2 0 1 7 REGISTRATION DOCUMENT including the annual Unancial report WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 CONTENTS
MESSAGE FROM THE MANAGEMENT 1 KEY FIGURES, GROUP STRATEGY BOARD’S CHAIRMAN 2 AND RISK FACTORS 11 CORPORATE 1.1b 2017 key Ɠ gures 12 GOVERNANCE 3 1.2b Group strategy 14 MAROC TELECOM IN BRIEF 4 1.3b Risk factors 16 HIGHLIGHTS 2017 6
2 GENERAL INFORMATION ABOUT THE COMPANY 23 2.1b Person responsible for the Registration Document and for the audit of the Ɠ nancial statements 24 2.2b Information about the Company andbcorporate governance 26
3 DESCRIPTION OF THE GROUP, BUSINESS ACTIVITIES, LEGAL AND ARBITRATION PROCEEDINGS 61 3.1b Description of the Group 62 3.2b Business activities 70 3.3b Legal and arbitration proceedings 103
4 FINANCIAL REPORT 105 4.1b Consolidated results of the past threebyears 106 4.2b Overview 109 4.3b Consolidated Ɠ nancial statements atb31bDecemberb2015, 2016 and 2017 120 4.4b Statutory Ɠ nancial statements 166
5 RECENT DEVELOPMENTS AND GROWTH OUTLOOK 197 5.1b Recent developments 198 5.2b Market outlook 198 5.3b Objectives 199
6 NOTES 203 Cross-reference table 204 Financial information reported in 2017 207 Statutory auditors’ fees 207 Ordinary Shareholders’ Meeting ofbAprilb24,b2018 208 Glossary 210 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 2017 REGISTRATION DOCUMENT Including the annual financial report
This Registration Document was filed with the French Financial Markets Regulator (AMF) on April 09, 2018, in accordance with Article 2212-13 of its General Regulations. The Registration Document may be used in connection with a financial transaction if supplemented by an offering circular (note d’opération) approved by the AMF. The document was prepared by the issuer and is binding on its signatories.
MAROC TELECOM ____ 2017 Registration Document 1 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 + MESSAGE FROM THE MANAGEMENT BOARD’S CHAIRMAN Abdeslam Ahizoune
Despite strong competitive and regulatory pressure, the performance of the Maroc Telecom Group in 2017 was excellent and demonstrated its resilience and agility in adapting to market developments. Its good results afƓ rm its strategic choices and give it the resources to achieve its ambitions. The Group is oriented toward Africa, where it currently has nearly 57bmillion customers, including more than 35bmillion in its subsidiaries on the continent. Maroc Telecom is one of the Ɠ rst companies that shared its know-how to help Africa develop harmoniously and rely on its own strength to achieve progress. This development, which involves promoting employment and investment to combat the digital divide, aims to provide everyone with the tools to speed up access to knowledge and expertise. The success of Maroc Telecom’s subsidiaries is based on the geographic proximity and the sharing of a common cultural and historical heritage, as well as respect for identities and, of course, the participation of local human resources. All of these assets can be seen in the current rapid growth of Maroc Telecom’s platform, one of the most successful in Africa and a signiƓ cant contributor to the Group’s results today. Because access to new technologies is an essential condition for the emancipation of individuals and societies, Maroc Telecom has made it a priority to support the development of a uniform and efƓ cient digital society. This is what made 2017 anotherbyear of massive investments across the Group to deploy and expand infrastructure and make technological innovation accessible to as many people as possible. Efforts are still constantly underway to connect the most remote areas. It is in this context that Maroc Telecom, after deploying 52,000 km of Fiber Optic cable nationally and internationally, will launch the West Africa international Ɠ ber optic undersea cableway in 2018. By signiƓ cantly increasing the connectivity of the countries linked to it, this cable will contribute to the permanent reduction of the digital divide in Africa. More than a global telecoms operator, Maroc Telecom is assisting the development of an entire continent.
More than a global telecoms Abdeslam Ahizoune operator, Maroc Telecom is assisting the development of an entire continent.
2 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 + CORPORATE GOVERNANCE
François Hassan Abdeslam Larbi Brahim VITTE RACHAD AHIZOUNE GUEDIRA BOUDAOUD
MANAGEMENT BOARD SUPERVISORY BOARD
Chairman Chairman – Abdeslam Ahizoune, – Mohamed Boussaïd, Chairman of the Management Board Minister of the Economy and of Finance Members Deputy Chairman – Larbi Guedira, – Eissa Mohamed Al Suwaidi, Managing Director Services Chairman of the Board of Directors of Etisalat Group – Hassan Rachad, Managing Director Networks and Systems Members – Brahim Boudaoud, – AbdelouaƓ LAFTIT, Managing Director, Legal and Regulatory Affairs Minister of the Interior – François VITTE, – Abderrahmane Semmar, Chief Financial OfƓ cer Director of Public Companies and Privatization at the Ministry of the Economy and of Finance – Mohamed Hadi Al Hussaini, Maroc Telecom also Member of the Board of Directors of Etisalat Group includes eight regional divisions reporting to the Management Board’s Chairman – Saleh Al Abdooli, Chief Executive OfƓ cer of Etisalat Group – Mohamed Saif Al Suwaidi, Director General ofbAbu Dhabi Fund for Development – Hatem DOWIDAR, Managing Director of Etisalat International – Serkan Okandan, Chief Financial OfƓ cer of Etisalat Group
MAROC TELECOM ____ 2017 Registration Document 3 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 + MAROC TELECOM IN BRIEF
MAROC
TELECOM Burkina Faso Morocco ONATEL CASANET % % 51 100 MAROC TELECOM MAROC TELECOM Niger AT NIGER Mauritania % MAURITEL 100 51.5 % MAROC TELECOM MAROC TELECOM * Benin ETISALAT BÉNIN 100% Mali MAROC TELECOM SOTELMA 51% MAROC TELECOM
Central Ivory Coast AFRICAN RÉPUBLIC AT CÔTE D’IVOIRE % % 100 85 MAROC TELECOM MAROC TELECOM Ivory Coast PRESTIGE TELECOM CÔTE D’IVOIRE Gabon GABON TELECOM % Togo 100 AT TOGO % MAROC TELECOM % 51 95 MAROC TELECOM ** MAROC TELECOM
LB@GBU<:GMIE:R>K BGMA>>
* 51.5% controlled via CMC, a Mauritanian company. ** Merger of Gabon Telecom and AT Gabon on June 29, 2016.
Historical
Maroc Telecom is the incumbent 1984 1998 2001 2004 telecommunications operator in the Kingdom of Morocco. It operates in the Fixed-line telephony, Mobile telephony and Internet segments. &UHDWLRQRI2137 Creation Acquisition IPO in Moroccan Post and RI0DURF7HOHFRP6$ of 54% Casablanca 7HOHFRPPXQLFDWLRQV of Mauritel SA and Paris Bureau Vivendi’s entry into 0DURFb7HOHFRPōVFDSLWDO
4 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 MAROC TELECOM IN BRIEF
3 5 49% MAD billions OF THE GROUP REVENUES GROUP EBITDA MARGIN TOTAL CONSOLIDATED REVENUES
5.9 8.2 MAD billions MAD billions ADJUSTED NET EARNINGS, IN GROUP INVESTMENTS GROUP SHARE 57 10, 879 millions GROUP WORKFORCE OF CUSTOMERS
2006 2007 2009 2014 2015 2016
Acquisition Acquisition of 51% Acquisition Etisalat acquires Acquisition of Etisalat’s Merger of 51% of Gabon Telecom of a 51% stake a stake in six African subsidiaries of Gabon stake in Sotelma Maroc Telecom in Ivory Coast , Gabon, Telecom in Onatel Sale of 4% of Maroc Telecom Niger, the Central African and Moov Gabon by the Moroccan Government Republic and Togo on the Casablanca stock exchange
MAROC TELECOM ____ 2017 Registration Document 5 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 + HIGHLIGHTS 2017
March
– In Morocco, reintroduction by the ANRT of a 20% asymmetry for Mobile January termination rates. Maroc Telecom’s Mobile termination rates decreased from MAD 0.1399/min to MAD 0.1169/ min, while Orange’s and Inwi’s remained – In Morocco, launch of a new 59 DH unchanged at MAD 0.1399/min. mobile plan: 3bhours of calls and 3GB. – In Morocco, launch of a satellite Internet February – In Morocco, Roaming rate overhaul offer to Residential, Business and accompanied by new zoning. Professional segments, with a range of speeds up to 20 Mb/s starting at – In Mali, the operators’ contribution to MADb249 incl. tax. the Universal Access Fund was increased – In Morocco, overhaul of Residential Fiber from 1.0% to 2.0% of revenues excluding – Cancellation of voice roaming charges for Optic offerings, with the decrease of the interconnection charges. customers between Senegal, Ivory Coast, 100MB rate to MADb500 incl. tax/Month, Mali, Togo, Burkina Faso and Guinea – In Benin, introduction of a new 10% tax on the launch of the new 200 Mb/s speed and starting Marchb31, 2017. gross revenues replacing the incoming marketing cessation of the 50 Mb/s speed. international call tax (CFA francb 53/min), – In Gabon, cancellation of ROAM (10% of – In Ivory Coast, Februaryb7, 2017 regulator the tax on outgoing calls (CFA franc b5/ revenues) and its replacement by a social decision prohibiting On-Net & Off-Net rate min) and the SMS tax (CFA francb 2/SMS). VAT of 1% of revenue. differentiation for all operators.
en attente retour image sur la VF
6 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 HIGHLIGHTS 2017
June
May – In Morocco, referral to Wana regarding certain operational aspects of roll-out of unbundling. – In Morocco, enhancement of MADb 5 – In Morocco, enhancement of the prepaid Mobile internet pass, which now Residential Fiber Optic plan by addition April offers 500MB instead of 400MB. of a free Ɠ xed line with unlimited access to the Maroc Telecom Fixed-Line network – In Gabon, awarding to Gabon Telecom and 10b hours of calls to Domestic of a new universal license for a 10-year Mobile lines and the major international period and an amount of CFAb9bbillion. – In Morocco, enhancement of the Jawal destinations of Zone A. – In Ivory Coast, the Prestige Board of SIM card pack: customers now have a – In Morocco, launch of the Datacenter Directors approved the early dissolution MADb50 voice credit valid for 6bmonths Hosting plan designed to meet the need of the Company on Juneb16, 2017. instead of 3bmonths, 1bhour of domestic to share company IT infrastructures. calls, and 1GB of data valid for one week. – In Morocco, overhaul of Jawal – In Morocco, international rate reductions international pass international rates. of up to 80% for major international – In Burkina Faso, payment of CFAb7bbillion destinations in Residential, Professional for the adjustment to Onatel’s customs and Business postpaid mobile plans. duties. – In Morocco, boosting of outbound international trafƓ c through overhaul of Maroc Telecom’s international mobile rates with change in international destination rates in Zone 1.
MAROC TELECOM ____ 2017 Registration Document 7 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 HIGHLIGHTS 2017
August
– In Morocco, launch of the new Distributed September Denial of Service (DDoS) Network Security service targeting Corporate customers who want optimal security against DDoS attacks. – In Morocco, launch of the “Smart Car” – In Morocco, launch of the new 12bhours offer, the first integrated smart vehicle July of airtime, 12GB of data and intragroup management offer. for MADb159 incl. tax for the Corporate – In Morocco, the business & corporate segment. 8bhour plan for MADb99 was bumped up – In Morocco, new entry-level 4G postpaid to 10bhours of airtime plus 2GB of data, – In Morocco, enhancement of 4G+/ 3G+ data plan with 7GB at MADb59 perbmonth. plus intragroup. – postpaid internet plans. In Burkina Faso, completion of the – In Ivory Coast, a new customer – In Niger, commercial launch of 3G on voluntary departure plan launched identification decree went into effect Julyb17, 2017. in Aprilb 2017 with the departure of on Septemberb12, 2017 that toughened 44bpeople. identiƓ cation requirements compared to – In the Central African Republic, the previous 2011 decree. Compliance Augustb2,b2017 awarding of 3G frequencies with the provisions of the new decree for a period of 3byears for an amount of must be complete within 6bmonths. CFAb705bmillion. – In the Central African Republic, new decree of the Postal and Telecommunications Ministry of Septemberb29, 2017 for the cancellation of the new international incoming calls tax of CFAb260/min and the maintenance of the initial tax of CFAb40/min.
8 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 HIGHLIGHTS 2017
November
– In Morocco, launch of the Jawal x12 promotion for the entire range of reƓ lls: an exclusive voice and data bonus October equivalent to 12 times the face value of the reƓ ll in MB. December – In Niger, cancellation of the tax on incoming international traffic starting Januaryb1, 2018. – In Morocco, launch of new Double Play – ADSL 12MB offers. In Ivory Coast , the regulator’s decision – In Morocco, completion of the voluntary prohibiting On-Net & Off-Net rate – In Morocco, 20% decrease in the 20MB redundancy plan with the departure of differentiation is suspended for all ADSL rate. 1,024 employees. operators. – In Mali, launch of the Ɠ rst test call of the – In Morocco, lowering of the Jawal SIM third largest operator with the Minister card pack rate to MADb20 with a call of the Digital Economy in attendance. credit of MADb20. Commercial launch scheduled for 2018. – In Morocco, launch of the new Customer Area (selfcare) for the online management of various products and services. (https://selfcare.iam.ma). – In Morocco, opening of the international pass *4 to all international destinations. – In Morocco, launch of ANRT consultation on relevant markets by 2020. – In Morocco, awarding of the “Best Mobile Network in Morocco” Prize by Ookla Speed Test for the secondbyear in a row. – Presence of Maroc Telecom on the “Emerging Market 70” charts for companies in emerging countries with the best social responsibility policies. – In Niger, the Council of Ministers adopted a decree declaring the effective date of the 3G license to be June 30, 2017 for a period of 15b years instead of Decemberb12, 2015.
