, essentially attributable to the Onatel and Mauritel subsidiaries and the removal of Mobisud France from the scope of consolidation. Commissions were up 1%, primarily due to the 4.6% increase in Maroc Telecom’s commissions, which rose from MAD952 million in 2008 to MAD996 million in 2009.

Note 22. Depreciation, impairment and provisions for 2009, 2008 and 2007

(In millions of Moroccan dirhams) 2009 2008 2007 Depreciation and impairment of fixed assets 4,127 3,770 3,623

Impairment of trade receivables 161 93 557

Impairment of inventories (15) (35) 121

Impairment of other receivables (11) (42) 13 Provisions (70) 273 (274)

Total 4,193 4,059 4,038

The increase in impairment losses for trade receivables and similar accounts is related to the growth of customer base and the adoption of a more restrictive policy for the impairment of trade receivables. “Provisions” mainly comprise the amounts relating to provisions for retirement benefits and provisions for contingencies and losses. (See note 29).

210 Maroc Telecom- 2009 Registration Document FINANCIAL REPORT 5.4. Consolidated financial statements

Note 23. Income from equity affiliates for 2009, 2008 for 2007

(In millions of Moroccan dirhams) 2009 2008 2007

Médi-1- Sat 43 (62) (34)

Total 43 (62) (34)

• Medi-1-Sat has been accounted for by the equity method since January 1, 2006.

Note 24. Net financial income (expense) for 2009, 2008 and 2007

24.1 Borrowing costs

(In millions of Moroccan dirhams) 2009 2008 2007

Income from cash and cash equivalents 79 112 131 Interest expense on loans (228) (106) (131)

Net borrowing costs (149) 6 0

The decrease in income from short-term investments between 2009 and 2008 was due to the reduced interest rate on term deposits and sight deposits. Interest expense increased 114% due to the consolidation of Sotelma, as well as the increase in interest paid by Maroc Telecom on the bank overdraft and the long term borrowing.

24.2 Other financial income and expenses

(In millions of Moroccan dirhams) 2009 2008 2007 Gains (losses) from foreign exchange translation (16) (31) 11

Other financial income (+) 41 837 21

Other financial expenses (-) (24) (418) (1)

Other financial income and expenses 2 388 31

Other financial income and expenses take into account the revenues from non-consolidated investments as well as proceeds from their disposal. The reduction in “Other financial income and expenses” reflects the positive impact on Gabon Télécom’s financial statements of the assumption by the Gabonese State of part of Gabon Télécom’s debt and, for Maroc Telecom, the negative impact of the compensation cost (contingent payment) granted by it.

Maroc Telecom - 2009 Registration Document 211 5

Note 25. Tax expense for 2009, 2008 and 2007

(In millions of Moroccan dirhams) 2009 2008 2007 Income tax expense 3,845 3,915 4,062 Deferred tax (18) 280 33 Provision for tax* 293 Current tax 4,120 4,196 4,095 Consolidated effective tax rate ** 30% 30% 33%

(In millions of Moroccan dirhams) 2009 2008 2007 Earnings 9,779 10,010 8,137 Income tax expense 3,827 4,196 4,095 Provision for tax* 293 Earnings before tax 13,899 14,206 12,232 Moroccan statutory tax rate 30% 30% 35% Theoretical income tax expense 4,170 4,262 4,281 Impact of changes in tax rates 0 0 (28) Other differences *** (343) (66) (158) Effective income tax expense 3,827 4,196 4,095 (*) Maroc Telecom was subject to a tax audit for the fiscal years 2005, 2006, 2007 and 2008 and received notification on December 17, 2009 of the tax authorities’ grounds for a tax reassessment in respect of the 2005 fiscal year alone. The Company has already provided a preliminary response and has transmitted additional documentation, as requested by the tax authorities. It is continuing to provide further responses in connection with its administrative appeal of the tax adjustment which was filed within the required time period. Maroc Telecom believes that the tax reassessment will not have a material impact on the income, net equity or liquidity of the Company. Notwithstanding this, Maroc Telecom recorded a provision for tax reassessments covering the tax claimed by the tax authorities in connection with their audit. (**) Tax expense/earnings before taxes (***) The line item ‘’Other differences’’ primarily includes the 17.5% tax exemption on revenues from international activities The deferred tax rate of Maroc Telecom and Onatel was 30%. The deferred tax rate of Gabon Télécom and Sotelma was 35%. Note 26. Minority interests for 2009, 2008 and 2007

(In millions of Moroccan dirhams) 2009 2008 2007 Mauritel 158 165 176 Mobisud France (5) (106) (51) Onatel 87 75 79 Gabon Télécom 93 355 (99) Sotelma 21 Total minority interests 354 490 104

Minority interests reflect the interests of shareholders other than Maroc Telecom in the net earnings of Mauritel, Mobisud France, Onatel, Gabon Télécom and Sotelma. Minority interests fell by 28% primarily due to the decrease in net earnings of Gabon Télécom (74%) and Mauritel (5%).

Note 27. Earnings per share for 2009, 2008 and 2007 27.1 Earnings per share Dec.31,09 Dec.31,08 Dec.31,07 (In millions of Moroccan dirhams) Basic Diluted Basic Diluted Basic Diluted Earnings attributable to equity holders of the parent 9,425 9,425 9,520 9,520 8,033 8,033 Adjusted earnings attributable to equity holders of 9,425 9,425 9,520 9,520 8,033 8,033 the parent Number of shares (in millions) 879 879 879 879 879 879 Earnings per share (in MAD) 10.7 10.7 10.8 10.8 9.1 9.1

27.2 Change in the number of shares 2009 2008 2007 Weighted average number of shares outstanding over the period 879,095,340 879,095,340 879,095,340 Adjusted weighted average number of shares outstanding over the period 879,095,340 879,095,340 879,095,340 Potential dilutive effect of financial instruments outstanding Weighted average number of shares after potential dilutive effect 879,095,340 879,095,340 879,095,340

212 Maroc Telecom- 2009 Registration Document FINANCIAL REPORT 5.4. Consolidated financial statements

Note 28. Segment data for the years ended December 31, 2009, 2008 and 2007

28.1. Breakdown of balance sheet items by business segment

December 31, 2009 Fixed- Unallocated Total Maroc (In millions of Moroccan dirhams) Mobile (B) line (A) (C) Telecom group Non-current assets 12,158 13,032 7,906 33,096 Current assets 6,683 4,805 1,335 12,823 Total assets 18,842 17,837 9,241 45,920

Total shareholders’ equity 23,227 23,227 Non-current liabilities 166 24 3,274 3,464 Current liabilities 6,967 8,863 3,399 19,229 Total shareholders’ equity and liabilities 7,133 8,888 29,899 45,920 Acquisitions of tangible and intangible assets 2,171 3,676 5,847

December 31,

2008 Fixed- Unallocated Total Maroc (In millions of Moroccan dirhams) Mobile (B) line (A) (C) Telecom group Non-current assets 11,182 11,391 2,461 25,034 Current assets 5,530 4,841 3,078 13,449 Total assets 16,713 16,232 5,538 38,483 Total shareholders’ equity 20,356 20,356 Non-current liabilities 113 16 1,190 1,319 Current liabilities 7,017 7,591 2,200 16,809 Total shareholders’ equity and liabilities 7,130 7,607 23,746 38,483 Acquisitions of tangible and intangible assets 2,343 3,613 5,957

December 31, 2007 Fixed- Unallocated Total Maroc (In millions of Moroccan dirhams) Mobile (B) line (A) (C) Telecom group Non-current assets 10,669 9,846 2,727 23,242 Current assets 7,285 3,530 3,692 14,507 Total assets 17,954 13,376 6,419 37,749 Total shareholders’ equity 18,634 18,634 Non-current liabilities 185 17 1,233 1,436 Current liabilities 7,573 7,984 2,121 17,679 Total shareholders’ equity and liabilities 7,759 8,002 21,989 37,749 Acquisitions of tangible and intangible assets 2,188 3,279 5,467

28.2. Breakdown of balance sheet items by geographical area

December December December (In millions of Moroccan dirhams) 31, 2009 31, 2008 31, 2007 Morocco 27,110 25,280 23,280

Other 9,569 7,665 8,050 Total segment assets 36,679 32,945 31,330

Maroc Telecom - 2009 Registration Document 213 5

28.3. Segment earnings by business

2009

(In millions of Moroccan dirhams) Fixed-line Mobile Eliminations Total

Revenues 11,106 22,190 (2,957) 30,339 Earnings from operations 3,297 10,712 14,008 Net depreciation and impairment 1,677 2,450 4,127 Voluntary redundancy plan (3) 0 (3)

2008

(In millions of Moroccan dirhams) Fixed-line Mobile Eliminations Total

Revenues 11,319 21,183 (2,982) 29,521 Earnings from operations 3,169 10,720 13,889 Net depreciation and impairment 1,622 2,148 3,770 Voluntary redundancy plan (28) (10) (38)

2007 (In millions of Moroccan dirhams) Fixe Mobile Eliminations Total

Revenues 11,042 19,328 (2 839) 27,532 Earnings from operations 2,644 9,589 12,234 Net depreciation and impairment 1,716 1,907 3,623 Voluntary redundancy plan 125 68 193

28.4. Segment earnings by geographical area

2009 Burkina Morocco Mauritania Gabon Mali France Belgium Eliminations Total (In millions of Moroccan dirhams) Faso

Revenues 25,764 1,105 1,693 1,220 554 35 90 (122) 30,339

Earnings from operations 13,080 355 322 214 63 (9) (16) 14,008

Net depreciation and impairment 3,071 192 436 258 169 1 0 4,127

Voluntary redundancy plan (3) 0 (3)

2008 Burkina Morocco Mauritania Gabon France Belgium Eliminations Total (In millions of Moroccan dirhams) Faso

Revenues 25,738 1,086 1,467 1,187 98 85 (140) 29,521

Earnings from operations 13,557 372 210 (11) (201) (38) 13,889

Net depreciation and impairment 2,859 181 410 282 39 0 3,770

Voluntary redundancy plan (17) (21) (38)

2007

(In millions of Moroccan dirhams) Morocco Other Eliminations Total Revenues 24,136 3,499 (103) 27,532 Earnings from operations 12,072 162 12,234 Net depreciation and impairment 2,786 837 3,623 Voluntary redundancy plan 193 0 193

214 Maroc Telecom- 2009 Registration Document FINANCIAL REPORT 5.4. Consolidated financial statements

Note 29. Restructuring provisions for the years ended December 31, 2009, 2008 and 2007

Maroc (In millions of Moroccan dirhams) Telecom Other Total Maroc Balance at January 1, 2007 304 0 304 Changes in scope of consolidation and purchase price allocation adjustment 0 Addition 0 Utilization (193) (193) Releases (100) (100) Balance at December 31, 2007 11 0 11 Changes in scope of consolidation and purchase price allocation adjustment 0 Addition 181 181 Utilization (11) (11) Releases 0 Balance at December 31, 2008 0 181 181 Changes in scope of consolidation and purchase price allocation adjustment 0 Addition 0 Utilization 0 Releases (181) (181) Balance at December 31, 2009 0 0

Maroc Telecom initiated a voluntary redundancy plan in 2006 for which it recorded provisions of MAD300 million. In 2008, MAD193 million of the provisioned amount was used and MAD100 million was reversed. In 2008, MAD11 million of the provision set aside for Maroc Telecom’s voluntary redundancy plan was utilized. In addition, Gabon Télécom initiated a voluntary redundancy plan with an estimated cost of MAD181 million. In 2009, the provision for Gabon Telecom’s voluntary redundancy plan was reclassified in debt.

Note 30. Transactions with related parties

30.1. Compensation of executive officers, Group management and directors in 2009, 2008 and 2007

For the year ended December 31, 2009, the members of the Management Board received MAD36 million. For the year ended December 31, 2008, the members of the Management Board received MAD29 million. For the year ended December 31, 2007, the members of the Management Board received MAD23 million.

(In millions of Moroccan dirhams) 2009 2008 2007 Short term benefits (1) 36 29 23 Post-employment benefits (2) - - - Other long-term benefits (3) - - - Termination benefits (4) 40 38 28 Share-based compensation (5) - - - Total 76 67 51

(1) Salaries, compensation, performance–based compensation and incentive plans, social security contributions, holiday pay, Directors’ attendance fees and benefits in kind. (2) Pension and post-retirement benefits, life insurance and medical care. (3) Long-service leave, sabbatical leave, long service benefits, jubilee payments, deferred compensation, performance-based compensation and incentive plans and bonuses (if payable 12 months or more after year end). (4) Entitlements to compensation on termination of employment. (5) Stock options and other share-based compensation.

Maroc Telecom - 2009 Registration Document 215 5

30.2. Equity affiliates Médi-1-Sat : Médi-1-Sat was created in 2004. Its business activity includes: • satellite transmission and broadcasting of news, educational programs, sports and entertainment programs; • broadcasting of advertising; • all cable and terrestrial TV broadcasting; • all operations relating to satellite image broadcasting, including the production and broadcasting of TV programs. In 2006, Maroc Telecom entered into an agreement with Medi-1-Sat under the terms of which Maroc Telecom agreed to grant Medi-1- Sat an advance of €2.8 million. In 2006, Maroc Telecom paid the first tranche of this advance corresponding to €1,200,000 (MAD13 million). In 2007, Maroc Telecom paid the second tranche of the advance for €1.6 million (MAD18 million). In 2008, two amendments were made to the agreement signed in 2006, whereby Maroc Telecom paid the first tranche of €1.1 million (MAD13 million). A second tranche of €0.5 million (MAD6 million) was paid. The balance of the advances as at December 31, 2009, including accrued interest, amounted to MAD68 million.

The main transactions with Medi-1-Sat and amounts owed by Medi-1-Sat or Maroc Telecom are detailed as follows:

(In millions of Moroccan dirhams) December 31, 2009 December 31, 2008 December 31, 2007 Revenues 4 3 1 Expenses 0 0 - Receivables 68 54 33 Payables 0 0

30.3. Other related parties Casanet During 2003, Maroc Telecom concluded several agreements with Casanet relating to: • the maintenance of Maroc Telecom’s “Menara” internet portal; • the provision of development services and hosting of Maroc Telecom’s mobile portal; • the hosting of Maroc Telecom’s El Manzil website; • the maintenance of new WAP applications on the Menara portal and the production of content relating to these applications; • the marketing of internet access over leased lines. Amounts invoiced by Casanet to Maroc Telecom in accordance with the above agreements totaled MAD62 million in 2009, compared with MAD32 million in 2008. The balance of payables due amounted to MAD29 million as at December 31, 2009.