MAROC TELECOM ____ 2017 Registration Document 9 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 10 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 1 KEY FIGURES, GROUP STRATEGY AND RISK FACTORS
1.1 2017 KEY FIGURES 12
1.2 GROUP STRATEGY 14
1.3 RISK FACTORS 16 1.3.1 Business risks 16 1.3.2 Regulatory risks 19 1.3.3 Market risks 20
MAROC TELECOM ____ 2017 Registration Document 11 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 KEY FIGURES, GROUP STRATEGY AND RISK FACTORS 1 2017 key U gures
1.1 _ 2017 key figures
REVENUES BY GEOGRAPHICAL AREA EBITDA BY GEOGRAPHICAL AREA (in MADbmillion) (in MADbmillion)
55% 34,963 45% 63% 17,160 37% Morocco International Morocco International
2017 2016 2015 2017 2016 2015 Morocco 20,481 21,244 21,033 Morocco 10,804 11,004 11,144 International 15,733 15,326 14,010 International 6,357 5,905 5,599 NET TOTAL 34,963 35,252 34,134 NET TOTAL 17,160 16,909 16,742
EBITA ADJUSTED BY GEOGRAPHICAL AREA (in MADbmillions)
66% 10,553 34% Morocco International
2017 2016 2015 Morocco 6,954 7,157 7,386 International 3,599 3,268 2,954 NET TOTAL 10,553 10,426 10,340
12 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 KEY FIGURES, GROUP STRATEGY AND RISK FACTORS 2017 key U gures
1 A DIVIDEND UP 1.9% IN LINE WITH THE GROWTH IN RESULTS
GROUP SHARE OF ADJUSTED NET INCOME CFFO ADJUSTED BY GEOGRAPHIC AREA (in MADbmillion) (in MADbmillions)
5,595 5,622 5,871 12,074 11,019 10,686 4,572 International 3,563 3,700 International International
7,502 7,124 7,319 Morocco Morocco Morocco
2015 2016 2017 2015 2016 2017
CUSTOMER BASE BY GEOGRAPHICAL AREA CAPITAL EXPENDITURE (inbthousandsbofbcustomers) (in MADbmillion)
56,997 54,015 8,835 50,811 7,983 8,232
35,376 3,643 32,760 International International 29,794 International 4,043 4,077 International International International
21,017 21,255 21,620 4,792 3,905 4,589 Morocco Morocco Morocco Morocco Morocco Morocco
2015 2016 2017 2015 2016 2017
MAROC TELECOM ____ 2017 Registration Document 13 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 KEY FIGURES, GROUP STRATEGY AND RISK FACTORS 1 Group strategy
1.2 _ Group strategy
The prospects for growth are promising in all of the countries in which Maroc Telecom Group operates (Morocco and countries in sub-Saharan Africa). Despite a difƓ cult economic and security environment in 2017, African economies have managed to stabilize their growth. Morocco’s 2018 Finance Act forecasts 3.2% growth in GDP, while the International Monetary Fund expects average GDP growth of 7.5% in 2018 for all nine sub-Saharan countries in which Maroc Telecom operates. In terms of the growth prospects of the telecom markets in particular, Morocco should be distinguished from other Group entities since that market presents a different set of challenges.
MOROCCAN TELECOMS MARKET OUTLOOK Morocco, with the best quality of service for its customers enabling it AND MAROC TELECOM’S BUSINESS to differentiate itself clearly from its rivals. Less than twobyears after its commercial launch, the Maroc Telecom 4G+ network covers 93% of STRATEGY the population, while its 3G network reaches 96% ofbthe population, allowing the Company to support throughout the Kingdom of In Morocco, the Mobile market is mature, with a mobile penetration Morocco the customer excitement about mobile internet, a segment level approaching that of European countries. According to the that grew 78% over onebyear. In order to take full advantage of this ANRT, the mobile penetration rate in Morocco was 126% in the fourth trend, the priority is to monetize Data through the development of quarter of 2017, while the European average was 127% (source: special predominantly data offers and by maintaining a fair-use policy Merrill Lynch Q4 2017). (maintaining Data consumption ceilings + Data options to be added), In 2017, the Moroccan telecom regulator maintained the regulatory while coupling data services with voice services in order to support framework introduced in 2016 (“the new guidelines”) and the usages of its customers, who are increasingly using their voice reintroduced an asymmetry in mobile call termination rates in favor services through Voice over IP applications. of the competitors. The current regulatory framework established The inroads made by competitors into the ADSL market remain very by the ANRT includes: limited despite the efforts required of Maroc Telecom by the regulator – Ŵ oor rates for all voice and data services, which have stabilized to guarantee that competitors have a fully Ŵ uid unbundling process. prices after severalbyears of signiƓ cant price declines; Despite the downward revision of wholesale unbundling prices, the positioning of the competition was maintained for broadband offers – rate asymmetry for domestic Mobile incoming call terminations in at unattractive prices, which partly explains their low impact on the favor of the competitors (+20%); market. – a special premium of 20% above the minimum rate for Mobile voice services, below which Maroc Telecom, the only operator Maroc Telecom continues to stand out with its very competitive declared to be dominant, cannot offer its rates; Fixed-line, ADSL and FTTH offers and its recognized quality. Thebyear – 2017 was marked by the revitalization of the FTTH segment, which an alignment of the three Mobile operators on data services with underwent a major rate overhaul (FTTH general public offer starting common prices to all three operators; at MADb500 perbmonth). Contributing to this is a panel of innovative – the liberalization since Novemberb2016 of IP telephony services, added value services that Maroc Telecom continues to enhance with a very marked impact on incoming international trafƓ c to (home automation, Cloud, M2M). Mobile lines. Maroc Telecom faces increased competition in all Fixed-line and In order to maintain its leadership in the Mobile market, where it Mobile segments. However, the incumbent intends to bolster remains number one with a 42.1% (Q4 2017) market share, while its leadership through differentiation on its quality of service and complying with the guidelines set by the regulator, Maroc Telecom continuous innovation. This is reflected in the ongoing network intends to continue its major investment program in order to roll out upgrade and the deployment of ultra-high-speed technology for the most extensive broadband Mobile network in the Kingdom of both Ɠ xed-line (MSAN and FTTH) and mobile (Single RAN and 4G+).
14 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 KEY FIGURES, GROUP STRATEGY AND RISK FACTORS Group strategy
INTERNATIONAL OUTLOOK AND STRATEGY at Group level will enable them to democratize Data Mobile usage OF MAROC TELECOM’S SUB-SAHARAN since they will beneƓ t from international bandwidth capacity at a SUBSIDIARIES very competitive price. 1 As for the subsidiaries acquired in 2015, Maroc Telecom continues Thebyear 2017 was marked by economic stable economic growth in to support them closely, sharing with the local teams the experience sub-Saharan Africa in connection with the crisis in the commodities and expertise of Maroc Telecom in Morocco and Africa. The market and the unstable political climate. marketing and sales efforts of all the subsidiaries bore fruit with an increased share of the Mobile market for each of the subsidiaries. All of the Group’s subsidiaries saw significant growth in their The signiƓ cant network investments implemented in 2016 and 2017 mobile penetration (on average 90% in 2017 vs. 86% in 2016), thus also contributed to these encouraging results thanks to the extension demonstrating the dynamism of those Mobile markets despite the of networks and the continuous improvement in the quality of service. strict customer identiƓ cation requirement that applies to all operators. SigniƓ cant efforts to streamline costs also improved the margins of The increase in competitive pressure (new entrant in Mali) should also all these subsidiaries, even if they are suffering from tax and royalty result in lower prices in those markets and a democratization of uses pressures in a Ɠ scal and regulatory environment that does not offer of mobile data and other features. levers favorable to challenger operators. These subsidiaries must also The historic subsidiaries continue to enjoy a privileged status as meet the challenge of mobile data development. SigniƓ cant network convergent historical operators (fixed/mobile), but their growth investments are planned for the period from 2018 to 2020. These model will have to be reviewed in the comingbyears. In subsidiaries investments should allow the subsidiaries to expand their coverage, experiencing growth in mature markets (Gabon Telecom and improve their service quality and keep pace with growing customer Mauritel), changes have begun to encourage the use of mobile data demand for mobile data and all the innovative products developed over voice. Their efforts must therefore focus on maintaining their because of it (M-payment, Cloud, M2M). leading position through continuous expansion of network coverage The challenge for these operators is to continue to gain market share and improvement of their QoS while developing innovative added and become benchmark operators in terms of service quality and value products (Mobile money, FTTH, Managed Corporate Services, innovation while ensuring the monetization of mobile data so that it etc.). becomes a growth booster in these markets. The historic subsidiaries operating in growing markets (Sotelma and The progressive improvement in the performances of the new Onatel) increasingly face challenges from their competitors in the subsidiaries and the consolidation of the assets of the historical Mobile market, but they remain very well placed to beneƓ t from the subsidiaries should increase their contribution to the growth of the rise of mobile data, which is considered a driver for growth in those Group’s sales and proƓ ts. markets. As such, the forthcoming installation of a submarine cable
MAROC TELECOM ____ 2017 Registration Document 15 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 KEY FIGURES, GROUP STRATEGY AND RISK FACTORS 1 Risk factors
1.3 _ Risk factors
This chapterbdescribes the major risks faced by the Company, given MAROC TELECOM FACES INCREASED the speciƓ c nature of its business, its structure and its organization. COMPETITION IN THE MAIN MARKETS These risks can be divided into three categories: IN WHICH IT OPERATES, WHICH COULD – business risks (Sectionb3.4.1); RESULT IN A LOSS OF MARKET SHARE AND – regulatory risks (Sectionb3.4.2); LOWER REVENUES FOR MAROC TELECOM – market risks (Sectionb3.4.3). The Company conducted a review of the risks that could have a The business activities of the Maroc Telecom Group are subject to material adverse effect on its business, Ɠ nancial position or results Ɠ erce competition, which could further intensify with the liberalization (or on its ability to achieve its objectives) and considers that there are of the main markets in which the Company operates. This competition no material risks, other than those described below. puts pressure on Maroc Telecom and its subsidiaries, which could lead to the Group introducing new reductions in rates, increasing Furthermore, other risks not yet identiƓ ed or currently considered loyalty costs and implementing promotional offers, which could lead insigniƓ cant by Maroc Telecom could have the same negative effect to reduced revenues and results for the Group. and investors could lose all or part of their investment. To meet, or even anticipate market needs and expectations, the In addition to all the other information in this Registration Document, Group must make signiƓ cant new investments, although it is not investors should carefully consider the risks described below before possible to ensure that the products and services thus developed deciding to invest in the Company. Should one or more of these and offered will not become obsolete in the short term. risks materialize, the operations, financial position, results and development of the Company could be adversely affected. Note that since 2016, Maroc Telecom faces competition in voice and data services provided from the Ɠ xed-line copper network due to the Maroc Telecom is involved in legal proceedings and litigation with operational implementation of unbundling. The competitors are able competitors or other parties. The outcome of these proceedings to offer multiple-play services from their unbundled access. is generally uncertain and could materially affect the results and Ɠ nancial position of the Company. Maroc Telecom is also be subject to an obligation to share all its passive infrastructure (including optical Ɠ ber), which risks signiƓ cantly The main disputes in which Maroc Telecom is involved are described reducing the competitive advantage it could derive from its in Sectionb3.3. “Legal and arbitration proceedings.” investments, especially in high-speed broadband (and FTTH in particular), if this obligation is not imposed on equitable terms and conditions. Maroc Telecom could lose its competitive advantage in terms 1.3.1 BUSINESS RISKS of coverage in the Mobile market in Morocco as a result of the implementation of national roaming in PACT areas and, if the proposed amendment to lawb24-96 is adopted in its current form, in the rural areas and roads selected by the ANRT. MAROC TELECOM’S FUTURE REVENUES AND RESULTS ARE HIGHLY DEPENDENT IF THE GROUP IS UNABLE TO CONTROL ON THE ECONOMIES OF THE COUNTRIES ITS COSTS, ITS FINANCIAL POSITION COULD IN WHICH IT OPERATES BE AFFECTED Maroc Telecom’s core business is the provision of telecommunications services, including the provision of international telecommunications If the Group is unable to control costs, its operating margins and services. Consequently, the Group’s revenues and profitability earnings could be adversely affected. depend significantly on developments in consumer telecoms Maroc Telecom’s constant objective is to update its cost structure, in spending and international call traffic. Telecom services usage particular its sales costs and overheads. Maroc Telecom has adopted trends are closely connected to changes in economic conditions in several voluntary termination plans and is continually taking steps to the countries concerned and, more particularly, in the disposable generate savings in its purchases and its network costs. incomes of the population and in the economic activity of businesses. A contraction of or slower-than-anticipated growth in the economy could have a negative impact on increases in the number of users or in usage rates for Mobile, Fixed-line and Internet telephone services, which could adversely affect the growth and proƓ tability of the Group’s business activities or might even result in a drop in revenues and results. Acts of terrorism or war, whether in Morocco or elsewhere, couldbsigniƓ cantly affect the economy in general (caused particularly by a decline in tourism). Maroc Telecom cannot anticipate the consequences of possible acts of terrorism or war.
16 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 KEY FIGURES, GROUP STRATEGY AND RISK FACTORS Risk factors
MAROC TELECOM DEPENDS ON THE MAROC TELECOM’S INDIRECT RELIABILITY OF ITS INFORMATION SYSTEMS. DISTRIBUTION NETWORK IS A STRENGTH FAILURE OR DAMAGE AFFECTING SOME THAT COULD BE WEAKENED IF MAROC 1 OR ALL OF ITS SYSTEMS COULD RESULT TELECOM WERE UNABLE TO MAINTAIN IT IN A LOSS OF CUSTOMERS AND A DROP Maroc Telecom has an extensive distribution network consisting of IN REVENUES a direct network of branches and an indirect network consisting of phone stores, resellers and partners, and an independent network Maroc Telecom is paid for its services only insofar as it has reliable (see Sectionb3.2.1.5 “Distribution, advertising”). information systems, including collection and billing systems, and succeeds in protecting and ensuring the operating continuity of its If Maroc Telecom were unable to maintain its close relationships, IT systems. Maroc Telecom has established a security policy for its or to renew its distribution agreements, with its indirect network information systems that allows it to deal with ordinary disruptions participants, or if its indirect distribution network were jeopardized for in computer operations (unauthorized access, power cuts, theft, other reasons, including the action of competitors, or if the managers hardware crashes, etc.) and to secure uninterrupted service. of telestores failed to comply with the exclusivity agreements with Maroc Telecom and distributed products competing with those of Maroc Telecom currently has a Business Recovery and Continuity Maroc Telecom, the distribution network could be weakened and the Plan for its critical information systemsb– i.e., those that have a direct activity and results of the Company could be signiƓ cantly affected. impact on its revenues, such as systems for collecting data on taxes, sales and billing information for its three product lines: Fixed-line, Mobile and Internet. The plan also covers administrative systems for CONTINUED AND RAPID CHANGES calculating inter-operator settlements, in Morocco and internationally, and for purchasing and Ɠ nancial management. IN TECHNOLOGY COULD INTENSIFY An accident entailing the total or partial destruction of these systems COMPETITION OR REQUIRE MAROC TELECOM (natural disasters, fire or acts of vandalism) would automatically TO MAKE SIGNIFICANT ADDITIONAL activate a backup information system. INVESTMENTS Since the critical data systems are synchronized in real time by means of replication between production and emergency platforms, the Many services offered by Maroc Telecom and its subsidiaries make risk of losing data and being unable to bill customers and recover extensive use of technology. The development of new technologies outstandings from them is now marginal. could render some of the Company’s services uncompetitive. Since inception, the plan has been, and is, tested and evaluated To respond to changes in the telecoms sector and to the expectations annually by simulating a situation where the information systems of demanding customers in terms of price and quality, the Group are totally unavailable. must adapt its networks and its technologies and develop new products and services at a reasonable cost, or it may not be able For some subsidiaries, the risk of information-systems failure to compete with its competitors. Moreover, it cannot be excluded concerns the lack of a Business Recovery and Continuity Plan (BRCP) that the new technologies in which the Company may choose, or be in the event of a major incident impacting the only data processing forced, to invest will affect its ability to achieve its strategic objectives. center currently available. However, data backup/recovery is carried As a result, Maroc Telecom may then lose customers, fail to attract out regularly to minimize this potential impact. Although difƓ cult new customers, or be obliged to incur signiƓ cant costs to maintain to quantify, the impact of such an event could result in customer its customer base, which might have a negative effect on its business dissatisfaction and lower revenues. activities, its operating revenues and its results.