(In millions of Moroccan dirhams) December 31, 2009 December 31, 2008 December 31, 2007

Revenues 6 2 0

Expenses 62 32 48 Receivables 16 14 0 Payables 29 11 12

216 Maroc Telecom- 2009 Registration Document FINANCIAL REPORT 5.4. Consolidated financial statements

Vivendi – SFR – Vivendi Telecom International – Groupe Canal+

In 2001, Itissalat Al-Maghrib entered into a management services agreement with Vivendi Telecom International (VTI) for the provision of technical assistance in the following fields: • strategy and organization; • development; • sales and marketing; • finance; • purchasing; • human resources; • information systems; • regulation and interconnection; • infrastructure and networks

In addition, with a view to further strategic cooperation, Maroc Telecom entered into transactions with SFR (the leading French private mobile operator), Group Canal+ and the Vivendi Universal group. These transactions are summarized as follows:

2009

Vivendi Telecom Vivendi SFR Canal+ group (In millions of Moroccan dirhams) International

Revenues 364 Expenses 1 98 10 Receivables 132 Payables 98 4 24 3

2008 (In millions of Moroccan dirhams) Vivendi SFR Canal+ group VTI Revenues 401 Expenses 3 197 8 5 Receivables 222 Payables 251 64 3 3

2007 (In millions of Moroccan dirhams) Vivendi SFR Canal+ group VTI Revenues 84 Expenses 6 131 5 12 Receivables 128 Payables 102 173 3

Maroc Telecom - 2009 Registration Document 217 5

Note 31. Contractual obligations and contingent assets and liabilities

31.1. Contractual obligations and commercial commitments recorded in the balance sheet

Due less than Due more than 5 (In millions of Moroccan dirhams) Total Due 1-5 years one year years Long- term debts 4,346 1,238 3,108 Capital lease obligations* - - - - Operating leases 4 4 - - Irrevocable purchase obligations - - - - Other long-term commitments - - - - Total 4,350 1,243 3,108

*Long-term vehicle leases (excluding tax)

31.2. Other commitments given and received relating to ordinary operations

Commitments given

Commitments given comprise the following:

2009 - Capital expenditure commitments in an aggregate amount of MAD7,401 million and comprising: • Commitments entered into by Maroc Telecom for MAD6,739 million, in connection with the third agreement signed with the Moroccan government in May 2009 (of which MAD3,569 million commitments to suppliers of fixed assets); • Commitments entered into by the subsidiaries for MAD661 million, with suppliers of fixed assets. - Capital expenditure commitment by Mauritel for MAD132 million, in connection with its acquisition of a third generation mobile telephony license; - Guarantees issued to banks for MAD86 million; - Commitment related to equity equivalents of Casanet for MAD4 million; - Operating leases for MAD13 million; - A commitment in connection with the long-term leasing of a satellite link for MAD128 million; 2008 - Capital expenditure commitments in an aggregate amount of MAD3,141 million and comprising: - Commitments entered into by Maroc Telecom for MAD2,689 million, with suppliers of fixed assets; - Commitments entered into by the subsidiaries for MAD452 million, with suppliers of fixed assets. - Capital expenditure commitment by Mauritel for MAD145 million , in connection with its acquisition of a third generation mobile telephony license; - Guarantees issued to banks for MAD78 million; - Stake acquired in Medi-1 Sat for MAD56 million; - Commitment related to quasi-equity of Casanet for MAD4 million; - Operating leases for MAD12 million; - Long-term satellite lease for MAD185 million; - Various other commitments of MAD0.2 million.

218 Maroc Telecom- 2009 Registration Document FINANCIAL REPORT 5.4. Consolidated financial statements

2007 − Guarantees on equipment contracts. As at December 31, 2007, these commitments amounted to MAD67.1 million, compared with MAD205 million at end-2006. The bulk of these commitments expired in less than one year. − Orders for fixed assets, which amounted to MAD1,753 million at end-2007, compared with MAD910 million at December 31, 2006. The bulk of these commitments expired in less than one year and orders relate mainly to acquisitions of property, plant and equipment. − Commitments relating to operating leases with terms of between three and ten years totaled MAD10.8 million at December 31, 2007. The amount recorded corresponds to one month’s expense reflecting the termination clause, which provides for a one-month notice period. − Long-term space segment leases for MAD254.2 million. − Sindbad seed fund amounting to MAD2 million in 2007 compared with MAD2 million in 2006. − CMC group agreed to retrocede to Socipam, a civil company comprising the employees of the Mauritanian subsidiaries, its 0.527% interest in Mauritel SA, which it bought in February 2006. The terms and conditions governing this commitment are the following: − possible buyback for 5 years by Socipam of 5,592 shares sold to CMC for MAD7.8 million; − By tranche of 100 shares; − at a unit price which will increase every year from 2007. − Mauritel’s commitment to the Government to invest MAD160 million in the third generation license, of which MAD32 million was due within one year and the remainder over more than one year.

− Gabon Télécom – contribution to health insurance: 10% of annual revenue from mobile business (excluding tax and less commissions to retailers) from January 1, 2008.

− Commitment by Maroc Telecom to increase the equity equivalents of Casanet by MAD6.1 million. − Maroc Telecom is exempt from customs duty for all capital goods imported pursuant to an investment agreement entered into with the public authorities of the Kingdom of Morocco. Under the terms of the agreement Maroc Telecom is required to carry out a three year capital expenditure program over three years from 2006 to 2009 for MAD7.4 billion and to create 150 new jobs. As at December 31, 2007, outstanding expenditure required under the program amounted to approximately MAD391 million. If Maroc Telecom does not make these investments, it will have to pay the customs duty outstanding on all the goods imported, plus penalties for late payment.

Commitments received

Commitments received include:

2009

− Guarantees received for MAD1,788 million at December 31, 2009, compared with MAD1,600 million at December 31, 2008. In connection with the 2008-2011 universal service agreement “Pacte” entered into with the telecommunications regulatory authority, Maroc Telecom is committed to extend mobile telephone coverage to 7,338 remote rural localities for an estimated investment of MAD1,159 million (€103 million). This commitment was made in return for an exemption from payment of MAD334 million (€30 million) to the universal service fund for 2009 (MAD396 million in 2008).

2008 − Guarantees received for MAD1,600 million at December 31, 2008, compared with MAD1,455 million at December 31, 2007. − Other commitments for MAD74 million. − On May 4, 2008, Maroc Telecom entered into a universal service agreement “Pacte” under which Maroc Telecom committed to extend mobile telephone coverage to 1,500 remote rural localities for an estimated investment of MAD923 million (€81 million). This commitment was made in return for an exemption from payment of MAD396 million (€35 million) to the universal service fund for 2008

2007 − Guarantees received in amount of MAD1,455 million at December 31, 2007 compared with MAD1,152 million at year-end 2006.

Maroc Telecom - 2009 Registration Document 219 5

− In 2007, Maroc Telecom concluded a trade-in agreement with Nokia Siemens Network whereby the latter agreed to purchase Maroc Telecom’s used mobile network equipment (HLR, MSC, TMSC and GPRS) for MAD615.5 million. − In 2007, Maroc Telecom signed two agreements to sell land for an aggregate amount of MAD39 million.

31.3 Collateral and pledges

2009 − Pledges totaling MAD39 million as at December 31, 2009 compared with MAD46 million as at December 31, 2008.

2008 − Pledges totaling MAD46 million as at December 31, 2008 compared with MAD55 million as at December 31, 2007.

2007 − Pledges totaling MAD55 million as at December 31, 2007 compared with MAD66 million as at December 31, 2006.

− In the event of the disposal, within a two-year period of over 65% of GSM Al-Maghrib’s share capital for a price above MAD293 per share, Air Time shall repay the capital gain exceeding 65% to Maroc Telecom.

− Note 32. Risk management

Credit risk

Maroc Telecom minimizes its credit risk by only engaging in credit operations with commercial banks and financial institutions that have high credit ratings and by spreading the transactions among the selected institutions. Maroc Telecom’s receivables do not have high credit risk, due to their significant dilution rate.

Currency risk

Maroc Telecom is exposed to variations in exchange rate as the breakdown of its receipts in foreign currencies differs from the breakdown of its disbursements in foreign currencies. Receipts and disbursements in foreign currencies represent a significant portion of company’s activity. Maroc Telecom’s foreign currency receipts relate to revenues from international operations and its foreign currency disbursements relate to the servicing of debt, payments to suppliers (in particular concerning investments and purchases of handsets) and payment for interconnection with foreign operators. These disbursements are mainly denominated in euros. The portion of foreign currency disbursements denominated in euros, excluding subsidiaries, was 79% at December 31, 2009, of an aggregate MAD7,142 million, MAD3,144 million of which relating to the acquisition of share in Sotelma. These foreign currency disbursements exceed the amount of foreign currency receipts (MAD3,049 million in 2009). In addition, Maroc Telecom Group had debt totaling MAD4,805 million at December 31, 2009, denominated mainly in Moroccan dirham, euro and FCFA:

(In millions of Moroccan dirhams) 2009 2008 2007 Euro 407 714 56 US dollar - - - Moroccan dirhams 3,288 1,077 779 Other (mainly FCFA) 1,031 646 1,512 Current debt 4,726 2,436 2,348 Accrued interest 79 15 44 Total financial debts 4,805 2,452 2,392

220 Maroc Telecom- 2009 Registration Document FINANCIAL REPORT 5.4. Consolidated financial statements

Maroc Telecom cannot net its foreign currency disbursements and receipts as Moroccan law only allows it to retain 50% of its telecoms receipts in a foreign currency account; the 50% remaining are converted into Moroccan dirhams. Maroc Telecom’s earnings may be affected by fluctuations in exchange rates, and in particular by fluctuations in the Moroccan dirham against the US Dollar or the euro. In 2009, the euro gained 1.0% in relation to the Moroccan dirham (from MAD11.2460 at December 31, 2008 to MAD11.3160 for €1 at December 31, 2009). Over the same period, the US dollar depreciated 3% from MAD8.0983 in 2008 to MAD7.8602 for USD1 in 2009). The operations of the African subsidiaries (Onatel, Gabon Télécom in 2007 and Sotelma in 2009), whose functional currency is the CFA Franc, increased the Group’s exposure to currency risk, in particular with respect to fluctuations in the euro against the Moroccan dirham. However, a 1% depreciation in the Moroccan dirham against the euro, would have had a limited impact on the Group’s financial statements for fiscal year 2009:

revenues = + MAD42 million earnings from operations = + MAD9 million net earnings, Group share = + MAD3 million

The following table sets out the Group’s foreign currency positions as at December 31, 2009.

(In millions of Moroccan Euro /FCFA USD Other * Total foreign MAD Total Maroc Telecom dirhams) currency group Total assets 14,588 48 2,122 16,758 29,161 45,920 Total liabilities and equity (14,582) (104) (2,126) (16,812) (29,753) (46,566) Net position 6 (56) (4) (54) (592) (646) * mainly Mauritanian Ouguiyas

The Group does not use foreign currency hedging instruments. Maroc Telecom’s assets denominated in foreign currencies are mainly receivables from foreign operators. Liabilities denominated in foreign currencies are mainly payables to foreign operators and suppliers. A 1% increase in the value of the euro and US dollar against the Moroccan dirham would have had the following impact on Maroc Telecom’s financial statements at December 31, 2009:

+MAD18 million for assets; - MAD22 million for liabilities; - MAD4 million for net liabilities; - MAD22 million for commitments and; - MAD26 million for total net liabilities. Conversely, a 1% decrease in the value of the euro and US dollar against the Moroccan dirham would have had the following impact on Maroc Telecom’s financial statements at December 31, 2009:

-MAD18 million for assets; +MAD22 million for liabilities; +MAD4 million for net liabilities; +MAD22 million for commitments and; +MAD26 million for total net liabilities.

Liquidity risk

Maroc Telecom believes that its cash flow from operations, net cash and funds available through credit lines will be sufficient to cover the expenses and investments necessary for its operations, to service its debt, to pay dividends and to complete the external growth operations underway as at December 31, 2009.

Interest rate risk

The majority of loans taken out by Maroc Telecom are fixed-rate loans. As the portion of floating rate interest loans is relatively low, Maroc Telecom Group is not highly exposed to favorable or unfavorable changes in interest rates.

Note 33. Post-balance sheet events January 2010: Dilution of Maroc Telecom’s equity interest in Médi1-Sat following the entry of new partners into the company’s capital. This brought Maroc Telecom’s stake down from 30.5% to 4.79%.

Maroc Telecom - 2009 Registration Document 221 5

5.5 INDIVIDUAL FINANCIAL STATEMENTS

Table of contents

B6 : Receivables • Report of the statutory auditors on the financial statements B7 : Liabilities • Balance sheet assets B8 : Guarantees given or received B9 : Financial commitments received or given • Balance sheet shareholders’ equity and liabilities excluding leasing transactions

B10 : Assets leased • Income statement B11 : Income statement items • Statement of operating data B12: Reconciliation of net income and tax income • Statement of cash flows B13 : Determination of ordinary income after tax B14 : Value added tax • Additional disclosures C1 : Shareholding structure A1 : Main valuation methods used by the company C2 : Appropriation of year-end income A2 : Exceptions C3 : Income and other significant characteristics of company over the last three years A3 : Changes in methods C4 : Transactions in foreign currencies during the B1 : Capitalized costs period B2 : Non-financial assets C5 : Date of financial statements and subsequent B2 Bis : Depreciation schedule events B3 : Gains or losses on disposals or withdrawls • Report of the statutory auditors of fixed assets B4 : Equity investments B5 : Provisions

222 Maroc Telecom- 2009 Registration Document FINANCIAL REPORT 5.5 Individual financial statements

Report of the Statutory Auditors on the financial statements From January 1, 2009 to December 31, 2009

To the Chairman To the Shareholders In accordance with the terms of our appointment by your General Shareholders’ meeting, we have audited the accompanying financial statements of Itissalat Al-Maghrib (IAM) for the fiscal year ended December 31, 2009, which comprise the balance sheet, the income statement, the statement of operating data, the cash flow statement and the additional disclosures. These financial statements, which show capital and reserves of MAD 17,781,282 thousand, including a net profit of MAD9,064,308 thousand.

Management’s responsibility Management is responsible for preparing these financial statements to give a true and fair view of the Company, in accordance with the accounting principles generally accepted in Morocco. This responsibility includes designing, implementing and monitoring internal controls over the preparation and presentation of the financial statements to ensure that they are free from material misstatement. It also entails determining reasonable accounting estimates given the circumstances.

Statutory auditor’s responsibility Our responsibility is to express an opinion on these financial statements on the basis of our audit. We conducted our audit in accordance with the auditing standards generally accepted in Morocco. Those standards require us to comply with a code of ethics and to plan and carry out the audit to obtain reasonable assurance that the financial statements are free from material misstatement. An audit also implies implementing procedures in order to gather and examine evidence underlying the amounts and disclosures in the financial statements. The choice of the procedures performed is based on the auditor’s judgement and assessment of the risk that the financial statements could contain material misstatements. When assessing such risk, the auditor takes into account the internal controls implemented by the Company over the preparation and presentation of the financial statements in order to define audit adapted to the circumstances, but not with the aim to express an opinion on effectiveness of internal controls. An audit also includes assessing the appropriateness of the accounting principles used, ensuring that the significant estimates made by Management in the preparation of the financial statements are reasonable and evaluating the overall adequacy of the presentation of these statements. We believe that our audit provides a reasonable basis for the opinion expressed below. Opinion on the financial statements In our opinion, the financial statements referred to in the first paragraph above give a true and fair view of Itissalat Al-Maghrib’s assets, liabilities and financial position as of December 31, 2009, as well as of its results of operations and cash flows for the year then ended, in accordance with the accounting principles generally accepted in Morocco. Without qualifying our opinion above, we draw your attention to note B5 of the statement of additional financial information, which describes the tax inspection underway for financial years 2005-2008 and outlines the stance taken by the Company. Specific controls and information We also performed the specific verifications required by law. In particular, we ensured that the information contained in the Manage- ment Board’s Report to the Shareholders was consistent with the Company’s financial statements. We draw your attention to certain transactions carried out during 2009 by Itissalat Al-Maghrib (IAM): -The acquisition in July 2009 of a 51% equity interest in the share capital of Sotelma, the incumbent telecoms operator of Mali, for MAD3,144 million. -The contribution of MAD176.2 million to the share capital increase of Gabon Télecom (51%-owned by IAM), thereby increasing the amount of IAM’s equity interest from MAD684.9 million to MAD861.1 million. The percentage of IAM’s shareholding in this subsidiary remained unchanged.

February 23, 2010

Statutory auditors

KPMG Abdelaziz ALMECHATT Fouad LAHGAZI Abdelaziz ALMECHATT Partner Partner

Maroc Telecom - 2009 Registration Document 223 5

Balance sheet

Assets Gross Amortization NET (In thousands of Moroccan dirhams) and provisions 2009 2008 2007 CAPITALIZED COSTS (A) 0 0 0 0 0 . Start-up costs 0 0 0 0 0 . Deferred costs 0 0 0 0 0 . Bond redemption premiums 0 0 0 0 0 INTANGIBLE ASSETS (B) 7,526,814 4,315,326 3,211,489 3,287,139 3,008,766 . Research and development costs 0 0 0 0 0 . Patents, trademarks and similar rights 6,914,448 4,290,675 2,623,772 2,638,842 2,454,246 . Goodwill 31,686 24,650 7,036 9,608 4,260 . Other intangible assets 580,680 0 580,680 638,688 550,260

PROPERTY, PLANT AND EQUIPMENT (C) 41,864,263 26,352,308 15,511,955 13,917,520 12,274,467

. Land 924,328 0 924,328 956,636 969,530 . Buildings 4,353,659 2,988,483 1,365,176 1,374,430 1,368,100

. Technical plant, machinery and equipment 29,187,381 20,834,547 8,352,834 7,427,370 7,013,607

. Vehicles 169,672 67,256 102,416 3,640 4,279 . Office equipment, furniture and fittings 3,189,969 2,325,086 864,884 787,180 726,410 . Other property, plant and equipment 11,048 0 11,048 11,048 11,048 . Work in progress 4,028,206 136,936 3,891,269 3,357,217 2,181,492 FINANCIAL ASSETS (D) 7,157,468 180,555 6,976,913 3,645,075 3,510,610 . Long-term loans 109,501 49,316 60,186 48,854 149,052 . Other financial receivables 2,333 0 2,333 1,988 1,966 . Equity investments 7,045,633 131,239 6,914,394 3,594,234 3,359,592 . Other investments and securities UNREALISED FOREIGN EXCHANGE LOSSES (E) 0 0 0 0 0 . Decrease in long term receivables 0 0 0 0 0 . Increase in long term debt 0 0 0 0 0

TOTAL I (A+B+C+D+E) 56,548,544 30,848,188 25,700,356 20,849,734 18,793,843

INVENTORIES (F) 527,026 130,241 396,786 468,601 381,903 . Merchandise 332,123 78,723 253,401 318,614 294,948 . Raw materials and supplies 194,903 51,518 143,385 149,988 86,955 . Work in progress 0 0 0 0 0 . Intermediary and residual goods 0 0 0 0 0 . Finished goods CURRENT RECEIVABLES (G) 13,524,725 5,607,448 7,917,277 7,583,832 7,242,014 . Trade payables, advances and downpayments 260,607 0 260,607 289,489 130,818 . Accounts receivable and related accounts 12,282,293 5,587,181 6,695,112 6,464,917 6,459,978 . Employees 13,572 4,120 9,452 13,544 10,304 . Tax receivable 738,474 0 738,474 640,545 529,964 . Shareholders’ current accounts 0 0 0 0 0 . Other receivables 198,623 16,148 182,475 130,025 29,149 . Accruals 31,155 0 31,155 45,313 81,802 MARKETABLE SECURITIES (H) 146,215 0 146,215 1,843,576 2,810,321 UNREALIZED FOREIGN EXCHANGE LOSSES (I) 0 0 0 0 0 (Current items) 57,341 0 57,341 58,570 88,978 TOTAL II (F+G+H+I) 14,255,308 5,737,689 8,517,618 9,954,580 10,523,216 CASH AND CASH EQUIVALENTS 33,716 0 33,716 161,153 120,530 . Checks 15,240 0 15,240 155,900 47,600 . Bank deposits 16,099 0 16,099 0 67,464 . Petty cash 2,377 0 2,377 5,253 5,466 TOTAL III 33,716 0 33,716 161,153 120,530

GRAND TOTAL I+II+III 70,837,568 36,585,878 34,251,690 30,965,467 29,437,589

224 Maroc Telecom- 2009 Registration Document FINANCIAL REPORT 5.5 Individual financial statements

SHAREHOLDERS’ EQUITY AND LIABILITIES NET

(In thousands of Moroccan dirhams) 2009 2008 2007

SHAREHOLDERS’ EQUITY (A) 17,781,282 18,233,492 16,793,541

. Share capital (1) 5,274,572 5,274,572 5,274,572

. . Less : capital subscribed and not paid-in 0 0 0

. . Paid-in capital 0 0 0 Additional paid-in capital 0 0 0 . Revaluation difference 0 0 0 . Statutory reserve 879,095 879,095 879,095 . Other reserves 2,563,307 2,552,197 2,546,122 . Retained earnings (2) 0 0 1,829

. Unallocated income (2) 0 0 0 . Net income of the year (2) 9,064,308 9,527,628 8,091,922

QUASI-EQUITY (B) 0 0 0 . Investment subsidies 0 0 0

. . Regulated provisions 0 0 0 Debenture bonds (C) 2,855,744 3,138 1,451 . Debenture bonds 0 0 0 . Other long-term debt 2,855,744 3,138 1,451

PROVISIONS (D) 25,414 26,424 27,407

. Provisions for contingencies 0 0 0 . Provisions for losses 25,414 26,424 27,407

UNREALIZED FOREIGN EXCHANGE GAINS (E) 0 0 0

. Increase in long-term receivables 0 0 0 . Decrease in long-term debt 0 0 0 TOTAL I (A+B+C+D+E) 20,662,441 18,263,054 16,822,399

CURRENT LIABILITIES (F) 12,209,301 10,893,340 11,328,952

. Accounts payable and related accounts 6,393,285 5,426,197 5,382,077 . Trade receivables, advances and downpayments 441,915 555,913 380,061 . Payroll costs 647,437 642,178 572,635 . Social security contributions 93,508 110,237 76,771 . Tax payable 2,421,207 2,289,450 3,129,379 . Shareholders’ current accounts 1 1 1 . Other payables 743,530 625,127 424,683 . Accruals 1,468,418 1,244,237 1,363,345

OTHER PROVISIONS FOR CONTINGENCIES AND LOSSES (G) 878,276 656,174 433,977

UNREALIZED FOREIGN EXCHANGE GAINS (CURRENT ITEMS) (H) 67,093 85,735 82,788

Total II (F+G+H) 13,154,670 11,635,250 11,845,717 BANK OVERDRAFTS 434,580 1,067,163 769,474 . Discounted bills 0 0 0 . Treasury loans 0 0 0 . Bank loans and overdrafts 434,580 1,067,163 769,474 Total III 434,580 1,067,163 769,474 GRAND TOTAL I+II+III 34,251,690 30,965,467 29,437,589

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Income statement (exclusive of VAT)

(In thousands of Moroccan dirhams) 2009 2008 2007 I- OPERATING INCOME 25,522,453 25,637,467 24,198,296 Sales of goods 729,556 904,290 977,764 Sales of manufactured goods and services rendred 24,086,581 23,969,851 22,684,747 Operating revenues 24,816,137 24,874,141 23,662,511 Change in inventories 0 0 0 Self-constructed assets 2,517 0 0 Operating subsidies 0 0 0 Other operating income 81,735 79,403 55,474 Operating write-backs; expense transfers 622,064 683,924 480,310 TOTAL I 25,522,453 25,637,467 24,198,296 II- OPERATING EXPENSES 12,648,332 12,065,958 12,293,097 Cost of goods sold 1,723,741 1,612,064 1,616,308 Raw materials and supplies 2,226,078 1,985,431 2,223,534 Other external expenses 2,632,245 2,622,754 2,550,059 Taxes (except corporate income tax) 213,304 220,049 265,600 Payroll costs 2,215,048 2,145,276 2,133,965 Other operating expenses 2,400 2,000 2,000 Operating allowances for amortization 2,970,916 2,762,409 2,591,979 Operating allowances for provisions 664,600 715,976 909,651 TOTAL II 12,648,332 12,065,958 12,293,097 III- OPERATING INCOME I-II 12,874,121 13,571,509 11,905,199 IV- FINANCIAL INCOME 611,246 394,771 299,404 Income from equity investments and other financial investments 66,187 86,317 14,008 Foreign exchange gains 105,795 121,330 81,188 Interest and other financial income 62,713 98,093 105,997 Financial write-backs; expense transfers 376,551 89,031 98,212 TOTAL IV 611,246 394,771 299,404 V- FINANCIAL EXPENSES 288,042 645,792 217,959 Interest on loans 136,897 20,868 44,861 Foreign exchange losses 79,898 135,312 37,365 Other financial expenses 0 0 0 Financial allowances 71,247 489,612 135,733 TOTAL V 288,042 645,792 217,959 VI- FINANCIAL INCOME IV - V 323,204 (251,021) 81,446 VII– ORDINARY INCOME III + VI 13,197,325 13,320,488 11,986,645 VIII– EXTRAORDINARY INCOME 565,558 577,803 640,477 Proceeds from disposal of fixed assets 81,472 107,967 64,829 Subsidies received 0 0 0 Write-backs of investment subsidies 0 0 0 Other extraordinary income 110,823 118,019 68,558 Extraordinary write-backs; expense transfers 373,264 351,817 507,090 TOTAL VIII 565,558 577,803 640,477 IX- EXTRAORDINARY EXPENSES 1,150,478 630,177 610,005

Net book value of disposed assets 481,277 28,142 20,488 Subsidies granted 0 0 0

Other extraordinary expenses 50,347 115,980 240,497 Regulated provisions 0 0 0 Extraordinary allowances for depreciation and provisions 618,853 486,055 349,019 TOTAL IX 1,150,478 630,177 610,005 X- EXTRAORDINARY INCOME VIII - IX (584,919) (52,374) 30,473 XI- INCOME BEFORE TAX VII + X 12,612,405 13,268,115 12,017,117 XII- CORPORATE INCOME TAX 3,548,097 3,740,486 3,925,195 XIII- NET INCOME XI - XII 9,064,308 9,527,628 8,091,922 XIV- TOTAL INCOME ( I+IV+VIII) 26,699,257 26,610,042 25,138,177 XV- TOTAL EXPENSES ( II+V+IX+XII) 17,634,949 17,082,414 17,046,255

XVI- NET INCOME (TOTAL INCOME-TOTAL EXPENSES) 9,064,308 9,527,628 8,091 922

226 Maroc Telecom- 2009 Registration Document FINANCIAL REPORT 5.5 Individual financial statements

Statement of operating data

Operating statements (in thousands of Moroccan dirhams) 2009 2008 2007 1 Sales of goods 729,556 904,290 977,764 2 - Cost of goods sold 1,723,741 1,612,064 1,616,308 I = GROSS MARGIN ON SALES (994,185) (707,774) (638,544)

II + PRODUCTION FOR THE YEAR : (3+4+5) 24,089,098 23,969,851 22,684,747 3 Sales of manufactured goods and services rendered 24,086,581 23,969,851 22,684,747 4 Change in inventories 0 0 0 5 Self-constructed assets 2,517 0 0 III - COST OF CURRENT YEAR PRODUCTION 4,858,323 4,608,185 4,773,593 6 Raw materials and supplies 2,226,078 1,985,431 2,223,534 7 Other external expenses 2,632,245 2,622,754 2,550,059

IV = ADDED VALUE (I+II-III) 18,236,590 18,653,892 17,272,610 8 + Operating subsidies 0 0 0 9 - Taxes 213,304 220,049 265,600 10 - Payroll costs 2,215,048 2,145,276 2,133,965 V = GROSS OPERATING SURPLUS 15,808,238 16,288,567 14,873,045

= NET LOSS FROM OPERATIONS 0 0 0 11 + Other operating income 81,735 79,403 55,474 12 - Other operating expenses 2,400 2,000 2,000 13 + Operating write-backs, expense transfers 622,064 683,924 480,310 14 - Operating allowances 3,635,516 3,478,385 3,501,630 VI = OPERATING INCOME (+ ou -) 12,874,121 13,571,509 11,905,199 VII + / - FINANCIAL INCOME 323,204 (251,021) 81,446 VIII = ORDINARY INCOME (+ ou -) 13,197,325 13,320,488 11,986,645 IX + / - EXTRAORDINARY INCOME (584,919) (52,374) 30,473 15 - CORPORATE INCOME TAX 3,548,097 3,740,486 3,925,195

X = NET INCOME (+ ou -) 9,064,308 9,527,628 8,091,922

OPERATING CASH FLOW (in thousands of Moroccan dirhams) 2009 2008 2007 1 Net income + Profit 9,064,308 9,527,628 8,091,922 - Loss 0 0 0 2 + Operating allowances (1) 2,970,916 2,762,409 2,591,979 3 + Financial allowances (1) 13,906 356,593 46,702 4 + Extraordinary allowances (1) 325,853 377,215 349,019 5 - Operating write-backs (2) 1 010 983 947 6 - Financial write-backs (2) 243,533 0 35,046 7 - Extraordinary write-backs (2) , (3) 279,424 340,010 214,567 8 - Proceeds on disposal of fixed assets 81,472 107,967 64,829

9 + Net book value of disposed assets 481,277 28,142 20,488 I Cash earnings 12,250,821 12,603,027 10,784,721 10 - Dividend payments 9,516,517 8,087,677 6,927,271 II NET CASH EARNINGS 2,734,304 4,515,350 3,857,450 (1) Excluding allowances related to current assets and liabilities and cash. (2) Excluding write-backs relating to current assets and liabilities and cash. (3) Including write-backs of investments subsidies.