DISRUPTIONS TO TECHNICAL NETWORKS ALTERNATIVE MEANS OF COMMUNICATION COULD RESULT IN A LOSS OF CUSTOMERS COULD LEAD TO A DECREASE IN THE UTILITY, AND LOWER REVENUES OR EVEN THE OBSOLESCENCE, OF The Maroc Telecom Group can only provide services to the extent THE MOBILE AND THE FIXED-LINE that it is able to protect its telecommunications networks from NETWORK, WHICH COULD RESULT IN damage caused by disruptions, power failures, computer viruses, natural disasters, theft and unauthorized access. Any disruption THE LOSS OF COMPETITIVE ADVANTAGE of the system, accident or breach of security measures that would AND SIGNIFICANTLY REDUCE THE cause interruptions in the Group’s operations might affect its ability COMPANY’S REVENUES to provide services to its customers and adversely affect revenues and results from operations. Such disruptions may also result in harm The Company has already been faced with the phenomenon to the image and reputation of the Company and/or its subsidiaries, of the shift from Ɠ xed-line to mobile, compounded by the use of which, in particular, could lead to a loss of customers. In addition, the alternative technologies: In addition, trafƓ c bypass solutions using Group may have to incur additional costs to repair the losses or harm GSM gateways compete with Fixed-line voice services to Corporate caused by these disruptions. customers.
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The Company’s Fixed-line and Mobile telephony business may be – have difƓ culty absorbing the acquired companies, their networks, affected by the growth of these gateways. products or services; Mobile activities are affected by the increasing use of Voice over IP – fail to retain the key talent in the acquired companies or to recruit (VoIP) applications, which are deƓ ned as technologies that enable skilled employees as needed; voice and video communications over the internet that have been – fail to achieve the expected synergies or economies of scale; deregulated in Morocco since Novemberb2016. If this phenomenon – make investments in countries where the political, economic or continues to grow, these alternative technologies could call into legal situation poses speciƓ c risks, such as civil or military unrest, question the usefulness of the Company’s infrastructure or business the lack of real or comprehensive protection of shareholders’ model, which could signiƓ cantly affect its revenues and proƓ ts. rights, or disagreements with other leading shareholders, including the public authorities, over management of the acquired POTENTIAL HEALTH RISKS PRESENTED companies; and – fail to adapt to the speciƓ c characteristics of the countries in which BY NETWORKS, MOBILE PHONES, the companies may possibly be acquired. AND WI-FI TERMINALS
In recentbyears, concerns have been expressed internationally about THE BUSINESS ACTIVITY OF MAROC the potential risks to health of electromagnetic waves from mobile TELECOM OUTSIDE MOROCCO COULD phones and mobile transmission sites. To date, Maroc Telecom is not aware of any tangible evidence that proves the existence of risks to GIVE RISE TO ADDITIONAL RISKS human health associated with the use of mobile phones, with the emission of radio frequencies, or with electromagnetic Ɠ elds. Maroc In the conduct of its international business, Maroc Telecom may be Telecom conducts campaigns eachbyear to measure the intensity faced with risks, such as: of electromagnetic waves from antennas, the results of which have – fluctuations in exchange rates and the devaluation of certain always proved consistent with international standards. currencies; Nevertheless, the perception of these risks by the public could have – restrictions imposed on the repatriation of capital; signiƓ cant negative effects on the revenues or the Ɠ nancial position – unexpected changes in the regulatory and tax environment; of Maroc Telecom, particularly if legal proceedings were instituted – tax measures that could have negative effects on Maroc Telecom’s or if regulation imposed additional costs for compliance with new results of operations or on its cash Ŵ ows; standards. – the local economic and political situation.
THE FRAUDULENT DIVERSION OF TRAFFIC WHEREVER MAROC TELECOM OPERATES, COULD LIMIT THE COMPANY’S REVENUES IT COULD FAIL TO RETAIN KEY PERSONNEL AND AFFECT ITS RESULTS OR TO HIRE HIGHLY QUALIFIED STAFF, The Company suffered a fraudulent diversion of trafƓ c. Since then, WHICH COULD SIGNIFICANTLY AFFECT THE Maroc Telecom has introduced a plan to Ɠ ght against this fraud. COMPANY’S BUSINESS ACTIVITIES AND ITS However, Maroc Telecom cannot predict if new means of fraud will develop, nor the sectors that will possibly be targeted by offenders, ABILITY TO ADAPT TO ITS ENVIRONMENT nor the impact that any such fraud might have. The performance of Maroc Telecom depends signiƓ cantly on skills If Maroc Telecom fails to curb the use of fraud, it could see its trafƓ c and services provided by its management team. The management decline, and its revenues and results could be affected. team has a great deal of experience and extensive knowledge of the telecoms industry. The loss of key members of management could have a signiƓ cant negative impact on the ability of Maroc Telecom THE RISKS INHERENT IN POTENTIAL to implement its strategy. ACQUISITIONS BY MAROC TELECOM Maroc Telecom and its performance are also dependent on skilled OF TELECOM COMPANIES OR personnel with the experience and the technical and commercial skills needed to grow its business. Maroc Telecom’s ability to adapt LICENSES COULD HAVE AN IMPACT its services, its products and its commercial offers, whether in the Ɠ eld ON MAROC TELECOM’S BUSINESS ACTIVITIES of Ɠ xed-line or of mobile telecoms, is highly dependent on its having competent and skilled teams in each market segment. To broaden its search for new drivers for growth, Maroc Telecom is If Maroc Telecom were not to succeed in retaining its key personnel, seeking to achieve external growth by acquiring telecom companies, whether in its management team or among its commercial and or by licensing, in other countries. Such transactions necessarily technical staff, its business could be affected and its operating involve risks. If Maroc Telecom were to fail to achieve the results income could diminish substantially. expected from these acquisitions, its business activities and its results could be affected. Maroc Telecom could, in particular: – make acquisitions on Ɠ nancial or operational terms and conditions which prove to be unfavorable;
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1.3.2 REGULATORY RISKS 1 THE INTERPRETATION OF EXISTING Following the passage of Lawb 104-12 on price freedom and REGULATIONS AND THE ADOPTION competition, the Decreebof Mayb31, 2016 amending and completing the Decreebof Julyb13, 2005 governing the proceeding with the ANRT OF FUTURE LEGAL OR REGULATORY for disputes, anti-competitive practices and economic concentration, STANDARDS COULD SIGNIFICANTLY granted to the ANRT new powers to control anti-competitive practices AFFECT MAROC TELECOM’S OPERATIONS and concentration in the telecommunications sector. As a result, the ANRT was given new powers to sanction anti-competitive practices, which can reach 10% of the revenue of the operator in question, The regulatory environment of the telecommunications industry in which is doubled in the event of repeated violations. Morocco and in the countries where the Group operates is constantly changing. In Morocco, Law 24-96 and its implementing provisions, as amended MAROC TELECOM’S BUSINESS COULD BE and supplemented, as well as current revisions, could be interpreted in a way that might affect Maroc Telecom’s business and lead to a AFFECTED BY REGULATORY PRESSURE decrease in revenues and net proƓ ts. IN THE MARKETS IN WHICH ITS Major directions for the future, as outlined by the ANRT in the context SUBSIDIARIES OPERATE of the 2014-2018 General Policy Document and the proposed Law 121-12 amending Law 24-96, as well as the new guidelines that have Group subsidiaries must comply with a set of regulations relating to taken effect since Mayb2016, could have a signiƓ cant impact on the the conduct of their operations. proƓ tability of some services, and Maroc Telecom’s business more They are subject to oversight by the authorities, which aim to ensure generally, especially with regard to: fair competition. – the strengthening of existing and future regulatory measures in Major changes in the nature, interpretation or application of regulation terms of access to the wired local loop and passive infrastructures; by governmental, legal or regulatory authorities, particularly as – tougher sanctions (increase in Ɠ nes of up to 2% of revenues, or 5% concerns antitrust law, could result in additional expense for Maroc in the case of repeat offenses, and assigning greater powers to the Telecom or cause it to modify its service, resulting in material impact regulator, which will have both investigative and punitive powers); on its operations, earnings and growth outlook. – boosting of national roaming and its extension to the areas For all subsidiaries, obligations relating to the identiƓ cation of mobile designated by the ANRT, in addition to areas with universal service; subscribers have increased, and for some of them the identiƓ cation – the intensiƓ cation of price controls over Maroc Telecom’s retail deadlines are expiring. After that, the accounts of unidentified offers and promotions (owing to its position as the dominant subscribers would have to be suspended. The risk of a Ɠ ne cannot operator in all markets), and communication and quality of be ruled out. service monitoring introduced by the regulator, risk prejudicing its If Maroc Telecom and its subsidiaries should be unable to acquire, commercial freedom and particularly its ability to launch attractive to renew the licenses they need, in good time and at a reasonable promotions on the market; cost, to carry out, continue, and develop their operations, and if they – the guidelines for reviewing the operators’ rate offers published should be unable to retain them, in particular for noncompliance with in 2016 are favorable to third-party operators. In contrast to commitments made in return for obtaining said licenses, their ability Maroc Telecom, they have the possibility of practicing different to achieve strategic objectives could be adversely affected. on-net and off-net rates for prepaid communications. Promotions Broadly speaking, the rise in regulatory fees and special taxes in and offers will be subject to a replicability test based on the full countries in which Maroc Telecom Group does business also cost. The minimum rate required from Maroc Telecom for the constitutes a signiƓ cant risk factor. replicability test is now 20% for Ɠ xed-line and mobile. These lines could negatively impact the competitive capacity of IAM; – the rules applicable to the occupation of the public domain MAROC TELECOM MAY BE UNABLE contain uncertainties and might evolve in a way that is unfavorable to Maroc Telecom; TO DEDUCT CERTAIN PROVISIONS – new rules relating to urban planning and new real estate FOR DOUBTFUL RECEIVABLES developments that have not yet been approved could have unfavorable consequences for Maroc Telecom; The amount of doubtful receivables for which Maroc Telecom has made provisions is deductible from its taxable proƓ t, subject to the – changes in Net Neutrality regulations encourage more intense presentation of evidence that legal action has been taken against competition from Over The Top (OTT) operators. the debtors. If the deductibility of such provisions for doubtful The regulatory levers were already strengthened in 2017 through receivables was challenged, the Company’s earnings and proƓ ts the decisions made by the ANRT regarding the asymmetry of mobile could be adversely affected. termination rates (see Section 3.2.1.4, Regulatory environment).
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1.3.3 MARKET RISKS
In accordance with its cash-management policy, Maroc Telecom risk.” For liquidity risk, see Noteb32 to the consolidated Ɠ nancial does not invest in stocks, equity UCITS or derivatives. Maroc Telecom statements, “Risk Management.” invests its cash with Ɠ nancial institutions, either in sight deposits or Interest-rate risk management and an analysis of the sensitivity of term deposits. The counterparty exposure limits for each Ɠ nancial the Group’s position to interest rate Ŵ uctuations are presented in institution are approved by the Management Board. Noteb32 to the consolidated Ɠ nancial statements, “Risk Management.” For market risks (foreign exchange and interest rate risks), see Sectionb4.2.3, “Qualitative and quantitative information on market
20 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 KEY FIGURES, GROUP STRATEGY AND RISK FACTORS
1
MAROC TELECOM ____ 2017 Registration Document 21 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 22 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 2 GENERAL INFORMATION ABOUT THE COMPANY
2.1 PERSON RESPONSIBLE FOR THE REGISTRATION DOCUMENT AND FOR THE AUDIT OF THE FINANCIAL STATEMENTS 24 2.1.1 Person responsible for the Registration Document 24 2.1.2 CertiƓcation of the Registration Document 24 2.1.3 Person responsible for the audit of the Ɠnancial statements 25 2.1.4 Information policy 25
2.2 INFORMATION ABOUT THE COMPANY AND CORPORATE GOVERNANCE 26 2.2.1 General information about the Company 26 2.2.2 Additional information about the Company 34 2.2.3 Corporate governance 44
MAROC TELECOM ____ 2017 Registration Document 23 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 GENERAL INFORMATION ABOUT THE COMPANY 2 Person responsible for the Registration Document and for the audit of the U nancial statements
2.1 _ Person responsible for the Registration Document and for the audit of the financial statements
In this Registration Document, the terms “Maroc Telecom” and the “Company” refer to Itissalat Al-Maghrib S.A (Maroc Telecom), and the term “Group” refers to the group comprising the Company and all of its subsidiaries, as described in Chapterb4.
2.1.1 PERSON RESPONSIBLE FOR THE REGISTRATION DOCUMENT
Abdeslam Ahizoune Chairman of the Management Board
2.1.2 CERTIFICATION OF THE REGISTRATION DOCUMENT
Having taken all reasonable care to ensure that the following is true, – the Statutory auditors’ report on the statutory Ɠ nancial statements I hereby certify that, to my knowledge, the information contained in for the Ɠ scalbyear ended Decemberb31, 2017, presented on page this Registration Document accurately reŴ ects the facts and contains 166 of this Registration Document; no omission likely to affect its meaning. – the Statutory auditors’ report on the consolidated financial I certify that, to my knowledge, the financial statements were statements for the Ɠ scalbyear ended Decemberb31, 2016, presented prepared in accordance with applicable accounting standards on page 152 of Registration Document D.17-0386 Ɠ led with the and that they present fairly the assets, Ɠ nancial position and results AMF on Aprilb14, 2017; of operations of the Company and its consolidated subsidiaries, – the Statutory auditors’ report on the statutory Ɠ nancial statements and that the management report (under Chaptersb3 and 4 of this for the Ɠ scalbyear ended Decemberb31, 2016, presented on page Registration Document) provides a fair review of the changes in 199 of Registration Document D.17-0386 Ɠ led with the AMF on revenues, results of operations and Ɠ nancial position of the Company Aprilb14, 2017; and its consolidated subsidiaries, as well as the risks and uncertainties – the Statutory auditors’ report on the consolidated financial they face. statements for the Ɠ scalbyear ended Decemberb31, 2015, presented I have received an audit completion letter from the Statutory auditors on page 157 of Registration Document D.b16-0336 Ɠ led with the (Abdelaziz Almechatt and Deloitte Maroc, represented by Sakina AMF on Aprilb14, 2016; Bensouda Korachi) stating that they have veriƓ ed all information – the Statutory auditors’ report on the consolidated financial pertaining to the Ɠ nancial position and Ɠ nancial statements included statements for the Ɠ scalbyear ended Decemberb31, 2015, presented in this Registration Document and that they have reviewed the on page 208 of Registration Document D.b16-0336 Ɠ led with the Registration Document in its entirety. AMF on Aprilb14, 2016. The historical Ɠ nancial information presented in this document has The Statutory auditors have reported on the forward-looking Ɠ nancial been reviewed in Statutory auditors’ reports: information contained in Chapterb5, Sectionb5.3, on page 200 of this – the Statutory auditors’ report on the consolidated financial Registration Document. statements for the fiscalb year ended Decemberb 31, 2017, presented on page 121 of this Registration Document; Chairman of the Management Board Abdeslam AHIZOUNE
24 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 GENERAL INFORMATION ABOUT THE COMPANY Person responsible for the Registration Document and for the audit of the U nancial statements
2.1.3 PERSON RESPONSIBLE FOR THE AUDIT OF THE FINANCIAL STATEMENTS
STATUTORY AUDITORS Abdelaziz Almechatt 83 avenue Hassan IIb– 20 100 Casablanca, Morocco Deloitte Audit, represented by Sakina Bensouda Korachi Abdelaziz Almechatt was Ɠ rst appointed in 1998 in accordance with 2 288 Boulevard Mohamed Zerktouni, Casablanca 20 050, Morocco the Bylaws. His current term of ofƓ ce, renewed for threebyears in Sakina Bensouda Korachi was Ɠ rst appointed by the Shareholders’ 2017, expires at the close of the Ordinary Shareholders’ Meeting Meeting on Aprilb26, 2016. Her current three-year term of ofƓ ce called to approve the Ɠ nancial statements for the Ɠ scalbyear ending expires at the close of the Ordinary Shareholders’ Meeting called Decemberb31, 2019. to approve the financial statements for the fiscalbyear ending Decemberb31, 2018.
2.1.4 INFORMATION POLICY
PERSON RESPONSIBLE FOR INFORMATION SCHEDULE OF FINANCIAL REPORTING
François Vitte All Ɠ nancial information reported by Maroc Telecom (press releases, presentations, annual reports) is available at its website: www.iam.ma. Managing Director Administration & Finance (CFO) Maroc Telecom – Avenue Annakhilb– Hay Riad Rabat, Maroc Telephone: +212 (0) 537 71 90 39 E-mail: [email protected]
Maroc Telecom’s 2018 Ɠ nancial reporting schedule (subject to change) is as follows:
Date (a) Event Februaryb19, 2018 Q4-2017 and FY 2017 Results Aprilb23, 2018 Q1-2018 Results Aprilb24, 2018 Shareholders’ Meeting Julyb23, 2018 H1-2018 Results Octoberb22, 2018 Q3-2018 Results
(a) Before stock market opening.
SHAREHOLDER INFORMATION Ɠ nancial analysts made by the Company and various press releases can be viewed on and/or downloaded from the Maroc Telecom Corporate, accounting, and legal documents, whose reporting website at www.iam.ma. is governed by Moroccan and French law and by the Company’s In accordance with the provisions of the Transparency Directive, in Bylaws, may be consulted at the Company’s registered ofƓ ce by force since Januaryb20, 2007, all regulated information is archived shareholders and third parties. Registration Documents and any and available on the Maroc Telecom website at the following address: updates of such documents registered or filed with the French http://www.iam.ma/groupe-maroc-telecom/communication- Financial Markets Regulator (AMF), presentations for investors and Ɠ nanciere/information-reglementee/.aspx
MAROC TELECOM ____ 2017 Registration Document 25 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 GENERAL INFORMATION ABOUT THE COMPANY 2 Information about the Company and corporate governance
2.2 _ Information about the Company and corporate governance
2.2.1 GENERAL INFORMATION ABOUT THE COMPANY
2.2.1.1 CORPORATE NAME As a result of the transposition of European Transparency Directive provisions, effective Marchb 30, 2008, the rules governing the ITISSALAT AL-MAGHRIB. shareholding disclosure thresholds are now applicable to the Company. The Company also operates under the trade names “IAM” and “Maroc Telecom.” Under French regulations, foreign issuers must apply the necessary measures that allow shareholders to manage their investments and exercise their rights. 2.2.1.2 REGISTERED OFFICE Because Company shares are listed on the: – The Company’s registered ofƓ ce is on Avenue Annakhil, Hay Riad, inform the French Financial Markets Regulator (AMF) of any Rabat, Morocco. changes in its share capital compared with previously disclosed information, particularly any shareholding disclosure that Maroc Telephone: +212 537.71.21.21 Telecom may have received; – publish a half-year Ɠ nancial report including condensed Ɠ nancial statements, a half-year operations report, a Statutory auditors’ 2.2.1.3 LEGAL FORM report on the review of the aforementioned Ɠ nancial statements, and a statement from the persons responsible for the report, Maroc Telecom is a Moroccan corporation. within threebmonths of the end of the Ɠ rst half of the Company’s Ɠ scalbyear; 2.2.1.4 GOVERNING LAW – publish an annual Ɠ nancial report including Ɠ nancial statements, a management report, a Statutory auditors’ report, and a statement from the persons responsible for the report, within fourbmonths of The Company is governed by Moroccan law, in particular by Lawb17-95 the end of the Company’s Ɠ scalbyear; pertaining to corporations, as amended and extended by Lawb20-05 and 78-12, and by the Company’s Bylaws. The Company is not subject – publish within four (4)bmonths of the Ɠ scalbyear-end the fees paid to French law governing business corporations. to each of the Statutory auditors (to be reported in the Registration Document posted on the Maroc Telecom website); Because the Company is listed on a regulated market in Morocco, – the provisions of various Moroccan laws, regulations, orders, decrees publishbmonthly the total number of voting rights and shares and circulars are applicable. comprising the Company’s share capital; – publish promptly any information on new facts that may materially affected the share price, and inform the AMF thereof; 2.2.1.5 COMMITMENTS OF THE COMPANY – inform French shareholders about changes in Company business WITH RESPECT TO THE FRENCH or in the management team; FINANCIAL MARKETS REGULATOR – make the necessary provisions to allow persons who hold their shares through Euroclear France to exercise their rights, particularly Because the Company is also listed on the Premier marché of NYSE by informing them of Shareholders’ Meetings and by allowing Euronext Paris, it is subject to certain provisions of French securities them to exercise their voting rights; regulations. Under current laws and pursuant to the General – notify persons who hold their shares through Euroclear Regulations of the French Financial Markets Regulator (AMF), France about dividend payments, new share issues, allocation, provisions concerning foreign issuers are applicable to the Company. subscription, surrender and conversion; In addition, NYSE Euronext Paris organization and operating rules are – update names and details of the persons responsible for generally applicable to the Company. The French Financial Markets information in France; Regulator may also enforce the mandatory submission of a public – tender offer and buyout for all buyout offers concerning Company provide the AMF with any information it may require in accordance shares. with its mission and with the laws and regulations applicable to the Company;
26 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 GENERAL INFORMATION ABOUT THE COMPANY Information about the Company and corporate governance
– comply with the provisions of the AMF General Regulations 2.2.1.8 CORPORATE PURPOSE relating to mandatory public disclosure; – comply with the various procedures described in the AMF General In accordance with its contract speciƓ cations as an operator and Regulations for publishing disclosures; pursuant to Articleb2 of the Company’s Bylaws and the statutory and regulatory provisions in force, the Company’s corporate purpose is: – post all available regulated information on Maroc Telecom’s website and keep a record of such information for at least tenbyears; – to provide all electronic communication services for domestic and international relations, and in particular to provide universal – inform the AMF and NYSE Euronext Paris of any proposed telecommunications service; amendment of the corporate Bylaws. – to establish, develop and operate all publicly available electronic 2 The Company is required to inform the AMF of any resolution by communications networks that are necessary for the provision of the Shareholders’ Meeting to authorize the Company to trade in the aforementioned services, and to ensure that said networks are its own shares, and must provide the AMF with periodic reports on interconnected with other networks available to users in Morocco the purchases or sales of shares by the Company by virtue of said and international users; authorization. – to provide all other services, facilities, equipment, handsets and The Company must publish identical information simultaneously in electronic communication networks, and to establish and operate France and in other countries, in particular Morocco. all networks that distribute audiovisual services, including audio, All publications and disclosures referred to in this chapterbare television and multimedia broadcasting. published mainly through notices and press releases in national As part of the activities thus deƓ ned, the Company may: Ɠ nancial daily newspapers distributed in France. – create, acquire, own and operate all movable and immovable Information intended for the French general public is written in property and any business necessary, or just useful, for its activities French. and particularly those the transfer or use of which is provided for Like French issuers, the Company publishes a Registration Document by law; providing legal and financial information relating to the issuer – market and, as a secondary activity, assemble and manufacture any (shareholder structure, operations, management procedures, telecommunication products, equipment and devices; Ɠ nancial information). The Registration Document does not contain – create, acquire or take on license and operate or sell any patents, information relating to the issue of speciƓ c securities. processes or trade names; In practice, the Company’s annual report may be used as the – participate, by any legal means, in any financial syndicates, Registration Document, on condition that it contain all mandatory businesses or companies, existing or being incorporated, with a information. purpose similar or related to that of the Company; The Registration Document must then be Ɠ led or registered with the – more generally, execute any commercial, financial, securities- AMF and subsequently made available to the public. related or real estate transactions and, if necessary, any industrial Annual and half-year reports in French are available to the public in operations that could, directly or indirectly, in whole or in part, be France at the ofƓ ces of the Ɠ nancial intermediary in charge of the connected with any of the Company’s corporate purposes, or with Company’s Ɠ nancial services in France (currently BNP Paribas). any similar or related purposes and even with any purposes that might promote its growth and development. In addition, the Company intends to maintain an active policy towards all shareholders, including those whose shares are held through Euroclear France, to allow them to participate in all rights issues open 2.2.1.9 CONSULTATION OF LEGAL to the public and, if applicable, carried out on international markets. DOCUMENTS However, because of the constraints arising from operations on international Ɠ nancial markets, in order to beneƓ t from the optimal Corporate, accounting and legal documents the disclosure of which conditions of those markets, and in the interest of the Company and is required by law and by the Company’s Bylaws to the shareholders of its shareholders, the Company cannot guarantee that persons and third parties may be inspected at the registered ofƓ ce of the holding their shares through Euroclear France will be able to Company. participate in any such rights issues where applicable. 2.2.1.10 COMPANY’S FINANCIAL YEAR 2.2.1.6 INCORPORATION–REGISTRATION The Company’s fiscalb year begins on January 1 and ends on The Company was founded in Rabat by a charter dated Februaryb3,b1998. December 31. The Company was registered with the Rabat Trade Registry on Februaryb10, 1998, under number 48b947. 2.2.1.11 ALLOCATION OF PROFITS 2.2.1.7 TERM At each fiscalbyear-end, the Management Board establishes an inventory of the Company’s various assets and liabilities at that date The term of the Company, subject to early liquidation or extension and prepares the Ɠ nancial statements and the management report as provided for by law and the Company’s Bylaws, is ninety-nine to be submitted at the Shareholders’ Meeting in accordance with the (99)byears from the date of registration with the Trade Registry. rules and regulations in force. The net proƓ t generated by the Company, less prior net losses, if any, is subject to a Ɠ ve percent (5%) deduction allocated to a legal reserve fund; this deduction ceases to be mandatory when the amount of the legal reserve exceeds one-tenth of the share capital.
MAROC TELECOM ____ 2017 Registration Document 27 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 GENERAL INFORMATION ABOUT THE COMPANY 2 Information about the Company and corporate governance
The distributable proƓ t consists of net proƓ t for the Ɠ scalbyear, after – by the liquidator(s) in the event of dissolution of the Company and allocation to the legal reserve and allocation of net income carried during its liquidation; over from previousbyears. – by the shareholders holding a majority of the capital or voting The Shareholders’ Meeting may deduct from the proƓ t any amounts rights following a public tender or exchange offer or after the that it deems appropriate to allocate to any ordinary or extraordinary disposal of a block of shares changing the control of the Company; discretionary reserve funds or to carry forward, within the limit of a and maximum total amount equal to half (1/2) the distributable proƓ t, – by the Supervisory Board. unless an exception has been authorized by the Supervisory Board Shareholders’ Meetings are called and deliberate as provided by law. by a majority of three-quarters (3/4) of those members of the Supervisory Board who are present or represented. The Company is required, at least thirty (30)b days before a Shareholders’ Meeting, to publish, in a newspaper appearing in the The balance is allocated to the shareholders in the form of dividends, list established by the Minister of the Economy and Finance, a notice the total amount of which must be equal to at least half (1/2) the of meeting containing the information required by law and the text distributable proƓ t, unless an exception has been authorized by of the draft resolutions to be presented to the Shareholders’ Meeting the Supervisory Board by a majority of three-quarters (3/4) of those by the Management Board . members of the Supervisory Board who are present or represented. The Company is required, at least fifteen (15)b days before a To the extent permitted by law, the Shareholders’ Meeting may Shareholders’ Meeting, to publish, in a newspaper appearing in decide, exceptionally, to distribute sums withdrawn from the the list established by the Minister of the Economy and Finance, a discretionary reserves which it controls. (See also Sectionb2.2.5. notice of meeting including, if applicable, information on how to vote “Dividends and dividend policy”). by mail. The Company must publish in an ofƓ cial journal of record, at the same time as the call to the Annual Ordinary Shareholders’ Payment of dividends Meeting, the summary Ɠ nancial statements for the previous Ɠ scalbyear prepared in accordance with the legislation in force (which must The arrangements for the payment of dividends approved by the include the balance sheet, the income statement, the schedule of Ordinary Shareholders’ Meeting are set by the meeting itself or, income statement balances and the cash Ŵ ow statement) and the failing this, by the Management Board. report of the Statutory auditor(s) on those statements. This payment will be made within a maximum period of nine Any changes to these documents must be published in an ofƓ cial (9)bmonths after the Ɠ scalbyear-end, subject to an extension of this journal of record by the Company within twentybdays of the date of period by order of the President of the Court, ruling in summary holding the Annual Ordinary Shareholders’ Meeting. proceedings, at the request of the Supervisory Board. Meetings are held either at the registered ofƓ ce or at another location After Ɠ vebyears from the dividend payment date, the dividends are speciƓ ed in the call to meeting. prescribed and lapse to the beneƓ t of the Company. Sums not collected and not prescribed constitute a claim by the 2.2.1.12.3 Agenda beneƓ ciaries that does not bear interest against the Company unless they are converted into loans on terms and conditions determined The agenda for meetings is set by the person calling the meeting. by mutual agreement. However, one or more shareholders representing at least two If the shares are encumbered by a usufruct, the dividends are due percent (2%) of the share capital may request that one or more draft to the usufructuary. However, the proceeds from a distribution of resolutions be included in the agenda. reserves, excluding retained earnings, are allocated to the owner. Regardless of the number of shares held, every shareholder has the right, on proof of identity, to attend Shareholders’ Meetings, on 2.2.1.12 SHAREHOLDERS’ MEETINGS condition: – for holders of registered shares: that these are registered in the name of the holder in the records of the Company; 2.2.1.12.1 Shareholders’ Meetings – for holders of bearer shares: that the bearer shares, or a certiƓ cate The collective decisions of the shareholders are made at of deposit issued by the depository of these shares, are lodged Shareholders’ Meetings, which can be ordinary or extraordinary at the place mentioned in the notice convening the meeting; and depending on the nature of the decisions for which they are called. – if applicable, to provide the Company, in accordance with the provisions in force, with any document that can be used to identify Duly convened Shareholders’ Meetings represent all the shareholders such shareholder. and their resolutions are binding on everyone, including the absent, incapacitated and objectors or shareholders deprived of the right These formalities must be completed no later than five (5)bdays to vote. before the date of the Shareholders’ Meeting, unless a shorter period is speciƓ ed in the notice of meeting or in current mandatory legal 2.2.1.12.2 Convening of Shareholders’ Meetings provisions reducing this period. Shareholders’ Meetings are convened by the Management Board. 2.2.1.12.4 Composition Otherwise, in an emergency, Ordinary Shareholders’ Meetings may The Shareholders’ Meeting is composed of all the shareholders also be called: regardless of the number of shares held. Corporate shareholders – by one or more Statutory auditors, who may only do so after are represented by their proxy who need not be a shareholder. unsuccessfully requesting that the meeting be called by the A shareholder may be represented by another shareholder, the Management Board; shareholders’ guardian, spouse or by an ascendant or descendant of – by a proxy appointed by the President of the Court following a the shareholder, without it being necessary that the latter, personally, summary application from any interested party or from one or more be shareholders, or by any company whose corporate purpose is the shareholders representing at least one-tenth of the share capital; management of portfolios of securities.