Maroc Telecom - 2009 Registration Document 227 5

Statement of cash flows Selected balance sheet data: Year Year Change (a-b) LINE ITEMS 2009 2008 Uses Sources

(In thousands of Moroccan dirhams) (a) (b) (c) (d)

1 Equity and long-term liabilities 20,662,441 18,263,054 2,399,387

2 Less long-term assets 25,700,356 20,849,734 4,850,622 3 Working capital (1-2) (A) (5,037,915) (2,586,680) 2,451,235

4 Current assets 8,517,618 8,254,580 263,039 5 Less current liabilities 13,154,670 11,635,250 1,519,420 6 Working capital requirement (4-5) (B) (4,637,051) (3,380,670) 1,256,382 7 Net cash (A-B) (400,864) 793,990 1,194,854

Uses and sources

I - LONG TERM FINANCING SOURCES 2009 2008 2007 (In thousands of Moroccan dirhams) Uses Sources Uses Sources Uses Sources NET CASH EARNINGS (A) 2,734,304 4,515,350 3,857,450 Cash earnings 12,250,821 12,603,027 10,784,721 Dividends 9,516,517 8,087,677 6,927,271 DISPOSALS AND REDUCTIONS OF FIXED ASSETS (B) 111,928 233,508 157,438 Reduction of intangible assets 0 0 0 Reduction of property, plant and equipment 23,074 116,737 78,211 Disposal of property, plant and equipment 71,094 107,967 64,829 Disposal of financial assets 10 378 0 0 Write-backs of long-term receivables 7,382 8,805 14,398

INCREASE IN SHAREHOLDERS’ EQUITY AND QUASI 0 0 0 EQUITY (C) Increase in equity, capital contribution 0 0 0 Investment subsidies 0 0 0 INCREASE IN LONG TERM DEBT (D) 3,002,606 1,688 0 (Net of redemption premiums) TOTAL (I) LONG TERM RESOURCES (A+B+C+D) 5,848,838 4,750,546 4,014,888 II - LONG TERM USES FOR THE YEAR

ADDITIONS & INCREASE IN FIXED ASSETS (E) 8,150,074 5,365,782 4,647,895 Acquisitions of intangible assets 601,423 667,862 918,218 Acquisitions of property, plant and equipment 4,032,134 4,198,056 3,264,716 Acquisitions of financial assets 3,428,682 473,064 384,933 Increase in long-term receivables 87,834 26,799 80,028 Increase in property, plant and equipment 0 0 0 REIMBURSEMENT OF EQUITY (F) 0 0 0 REIMBURSEMENT OF LONG-TERM DEBT (G) 150,000 0 532 CAPITALIZED COSTS (H) 0 0 0

TOTAL (II) STABLE USES (E+F+G+H) 8,300,074 5,365,782 4,648,427 III - CHANGE IN WORKING CAPITAL REQUIREMENT 1,256,382 641,778 0 0 430,341 IV - CHANGE IN CASH AND CASH EQUIVALENTS 0 1,194,854 0 1,257,014 0 203,198 GRAND TOTAL 8,300,074 8,300,074 6,007,560 6,007,560 4,648,427 4,648,427

228 Maroc Telecom- 2009 Registration Document FINANCIAL REPORT 5.5 Individual financial statements

A1 : Main valuation methods used by the company Accounting policies The company’s financial statements have been prepared in accordance with generally accepted accounting principles, and in particular with the principles related to historical cost, separation of accounting periods, prudence, consistent accounting methods from one year to the next and no netting.

Property, plant and equipment and intangible assets

− The assets transferred by the Moroccan government on February 26,1998, to establish Maroc Telecom as a public operator, were recorded as a net amount in the opening balance sheet, which was approved by:

− the Postal Services and Information Technology Act no.24-96 and; − the joint order no.341-98 of the Minister of Telecommunications and Minister of Finance, Commerce and Industry, approving the inventory of assets transferred to Itissalat Al-Maghrib. − Assets acquired subsequently are recorded at their acquisition or production cost, which for networks essentially comprises design and planning costs, construction costs, site development cost, network rollout costs, customs duties and internal costs related to network development. Financial expenses corresponding to interest payments on loans to finance the production of property, plant and equipment are not included in production costs during the construction period. − Network maintenance charges are expensed. − Assets are depreciated in a consistent way according to their nature (intangible vs. tangible) and their use (e.g. transmission, network equipment). − Depreciation and amortization is calculated using the straight-line method over the estimated useful lives of the assets, which are as follows: − Intangible assets: 4 to 5 years except 3G license (25 years) − Property, plant and equipment: − Buildings 20 years − Civil engineering 15 years − Network equipment: − Transmission (mobile) 10 years − Switching 8 years − Transmission (fixed-line) 10 years − Other property, plant and equipment − Furniture and fittings 10 years − Computer equipment 5 years − Office equipment 10 years − Transportation equipment 5 years − Whenever necessary, an additional provision is recorded for technical obsolescence, reduction in the estimated useful life or impairment of the asset.

− Assets that have not yet been brought into service are recorded as work-in-progress. Financial assets

− Non-consolidated investments are reported at their acquisition value. A provision for impairment is recorded whenever the carrying value is higher than the value in use. The provision is determined based on the Group’s proportionate share in the equity of the non-consolidated investment, which is adjusted, where appropriate, to account for the company’s growth and earnings outlook.

− Other financial assets, which include receivables, loans and deposits, are recorded on the basis of their nominal value, with provisions recorded, where appropriate, for collection risk.

Maroc Telecom - 2009 Registration Document 229 5

Inventories Inventories consist of:

• mobile handsets and accessories held for sale to customers upon line activation; • technical equipment required for network rollout and maintenance other than cable and spare parts. Inventories of mobile handsets and accessories are accounted for using the weighted average cost method and a provision for impairment is recorded for both the risk of obsolescence and excess inventory. Technical equipment inventories are measured at their average acquisition cost (including customs duties and other costs) and are written down based on their value in use or obsolescence.

Accounts receivable Accounts receivable are reported at nominal value. Trade receivables: Impairment provisions are recorded to cover collection risk, which is estimated based on the age of the receivable. Government receivables: Provisions are recorded to cover the risk of the Moroccan government not recognizing these receivables. These provisions are evaluated statistically. Other receivables: Where appropriate, other receivables are provisioned in line with estimated collection risk.

Accruals (assets) This caption mainly includes prepaid expenses.

Cash and investment securities Cash and investment securities are made up of immediately available liquid assets and short-term investments, and are recognized at historical cost.

Regulated provisions Regulated provisions comprise:

• provisions for employee housing; • provision for investments in capital goods and machinery, in accordance with the tax regulations in force at the balance sheet date.

Provisions for contingent liabilities These include long-term provisions for contingent liabilities and other provisions for contingent liabilities. Long-term provisions for liabilities and charges correspond to provisions related to translation adjustments and life annuities. Other provisions for contingent liabilities include provisions for restructuring and loyalty programs, and provisions to cover liabilities or litigation outstanding at period end. These provisions are evaluated on the basis of the state of procedures underway and estimated risks at period end. No provision has been recorded for pension and post-retirement benefits in the consolidated financial statements as pension expenses are covered by statutory pension plans set up for employees in Morocco.

Accruals (liabilities) This item mainly contains deferred income concerning prepaid subscriptions and unused prepaid minutes sold.

Receivables and payables in foreign currencies Receivables in foreign currencies are translated into the reporting currency using the exchange rate at the transaction date. At period end, receivables and payables in foreign currencies are translated using the exchange rate at the closing date, and the unrealized gain or loss is recorded on the balance sheet under “Accruals” (assets or liabilities). Unrealized losses are accrued in full.

230 Maroc Telecom- 2009 Registration Document FINANCIAL REPORT 5.5 Individual financial statements

Revenues Revenues are recorded on the basis of consumption by subscribers and customers at the end of the period, net of customer acquisition and loyalty costs.

• Sales of goods and services are related to outbound and inbound communications at the time they take place (communication and access charges). Subscription fees are recognized every month in advance under deferred income on the balance sheet, then reported in revenues for the period. For prepaid services, revenues are recognized as and when consumption takes place. They also include revenues from sales of advertising in paper and electronic telephone directories, which are recognized when the advertisements are published. • Sales of merchandise relate to revenues from handset sales, which are recognized at the time of delivery or line activation. • Customer acquisition and loyalty costs include discounts to new customers and promotions (free airtime granted to new customers). Discounts on mobile phones are deducted from revenues at the time the mobiles are delivered to the customer or the distributor. Discounts granted to distributors as remuneration for services rendered are mainly recognized in revenues at the time of delivery.

Other income Other income from operations include:

• Expenses transferred (mainly telecommunication costs specific to IAM, recognized under “Other operating expenses”); • Reversal of operating provisions (provisions for impairment of inventories and provisions for liabilities and charges).

Other expenses Aside from rental expenses, maintenance charges, advertising expenses and general expenses, other expenses include:

• ANRT fees related to frequency assignment in accordance with Act 24-96 Order 310-98 of February 25, 1998; • costs related to the universal service obligation in accordance with Act 24-96 and Order 2.00.1333 of October 9, 2000; and • costs related to research, training and telecommunications standardization in accordance with Act 24-96 and Order 2.00.1333 of October 9, 2000 (contract specifications of Itissalat Al-Maghrib).

Financial instruments Maroc Telecom does not use financial instruments or currency hedges.

A2 : Exceptions NONE

A3 : Changes in methods NONE

B1 : Capitalized costs NONE

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B2: Non-financial assets

(In thousands of Moroccan dirhams) Year ended December 31, 2009 Gross balance INCREASE DECREASE Gross balance DESCRIPTION carried forward Acquisition Self- Transfer Disposals Retire- Transfers at year-end constructed ment assets

CAPITALIZED COSTS 0 0 0 0 0 0 0 0 Start-up costs 0 0 0 0 0 0 0 0 Deferred costs 0 0 0 0 0 0 0 0 Bond redemption premiums 0 0 0 0 0 0 0 0 INTANGIBLE ASSETS 6,704,015 601,423 0 881,358 0 0 659,981 7,526,814 Research and development costs 0 0 0 0 0 0 0 0 6,033,640 0 0 880,808 0 0 0 6,914,448 Patents, trademarks and similar rights Goodwill 31,686 0 0 0 0 0 0 31,686 Other intangible assets 638,688 601,423 0 550 0 0 659,981 580,680 38,155,566 4,029,617 2,517 3,274,498 42,583 59,478 3,495,874 41,864,263 PROPERTY, PLANT AND EQUIPMENT Land 956,636 0 0 3,152 35,459 0 0 924,328 Buildings 4,205,200 0 0 154,807 6,348 0 0 4,353,659 Technical plant, machinery and equipment 26,472,087 0 0 2,715,558 265 0 0 29,187,381 Vehicles 69,574 0 0 100,610 511 0 0 169,672 Office equipment 2,889,598 0 0 300,372 0 0 0 3,189,969 Other property, plant and equipment 11,048 0 0 0 0 0 0 11,048 Work in progress 3,551,424 4,029,617 2,517 0 0 59,478 3,495,874 4,028,206

B2 (cont.): Depreciation schedule (In thousands of Moroccan dirhams) Year ended December 31, 2009

Accumulated Allowances for Amortization of Amount depreciation DESCRIPTION opening of period The period(*) Disposed assets At year-end CAPITALIZED COSTS 0 0 0 0 * Start-up costs 0 0 0 0 * Deferred costs 0 0 0 0 * Bond redemption premiums 0 0 0 0 INTANGIBLE ASSETS 3,416,876 898,450 0 4,315,326 * Research and development costs 0 0 0 0 * Patents, trademarks and similar rights 3,394,798 895,878 0 4,290,675 * Goodwill 22,078 2,572 0 24,650 * Other intangible assets 0 0 0 0 PROPERTY, PLANT AND EQUIPMENT 23,880,912 2,261,383 4,633 26,137,661 * Land 0 0 0 0 * Buildings 2,830,770 161,570 3,857 2,988,483 ,* Technical plant, machinery and equipment 18,881,790 1,875,311 265 20,756,837 * Vehicles 65,933 1,834 511 67,256 * Office equipment 2,102,418 222,668 0 2,325,086 * Other property, plant and equipment 0 0 0 0 * Work in progress 0 0 0 0 Of which extraordinary allowances: - Asset retirement MAD156 million - Corrective action to remedy delays to entry into service MAD33 million Total of extraordinary allowances MAD189 million

232 Maroc Telecom- 2009 Registration Document FINANCIAL REPORT 5.5 Individual financial statements

B3: Gains or losses on disposals or retirement of fixed assets

(In thousands of Moroccan dirhams) Year ended December 31, 2009 Disposal or Principal Gross amount Accumulated Net book Proceeds Gains Losses Retirement date amount depreciation value from disposal of assets 2009 231& 232 41,808 3,857 37,950 70,468 32,517 2009 233 265 265 0 0.6 0.6 2009 234 511 511 0 626 626 2009 251 406,924 0 406,924 10,378 0 396,546 2009 239 36,403 0 36,403 0 0 36,403 Total 485,910 4,633 481,277 81,472 33,144 432,949

B4: Equity investments

(In thousands of Moroccan dirhams) Year ended December 31, 2009 Operating sector Share % of Overall Net book Derived from latest selected Income recorded capital interest acquisition value financial data of issuer company in income price statement Closing date Net equity Net income 1 2 3 4 5 6 7 8 9 Matelca 300 50 50 0 Dec.31,09 - - Study and realization of submarine cables -

Arabsat Operation and marketing of telecommunications 1,277,366 0.61 6,454 6,454 Dec.31,09 - 839 systems - ADM Building and operation of Moroccan road network 7,715,629 0.31 20,000 16,000 Dec.31,09 - - -

Thuraya Regional satellite operator 5,312,845 0.16 9,872 9,872 Dec.31,09 - - - Casanet Internet service provider 14,414 100 18,174 18,174 Dec.31,09 - - - CMC Financial holding company 344,617 80 399,469 399,469 Dec.31,09 - 65,348 - Fonds Amorçage Seed capital fund 48,000 10 5,000 0 Dec.31,09 - - Sindbad - Médi1 Sat Media (Satellite television) 203,076 31 15,301 0 Dec.31,09 - - -

Maroc Telecommunications 106,888 100 106,888 0 Dec.31,09 - - Telecom - Belgique SA Onatel Telecommunications 585,631 51 2 ,459,380 2,459,380 Dec.31,09 - - - Gabon Telecommunications 1,639,524 51 861,134 861,134 Dec.31,09 - - Télécom - Sotelma Telecommunications 151,437 51 3,143,911 3,143,911 Dec.31,09

Total 7,045,633 6,914,394 0 0 66,187

B5: Provisions (In thousands of Moroccan dirhams) Year ended December 31, 2009

DESCRIPTION ALLOWANCES WRITE-BACKS Opening Closing balance Operating Financial Extraordinary (*) Operating Financial Extraordinary (*) balance 1- Provisions for depreciation of fixed assets 767,316 0 13,906 136,936 0 243,533 279,424 395,201 2-Regulated provisions 0 0 0 0 0 0 0 0 3-Provisions for contingences and losses 26,424 0 0 0 1,010 0 0 25,414 Sub total (A) 793,740 0 13,906 136,936 1,010 243,533 279,424 420,616 4-Provisions for depreciation of current assets (excluding cash and cash equivalent) 5,550,621 487,411 0 0 300,343 0 0 5,737,689 5-Other provisions for contingencies 656,174 177,189 57,341 293,000 78,570 133,018 93,840 878,276 6-Provisions for depreciation of cash and cash equivalents 0 0 0 0 0 0 0 0 Sub total (B) 6,206,795 664,600 57,341 293,000 378,912 133,018 93,840 6,615,965 Total (A+B) 7,000,535 664,600 71,247 429,936 379,922 376,551 373,264 7,036,581 .( * ) Of which: ( * ) Of which: Depreciation of inventories class 2 MAD40 M Amortization MAD5 M Delays to entry into service of work in progress MAD97 M Spare parts MAD133 M Write-backs of provision for swaps MAD80 M Delays to entry into service of work in progress MAD62 M Total MAD137 M MAD279 M Maroc Telecom was subject to a tax audit for the fiscal years 2005, 2006, 2007 and 2008 and received notification on December 17, 2009 of the tax authorities’ grounds for a tax reassessment in respect of the 2005 fiscal year alone. The Company has already provided a preliminary response and has transmitted additional documentation, as requested by the tax authorities. It is continuing to provide further responses in connection with its administrative appeal of the tax adjustment which was filed within the required time period. Maroc Telecom believes that the tax reassessment will not have a material impact on the income, net equity or liquidity of the Company. Notwithstanding this, Maroc Telecom recorded a provision for tax reassessments covering the tax claimed by the tax authorities in connection with their audit.

Maroc Telecom - 2009 Registration Document 233 5

B6: Receivables (In thousands of Moroccan dirhams) Year ended December 31, 2009 RECEIVABLES TOTAL BREAKDOWN BY MATURITY OTHER BREAKDOWN Amounts Due in more Due in less Amount in Amounts due from due from than one than one Expired but foreign government and related Amounts in year year not recovered currency public bodies parties notes FIXED ASSETS 111,834 84,560 27,275 67,920 70,220 Long-term loans 109,501 82,227 27,275 67,920 70,220 Other financial receivables 2,333 2,333 0

CURRENT ASSETS 13,524,725 0 6,799,840 6,724,884 1,895,039 2,415,195 464,939 0 . Trade payables, advances and downpayments 260,607 0 260,607 62,193

. Accounts receivable and related accounts 12,282,293 0 5,577,676 6,704,617 1,716,445 1,676,720 363,422 . Employees 13,572 0 9,452 4,120 . Tax receivables 738,474 0 738,474 738,474 . Shareholders’ current accounts 0 0 0 . Other receivables 198,623 0 182,475 16,148 116,400 101,516 . Accruals 31,155 0 31,155

B7: Liabilities

(In thousands of Moroccan dirhams) Year ended December 31, 2009 LIABILITIES TOTAL ANALYSIS BY MATURITY OTHER BREAKDOWN Amounts due Due in more Due in less Expired but Amount in to government Amounts due than one than one not recove- foreign curren- and public to related Amounts in year year red cy bodies parties notes LONG-TERM DEBT 2,855,744 2,255,744 600,000 558 0 0 Debenture bonds 0 0 0 0 0 0 0 0 Other long-term debt 2,855,744 2,255,744 600,000 0 558 0 CURRENT LIABILITIES 12,209,301 169,711 10,051,176 1,988,413 4,665,996 2,826,848 609,606

. Accounts payable and related accounts 6,393,285 169,711 4,300,067 1,923,507 4,224,081 0 217,885 . Trade receivables, advances and downpayment 441,915 0 441,915 0 441,915 0 0 Employees 647,437 0 647,437 0 0 0 . Social security authorities 93,508 0 93,508 0 0 93,508 0 0 Tax payable 2,421,207 0 2,421,207 0 0 2,421,207 0 0 . Shareholders’ current accounts 1 0 1 0 0 0 0 0 . Other payables 743,530 0 678,623 64,907 312,133 391,721 0 . Accruals 1,468,418 0 1,468,418 0 0 0 0 0

B8: Guarantees given or received (In thousands of Moroccan dirhams) Year ended December 31, 2009

Amount cove- Date and Net book value of the red by garan- Descrip- place of garantee given at Third parties tee tion registration Purpose (2) (3) balance sheet date . Guarantees given . Garantees received Guarantees received are Long-term loans 39,281 (1) from employees

( 1) Collateral : 1-Mortgage :2-Pledge: 3-Warrant : 4– Others : 5- (to be specified) ( 2 ) State if the guarantee is given to a company or to a person (guarantees given) (related parties, partners, employees) ( 3 ) State if the guarantee is received from a person other than the debtor (guarantees received)

234 Maroc Telecom- 2009 Registration Document FINANCIAL REPORT 5.5 Individual financial statements

B9: Financial commitments received or given excluding leasing transactions

(In thousands of Moroccan dirhams) Year ended December 31, 2009 Amounts Amounts COMMITMENTS GIVEN Year end Previous

Year - Investments not yet realized 6,739,443 2,812,316 * Property, plant and equipment 6,739,443 0 * Investment commitment 3,569,305 2,812,316

6,739,443 2,812,316 - Guarantees from banks * Documentary credit 0 0 * Endorsements 63,099 61,981

63,099 61,981 - - Equity investments * Gabon Télécom 0 175,408 * Sindibad seed capital fund 0 0 * Médi1Sat (capital increase) 0 55,836 * Médi1Sat (quasi-equity) 0 0 * Mobisud France (capital increase) 0 37,224 * Mobisud France (quasi-equity) 0 0 * Casanet (quasi-equity) 3,800 3,800

3,800 272,268 - Partnership commitment with ASSOCIATION FORUM DE CASABLANCA 0 0 0 0 - Operating lease obligations (*) 12,109 11,281 12,109 11,281 - Purchase commitment for land in Casa Technology Park and construction within 3 years 230 230

Total 6,818,680 3,158,076 (*) 2 to 15 year rent contract with tacit renewal. The amount indicated is related to one month’s notice

Amounts Prior-year COMMITMENTS RECEIVED at year-end amounts

. Endorsements and guarantees 1,573,762 1,528,452 . Other commitments received . Commitment by the Moroccan government to social outreach initiatives

. Investment commitment Exemption of the customs duties on the imports relating to the investments. 0 0

Total 1,573,762 1,528,452

B10: Finance lease assets NONE

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B11: Analysis of income statement items

(In thousands of Moroccan dirhams) Year ended December 31, 2009 ITEM Current year 2009 Prior year

OPERATING INCOME 25,522,453 25,637,467 711 .Sales of goods 0 0 . Sales of goods in Morocco 729,556 904,290 . Sales of goods abroad 0 0 . Other sales of goods Total 729,556 904,290 712 . Sales of manufactured goods and services rendered . Sales of manufactured goods in Morocco . Sales of manufactured goods abroad . Sales of services rendered in Morocco 21,050,947 20,717,694 . Sales of services rendered abroad 3,035,634 3,252,156 . Royalties for patents, trademarks, rights , etc. . Other sales of manufactured goods and services rendered 0 0 Total 24,086,581 23,969,851 713 CHANGE IN INVENTORIES 0 0 . Change in manufactured goods inventory 0 0 . Change in services inventory 0 0 . Change in product inventory WIP 0 0 Total 0 0 714/718 OTHER OPERATING INCOME 0 0 . Directories’ fees received 0 0 . Other operating income 84,252 79,403 Total 84,252 79,403

719 OPERATING WRITE-BACKS, EXPENSE TRANSFERS

. Write-backs 379,922 374,904 . Expense transfers 242,142 309,020 Total 622,064 683,924

FINANCIAL INCOME

738 . Interest and other financial income

. Interest and similar income 27,137 29,753 . Income from receivables of controlled entities 0 0 . Net proceeds from disposal of marketable securities 28,532 60,187 . Other interest and financial income 7,044 8,153 Total 62,713 98,093

236 Maroc Telecom- 2009 Registration Document FINANCIAL REPORT 5.5 Individual financial statements

(In thousands of Moroccan dirhams) Year ended December 31, 2009 ITEM Current year 2009 Previous year OPERATING EXPENSES 611 Cost of goods sold . Cost of goods 1,623,074 1,577,545 . Change in inventory (+,-) 100,667 34,519 Total 1,723,741 1,612,064 612 Raw material and supplies . Raw materials 0 0 . Change in raw material inventory . Supplies and packaging 301,313 366,233 . Change in supplies and packaging inventory (15,697) (66,184) . Cost of consumable materials and supplies 252,423 221,966 . Cost of research, surveys, studies and services 1,688,039 1,463,416 Total 2,226,078 1,985,431 613/614 OTHER EXTERNAL EXPENSES . Rent and rental expenses 366,110 328,836 . Finance lease installments 0 0 . Maintenance and repairs 650,809 637,504 . Insurance premiums 10,791 12,515 . Payments of external staff 80,514 86,432 . Payments for intermediaires and fees 183,108 218,451 . Fees for patents, trademarks, rights, etc. 416,901 331,817 . Transportation 9,744 14,851 . Travel and entertainment expenses 84,890 97,089 . Other external expenses 829,377 895,258 Total 2,632,245 2,622,754 617 PAYROLL COSTS . Payroll 1,924,199 1,866,567 . Social security 290,849 278,709 . Other payroll costs 0 0 Total 2,215,048 2,145,276 618 OTHER OPERATING EXPENSES . Directors’ fees 2,400 2,000 . Losses on uncollectible receivables 0 0 . Other operating expenses 0 0 Total 2,400 2,000 638 FINANCIAL EXPENSES . Other financial expenses 0 0 . Net losses on disposal of marketable securities 0 0 . Other financial expenses 0 0 Total 0 0 658 EXTRAORDINARY EXPENSES . Other extraordinary expenses 46,868 85,434 . Contract cancellation payments and forfeiture of deposits 0 0 . Back tax payments (other than income tax) 0 0 . Tax penalities and fines 1,125 11,892 . Uncollectible receivables 0 0 . Other extraordinary expenses 2,354 18,654 Total 50,347 115,980

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B12: Reconciliation of net income to taxable income

(In thousands of Moroccan dirhams) Year ended December 31, 2009 I DETERMINATION OF INCOME AMOUNT AMOUNT I– NET INCOME - Net profit 9,064,308 - Net loss

II- TAX ADD-BACKS 4,058,072 1. Ordinary 3,630,864 - Income tax 2009 3,548,097 - Amortization in excess of MAD300,000 854 - POP Paris expenses (IAM branch) 2,191 - Unrealized foreign exchange gains 2009 67,093 - Gifts exceeding MAD100 per unit 8,984 - Donations in cash or kind 696 - Expenses from prior years 2,948 2. Extraordinary 427,208 - Provisions & amortization 423,729 - Penalties and fiscal fines 1,125 - Expenses from prior years 2,354

III- TAX DEDUCTIONS 692,428 1. Ordinary 152,009 - Unrealized foreign exchange gains 2008 85,735 - POP Paris income (IAM branch) 88 - Revenues from equity investments 66,187 2. Extraordinary 540,419 - Allowance on net capital gains from disposal 0 - Provisions & amortization 540,419 - Reversal of provisions for impairment of investments 0

TOTAL 4,058,072 692,428 IV- GROSS TAXABLE INCOME - Gross profit 12,429,951 - Gross taxable loss V- LOSS CARRIED FORWARD 0 VI- TAXABLE INCOME - Net taxable profit 12,429,951 - Net taxable loss 50% rebate on corporate income tax for export revenues 180,888 * CORPORATE INCOME TAX 3,548,097

238 Maroc Telecom- 2009 Registration Document FINANCIAL REPORT 5.5 Individual financial statements

B13: Determination of ordinary income after tax

(In thousands of Moroccan dirhams) Year ended December 31, 2009 I DETERMINATION OF INCOME AMOUNT

Ordinary income from income statement (+) 13,197,325

Add-backs on ordinary operations 82,766

Deduction of ordinary operations 152,009

Ordinary income theoretically taxable (=) 13,128,082 3,938,425 Theoretical tax on ordinary income ( - )

Exemption of export revenues (191,048)

Ordinary income after tax (=) 9,449,948

II - INDICATION OF THE TAX STATUS AND ADVANTAGES GRANTED

Maroc Telecom benefits from a reduced rate of corporate income tax (17.5% instead of 30%) for its international revenues.

GRANTED BY INVESTMENT CODES

OR BY SPECIFIC LEGAL PROVISIONS

B14: Analysis of value-added tax

(In thousands of Moroccan dirhams) Year ended December 31, 2009 Opening Operations VAT Closing DECSRIPTION balance returns balance 1 2 3 (1+2-3) A / Invoiced VAT 1,979,352 4,409,611 4,254,181 2,134,782 B / Recoverable VAT 415,120 1,686,934 1,653,180 448,874 * On expenses 255,631 984,005 931,159 308,476 * On assets 159,490 702,930 722,021 140,398 C / VAT payable (VAT credit) 1,564,232 2,722,677 2,601,001 1,685,907 VAT = (A-B)

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C1: Shareholding structure

(In thousands of Moroccan dirhams) Year ended December 31, 2009

Adress STOCKS HELD CAPITAL AMOUNT

Nominal value Subscribed Called Fully paid of each stock Surname, first name, business name of main shareholders (1) Previous year Current year or share 1 2 3 4 5 6 7 8 1°/ / Kingdom of Morocco represented by M. Salaheddine 263,729 263,729 0.006 1,582,371 1,582,371 1,582,371 Mezouar, Minister of the Economy and Finance 2°/ Société de Participation dans les Télécommunications 465,920 465,920 0.006 2,795,523 2,795,523 2,795,523 represented by M. Jean-Bernard Levy 3°/ Mr. Salaheddine Mezouar 10 10 0.006 0.060 0.060 0.060

4°/ Mr. Chakib Benmoussa 10 10 0.006 0.060 0.0600 0.060

5°/ Mr. Jean -Bernard levy 10 10 0.006 0.060 0.060 0.060

6°/ Mr. Regis Turrini 10 10 0.006 0.060 6.060 6.060 7°/ Mr Jacques Paul Espinasse 10 10 0.006 0.060 0.060 0.060 8°/ Mr. Philipe Capron 1,010 1,010 0.006 6.060 6.060 6.060 9°/ Mr. Franck Esser 10 10 0.006 0.060 0,060 0.060 10°/ Mr. Jean-Rene Fourtou 10 10 0.006 0.060 0.060 0.060

10°/ Mr. Jean-Rene Fourtou 10 10 0.006 0.060 0.060 0.060

11°/ Mr. Jacques Chreyre 0 100 0.006 0.60 0.60 0.60

12°/ Mr. Abdelaziz Talbi 10 10 0.006 0.060 0.060 0.060

13°/ Other shareholders 149,445 149,445 0.006 896,671 896,671 896,671

(1) If the number of shareholders is less than or equal to 10, the company should list all the shareholders. Otherwise, the company may list only the 10 major shareholders.

C2: Appropriation of year-end income

Year ended December (In thousands of Moroccan dirhams) 31, 2009

AMOUNT AMOUNT

A. SOURCE OF INCOME (Decision of April 23, 2009 ) B. INCOME APPROPRIATION . Retained earnings at December 31, 2008 0 . Other reserves 11,111 . Net income to be allocated 0 . Directors’ share in profits 0 . Net income for the period 9,527,628 . Dividends 9,516,517 . Withholding from reserves 0 . Other allocations 0 . Other reserves 0 . Retained earnings 0 Total A 9,527,628 Total B 9,527,628

240 Maroc Telecom- 2009 Registration Document FINANCIAL REPORT 5.5 Individual financial statements

C3: Income and other significant characteristics of company over the last three years

(In thousands of Moroccan dirhams)

DESCRIPTION 2007 2008 2009

NET EQUITY OF THE COMPANY

Shareholders’ equity and quasi-equity less capitalized costs 16,793,541 18,233,492 17,781,282

OPERATIONS AND INCOME FROM PERIOD Revenues excluding tax 23,662,511 24,874,141 24,816,137 Income before tax 12,017,117 13,268,115 12,612,405 Corporate income tax 3,925,195 3,740,486 3,548,097

Dividends 6,927,271 8,087,677 9,516,517

Unappropriated income (reserves or to be allocated) 1,829 7,046 11,111

EARNINGS PER SHARE Earnings per share for period (in Moroccan dirhams) 9.20 10.84 10.31 Dividends per share (*) in Moroccan dirhams 7.88 9.20 10.83 (*) The nominal value decreased from MAD100 in 2003 to MAD10 in 2004 and MAD6 in 2006.