28 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 GENERAL INFORMATION ABOUT THE COMPANY Information about the Company and corporate governance
Joint owners of undivided shares are represented at Shareholders’ 2.2.1.12.8 Ordinary Shareholders’ Meetings Meetings by one of them or by a single proxy. Shareholders who have pledged their shares retain only the right to POWERS AND RESPONSIBILITIES attend Shareholders’ Meetings. Ordinary Shareholders’ Meetings decide on all administrative matters that exceed the powers of the Supervisory Board and 2.2.1.12.5 Committee ć Attendance register the Management Board and which are not within the powers of Extraordinary Shareholders’ Meetings. COMMITTEE An Ordinary Shareholders’ Meeting is held at least once abyear, within 2 Shareholders’ Meetings are chaired by the Chairman or the Deputy sixbmonths of the Ɠ scalbyear-end. Chairman of the Supervisory Board. Otherwise, the meeting elects This Shareholders’ Meeting hears the reports of the Management its own Chairman. Board and of the Statutory auditor(s). It considers, amends, The Chairman of the Shareholders’ Meeting is assisted by twob(2) and approves or rejects the Ɠ nancial statements. It votes on the shareholders representing the largest number of shares, either in distribution and appropriation of proƓ ts. their own right or as proxies, who, subject to their acceptance, are It appoints and removes the members of the Supervisory Board, appointed as tellers. The committee thus formed appoints a Secretary removes the members of the Management Board and appoints the who need not be a shareholder attending the meeting. Statutory auditors.
ATTENDANCE REGISTER QUORUM AND MAJORITY An attendance register is maintained at each Shareholders’ Meeting Ordinary Shareholders’ Meetings are regularly constituted and showing the Ɠ rst name(s), the family name and the address of the may validly deliberate on Ɠ rst call if the shareholders present or shareholders and, if applicable, their representatives, and the number represented hold at least one quarter of the shares with voting rights, of shares and votes they hold. excluding shares acquired or accepted as security by the Company. If This attendance register is initialed by all shareholders present and there is no quorum, a second meeting is called for which no quorum by the proxies of those absent. It is then certiƓ ed by the members of is required. the Meeting Committee. At Ordinary Shareholders’ Meetings, resolutions are passed by a majority vote of the shareholders present or represented. 2.2.1.12.6 Voting 2.2.1.12.9 Extraordinary Shareholders’ Members of the Shareholders’ Meeting have as many votes as the shares they hold or represent, including by means of voting proxies Meetings or other powers. POWERS AND RESPONSIBILITIES Voting rights attached to shares belong to the usufructuary at Ordinary Shareholders’ Meetings and to the bare owner at Only Extraordinary Shareholders’ Meetings are authorized to amend Extraordinary Shareholders’ Meetings. any or all the provisions of the Bylaws. If shares are pledged, the owner exercises the right to vote. However, they may not change the nationality of the Company nor increase the obligations of shareholders without the consent of each The Company may not vote using shares that it has acquired or of them. accepted as security. They may decide to transform the Company into a company with any Any shareholder may vote by mail in accordance with current other form, subject to compliance with the legal provisions applicable regulations. Shareholders exercising a postal vote are treated as on this subject. shareholders present or represented when their postal voting form is received by the Company at least twobdays before the Shareholders’ QUORUM AND MAJORITY Meeting. Extraordinary Shareholders’ Meetings are only duly constituted and may only validly deliberate if the shareholders present or represented 2.2.1.12.7 Minutes at the Ɠ rst meeting called hold at least half or, at the second meeting Minutes of Shareholders’ Meetings are recorded in a special register called, one quarter of the shares providing the right to vote, excluding kept at the registered ofƓ ce, numbered and initialed by the Registrar shares purchased or accepted as security by the Company. of the Court of the place where the Company’s registered ofƓ ce is In the absence of a quorum representing one quarter, the second located. meeting may be postponed to a date no more than twobmonths after Copies or extracts of thebminutes are certiƓ ed only by the Chairman of the meeting at which it had been called and may duly be held with the Supervisory Board or by the Deputy Chairman of the Supervisory the presence or representation of shareholders representing at least Board, signing jointly with the Secretary. one quarter (1/4) of the share capital. At Extraordinary Shareholders’ Meetings, resolutions are passed by a two-thirds majority vote of the shareholders present or represented.
MAROC TELECOM ____ 2017 Registration Document 29 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 GENERAL INFORMATION ABOUT THE COMPANY 2 Information about the Company and corporate governance
2.2.1.13 STATUTORY AUDITORS The Statutory auditor(s) may, at any point throughout thebyear, conduct any inspections and audits that they deem appropriate, and Audits of the Company are conducted by at least two Statutory may obtain disclosure, at the Company’s ofƓ ces, of any documents auditors who are appointed and perform their engagement they consider necessary for the performance of their duties and, according to law. in particular, any contracts, ledgers, accounting documents and registers ofbminutes. 2.2.1.13.1 Appointment ć DisqualiUcation ć The summary Ɠ nancial statements and the Management Board’s Ineligibility management report are made available to the Statutory auditors at least sixtybdays prior to the notice convening the Annual Shareholders’ During the life of the Company, the Statutory auditors are appointed Meeting. for three Ɠ scalbyears by the Ordinary Shareholders’ Meeting. The duties of the Statutory auditors expire after the Ordinary Shareholders’ Meeting called to approve the Ɠ nancial statements 2.2.1.14 AUDIT COMMITTEE for the third Ɠ scalbyear. Statutory auditors may be reappointed. Lawb78.12 amending and supplementing Lawb17-95 on corporations A Statutory auditor appointed by a Shareholders’ Meeting to replace The latter is speciƓ cally responsible for ensuring that information another will only remain in ofƓ ce for the remainder of the term of is collected and presented to the shareholders, the public and ofƓ ce of the Statutory auditor’s predecessor. If it is proposed at a the AMMC for monitoring the effectiveness of internal control Shareholders’ Meeting not to renew a Statutory auditor’s term of systems, internal audits, the statutory audit of Ɠ nancial statements ofƓ ce when it expires, the Statutory auditor may, if the Statutory and the independence of auditors with particular focus on the auditor so requests, address the Shareholders’ Meeting. provision of additional services. It also makes recommendations One or more shareholders representing at least 5% of the share to the Shareholders’ Meeting on the Statutory auditor(s) whose capital and/or the Moroccan Financial Market Authority (AMMC) may appointment is proposed. In addition, it reports to the Supervisory make a duly justiƓ ed application to the President of the Commercial Board on a regular basis on the performance of its duties and Court, ruling in summary proceedings, for the disqualiƓ cation of the promptly informs of any difƓ culties encountered. Statutory auditor(s) appointed by the Shareholders’ Meeting and for the appointment of one or more auditors to hold ofƓ ce in their place. For the matter to be referred to the court, a duly reasoned 2.2.1.15 DISPOSAL OF SHARES application must be submitted within a period of (30) thirtybdays from the disputed appointment. If the application is granted, the Disposals of shares take place as provided by law. Statutory auditor(s) appointed by the President of the Commercial Court will remain in ofƓ ce until the appointment of new auditor(s) by the Shareholders’ Meeting. 2.2.1.16 SHAREHOLDING DISCLOSURE If it becomes necessary to appoint one or more auditors and if the THRESHOLDS meeting fails to do so, any shareholder may apply to the President of the Commercial Court, ruling in summary proceedings, for the appointment of the required Statutory auditor(s). 2.2.1.16.1 In Morocco The Statutory auditor(s) appointed by the President of the Court will The obligations concerning the thresholds for the disclosure remain in ofƓ ce until the appointment of the new Statutory auditor(s) of ownership of shares or voting rights in listed companies are by the Shareholders’ Meeting. The appointment of Statutory auditors described by Circular 01/04 of Juneb8, 2004. must take into account the rules governing conŴ icts of interest. The following description summarizes these obligations. Holders of In the event of resignation, the Statutory auditors must prepare a Company shares or other securities are advised to consult their legal report explaining the reasons for their decision. This document is advisors in order for them to prepare a declaration if the disclosure submitted to the Supervisory Board and to the next Shareholders’ obligation is applicable to them. Meeting. It must be sent immediately to the AMMC. Any individual or legal entity, acting alone or in concert, who comes to hold, directly or indirectly, a number of shares representing more 2.2.1.13.2 Duties of Statutory auditors than a twentieth (5%), a tenth (10%), a Ɠ fth (20%), a third (33.33%), Statutory auditors have the permanent duty, to the exclusion of any half (50%) or two-thirds (66.66%) of the Company’s capital or voting interference in the management, to audit the book values, ledgers rights must, within Ɠ ve businessbdays of crossing above or below the and accounting records of the Company and to verify that its accounts shareholding threshold, inform the Company, the Moroccan Financial comply with the rules in force. They also verify the accuracy and Market Authority (AMMC) and the Casablanca Stock Exchange of the consistency with the summary Ɠ nancial statements of the information total number of shares held and the attached voting rights. The date set out in the management report of the Management Board and of crossing the shareholding threshold is the date of execution on in the documents sent to shareholders concerning the Company’s the stock market of the order passed by the declarant. assets, its Ɠ nancial position and its results of operations. In addition to the statutory obligation mentioned above to inform The Statutory auditors ensure that equality between the shareholders the Company of crossing upward or downward the aforementioned has been observed. thresholds for holdings of capital or voting rights, any individual or legal entity, acting alone or in concert, who comes to hold, directly The Statutory auditors are invited to meetings of the Management or indirectly, a number of shares representing more than 3%, 5%, 8%, Board and the Supervisory Board which approve the financial 10%, and, above 10%, each 5% multiple of the Company’s capital or statements and to Shareholders’ Meetings. voting rights, is required to declare to the Company, by registered mail with acknowledgment of receipt, the total number of shares or voting rights held, within Ɠ ve stock exchange tradingbdays from the date of acquisition.
30 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 GENERAL INFORMATION ABOUT THE COMPANY Information about the Company and corporate governance
The declaration mentioned above must also be made when the Declaration of intent: shareholding falls below the thresholds indicated above. – the declaration of crossing the threshold(s) of 10%, 15%, 20% In each declaration referred to above, the declarant must certify that or 25% of the capital or voting rights results in the obligation the declaration made comprises all the shares or voting rights owned to make a declaration of intent for the next sixbmonths. Such or held. It must also indicate the dates of acquisition or transfer of declaration must indicate whether the purchaser is acting alone shares. or in concert, whether it plans to stop or to continue buying or to acquire control of a company, the strategy which it plans with Any individual or legal entity, acting alone or in concert, who comes regard to the issuer, and if it plans to ask the issuer to appoint the to hold, directly or indirectly, a number of shares representing more declarant or one or more persons as a Director or as a member than one-tenth (10%) or one-Ɠ fth (20%) of the capital or voting rights 2 of the Management Board or of the Supervisory Board. It must be of the Company must, within Ɠ ve businessbdays of crossing above sent to the Company whose shares were acquired and to the AMF one of these thresholds, inform the Company, the Moroccan Financial within ten tradingbdays. This information is disclosed to the public Market Authority (AMMC) and the Casablanca Stock Exchange of the in accordance with the terms set forth in the General Regulations objectives it intends to pursue in the subsequent twelve (12)bmonths, of the AMF. clarifying whether it is acting alone or in concert, whether it plans to stop or continue buying shares, whether it plans to nominate The penalty attached to failure to declare the crossings of members for the corporate bodies, and whether or not it intends to shareholding thresholds or to irregularities in these declarations (loss take control of the Company. of voting rights attached to shares exceeding the fraction that should have been declared for any Shareholders’ Meeting to be held within The date of crossing a threshold referred to in the previous paragraph twobyears from the date of proper notice) also applies to failure to is the date when the order passed by the declarant is executed on make a declaration of intent. the stock market. Without prejudice to the provisions of public order and within the mandatory provisions of the law, in the event of non-compliance with 2.2.1.17 PUBLIC OFFERS the above reporting obligation, the shares exceeding the fraction that should have been declared are stripped of the right to vote at Public offers under Moroccan law are governed by Lawb46-06 any Shareholders’ Meeting held until the expiration of a period of amending and supplementing Lawb26-03 of Aprilb21, 2004. A public twob(2)byears from the date of the violation. offer is deƓ ned as a procedure that enables an individual or legal Holders of shares may also be subject to reporting obligations entity (called the offeror), acting alone or in concert, to make it known provided for by Moroccan royal decree (Dahir) 1-04-21 promulgating publicly that it proposes to acquire, exchange or sell all or part of Lawb26-03 relating to tender offers on the stock market, as amended the securities giving access to the share capital or voting rights of a and supplemented by Lawb46-06. company the securities of which are listed. As under French law, public offers can be voluntary or mandatory 2.2.1.16.2 In France when certain conditions are met. The provisions of the General Regulations of the French Financial Markets Regulator (AMF), concerning the method for calculating 2.2.1.17.1 Voluntary Public OTers declarations of crossing the shareholding thresholds, the content, Any individual or legal entity, acting alone or in concert, wishing to the distribution and Ɠ nally the declaration of intent, applicable to make it known publicly that it intends to sell or purchase securities the Company, are deƓ ned as follows: listed on the stock exchange may Ɠ le a draft Public Offer for the In calculating the shareholding disclosure thresholds, the person purchase or sale of said securities. liable for the information takes into account the shares and voting Unlike French law, which requires the involvement of the sponsoring rights it holds, as well as the shares and voting rights considered institutions, under Moroccan law, a draft public offer is Ɠ led by the equivalent to them, and determines the fraction of the share capital offeror with the Moroccan Financial Market Authority (AMMC) and and voting rights which it holds on the basis of the total number of must include: shares representing the share capital of the Company and the total – the objectives and intentions of the offeror; number of voting rights attached to these shares. – the number and type of shares that the Company holds or expects Content of and methods for delivering the declaration of crossing to hold; the shareholding disclosure threshold(s): – the date and terms on which their purchase has been or may be – persons to notify the AMF must do so no later than the fourth carried out; trading day after crossing the shareholding threshold. The AMF – the price or exchange ratio at which the offeror is offering to publishes on its website the calendar of tradingbdays on the acquire or dispose of the securities, the basis it has selected for different regulated markets established or operating in France; setting them and the planned terms of settlement, delivery or – declarations of crossing the shareholding disclosure threshold exchange; must be prepared based on the template provided in the AMF – the number of securities involved in the draft public offer; and guidelines concerning declarations of crossing the shareholding threshold available on the website www.amf-france.org. – if applicable, the percentage, expressed in voting rights, below which the offeror reserves the right to withdraw its offer. They may be transmitted electronically to the AMF. The AMF then informs the public about the declarations within a maximum of three The draft public offer must be accompanied by a prospectus. tradingbdays after the receipt of the completed declarations. The different applicable thresholds are as follows: 5%, 10%, 15%, 20%, 25%, 30%, 33%, 50%, 66%, 90% and 95%.