C4: Transactions in foreign currencies during the period From January 1, 2009 to December (In thousands of Moroccan dirhams) 31, 2009 DESCRIPTION Entry Outgoing Exchange value Exchange value . Permanent financing . Gross assets 5,629,243 . Receipts from sale of fixed assets 60,527 . Repayment of long-term debt 0 . Dividends paid . Income 2,988,572 . Expenses 1,512,690 TOTAL INFLOWS 3,049,099 TOTAL OUTFLOWS 7,141,933 FOREIGN CURRENCY BALANCE 4,092,834 TOTAL 7,141,933 7,141,933

C5: Date of financial statements and subsequent events I. DATES . Balance sheet date (1) : December 31, 2009 . Date of preparation of the financial statements (2) January 16, 2010 . Date of rectifying declaration

(1) Justification in the event of a change in the balance sheet date (2) Justification in the event of non-compliance with the regulatory requirement to prepare financial statements within three months of the balance sheet date

II. EVENTS SUBSEQUENT TO THE DATE OF THE FINANCIAL STATEMENTS AND KNOWN PRIOR TO INITIAL DISCLOSURE OF THE FINANCIAL STATEMENTS

Dates Indication of events

NONE

Maroc Telecom - 2009 Registration Document 241 5

Report of the statutory auditors on related-party agreements Year ended December 31, 2009

To the Shareholders, In our capacity as statutory auditors of the company, we hereby present our report on related-party agreements. In accordance with Article 58 of Moroccan Act 17-95 as amended and completed by Act 20-05, we have been advised of the following related party agreements which were authorized in advance by the Supervisory Board and the ordinary general shareholders’ meeting.

1. Related-party transactions concluded during 2009 1.1. Contract with Sotelma In 2009, Sotelma entered into an agreement with ITISSALAT AL MAGHRIB under which the Company provides services and technical assistance. These services are essentially carried out by expatriate employees. At December 31, 2009, the amount invoiced to Sotelma in respect of services rendered in 2009 amounted to MAD5,258 thousand excluding tax. The balance payable at December 31, 2009 amounted to MAD5,258 thousand. The persons serving on the management bodies of both entities are: Messrs. Larbi GUEDIRA, Arnaud CASTILLE and Rachid MECHAHOURI.

1.2. Divestment of the Mobisud France subsidiary On June 8, 2009, ITISSALAT AL MAGHRIB divested its entire equity interest in Mobisud France to SFR (a sister subsidiary of the Vivendi group) for one euro. The divestment was authorized by the Supervisory Board at its meeting held on February 23, 2009.

1.3. Moroccan Royal Athletics Federation (FRMA) The agreement between Maroc Telecom and The Moroccan Royal Athletics Federation (FRMA), of which Mr. Abdeslam AHIZOUNE (Chairman of the Management Board of ITISSALAT AL MAGHRIB) is also chairman, expired in June 2009. At its meeting held on December 3, 2009, the Supervisory Board authorized the renewal of this agreement for a one-year term renewable on three occasions and representing a disbursement of MAD8 million per year, plus the assumption of the travel and representation expenses of the Chairman of the FRMA.

1.4. Africa Entreprendre Forum At its meeting held on December 3, 2009, the Supervisory Board authorized the conclusion of a partnership agreement with the “Club Entreprendre” association, of which Mr. Abdeslam AHIZOUNE (Chairman of the Management Board of ITISSALAT AL MAGHRIB) is also the chairman in his capacity as “Platinum Sponsor”. This agreement relates to IAM’s contribution of MAD1.5 million to finance the organization of the inaugural edition of the Africa Entreprendre Forum. In addition to this amount, ITISSALAT AL MAGHRIB makes an annual contribution of MAD700 thousand to the running costs of Club Entreprendre.

1.5. Distribution agreement with Media Overseas At its meeting held on July 28, 2009, the Supervisory Board of ITISSALAT AL MAGHRIB authorized the conclusion of an agreement governing the distribution by the IAM network of prepaid TV access cards to the “CANAL+ Maghreb” bouquet of Media Overseas. Vivendi group is a shareholder in both entities.

2. Related-party agreements concluded in previous years that remained effective in 2009 2.1 Agreement with Medi-1 Sat relating to a current account advance During 2006, Itissalat Al-Maghrib concluded an agreement with Medi-1 Sat under which it committed to grant Medi-1 Sat a current account advance of €2.8 million in order to meet the financing requirements of the latter company. In 2006, Maroc Telecom paid the first tranche of this advance for €1.2 million (MAD13,283 thousand). In 2007, IAM paid the second tranche of this advance for €1.6 million (MAD18,198 thousand). Furthermore, at its meeting held on May 29, 2008, the Supervisory Board of ITISSALAT AL MAGHRIB authorized a second current account advance to Medi-1 Sat. The agreement provided for the disbursement of a total advance of €4 million to be borne by Medi-1 Sat’s shareholders proportionally to their share in the equity capital of the company. On the date of the agreement, the amount proportional to ITISSALAT AL MAGHRIB’s interest in Medi-1 Sat came to €1.12 million. The amount of this advance was released in 2008 and represented an exchange value of MAD12,896 thousand. Moreover, an additional amount of €504 thousand (MAD5,673 thousand) was provided in 2008. Furthermore, ITISSALAT AL MAGHRIB redeemed half of the current account receivables due to CIRT (shareholder in Medi-1 Sat) for one euro, following the acquisition of one-half of CIRT’s equity interest in Medi-1 Sat. The principal characteristics of these advances are set forth below:

242 Maroc Telecom- 2009 Registration Document FINANCIAL REPORT 5.5 Individual financial statements

Principal amount Date of disbursement Year of the advance Maturity (*) Interest rate or acquisition (€ thousand) 2006 1,200 June 30, 2006 January 2010 6.03%

2007 1,600 October 31, 2007 January 2010 6.03%

2008 1,120 June 17, 2008 January 2010 6.03% 2008 504 October 06, 2008 January 2010 6.03%

2009 (**) 870 February 02, 2009 January 2010 6.03%

Total 5,294

* Maturity dates expiring prior to the periods stipulated in the initial agreements. ** Acquisition from CIRT At December 31, 2009, the total balance of these advances including interest receivable on that date amounted to MAD67,920 thousand. The person serving on the management bodies of both entities is Mr. Abdeslam AHIZOUNE.

2.2. 2008 Agreement with Mobisud France relating to a current account advance On March 1, 2007, the Supervisory Board approved an agreement relating to a current account advance to be made by IAM to Mobi- sud France in a maximum amount of €5,280 thousand. On July 29, 2008, the Supervisory Board of IAM approved a current account advance to Mobisud France for an amount of €6.6 million. The first advance was released in full in 2007 for a principal amount of MAD59,628 thousand. The second advance was released in full in 2009 and amounted to MAD73,473 thousand.

Principal amount Date of disbursement Year of the advance Maturity (*) Interest rate or acquisition (€ thousand) 2007 2,640 June 08, 2007 April 2009 5.296%

2007 2,640 October 19, 2007 April 2009 5.428%

2008 6,600 Janaury 01, 2009 April 2009 3.179%

Total 11,880

In 2009, the above advances and associated interest were used in connection with ITISSALAT AL MAGHRIB’s proportional contribution to the share capital increase of Mobisud France. For reference, in June 2009, the entire equity interest held by ITISSALAT AL MAGHRIB in the capital of Mobisud France was transferred to SFR (a Vivendi group subsidiary) for one euro. The person serving on the management bodies of both entities is Mr. Larbi GUEDIRA.

2.3. Contract with Onatel During 2007, Onatel concluded an agreement with IAM under which the latter provides services in the following areas: • Strategy and development; • Organization; • Networks; • Marketing; • Finance; • Purchasing; • Human resources; • Information systems; • Regulation. These services may be implemented by expatriate employees. The amount charged by IAM to Mauritel for 2009 was MAD12,050 thousand (excluding tax). Furthermore, during 2009, ITISSALAT AL MAGHRIB completed the transfer of equipment with an aggregate value of MAD1 million to the benefit of its subsidiary Onatel. The transactions effected in connection with these asset transfers were not authorized in advance by the Supervisory Board. As of December 31,2009, the balance of Mauritel’s receivable in ITISSALAT AL MAGHRIB‘s books amounted to MAD16,570 thousand. The persons serving on the management bodies of both entities are Mr. Larbi GUEDIRA, Mr. Arnaud CASTILLE and Mrs. Janie LE- TROT.

Maroc Telecom - 2009 Registration Document 243 5

2.4. Contract with Gabon Telecom In 2007, Gabon Telecom concluded an agreement with ITISSALAT AL MAGHRIB under which the latter provides services in the following areas: • Strategy and development; • Organization; • Networks; • Marketing; • Finance; • Purchasing; • Human resources; • Information systems; • Regulation. These services may be implemented by expatriate employees. Under this agreement, the amount charged by ITISSALAT AL MAGHRIB to Gabon Télécom during 2009 was MAD11,803 thousand excluding tax. As of December 2009, the Gabon Télécom’s account in ITISSALAT AL MAGHRIB’s books amounted to a liability of MAD14,665 thousand. The persons serving on the management bodies of both entities are Messrs. Larbi GUEDIRA and Arnaud CASTILLE.

2.5. Current account advance made to Casanet ITISSALAT AL MAGHRIB decided to outsource its yellow pages business to its subsidiary Casanet. At its meeting held on December 4, 2007, the Supervisory Board authorized the Company to underwrite the cost of capital expenditure through the provision of unremunerated current account advances in a maximum amount of MAD6,100 thousand. In 2008, ITISSALAT AL MAGHRIB made a current account advance to Casanet for an amount of MAD2,300 thousand which corresponded to Casanet’s debit balance at December 31, 2008 in the accounts of ITISSALAT AL MAGHRIB. At December 31, 2009, no payment had been made under this convention. The persons serving on the management bodies of both entities are Messrs. Larbi GUEDIRA and Rachid MECHAHOURI.

2.6. Management services agreement with Vivendi Telecom International (VTI) During 2001, ITISSALAT AL MAGHRIB entered into a management services agreement with Vivendi Telecom International (VTI), under which the latter and its subsidiaries provide ITISSALAT AL MAGHRIB with technical assistance in the following areas: • Strategy and organization; • Development; • Sales and marketing; • Finance; • Purchasing; • Human resources; • Information systems; • Regulation; • Interconnection; • Infrastructure and networks. These services may be implemented by expatriate employees. In accordance with the terms of this agreement, the fees agreed to be paid by IAM amounted to MAD1,135 thousand (excluding tax) in 2009. As of December 31, 2009, the balance payable amounted to MAD6,466 thousand.

2.7. Invoicing of costs related to stock options and bonus share grant Vivendi invoiced its subsidiaries for costs concerning the agreed benefits linked to the stock options and the allocation of bonus shares to employees. Pursuant to the stock options and bonus shares granted, the invoiced amount totaled MAD27,915 thousand. As of December 31, 2009, the balance of debts amounted to MAD96,837 thousand. The person serving on the management bodies of both entities is Mr. Abdeslam AHIZOUNE.

2.8. Contract with Mauritel SA During 2001, Mauritel SA concluded an agreement with ITISSALAT AL MAGHRIB under which the latter provides services, technical assistance and transfer of equipment to Mauritel SA. The amount charged by IAM to Mauritel SA was MAD12,964 thousand (excluding tax) for 2009. As of December 31,2009, Mauritel’s account in ITISSALAT AL MAGHRIB’s books amounted to a liability of 20,539 thousand. The persons serving on the management bodies of both entities are Messrs. Larbi GUEDIRA and Arnaud CASTILLE.

244 Maroc Telecom- 2009 Registration Document FINANCIAL REPORT 5.5 Individual financial statements

2.9. Contract with Casanet During 2003, IAM concluded several agreements with Casanet related to: • Maintenance of IAM’s internet portal ‘’Menara’’; • Supply of development services and hosting of the IAM mobile portal; • Hosting of Itissalat Al-Maghrib’s ‘’El-Manzil ‘’ website; • Maintenance of new WAP applications on the Menara portal; • Production of the IPTV web site; • Marketing of leased line internet access; • Acquisition of equipment; • Production and marketing of IAM’s yellow pages; • Regularization and the setting on line of the advertising banners on the Menara portal; • Transmission of SMS on behalf of IAM; • etc. As of December 31, 2009, the total expenses recorded by IAM under this agreement amounted to MAD62,458 thousand excluding tax. As of December 31, 2009, total income recorded by IAM under this agreement amounted to MAD5,652 thousand excluding tax. At December 31, 2009, Casanet’s account in ITISSALAT AL MAGHRIB‘s books represented a credit balance of MAD29,261 thousand and a debit balance of MAD15,776 thousand. The persons serving on the management bodies of both entities are Messrs. Larbi GUEDIRA and Rachid MECHAHOURI.

2.10. Agreement with Media Overseas On February 24, 2006, IAM’s Supervisory Board approved the agreement entered into during the period with Media Overseas, a subsidiary of Canal+ Group, concerning the launch of IPTV. Business operations in connection with this agreement are performed by MULTITV AFRIQUE, a subsidiary of Media Overseas. In 2009, ITISSALAT AL MAGHRIB recorded an expense of MAD10,195 thousand excluding tax in connection with this agreement. At December 31, 2009, the balance of MULTITV AFRIQUE in ITISSALAT AL MAGHRIB‘s books amounted to a liability of MAD2,930 thousand. Vivendi group is a shareholder in both entities.

February 23, 2010

The Statutory Auditors

KPMG Abdelaziz ALMECHATT Fouad LAHGAZI Abdelaziz ALMECHATT Partner Partner

Maroc Telecom - 2009 Registration Document 245 RECENT DEVELOPMENT AND OUTLOOK 6.1 RECENT DEVELOPMENT 248

6.2 MARKET OUTLOOK 249

6.3 OBJECTIVES 250

REPORT OF THE STATUTORY AUDITORS ON PROFIT

FORECASTS 251 6

6.1 RECENT DEVELOPMENT General Shareholders’ Meeting of April 22, 2010 The shareholders of Itissalat Al-Maghrib, a Moroccan-law société anonyme (joint stock company) with Management and Supervisory Board and a capital of 5,274,572,040 dirhams whose head office is in Rabat, at avenue Annakhil, Hay Ryad registered in the trade register of Rabat under number 48,947, are convened on April 22, 2010 at 3pm at the head office in order to deliberate on the following agenda: • Approval of the annual reports and the individual financial statements for the fiscal year ended December 31, 2009; • Approval of the consolidated financial statements for the fiscal year ended December 31, 2009; • Approval of related party agreements referred to in the special report of the Statutory Auditors; • Appropriation of net income for the 2009 fiscal year and payment of the dividend; • Renewal of the term of office of Mr. Philippe Capron as a member of the Supervisory Board; • Ratification of the cooptation of Mr. Taïeb Cherqaoui as member of the Supervisory Board; • Ratification of the cooptation of Mr. Gérard Brémond as member of the Supervisory Board; • Renewal of the term of office of the Statutory Auditors, KPMG Maroc, represented by Mr. Fouad Lahgazi; • Powers to effect formalities.