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The content and implementation of the proposals in the draft offer required for it to learn about both the draft offer and the draft are guaranteed by the offeror and, if applicable, by any person prospectus. acting as surety. The draft Public Offer Ɠ led with the AMMC must The deadline is suspended until receipt of the required documents. be accompanied, if applicable, by the prior authorization(s) of the If the draft offer meets the required conditions, the AMF publishes competent authorities. Without this authorization, a draft public offer a compliance statement that carries its approval of the prospectus. is inadmissible. Under French law, the prospectus approved by the AMF must be Upon Ɠ ling of the draft Public Offer, the AMMC will publish a notice of widely publicized (i) in a daily economic and Ɠ nancial newspaper with Ɠ ling of the draft Public Offer in an ofƓ cial journal of record reporting national circulation or (ii) by being made available to the public, free the main provisions of the proposal. The publication of such notice of charge, by the Offeror and the target company and published in marks the start of the offer period. summary form, or be the subject of a press release the distribution The AMMC discloses the main features of the draft public offer to the of which is ensured by the Offeror, in accordance with established authorities, which then have twob(2) businessbdays to decide whether procedures. This publication must take place before the opening the draft is admissible in view of the national strategic interests. of the offer and no later than the second trading day following the issuance of approval. If the administration fails to publish its decision within twob(2)bdays, it is deemed not to have any comments to make. 2.2.1.17.2 Mandatory public oTers Upon Ɠ ling of the draft Public Offer, the AMMC will request that the stock exchange management company suspend trading in TENDER OFFER the securities of the target of the draft Public Offer. The notice of suspension is published. Under the provisions of Articleb18 of Moroccan Lawb26-03 on public offers, as amended and supplemented by Lawb46-06, it is mandatory The AMMC has ten (10) businessbdays from the publication to to Ɠ le a tender offer where a person or entity, acting alone or in consider the admissibility of the draft offer and may require the concert, comes to hold, directly or indirectly, a certain percentage offeror to produce any evidence or information required for its of the voting rights of a company the shares of which are listed on assessment. Under French regulations, this time limit is five (5) the stock exchange. tradingbdays following the publication of the Ɠ ling of the draft offer. The Minister of Finance and Privatization’s Decreeb1874-04 of 11 As under French law, the offeror must amend the draft to comply Ramadan 1425 (Octoberb25, 2004) set at 40% the percentage of with the recommendations of the AMMC if the latter considers that voting rights that requires the holder to make a take-over bid. the draft violates the principle of equality among shareholders, transparency, market integrity and fairness in transactions and Any individual or legal entity must, on its own initiative and within competition. In all cases, the AMMC has the authority to ask the three businessbdays after crossing the threshold of 40% of the voting offeror for any additional warranties or to require the deposit of rights, Ɠ le a draft public offer with the AMMC. Failing which, such margin in cash or securities. Reasons must be given for any decision person and those acting in concert with it automatically lose all the of inadmissibility. voting rights and the monetary and other rights that they may have in their capacity as shareholders. These rights are recovered only Where an offer is declared admissible, the AMMC informs the offeror after the Ɠ ling of a draft public offer. of its decision and publishes a notice of admissibility in an ofƓ cial journal of record. Concurrently, the AMMC asks the stock exchange The AMMC may grant an exception to the Ɠ ling of a draft Mandatory management company to resume trading. Public Offer where: Any proposed Public Offer must be accompanied by a prospectus – crossing the percentage of 40% does not affect the control of the which may be prepared jointly by the Offeror and the target company company concerned, particularly in the event of a capital decrease if it accepts the Offeror’s objectives and intentions. If not, the target or a transfer of ownership of shares between companies in the company may separately prepare and Ɠ le with the AMMC its own same group; prospectus within a maximum period of Ɠ ve (5) tradingbdays from – voting rights result from direct transfer, from distribution of assets receipt of the Offeror’s prospectus. The latter is required to deliver a by a legal entity proportionate to the shareholders’ rights, following copy of its prospectus and its draft Public Offer to the target company a merger or partial contribution of assets, or from subscription to on the day it Ɠ les its draft Public Offer with the AMMC. the increase in capital of a company in Ɠ nancial difƓ culty. The contents of the prospectus(es) is set by the AMMC, which Applications for exemptions are Ɠ led with the AMMC within three has a maximum of twenty-Ɠ ve (25) businessbdays to approve the businessbdays of crossing the threshold of 40% of the voting rights. prospectus(es) from the date of Ɠ ling. If it considers that additional The applications must include undertakings by this person to the justification or explanations are required, this period may be AMMC not to take any action aimed at acquiring control of said extended by ten (10) businessbdays. When this period has elapsed, company for a speciƓ ed period or to implement a recovery plan the AMMC will grant or refuse approval, and reasons must be given to revive the company concerned if it is in Ɠ nancial difƓ culty. If the for any refusal of approval. AMMC grants the requested exemption, the decision is published The management company centralizes the sale or exchange orders in an ofƓ cial journal of record. and communicates the results to the AMMC, which publishes a notice on the outcome of the offer in an ofƓ cial journal of record. Under PUBLIC BUYOUT OFFER French law, the AMF’s task is to check that the Offeror’s proposal Under the provisions of Articleb20 of Moroccan Lawb26-03 on public complies with current regulations (audit of compliance). To that end, offers, as amended and supplemented by Lawb46-06, it is mandatory the AMF has ten (10) tradingbdays from the start of the offer period to Ɠ le a public buyout offer where a person or entity, acting alone or to examine, among other things, the objectives and intentions of the in concert, comes to hold, directly or indirectly, a certain percentage Offeror and the information contained in the draft prospectus. During of the voting rights of a company the shares of which are listed on this period, the AMF may request any explanation or justiƓ cation the stock exchange.
32 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 GENERAL INFORMATION ABOUT THE COMPANY Information about the Company and corporate governance
The Minister of Finance and Privatization’s Decreeb1875-04 of 11 2.2.1.17.4 Rules relating to target companies Ramadan 1425 (Octoberb25, 2004) set at 95% the percentage of and to the oTerors of a public oTer voting rights that requires the holder to make a public buyout offer. During the period of a public offer, the offeror, and the persons with The persons who Ɠ le such an offer must, on their initiative and within whom the offeror acts in concert, may not, in the case of a joint offer, three businessbdays after crossing the threshold of 95% of the voting trade in securities of the target company nor in securities issued rights, Ɠ le a draft public buyout offer with the AMMC. by the company whose securities are offered in exchange. In the Failing which, they automatically lose all voting, monetary and other event of a voluntary public offer, the offeror may withdraw its offer rights that they may have in their capacity as shareholders. These within the Ɠ ve tradingbdays following the publication of the notice rights are recovered only after the Ɠ ling of a draft public buyout offer. of admissibility of a competing offer or of an overbid. The offeror 2 informs the AMMC of its decision to abandon, which is published The Ɠ ling of a public buyout offer may also be imposed by the AMMC by the latter in an ofƓ cial journal of record. This option exists under or the individual(s) or legal entity(ies) holding, alone or in concert, a the French regulations as well. majority of the capital of a company the shares of which are listed on the stock exchange, at the request of a group of shareholders that do During the period of the public offer, the target company and, if not belong to the majority group, provided that several conditions applicable, the persons acting in concert with such, may not trade, are met including the requirement for the person(s) holding a directly or indirectly, in the securities of the target company. Where majority simultaneously to hold 66% of the voting rights (Minister of the public offer is paid entirely in cash, the target company may, Finance and Privatization Decreeb1873-04 dated 11 Ramadan 1425). nonetheless, proceed with a share buyback program if a resolution of the Shareholders’ Meeting which authorized the program has It is also mandatory for the individuals or legal entities holding, alone expressly provided for this. or in concert, a majority stake in the company, to Ɠ le a public buyout offer if the shares of a company are delisted for whatever reason. During the period of the public offer, the target company, the offeror, the individuals or legal entities directly or indirectly holding at least 2.2.1.17.3 Competing public oTers 5% of the capital or voting rights of the target company, and any other individuals or legal entities acting in concert with them, must, and overbidding after each trading session, declare to the AMMC the buy and sell Public offers may be subject to one or more competing public offers transactions that they have executed in the securities concerned by or overbidding. the offer, as well as any transaction that transfers the ownership of the shares or voting rights of the target company, immediately or A competing public offer is a procedure by which any individual or in the future. legal entity, acting alone or in concert, may, from the opening of a public offer and no later than Ɠ ve tradingbdays before its closing date, Any authorization of a capital increase adopted by the Extraordinary Ɠ le with the AMMC a competing public offer for the securities of the Shareholders’ Meeting of the target company is suspended for the company targeted in the initial offer. period of the public offer or the exchange offer for the shares of said company, and the target company may not increase its treasury Overbidding is the process by which the offeror of the initial public stock holdings. offer improves the terms of its initial offer, either on its own initiative or as a result of a competing public offer, by changing the price or During the period of the public offer, the competent bodies of the type or amount of the securities or the terms and conditions of the target company must first notify the AMMC of any planned payment. An offeror who wishes to make a higher offer must Ɠ le decision, within their powers, that would prevent the completion the amendments proposed to its initial public offer with the AMMC of the public offer or of a competing offer. Under French law, the no more than Ɠ ve tradingbdays before the closing date of its initial offeror of a public offer and the persons acting in concert with it may, offer. The AMMC assesses the admissibility of the overbidding offer subject to exceptions, purchase the securities of the target company within Ɠ ve tradingbdays from the Ɠ ling of the draft offer. The offeror in the market, on certain conditions as to price. These rules also of a public offer prepares and submits a supplementary prospectus apply to own-account trades by an institution advising the offeror to the AMMC for approval. or the target company. The General Regulations of the AMF also impose obligations to declare buy and sell transactions in securities Where more than ten weeks have passed since the publication of concerned by the offer. the opening of a public offer, the AMMC may, in order to expedite the competition between the public offers, set a deadline for the submission of overbids or of successive competing public offers. 2.2.1.17.5 AMMC Supervision and Monetary Penalties If there is a competing public offer, the offeror of the initial or previous public offer must, no later than tenbdays before the closure of said The offerors of a public offer, the target companies and the persons public offer, inform the AMMC of its intentions. It may maintain its acting in concert with them are subject to control by the AMMC, offer, abandon it or change it with a higher bid. which ensures the orderly conduct of such offers in the best interests of investors and the market. The AMMC may impose civil and criminal Under French law, a competing tender offer or an overbid must penalties. be drafted with a price which is at least 2% higher than the price stipulated in the initial offer. In other cases, it may also be declared admissible if it is accompanied by a signiƓ cant improvement in the terms and conditions proposed to the shareholders. Finally, it may also be declared admissible if, without modifying the terms stipulated in the previous offer, it removes or lowers the threshold below which the offeror would not have responded to the offer.
MAROC TELECOM ____ 2017 Registration Document 33 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 GENERAL INFORMATION ABOUT THE COMPANY 2 Information about the Company and corporate governance
2.2.2 ADDITIONAL INFORMATION ABOUT THE COMPANY
2.2.2.1 SHARE CAPITAL The heirs, creditors, assigns or other representatives of a shareholder may not, under any pretext whatsoever, require ofƓ cial seals to be placed on the property and assets of the Company, nor request that 2.2.2.1.1 Amount of capital subscribed these be divided or offered for sale at auction nor interfere in any way in its management. When exercising their rights, they must rely The share capital of Itissalat Al-Maghrib is MADb5,274,572,040, on the corporate inventories and the decisions of the Shareholders’ divided into 879,095,340 shares with a par value of MADb6 each, all Meeting. of the same class and fully paid in. Whenever it is necessary to own several shares in order to exercise The nominal value of the shares may be increased or reduced as any right, the owners of single shares or of less than the required provided for by current laws and regulations. The share capital may number of shares will be personally responsible for consolidating be increased, reduced or redeemed by decision ofbthe relevant and if necessary buying or selling the required number of securities Shareholders’ Meeting and as provided by current laws and or rights. regulations.
2.2.2.1.2 Form of shares 2.2.2.1.4 Acquisition by the Company of its own shares The shares are in registered or bearer form, at the shareholder’s choice. MOROCCAN LAWS The Company maintains a register of transfers at its registered ofƓ ce According to Moroccan laws and the Company’s Bylaws, the in which subscriptions and transfers of registered shares are recorded Company may acquire its own fully paid shares, up to a limit of 10% in chronological order. The register is numbered and initialed by the of the total of its shares and/or of a speciƓ c category of its shares. President of the Court. Any holder of a registered share issued by the Company is entitled to obtain a true copy certiƓ ed by the President Pursuant to Decreeb2-02-556 of Februaryb24, 2003, as amended and of the Management Board. If the register is lost, copies are authentic. supplemented by Decreeb2-10-44 of Juneb30, 2010, and to AMMC Circular of Februaryb2011, replaced by the circular of Januaryb2012, The Company reserves the right not to create its securities in physical the circular of Octoberb2013 and the Circular of Octoberb2014, form. In accordance with current legal provisions concerning the any corporation whose shares are listed on the Casablanca Stock registration of securities, the Company’s shares must be evidenced Exchange wanting to buy back its own shares in order to regulate by an account entry with the central depository. their price must prepare a factsheet which must be submitted to the AMMC for approval prior to holding the Shareholders’ Meeting INDIVISIBILITY OF SHARES convened to vote on the transaction. The shares are indivisible with respect to the Company, which only Trading by the Company in its own shares in order to regulate their recognizes one owner for each share. price must not interfere with the normal functioning of the market. Joint owners are required to appoint a joint representative in respect A company which trades in its own shares must, no later than the of the Company to exercise their rights as shareholders. In the seventh day following the end of thebmonth in question, notify the absence of an agreement, a proxy is appointed by the President AMMC about the transactions executed in the share. If a company of the Court, ruling in summary proceedings, on application by the does not trade its own shares during any givenbmonth, it must inform most vigilant co-owner. the AMMC thereof within the same deadline. However, the right to receive documents required by law belongs During the implementation of the buyback program, any changes to each of the joint owners of undivided shares, and to each of the to the number of shares to be acquired, to the maximum purchase bare owners and usufructuaries. price and minimum sale price, and to the deadline within which the acquisition is to be made, must promptly be brought to the 2.2.2.1.3 Rights and obligations attached attention of the public by way of a press release published in an ofƓ cial journal of record. Such changes must remain within the limits to shares of the authorization given by the Shareholders’ Meeting. Each share confers the right to one part, in proportion to the percentage of the capital it represents, of the profits or in the FRENCH REGULATIONS corporate assets, on distribution, both during the life of the Company Following the admission of its shares to trading on a regulated market and in liquidation. in France, the Company is subject to the regulations summarized Every shareholder has the right to be informed about the progress below. of the Company and to obtain disclosure of certain corporate In accordance with the General Regulations of the AMF, the purchase documents at the times and in the manner provided for by law and by a company of its own shares is conducted in terms of a prospectus by the Bylaws. entitled “Program Description,” which is not subject to AMF approval. Shareholders are only liable for corporate debt up to the nominal Under said regulation and under European Commission Regulation amount of the shares they own; any call for funds beyond this sum 2273/2003 of Decemberb22, 2003, a company may not trade in its is not permitted. own shares for the purpose of manipulating the market. The rights and obligations attached to a share follow ownership After purchasing its own shares, a company is required to render whenever it changes. the details of all of its transactions public before the end of the Share ownership will automatically imply acceptance of the seventh trading day following the date of execution and to Ɠ le, with Company’s Bylaws and the resolutions of Shareholders’ Meetings and the AMF,bmonthly reports containing speciƓ c information about the of the Supervisory and Management Board, acting upon delegations transactions involved and a semi-annual account of the means in of authority from Shareholders’ Meetings. securities and in cash involved.
34 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 GENERAL INFORMATION ABOUT THE COMPANY Information about the Company and corporate governance
SHARE BUYBACK PROGRAM exchange, in Morocco or abroad, shares of the Company in order The current buyback program to regulate the market was approved to regularize prices and establish a liquidity contract backing this by the Shareholders’ Meeting of Aprilb25, 2017, after the Company buyback program on the Casablanca Stock Exchange. The number had obtained approval from AMMC on Aprilb7, 2017 under reference of shares targeted by said liquidity contract may not under any VI/EM/009/2017 for the Simplified Prospectus relating to said circumstances exceed 300,000 shares, representing 20% of total program. number of shares covered by the buyback program. The Shareholders’ Meeting held on Aprilb25, 2017 resolved: The characteristics of this buyback program are as follows: – – to revoke the buyback program on the stock exchange in order to program schedule: from Mayb9, 2017, to Novemberb8, 2018; regulate the market as authorized by the Ordinary Shareholders’ – spread between buy and sell trades price: MADb92 – MADb191; 2 Meeting of Aprilb 26, 2016, which is expected to expire on – maximum part of the share capital to be held, including the shares Novemberb9, 2017 ; targeted by the liquidity contract: 0.17%, i.e., 1.5bmillion shares; – to authorize the Management Board , as from this meeting, in – maximum amount allocated to the program: MADb286,500,000; accordance with the provisions of Articleb281 of the Companies – liquidity contract backing this buyback program, representing 20% Act, for a period of eighteenb months from Mayb 9, 2017 to of the program, or a maximum of 300,000 shares. Novemberb8, 2018 to purchase, in one or more stages on the stock
The result of the share buyback program for the period extending from January 1 to Decemberb31, 2017 is as follows:
Casablanca ć excl. Casablanca ć liquidity pool liquidity pool Paris Total Number of shares bought 870,020 812,531 214,843 1,897,394 Average buy price MADb137.28 MADb137.15 EURb12.36 - Number of shares sold 829,020 731,281 106,245 1,666,546 Average sell price MADb137.65 MADb137.67 EURb12.61 - SHARES HELD AT DECEMBERb31, 2017 42,000 85,000 116,077 243,077
Under a contract signed on Octoberb17, 2014, Maroc Telecom – in Paris, a liquidity contract in accordance with the Code of commissioned Rothschildb& Cie Banque with the implementation Ethics established by the French Association of Investment Firms of the following: (AFECEI). For the implementation of this contract, EURb5bmillion was allocated to the liquidity account. – in Casablanca, a price regulation contract in accordance with the circular of Januaryb2012, for which an amount of MADb55bmillion has been allocated;
The following table shows the summary of these contracts:
Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2015 42,000 shares 1,000 shares 207,000 shares Casablancab– excl. liquidity pool MADb27,869,726.23 MADb32,777,312.76 MADb8,547,584 85,000 shares 3,750 shares 145,000 shares Casablancab– liquidity pool MADb24,815,586.10 MADb35,019,587.96 MADb18,229,490.57 116,077 shares 7,479 shares 17,742 shares Parisb– liquidity account EURb3,616,882.00 EURb4,943,937.00 EURb4,771,055
Source: Rothschild & Cie Banque.
2.2.2.1.5 Changes in the Company’s share since incorporation The table below shows the main transactions in the share capital executed in the last threebyears:
Total number Nominal Capital Date Transaction of shares (in MAD) (in MAD) Dec.b31, 2015 None 879,095,340 6 5,274,572,040 Dec.b31, 2016 None 879,095,340 6 5,274,572,040 Dec.b31, 2017 None 879,095,340 6 5,274,572,040
MAROC TELECOM ____ 2017 Registration Document 35 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 GENERAL INFORMATION ABOUT THE COMPANY 2 Information about the Company and corporate governance
2.2.2.2 CURRENT SHAREHOLDER STRUCTURE AND VOTING RIGHTS OF THE COMPANY
2.2.2.2.1 Shareholder structure At Decemberb31, 2017, the share capital and voting rights of the Company were held as follows:
% Number of % Shareholders Number of shares of capital voting rights of voting rights Société de participations dans les télécommunications (SPTb(a)) 465,940,477 53.00% 465,940,477 53.00% Kingdom of Morocco 263,728,575 30.00% 263,728,575 30.00% Senior managers 76,303 0.01% 76,303 0.01% Public 149,106,908 16.96% 149,337,756 16.96% Treasury sharesb(b) 243,077 0.03 % - - TOTAL 879,095,340 100% 879,083,111 100%
(a) SPT is a Moroccan corporation controlled 91.3% by Etisalat and 8.7% by Abu Dhabi Development Fund. (b) Maroc Telecom shares held directly or indirectly by the Company, both in the Casablanca and in the Paris stock market. These shares do not carry voting rights atbShareholders’ Meetings.
2.2.2.2.2 Potential capital In 2006, the Moroccan government sold 0.10% of Maroc Telecom’s share capital, thereby reducing the Kingdom of Morocco’s stake to 34%. At the date of this Registration Document, the Company had not issued any securities, other than ordinary shares, carrying direct On Julyb2, 2007, the Moroccan Government placed 4% of Maroc or indirect rights to Company capital, immediately or in the future. Telecom’s shares on the Casablanca Stock Exchange at MADb130 per Likewise, there is currently no stock-option plan reserved for share. The sale took the form of a private placement for Moroccan employees. and international institutional investors, with book building during the period Juneb26-28, 2007. On completion of the transaction, the 2.2.2.2.3 Changes in the Company’s Moroccan government held 30% of the share capital and voting rights shareholding structure of Maroc Telecom, and the free Ŵ oat had increased from 15% to 19%. Under the terms of the agreement signed in 2007 between Vivendi Maroc Telecom shares have been listed on both the Casablanca and the CDG Group, Vivendi acquired 2% of Maroc Telecom’s share and Paris Stock Exchanges since Decemberb13, 2004, after the capital, thereby increasing its stake from 51% to 53% and reducing Kingdom of Morocco’s sale by public offering of a 14.9% stake in the free Ŵ oat to 17%. In addition, the CDG Group acquired a 0.6% Maroc Telecom. stake in Vivendi. On Novemberb18, 2004, the Kingdom of Morocco and Vivendi On Mayb14, 2014, under a service agreement between Emirates concluded an agreement regarding the acquisition by Vivendi of a Telecommunications Corporation (“Etisalat”) and Vivendi, Etisalat 16% stake in Maroc Telecom. took control of Société de Participation dans les Télécommunications On Januaryb4, 2005, this agreement allowed Vivendi to increase its (“SPT”), a holding company with 53% of the share capital and voting stake from 35% to 51% through the acquisition of 140,655,260 Maroc rights of the Company. Telecom shares, thereby extending its control.
During the last threebyears, the share capital and voting rights of the Company were held as follows:
Dec. 31, 2017
% Number of % Shareholders Number of shares of share capital voting rights of voting rights Société de Participation et de Télécommunication (SPTb(a)) 465,940,477 53.00% 465,940,477 53.00% Kingdom of Morocco 263,728,575 30.00% 263,728,575 30.00% Senior managers 76,303 0.01% 76,303 0.01% Public 149,106,908 16.96% 149,337,756 16.96% Treasury sharesb(b) 243,077 0.03 % - - TOTAL 879,095,340 100% 879,083,111 100%
(a) SPT is a Moroccan corporation controlled 91.3% by Etisalat and 8.7% by Abu Dhabi Development Fund. (b) Maroc Telecom shares held directly or indirectly by the Company, both in the Casablanca and in the Paris stock market. These shares do not carry voting rights atbShareholders’ Meetings.
36 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 GENERAL INFORMATION ABOUT THE COMPANY Information about the Company and corporate governance
Dec. 31, 2016
% Number of % Shareholders Number of shares of chare capital voting rights of voting rights Société de Participation et de Télécommunication (SPTb(a)) 465,940,477 53.00% 465,940,477 53.00% Kingdom of Morocco 263,728,575 30.00% 263,728,575 30.00% Senior managers 76,303 0.01% 76,303 0.01% 2 Public 149,337,756 16.99% 149,337,756 16.99% Treasury sharesb(b) 12,229 0.00% - - TOTAL 879,095,340 100% 879,083,111 100%
(a) SPT is a Moroccan corporation controlled 91.3% by Etisalat and 8.7% by Abu Dhabi Development Fund. (b) Maroc Telecom shares held directly or indirectly by the Company, both in the Casablanca and in the Paris stock market. These shares do not carry voting rights atbShareholders’ Meetings.
Dec. 31, 2015
% Number of % Shareholders Number of shares of share capital voting rights of voting rights Société de Participation et de Télécommunication (SPTb(a)) 465,940,477 53.00% 465,940,477 53.03% Kingdom of Morocco 263,728,575 30.00% 263,728,575 30.01% Senior managers 76,303 0.01% 76,303 0.01% Public 148,980,243 16.97% 148,980,243 16.95% Treasury sharesb(b) 369,742 0.04% - - TOTAL 879,095,340 100% 878,725,598 100%
(a) SPT is a Moroccan corporation controlled 91.3% by Etisalat and 8.7% by Abu Dhabi Development Fund. (b) Maroc Telecom shares held directly or indirectly by the Company, both in the Casablanca and in the Paris stock market. These shares do not carry voting rights atbShareholders’ Meetings.