248 Maroc Telecom - 2009 Registration Document RECENT DEVELOPMENT AND OUTLOOK 6.2. Market outlook

6.2 MARKET OUTLOOK

The discussion herein relating to market outlook contains forward-looking statements, and information relating to the Company’s expectations. Such forward-looking statements involve risks and uncertainties inherent to forecasts, and are based solely on evaluations made as of the date on which such statements are made. The Company warns investors that a significant number of factors could result in the actual results differing materially from those expected, including the factors listed in section 4.14. The telecommunications market in Morocco offers significant potential for growth, owing to the following economic and social factors, which favor increased penetration of new information and telecommunications technologies:

• Morocco’s population is growing at an annual rate of 1.4%. An ever increasing proportion of this population live in urban centers (55% of the population in 2004 versus 43% in 1982) while 51% of the population is aged under 20 (source: High Commission for Planning); • sustained growth in GDP (5% annual average growth over the last five years) and completion of programs for the development of road and tourism infrastructures, and electrification of rural areas; • the National Initiative for Human Development (INDH) was launched in 2005 and aims to set up programs which aim to fight against poverty and exclusion; • the establishment of free-trade agreements with the European Union, the United States and Arab countries. In the mobile segment, revenue growth is expected to be deriven by increases in the penetration rate of mobile telecommunications in Morocco as well as in the countries in which the subsidiaries of Maroc Telecom are established. On the basis of Maroc Telecom estimates, the rate of mobile penetration in Morocco could exceed 100% in the medium term. Moreover, the Company hopes to benefit from the growth in usage, owing mainly to a migration of prepaid customers to pospaid subscriptions and of the increased use of the data services in the medium term. Regarding its competitive position in this market, Maroc Telecom considers that is possible that a new operator, holding a new license as a Mobile Virtual Network Operator (MVNO) or through other means, may enter to the market in the near future. In the fixed-line and internet segments, Maroc Telecom intends to pursue its efforts, initiated, in order to expand its fixed-line business by developing unlimited and multi-play offers, while continuing to improve quality of service. In the future, the company anticipates a moderate growth of the number of fixed lines in Morocco, offset by the development of the usage and the offers of contents. Regarding the Internet, the strong growth posted since 2004 is expected to continue over coming years , in particular due to the development of the wireline broadband (ADSL) and +3G mobile services. The Company also considers that market deregulation could, in the near future, decrease its market share in the short term. Nevertheless, the fixed-line market could be revitalized by deregulation and from the arrival of new entrants, as it has been the case in other countries that liberalized their telecommunications sector. In sub-Saharan Africa where the principal subsidiaries of Maroc Telecom operate, the telecommunications market offers a very significant growth potential due to: . GDP growth estimated at more than 4%/year over the next two years (source: International Monetary Fund). . An increased rate of foreign direct investment. . A penetration rate which will grow significantly during the next years.

Maroc Telecom - 2009 Registration Document 249 6

6.3 OBJECTIVES

This section contains information regarding the Company’s objectives for the fiscal year 2010. The Company warns potential investors that these forward-looking statements are dependent on circumstances and events which are expected to occur in the future. These statements do not reflect historical data and are not to be interpreted as warranties that the facts and data mentioned will occur or that the targets will be achieved. By their nature, these are targets and it is therefore possible that they may not be achieved, and the assumptions on which they are based may be found to be erroneous. Investors are invited to take into consideration the fact that some of the risks described in section 4.14 “Risk factors” herein may affect the Company’s operations and its ability to achieve its targets (see also section 6.2 “Market Outlook”). Given continuing growth in Morocco as well as in subsidiaries, the Company’s growth targets for 2010 are as follows:

• Moderate growth in revenues, driven mainly by growth of subsidiaries; • Profitability to be maintained at high levels while pursuing a sustained program of capital expenditure.

250 Maroc Telecom - 2009 Registration Document RECENT DEVELOPMENT AND OUTLOOK 6.3. Objectives

Report of the statutory auditors on profit forecasts

Mr. Chairman, In our capacity as Statutory Auditors and in accordance with the European Regulation (EC) no. 809/2004, we have prepared this report on Maroc Telecom’s profit forecasts in part 6, section 6.3 of this 2009 Registration Document. These forecasts and underlying significant assumptions were prepared under the responsibility of the Management Board of Itissalat Al-Maghrib, in accordance with the provisions of the European Regulation (EC) no.809/2004 and the CESR recommendations on profit forecasts. It is our responsibility to express, in accordance with the terms required by annex I, item 13.3 of the European Regulation (EC) no.809/2004, our conclusions on the appropriateness of the preparation of such forecasts. We conducted our work in accordance with international auditing standards. Our work included an assessment of the procedures implemented by management to prepare the forecasts, as well as the performance of procedures to obtain assurance about whether the accounting methods used are consistent with those used for the preparation of historical data of ITISSALAT AL-MAGHRIB. They also involved collecting data and explanations we deemed necessary in order to obtain reasonable assurance about whether the forecasts are appropriately prepared on the basis of the specified assumptions. We remind you that, as this concerns forecasts, which are uncertain by nature, actual results may differ significantly from the forecasts presented and so, we do not express any conclusion as to the potential realization of such forecasts. In our opinion:

• The forecasts have been appropriately prepared in accordance with the indicated basis ; • The accounting basis used for the purposes of these forecasts is consistent with the accounting methods used by Itissalat Al-Maghrib. This report is issued for the sole purpose of filling the reference document with the Autorité des Marchés Financiers (AMF) and, as appropriate, any public offering — in France and any other European Union country — realized on the basis registered with the AMF, including or incorporating by reference the 2009 Registration Document. It may not be used in any other context

April 26, 2010

Statutory Auditors

KPMG Abdelaziz ALMECHATT Fouad LAHGAZI Abdelaziz ALMECHATT Partner Partner

Maroc Telecom - 2009 Registration Document 251 INFORMATION RELATING TO THE TRANSACTION

NOT APPLICABLE TABLE OF CONCORDANCE

Schedules from appendix 1 of the European regulation 809/2004 Page number of the Registration Document 1. 10 PERSONS RESPONSiBLE 2. 11 STATUTORY AUDITORS 3. - SELECTED FINANCIAL INFORMATION 3.1. 6 / 142 Selected historical financial information 3.2. 7 Selected financial information for interim periods 4. 133-139 RISK FACTORS 5. - INFORMATION ABOUT THE ISSUER 5.1. 34 / 66 History and development of the Issuer 5.2. 169-170 Investments

6. - BUSINESS OVERVIEW 6.1. 72-111 / 162-167 Principal activities 6.2. 54-111 Principal markets 6.3. NA Information given pursuant to items 6.1. and 6.2. that has been influenced by exceptional events

6.4. Extent to which the issuer is dependent on patents or licenses, industrial commercial or financial 129 contracts or new manufacturing processes 6.5. 103-105 / 106-111 The basis for any statements made by the issuer regarding its competitive position 7. - ORGANIZATIONAL STRUCTURE 7.1. 67-68 Description of the group 7.2. 106-111 Significant subsidiaries 8. - PROPERTY, PLANT AND EQUIPMENT 8.1. 128 Existing or planned material tangible fixed assets 8.2. NA Environmental issues that may affect the issuer’s utilization of tangible fixed assets 9 142-177 OPERATING AND FINANCIAL REVIEW 9.1. 142-177 Financial condition 9.2. 154-163 Operating income 10. 168-176 CASH AND CAPITAL RESOURCES 10.1. 168-176 Information concerning the issuer’s capital resources (both short and long term) 10.2. 168-176 Cash flows 10.3. 168-176 Information on the borrowing requirements and funding structure of the issuer 10.4. NA Information regarding any restrictions on the use of capital resources NA 10.5. Information regarding the anticipated sources of funds needed to fulfill commitments referred to in items 5.2.3 and 8.1 11. 112/129 RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES 12. 249 TREND INFORMATION 13. 250 PROFIT FORECASTS OR ESTIMATES 14. - ADMINISTRATIVE, MANAGEMENT, AND SUPERVISORY BODIES AND SENIOR MANAGEMENT 14.1. 14-25 Administrative, management or supervisory bodies 14.2. Administrative, management, and supervisory bodies and senior management conflicts of inte- 26-27 rests 15. REMUNERATION AND BENEFITS 26

15.1 Remuneration paid and benefits in kind 26

15.2 Pension, retirement and similar benefits 26

254 Maroc Telecom - 2009 Registration Document TABLE OF CONCORDANCE

Schedules from appendix 1 of the European regulation 809/2004 Page number of the Registration Document 16. BOARD PRACTICES -

16.1. Date of expiration of the current term of office 14/17 16.2. Information about members of the administrative, management or supervisory bodies’ service contracts 27

16.3. Audit committee and others 22-25

16.4. Statement as to whether or not the issuer complies with the incorporation corporate governance regime of its NA country 16.5. Report of the Chairman of the Supervisory Board on internal control NA

16.6. Statutory Auditors’ report on the Chairman’s report NA

17. EMPLOYEES -

17.1. Human resources 125-127

17.2. Shareholdings and stock options 27

17.3. Description of any arrangements for involving the employees in the capital of the issuer 60

18. MAJOR SHAREHOLDERS 59-60 18.1. 59-60 Breakdown of capital and voting rights

18.2. Different voting rights NA

18.3. Control of the issuer 49-62 18.4. Description of any arrangements, known to the issuer, the operation of which may at a subsequent date 49-62 result in a change of control of the issuer 19. OPERATIONS AVEC DES APPARENTES 28-29

20. INFORMATIONS FINANCIERES CONCERNANT LE PATRIMOINE, LA SITUATION FINANCIERE ET LES RESULTATS DE L’EMETTEUR 20.1. Historical financial information 142-177

20.2. Pro forma financial information 142-177

20.3. Financial statements 178-241

20.4. Auditing of financial information 179/223/242-245

20.5. Age of latest financial information 142

20.6. Interim and other financial information NA

20.7. Dividend policy 56

20.8. Legal and arbitration proceedings 131-132

20.9. Significant change in the issuer’s financial or trading position 248

21. ADDITIONAL INFORMATION -

21.1. Share capital 50-53

21.2. Memorandum and articles of association 16-39

22. ADDITIONAL INFORMATION NA 23. THIRD PARTY INFORMATION AND STATEMENT BY EXPERTS AND DECLARATION OF ANY INTEREST NA

24. DOCUMENTS ON DISPLAY 11 25. INFORMATION ON HOLDINGS 106-111

In compliance with article 28 of European Commission regulation (EC) no. 809/2004 dated April 29 2004, the following information is included for reference in the present Registration Document: • The consolidated financial statements for the year ended December 31, 2008, the relevant Statutory Auditors’ report and the Group financial report on pages 185,186 and 146 of the Registration Document filed with the AMF on April 24, 2009 (R 09-0289) • The consolidated financial statements for the year ended December 31, 2007, the relevant Statutory Auditors’ report and the Group financial report on pages 186, 187 and 146 of the Registration Document filed with the AMF on April 28, 2007 (R 08-0323) ; • The consolidated financial statements for the year ended December 31, 2006, the relevant Statutory Auditors’ report and the Group financial report on pages 135, 175 and 106 of the Registration Document filed with the AMF on May 9, 2007 (R 07-0058) ; • The consolidated financial statements for the year ended December 31, 2005, the relevant Statutory Auditors’ report and the Group financial report on pages 124, 167 and 98 of the Registration Document filed with the AMF on April 11, 2006 (R 06-031) ; • The consolidated financial statements for the year ended December 31, 2004, the relevant Statutory Auditors’ report and the Group financial report on pages 157, 131 and 100 of the Registration Document filed with the AMF on April 8, 2005 (R 05-038) ; • The consolidated financial statements for the year ended December 31, 2003, the relevant Statutory Auditors’ report and the Group financial report on pages 160, 122 and 208 of the Registration Document recorded with the AMF on November 8, 2004 (I 04-198). • The chapters of the Registration Document no. R 05-038 and of the draft prospectus no. I 04-198 that are not referred to above are either not relevant for the investor, or are covered elsewhere in this Registration Document.

Maroc Telecom - 2009 Registration Document 255 ANNUAL INFORMATION DOCUMENT 2009

The following table shows a list of the information published or made public by Maroc Telecom over the past twelve months (from 26 January 2006 to 22 January 2007), in accordance with article L. 451-1-1 of the Monetary and Financial Code and article 221-1-1 of the AMF General Regulation:

Date Title

March 20, 2009 Shareholders’ Meeting Notice for General Meeting on April 23, 2009

April 27, 2009 Press release: post General Shareholders’ Meeting dated April 23, 2009

April 27, 2009 Press release: Official disposal of the 2008 registration document

May 11, 2009 Press release: first quarter 2009 revenues and results

May 21, 2009 Signature of an investment agreement between between the Government of the kingdom of Morocco and Maroc Telecom July 6, 2009 Half year assessment of liquidity (Paris) - Contract of share regularization (Casablanca)

July 8, 2009 Acquisition of a 51% of stake in Sotelma

July 29, 2009 Press release: first half 2009 results

August 28, 2009 Disposal of the 2009 half year financial report

October 21, 2009 Shareholders’ Meeting Notice for General Meeting on December 3, 2009

November 4, 2009 Press release: third quarter 2009 revenues and results

December 3, 2009 Press release: post General Shareholders’ Meeting dated April 3, 2009

December 9, 2009 Descriptive of share buyback program

January 7, 2010 Half year assessment of liquidity (Paris) - Contract of share regularization (Casablanca)

February 23, 2010 Press release: 2008 results

March 22, 2010 Press release: post General Shareholders’ Meeting dated April 22, 2010

All press releases are available on: − The AMF website: http://www.amf.fr − Maroc Telecom’s website under “Information réglementée”: http://www.iam.ma/Information-Reglementee.aspx

256 Maroc Telecom - 2009 Registration Document ANNUAL INFORMATION DOCUMENT

Statutory auditors fees

STATUTORY AUDITORS FEES

2009

In accordance with the provisions of article 221.1.2 of the AMF General Regulation, the table below shows the amount of fees paid by the Maroc Telecom Group, to each of its statutory auditors for the fiscal year 2009:

In millions of Moroccan Maroc Telecom Group dirhams Total 2009 Total 2008 Abdelaziz KPMG Other Almechatt

Statutory auditors’ fees 12.42 3.82 3.32 19.56 17.86

Other missions of audit 5.81 - 0.09 5.90 4.17

Total 18.23 3.82 3.41 25.46 22.03

Maroc Telecom - 2009 Registration Document 257 ORDINARY GENERAL SHAREHOLDERS’ MEETING, April 23, 2010

Proposed resolutions

FIRST RESOLUTION: Approval of the reports and annual financial statements for the year ended December 31, 2009

The Shareholders’ General Meeting, having satisfied the quorum and majority requirements for Ordinary Meetings and after hearing: − the report of the Management Board and the observations of the Supervisory Board thereon; and − the Auditors’ Report on the financial statements for the fiscal year ended December 31, 2009; Approves the financial statements for the 2009 fiscal year and the transactions recorded therein or summarized in reports. In consequence, the Shareholders’ General Meeting resolves to give final discharge to the members of the Supervisory and Management Boards for the performance of duties for the 2009 fiscal year.

SECOND RESOLUTION: Approval of the consolidated financial statements for the year ended December 31, 2009

The Shareholders’ General Meeting, having satisfied the quorum and majority requirements for Ordinary Meetings, approves as necessary the consolidated financial statements, as presented, for the fiscal year ended December 31, 2009.

THIRD RESOLUTION: Approval of related party agreements

The Shareholders’ General Meeting, having satisfied the quorum and majority requirements for Ordinary Meetings, after having heard a reading of the special report of the Statutory Auditors on agreements referred to in Article 95 of Act no. 20-05, approves all the transactions and agreements referred to therein.

FOURTH RESOLUTION: Appropriation of net income and payment of dividend

The Shareholders’ General Meeting, having satisfied the quorum and majority requirements for Ordinary Meetings, resolves to appropriate the net income of MAD 9,064,307,790.93 for the year ended December 31, 2009 as follows: • Distributable income MAD 9;064,307,790.93 • Total amount distributable MAD 9,064,307,790.93 • Ordinary dividend(1) MAD 9,063,472,955.40 • Optional reserve MAD 834,835.53 (1) This amount will be adjusted to take into account the number of shares held by the company at the dividend payment date. The Shareholders’ General Meeting sets the total dividend at MAD 10.31 per share for each of the shares making up the share capital held on the record date. This dividend will be paid as from May 31, 2010. Ordinary dividends paid in each of the past three fiscal years were as follows:

Fiscal year 2008 2007 2006 Shares outstanding 879,095,340 879,095,340 879,095,340 Dividend per share (MAD) 10.83 9.20 7.88 Total dividend distribution (MAD‘000) 9,516, 517 8,087,677 6,927,271

258 Maroc Telecom - 2009 Registration Document GENERAL SHAREHOLDERS’MEETING Proposed resolutions

FIFTH RESOLUTION: Renewal of the term of office of Mr. Philippe Capron as a member of the Supervisory Board

The Shareholders’ General Meeting, having satisfied the quorum and majority requirements for Extraordinary Meetings, resolves to renew the term of office of Mr. Philippe Capron as a member of the Supervisory Board, for a period of six years expiring at the end of the Ordinary General Meeting called to approve the financial statements for the fiscal year ending December 31, 2015.

SIXTH RESOLUTION: Ratification of the cooptation of Mr. Moulay Taïeb Cherkaoui as member of the Supervisory Board

The Shareholders’ General Meeting, having satisfied the quorum and majority requirements for Extraordinary Meetings, resolves to ratify the cooptation of Mr. Moulay Taïeb Cherkaoui as a member of the Supervisory Board to replace Mr. Chakib Benmoussa for the remaining term of his office which will expire at the end of the Ordinary General Meeting called to approve the financial statements for the fiscal year ending December 31, 2012.

SEVENTH RESOLUTION: Ratification of the cooptation of Mr. Gérard Brémond as member of the Supervisory Board

The Shareholders’ General Meeting, having satisfied the quorum and majority requirements for Extraordinary Mee- tings, resolves to ratify the cooptation of Mr. Gérard Brémond as a member of the Supervisory Board to replace Mr. Frank Esser for the remaining term of his office which will expire at the end of the Ordinary General Meeting called to approve the financial statements for the fiscal year ending December 31, 2012.

EIGHTH RESOLUTION: Renewal of the term of office of the Statutory Auditors, KPMG Maroc, represented by Mr. Fouad Lahgazi

The Shareholders’ General Meeting, upon proposal of the Supervisory Board, resolves to renew the term of office of KMPG Maroc, represented by Mr. Fouad Lahgazi, as Statutory Auditors, for a three-year term expiring at the end of the Ordinary General Meeting called to approve the financial statements for the fiscal year ending December 31, 2012.

NINTH RESOLUTION: Powers to effect formalities

The Shareholders’ General Meeting, having satisfied the quorum and majority requirements for Ordinary Meetings, gives full powers to the bearer of an original, copy or extract of the minutes of this Meeting for the purposes of carrying out any formalities required by law.

Maroc Telecom - 2009 Registration Document 259 GLOSSARY

3RP (Réseau Radioélectrique à Ressources Partagées). Trunked private or cut-price handsets, and free calls and SMS messages. ou à prix mobile radio networks Mobile radio networks where frequenciesare shared by réduit, de communications et de SMS gratuits. the users of several companies or organizations for internal communications. Inter-segment revenues. Inter-segment revenues are mainly The sharing of frequencies is limited to the duration of each call. generated from interconnection services relating to traffic between ADSL (Asymetrical Data Subscriber Line). Technology enabling users to the fixed-line and mobile networks and the provision to the Mobile receive high bandwidth services through their existing phone lines while segment of leased lines by the Fixed-line and Internet segment. being able to make a phone call at the same time. The transmission capacity Since July 1, 2004, they also include revenues from the provision going from the network to the customer is greater than that from the customer of services to Mauritel. to the network, hence Asymmetric. ANRT. The Moroccan Telecommunications Regulator Frame Relay. Technology used to send high bandwidth data over long distances enabling the transmission of large amounts of ARPU (average revenue per user). ARPU corresponds to the information, the handling of fluctuations in data flows and voice revenues generated (prepaid and postpaid) for a given period, transmission. excluding roaming in revenues (incoming and outgoing calls, revenues from value added services) divided by the average GMPCS (Global Mobile Personal Communications by Satellite). number of customers (prepaid and postpaid) over the same pe- Personal communications system providing cross-border, regional riod, on a monthly basis. The average number of customers is the or worldwide coverage via a network of satellites accessible using average of average monthly customer base (prepaid and post- small easily transportable handsets. paid) figures. The monthly average customer base corresponds to GPRS (General Packet Radio Service). Packet switching system the mean number of customers per month (prepaid and postpaid) enabling enhanced data rates over GSM networks. taken at the beginning and at the end of each month Maroc Telecom Group . Indicates all the companies fully consoli- ATM (Asynchronous Transfer Mode). Network technology that dated within the scope of consolidation. accommodates the simultaneous transmission of data, voice, and GSM (Global Systems for Mobile communications). European video. It is based on asynchronous transmission of short packets digital radio transmission standard for mobile telephony, known as of fixed length. 2G (2nd generation), adopted in 1987 and devised by the ETSI Optical local loop. Optical Fiber Cable-based access network used (European Telecommunications Standard Institute). It is the most forconnecting broadband customers. widely used standard in the world. In operation since 1992, this technology uses two band frequencies: 900 and 1,800 MHz, and BTS (Base Transeiver Station). Component of the mobile radio network comprising antennas and radio transmitters/receivers can transmit voice as well as data. (TRX). It provides GSM network coverage within a given range. Interconnection. Reciprocal service offered by the operators of two Self-Routing Switch. A switch is a piece of equipment used to different telecommunications networks enabling all subscribers establish a temporary link or connection between an incoming within the two groups to communicate freely with each other. path and an outgoing path on a line or circuit. IP (Internet Protocol). Telecommunications protocol used on CAIR. Virtual call center solution offered by Maroc Telecom, ai- networks used to carry internet traffic and based on the technique med at companies for which customer relationship management is of transmission of data packets. strategically crucial. This solution enables businesses to set up customer-response solutions with minimum investment. All call Kbits/s (Kilo bits per second). Unit of measurement used to center functions can be managed within Maroc Telecom’s net- express the speed at which data can be transmitted along a line. work. Leased line . Every part of the network, including an access line SIM (Subscriber Identity Module). Without a SIM card, calls to the network, that is supplied as a dedicated channel with all of cannot bemade from a mobile phone. In particular, the SIM card its capacity available exclusively to the user and on which there stores the user’s personal profile and a PIN code protecting ac- are no controls or signaling. cess to the card). LO BOX (GSM Gateways). Terminal equipment, compatible with Mobile Switching Center (MSC) Mobile Switching Center (MSC) the GSM standard, that has been designed to act as an interface between the GSM network and terminal equipment that is normal- International Transit Center.A switch that carries international ly meant to be connected to the fixed public telecommunications calls to foreign operators’ networks. network (such as private switching systems (PABX) or ordinary Unbundling. An incumbent operator, owner of the local loop, has telephones). an obligation to provide pairs of copper wires to third-party opera- MENA (The Middle East and North Africa). Region including the tor, in exchange for compensation. Such third-party operator following countries: Algeria, Bahrain, Egypt, Gaza and the West install their own transmission equipment in order to connect their Bank, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Morocco, network to their customers’ premises. Partial unbundling allows Oman, Qatar, Saudi Arabia, Syria, Tunisia, Turkey, UEA, Yemen. the third party operator to take over the Internet connection while PCM (Pulse Code Modulation). Process used to transmit the the incumbent operator still provides telephony subscription and spoken word involving the sampling and digital coding of the sig- services. Full unbundling allows the third party operator to connect nal. The PCM circuit is the circuit at the heart of the 2 Mbps tele- the entire customer line to its own network, and thus to offer both phone network. telephony and ADSL services. DSLAM (Digital Subscriber Line Access). ADSL device located MMS (Multimedia Messaging Service). Multimedia version of at a telephone exchange. It is an electronic assembly holding SMS enabling real multimedia files to be attached to text mes- several cards that are equivalent to the client filter and modem. sages: videos, audio, high-resolution images. The filter separates incoming phone and data signals and the Multiplexeur. A piece of telecom network equipment enabling the modem translates back the ATM cells (small packets transported insertion or extraction of data packages. over ATM connections). Standard NMT (Nordic Mobile Telephone). Mobile network ISP (Internet Service Provider). A company or an organization launched by Maroc Telecom, based on analogue technology offering internet access to household, professional and business operating in the 450 Mhz frequency band. users. Radio-relay link. Technology used for radio signal transmission PABX (Private Automatic Branch exchange). Equipment able to (voice, data or video). Relays are installed on pylons or highpoints, stablish temporary connections between inbound and outbound which are deployed to carry signals from one point to the next, lines in order to route communications. creating the link. IN platform (Intelligent Network).Platform allowing value-added Fidelio. Fidelio is the first point-based loyalty program introduced services to be made available (prepaid card, prepaid line, kiosk, in Morocco. It is reserved for postpaid customers and was laun- capped rate plan, etc.). ched on June 1, 2002. The program allows points to be collected Segments. Refers to the Mobile segment or the Fixed-line and based on expenditure, and provides advantages in the form of free Internet segment of Maroc Telecom.

260 Maroc Telecom - 2009 Registration Document GLOSSARY

Postpaid (services). Method of paying for services after they fully established emanating from the existing mobile subscriber have been used (free services can also be included in this me- base (on the BSS radio part), in relation to all calls made on the thod). network. Power CP. New more powerful processor for MSC mobile swit- Fault report rate. Generic term, applicable to different services, ches based on Siemens technology. illustrating the number of faults reported on lines or for services over a certain period in proportion to the total number of lines or PPT. Intelligent Network service allowing the marketing of capped- services on offer over the same period . rate plans, not with a line number (CLI) but any virtual phone number. Success rate. A quality indicator that measures the number of SMS successfully sent by the existing mobile subscriber base in Prepaid (services). Formula whereby services are paid for prior to being used (free services can also be included in this formula). relation to the total number of SMS sent over the network. Radio paging.Transmission of numeric or alphanumeric messa- Technologie CAMEL (Customised Applications for Mobile ges to a mobile handset or a group of mobile handsets. networks Enhanced Logic). A technology that enables a user to call his home country without needing an area code. The technolo- NSS (Network Sub-System). All elements/equipment, notably gy works for short messages (SMS) as well as voice calls. switchgear required to make up a GSM network. SDH Technology (Synchronous Digital Hierarchy). High SS7 (Signaling System 7). American name for the CCITT 7 throughput technology based on a “ring”. This type of structure network signaling protocol. allows for a different geographical trace to be made available, ISDN (Integrated Services Digital Network). Entirely digital providing a back-up path when the primary route becomes unavai- telecom network enabling the simultaneous transmission of voice lable. and data (fax, internet etc.). Phone shops. Commercial outlet managed by a third party not Roaming. When a user is abroad, this function enables a user to employed by Maroc Telecom, open to the public and containing a make and receive calls via an operator other than the one to which certain number of payphones, providing telecom services to he/she is a subscriber consumers. PSTN (Public Switched Telephone Network).This is the traditio- Digital network termination. Device used to connect ISDN nal two wire network. This network is switched in so far as the clients. connection with the person being called is temporary as opposed TRX (Transceiver Receiver). The part of the BTS that emits and to cable where the connection is permanent. receives the GSM signal. SDH (Synchronous Digital Hierarchy). Digital method of trans- UMTS (Universal Mobile Telecommunications System). 3G mission used to optimize transmissions over optic fiber and radio (3rd generation) standard used for the transfer of voice and data. systems. This technology, based on the WCDMA-CDMA standards, allows SMSC (Short Message Service Center) servers.Service allo- for throughput in excess of 2Mbps. wing the sending and reception of written messages containing a Billing unit (BU). Unit used for billing calls, the duration of which maximum of 160 characters. Messages can be sent via an opera- varies according to the type of call made (local, national, interna- tor, via the internet or directly using the keyboard on a mobile tional, fixedto- mobile). phone. If the recipient’s phone is turned off the messages are still saved at the operator’s message center. The length of time these VMS (Voice Mail System). Name given to the voice messaging messages are stored for varies depending on the operator. None- system. theless, in order for messages to be received, the maximum sto- VPN (Virtual Private Network). A VPN is a private communica- rage capacity of the handset must not have been attained. tions network used for the internal needs of a closed group of SMS (Short Message Service). Written message, limited to 160 users to communicate over one or a number of public networks. characters, exchanged between mobile telephones. This product fulfils both the internal and external communication requirements of businesses. SMW3 (SEA-ME-WE3 / South East Asia – Middle East – West- ern Europe). Fiber optic sub-sea cable linking 4 continents. VSAT (Very Small Aperture Terminal). System of satellite transmission using small antennas. A VSAT base equates to a micro- SSNC (Signalling System Network Control). A new component station made up of antennae with a diameter of 0.9 to 3.5 m. A developed by Siemens for controlling signaling traffic for MSCs VSAT network is a satellite network enabling communications, via (mobile switching centers), enabling handling capacity to be in- a hub, with a group of sites equipped with micro-stations (VSAT) creased. linked to a central system by a star topology. Signaling Transfer Point (STP).Signaling transfer point for S7 WAP (Wireless Application Protocol). Standard adapting the signaling systems. The STP allows for the routing and transfer of internet to the constraints of mobile telephony, notably through the signaling messages using the SS7 protocol. use of an appropriate content format. Churn rate. An indicator that is calculated by dividing the number WiFi (Wireless Fidelity). Commercial brand name for a data of contracts terminated over a given period by the average custo- transmission system based on the IEEE 802.11 standard that mer base over the same period, expressed on an annualized allows wireless access to an Ethernet network from up to a few basis. The average customer base corresponds to the mean hundred meters away at a speed of 11 Mbits/s. number of clients taken at the beginning and at the end of each X 25. Protocol used to manage packet switched networks. Used month. by Maroc Telecom through Maghripac. Average churn rate. An indicator that is calculated by dividing the number of contracts terminated (by clients subscribing to prepaid . and postpaid offers) over a given period by the average total customer base (prepaid and postpaid) over the same period, expressed on an annualized basis. The average customer base is based on the average monthly figures (prepaid and postpaid) for the period. The average monthly customer base corresponds to the mean number of clients (prepaid and postpaid) at the beginning and at the end of the month. Dropped call rate. A quality indicator that measures, across the whole of the existing mobile subscriber base, the number of disconnected calls in proportion to all the calls made on the network. Successful connections rate. A quality indicator that measures, during peak periods on the network, the number of calls success-

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