2.2.2.2.4 Shareholders’ Agreements The Chairman of the Supervisory Board will be appointed by the Supervisory Board as proposed by the Kingdom of Morocco for as SHAREHOLDERS’ AGREEMENT BETWEEN THE KINGDOM long as the Kingdom of Morocco holds at least 15% of the shares and OF MOROCCO AND EMIRATES TELECOMMUNICATIONS voting rights of the Company. If the Kingdom of Morocco’s interest CORPORATION REGARDING MAROC TELECOM SHARES in the share capital and voting rights of the Company is less than 15% but at least equal to 5%, Etisalat will be entitled to propose the On Mayb 15, 2014, Emirates Telecommunications Corporation Chairman of the Supervisory Board and the Kingdom of Morocco (“Etisalat”), Société de Participation dans les Télécommunications will be entitled to propose the Deputy Chairman of the Supervisory (“SPT”), which is a subsidiary of Etisalat, and the Kingdom of Morocco Board. concluded a Shareholders’ Agreement pertaining to Maroc Telecom (“the Company”). The key provisions governing the relationships The Deputy Chairman of the Supervisory Board will be appointed between the Kingdom of Morocco and Etisalat Group are as follows: by the Supervisory Board on the proposal of Etisalat for as long as the Kingdom of Morocco is entitled to propose the appointment of Organization of powers in the management bodies the Chairman and Etisalat is entitled to propose the majority of the of Maroc Telecom members of the Supervisory Board. Supervisory Board In addition, the majority principles applicable to the Supervisory The Shareholders’ Agreement stipulates that the Supervisory Board Board were incorporated into the Company’s Bylaws at the will be composed of no more than nine members. Shareholders’ Meeting of Septemberb23, 2014. The allocation of seats on the Supervisory Board will depend on the Management Board percentage of the Kingdom of Morocco’s interest in the share capital The allocation of seats on the Management Board will depend on and voting rights of the Company, as follows: the percentage of the Kingdom of Morocco’s interest in the share capital and voting rights of the Company, as follows: – if the interest of the Kingdom of Morocco is at least equal to 15% of the share capital and voting rights of the Company, three members – if the interest of the Kingdom of Morocco is at least equal to 15% of of the Supervisory Board will be appointed upon proposal by the the share capital and voting rights of the Company, two members Kingdom of Morocco and six by Etisalat; of the Management Board will be appointed on the proposal of – if the interest of the Kingdom of Morocco is less than 15% but the Kingdom of Morocco and three, including the Chairman, by at least equal to 5% of the share capital and voting rights of the Etisalat; Company, one member of the Supervisory Board will be appointed – if the interest of the Kingdom of Morocco is less than 15% but upon proposal by the Kingdom of Morocco and eight by Etisalat. at least equal to 9% of the share capital and voting rights of
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the Company, one member of the Management Board will be This clause will remain in force as long as the Kingdom of Morocco appointed upon proposal by the Kingdom of Morocco and four, holds at least 20% of the Company’s share capital. including the Chairman, by Etisalat. Specific rights of the Kingdom of Morocco Audit Committee and Appointments and Compensation Committee The Kingdom of Morocco has the right to veto in the following cases: As long as the Kingdom of Morocco holds at least 15% of the – share capital and voting rights of the Company, it may propose proposal of a merger, spin-off or partial transfer of assets that the appointment of at least two members of the Company’s Audit may substantially modify the Company’s scope of activities or Committee; and as long as the Kingdom of Morocco holds at least substantially modify the Company’s corporate purpose, if the 5% of the share capital and voting rights of the Company, it may proposal is likely to affect the national interests of the Kingdom propose the appointment of at least one member of said committee. of Morocco for any reason of national security; – transfer of shares by SPT to any entity, including any entity that The rules of procedure for the Audit Committee will provide for: controls SPT or is controlled by SPT and which is likely to affect – the option for any member of the Audit Committee to propose the national interests of the Kingdom of Morocco. that the Audit Committee carry out an audit of the Company, and These provisions will remain in force for the entire term of the the obligation for the Audit Committee to decide on any formal Company. request made by at least two members of the Audit Committee to carry out such an audit; and Term of the Shareholders’ Agreement – the option for any member of the Audit Committee to make any Subject to speciƓ c provisions with regard to the duration of certain proposal relating to the work of the Audit Committee. rights, the Shareholders’ Agreement has been entered into for a term The Shareholders’ Agreement also provides for an Appointments and of ten (10)byears and will be renewable automatically for successive Compensation Committee composed of the Chairman and Deputy periods of Ɠ ve (5)byears. Chairman of the Company’s Supervisory Board. MAURITEL SA SHAREHOLDERS’ AGREEMENT The stipulations with regard to the allocation of seats on the Supervisory Board will remain in force as long as the Kingdom of According to the shareholders agreement entered into with the Morocco holds at least 5% of the share capital and voting rights Islamic Republic of Mauritania, Maroc Telecom, which owns 51.527% of the Company. The stipulations with regard to the appointment of Mauritel via CMC Group, received end/or granted certain rights of the Chairman and Deputy Chairman of the Supervisory Board (Right of Ɠ rst refusal, etc.) enabling itbto protect its shareholders rights. and to the majority rules applicable to the Supervisory Board, as well as those applicable to the appointment of members of the GABON TELECOM SHAREHOLDERS’ AGREEMENT Management Board, the Audit Committee, and the Appointments According to the Shareholders’ Agreement entered into with the and Compensation Committee, will remain in force as long as the Republic of Gabon, Maroc Telecom, which owns 51% of Gabon Kingdom of Morocco holds at least 5% of the share capital and voting Telecom, received and/or granted certain rights (right of first rights of the Company and as long as Etisalat Group holds at least refusal,betc.) enabling it to protect its shareholder rights. 20% of the share capital and voting rights of the Company. SOTELMA SHAREHOLDERS’ AGREEMENT Terms and conditions for the disposal or acquisition of shares of the parties According to the Shareholders’ Agreement entered into with the Republic of Mali, Maroc Telecom, which owns 51% of Sotelma, Non-transfers of shares by the Kingdom of Morocco received and/or granted certain rights (right of Ɠ rst refusal,betc.) The Kingdom of Morocco has undertaken not to surrender any of the enabling it to protect its shareholder rights. shares it holds in the Company for a period of Ɠ ve (5)byears following the signing of the Shareholders’ Agreement (i.e., Mayb15, 2014), if ATLANTIQUE TELECOM CÔTE D’IVOIRE SHAREHOLDERS’ such transfer would result in the Kingdom of Morocco holding less AGREEMENT than 22% of the share capital and voting rights of the Company. According to the Shareholders’ Agreement entered into with the joint Preemption right to the benefit of the Kingdom of Morocco shareholder, Maroc Telecom, which owns 85% of Atlantique Telecom In the event of a proposed disposal of the shares held by Etisalat Côte d’Ivoire, received and/or granted certain rights to the minority Group or its afƓ liates to a third party, the Kingdom of Morocco will be shareholder enabling it to protect its shareholder rights. entitled to exercise a preemption right for a period of eight (8)byears after the signing of the Shareholders’ Agreement. This preemption FONDS SINDIBAD SHAREHOLDERS’ AGREEMENT right will only apply (i) to a transfer that would reduce the total interest According to the Shareholders’ Agreement signed with the other of the Etisalat Group and SPT in the share capital of the Company shareholders, Maroc Telecom, which owns 10.41% of Sindibad Fund, to less than 50%, and (ii) to any transfer by Etisalat Group or SPT received and/or granted certain rights (right of Ɠ rst refusal,betc.) until the Kingdom of Morocco’s stake reaches 50% of the Company enabling it to protect its shareholder rights. shares plus one share. Call option held by the Kingdom of Morocco 2.2.2.3 PLEDGED ASSETS The Kingdom of Morocco has a call option entitling it to purchase, should it so notify its intention, all of the shares held by the investment The Company has not pledged any assets. vehicle of Etisalat (currently SPT) in the Company, if a change of control of Etisalat (i) affects the national interests of the Kingdom In addition, the shares held by Maroc Telecom in its subsidiaries are of Morocco or (ii) has a substantial and negative impact on the not pledged for the beneƓ t of third parties. competitive environment in Morocco, or following a loss of control of SPT by Etisalat or the vehicle that becomes a shareholder in Maroc Telecom in place of SPT.
38 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 GENERAL INFORMATION ABOUT THE COMPANY Information about the Company and corporate governance
2.2.2.4 COMPANY STOCK INFORMATION
2.2.2.4.1 Place of listing Maroc Telecom’s shares have been listed on both the Casablanca and Paris Stock Exchanges since Decemberb13, 2004.
2.2.2.4.2 Maroc Telecom share price Casablanca Stock Exchange 2
Marché Principal, code 8001
Transactions (c)
Number Average Price (a) High (b) Low (b) of stocks In capital (in MAD) (in MAD) (in MAD) (in thousand) (in MAD million) Januaryb2017 152.68 162.50 140.00 4,112.98 627.97 Februaryb2017 144.94 152.25 138.65 2,874.92 416.69 Marchb2017 141.11 146.95 136.45 1,111.79 156.89 Aprilb2017 135.73 139.50 134.00 1,593.14 216.23 Mayb2017 136.53 140.50 129.10 3,043.11 415.47 Juneb2017 136.84 143.00 131.30 3,366.43 460.66 Julyb2017 138.51 141.00 136.00 2,312.67 320.33 Augustb2017 136.34 138.00 135.20 1,020.20 139.09 Septemberb2017 138.33 140.50 137.05 1,493.00 206.53 Octoberb2017 136.91 139.00 135.30 1,417.74 194.10 Novemberb2017 138.01 142.00 135.35 1,851.01 255.46 Decemberb2017 136.43 137.95 134.00 2,509.89 342.43
(a) The average price is calculated by dividing trading value by number of shares. (b) Excluding off-market transactions. (c) Intraday. Source: Casablanca Stock Exchange MAROC TELECOM SHARE PRICE TREND ON THE CASABLANCA STOCK EXCHANGE Since Decemberb2004 (base 100)
400
350 IAM MASI 300
250
200
150
100
50
0
12/01/2004 12/01/2005 12/01/2006 12/01/2007 12/01/2008 12/01/2009 12/01/2010 12/01/2011 12/01/2012 12/01/2013 12/01/2014 12/01/2015 12/01/2016 12/01/2017
MAROC TELECOM ____ 2017 Registration Document 39 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 GENERAL INFORMATION ABOUT THE COMPANY 2 Information about the Company and corporate governance
Since Januaryb2017 (base 100)
115 IAM MASI 110
105
100
95
90
85
80
Jul-17 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17
At end-2017, 98% of the free Ŵ oat was traded on the Casablanca Stock Exchange.
NYSE Euronext Paris Eurolistb– Foreign securities, code MA0000011488, eligible for Euronext’s SRD (deferred settlement service)
Transactions (c)
Number Average Price (a) High (b) Low (b) of stocks In capital (in MAD) (in MAD) (in MAD) (in thousand) (in MAD million) Januaryb2017 13.59 14.34 13.00 16.50 0.22 Februaryb2017 13.07 13.45 12.85 19.39 0.25 Marchb2017 13.03 13.35 12.76 8.74 0.11 Aprilb2017 12.65 12.82 12.50 7.20 0.09 Mayb2017 12.55 12.97 11.99 14.12 0.18 Juneb2017 12.53 12.97 12.02 13.92 0.17 Julyb2017 12.43 12.84 12.20 32.33 0.40 Augustb2017 12.24 12.53 12.02 26.99 0.33 Septemberb2017 12.37 12.50 12.20 24.27 0.30 Octoberb2017 12.34 12.60 12.20 49.92 0.62 Novemberb2017 12.44 12.72 12.20 31.00 0.39 Decemberb2017 12.17 12.48 11.90 50.47 0.61
(a) The average price is calculated by dividing trading value by number of shares. (b) Excluding off-market transactions. (c) Intraday. Source: NYSE Euronext Paris
40 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 GENERAL INFORMATION ABOUT THE COMPANY Information about the Company and corporate governance
MAROC TELECOM SHARE PRICE TREND ON THE PARIS STOCK EXCHANGE Since Decemberb2004 (base 100)
350
IAM 300 CAC 40 250 2
200
150
100
50
0
12/10/2004 12/10/2005 12/10 /2006 12/10/2007 12/10/2008 12/10/2009 12/10/2010 12/10/2011 12/10/2012 12/10/2013 12/10/2014 12/10/2015 12/10/2016 12/10/2017
Since Januaryb2017 (base 100)
120
115 IAM CAC 40 110
105
100
95
90
85
80
Jul-17 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17
At end-2017, 2% of the free Ŵ oat was traded on the Paris Stock Exchange.
MAROC TELECOM ____ 2017 Registration Document 41 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 GENERAL INFORMATION ABOUT THE COMPANY 2 Information about the Company and corporate governance
2.2.2.5 DIVIDENDS AND DIVIDEND POLICY
2.2.2.5.1 Dividends paid out over the past Uscal years The following table shows the amounts of dividends (in MADbmillion) paid out by the Company for Ɠ scalbyears 2004 to 2017:
Fiscal year Payment date Dividends 2004 5/4/2005 4,395 2005 5/2/2006 6,119 Extraordinary dividend 6/12/2006 3,516 2006 5/15/2007 6,927 2007 5/28/2008 8,088 2008 6/3/2009 9,517 2009 6/2/2010 9,063 2010 5/31/2011 9,301 2011 5/31/2012 8,137 2012 6/3/2013 6,501 2013 6/2/2014 5,275 2014 6/2/2015 6,065 2015 6/2/2016 5,591 2016 6/2/2017 5,590 2017 6/5/2018 5,697b(a)
(a) Amount proposed to the Ordinary Shareholders’ Meeting of Aprilb24, 2018. This amount will be adjusted to take into account the number of treasury shares held on the dividend payment date.
At Decemberb 31, 2017, the Company’s reserves totaled 2.2.2.5.3 Tax treatment of dividends MADb4,389.6bmillion (excluding the earnings at end-Decemberb2016), ofbwhich MADb965bmillion are available for distribution. MOROCCAN TAX TREATMENT Shareholders should note that the Moroccan tax treatment is 2.2.2.5.2 Future dividend policy described below only for guidance and is not an exhaustive description of the tax situation applicable to each shareholder. The Company is keen to reward its shareholders to their satisfaction, Shareholders should therefore take advice from their tax advisers while also ensuring the means for its growth. This is why Maroc regarding the tax applicable to their specific situation and in Telecom has decided to pursue a policy of regular dividend particular concerning the acquisition, ownership or transfer of the distribution in signiƓ cant amounts, based on current conditions, the Company’s shares. Company’s proƓ ts and its Ɠ nancing needs. The tax rules applicable in Morocco for dividend distribution are However, the amount of dividends to be paid will be determined governed by the General Tax Code: Corporate Income Tax applicable by taking into account the Company’s capital requirements, return to legal entities and Individual Income Tax applicable to individuals. on capital and current and future proƓ tability. The Company cannot guarantee shareholders that they will receive the same dividend The income from shares (dividends) paid, made available to or payment everybyear. This does not constitute a commitment by the entered into accounts belonging to individuals or legal entities, Company. whether resident in Morocco or not, is subject to a withholding tax of 15%. The companies involved in the payment of this income are Notebthat Articleb16 of the Bylaws provides for the payment to the responsible for withholding the tax at source and paying it to the shareholders, in the form of dividends, of a total amount that is at Treasury. least half the distributable proƓ t, unless otherwise approved by a majority of three-quarters of the Supervisory Board. However, companies that have their registered ofƓ ce in Morocco are exempt from this withholding, provided that they deliver to the In addition, the provisions at the end Articleb331 of Law 17-95 as paying agents a certiƓ cate of ownership of the shares showing their amended and supplemented by Law 20-05 and Law 78-12 state IS tax identiƓ cation number in Morocco. that it is prohibited to stipulate a Ɠ xed dividend for shareholders; Any contrary clause is deemed null and void unless the government Notebthat dividends and other income from investments resulting grants shareholders a guaranteed minimum dividend. from the distribution of proƓ ts by companies within the scope of corporate income tax, even if those companies are specifically Moroccan company law requires Maroc Telecom, like any corporation, exempt from this, are included in the operating income of the to allocate 5% of net income to the legal reserve until it reaches 10% beneƓ ciary of the dividends and other income from investments of the share capital. Maroc Telecom reached the limit of its legal with a 100% allowance. reserve in 2004 and may therefore, starting with Ɠ scalbyear 2005, distribute all its distributable proƓ t, if its shareholders consider this is advisable.
42 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 GENERAL INFORMATION ABOUT THE COMPANY Information about the Company and corporate governance
Similarly, dividends and other income from investments resulting France is entitled to take a tax credit chargeable against the amount from the distribution of foreign proƓ ts are included in the operating of tax on the income in France payable on this same income. The income of the beneƓ ciary company with a 100% allowance. This amount is set out in Articleb25-3 of the Tax Treaty at a Ŵ at rate of 25% measure applies to dividends and other income from investments of the gross amount of the dividends distributed (before application received after Januaryb1, 2008; of Moroccan withholding tax). Notebthat dividends paid to residents of countries with which the The net dividends received, plus the tax credit attached to them, are Kingdom of Morocco has signed double taxation treaties may be taken into account in determining the total income of the taxpayer subject to taxation at a rate below 15%, if the treaties provide for under investment income and are subject to progressive rates of such a rate. income tax as described below: 2 International law effectively prevails, in accordance with the Moroccan – dividends pursuant to a valid decision of the competent bodies of Constitution. If the double taxation agreement provides for a rate the Company are taken into account in the calculation of income below 15%, the rate stipulated in the agreement is applied. tax, after applying a 40% deduction on their gross amount (i.e., 60% of the gross dividend is taxable). Investors should note For example, the rate of 15% applies in the case of a beneƓ ciary that dividends denominated in Moroccan dirhams will, for the resident in France, because the double taxation agreement between purposes of taxation in France, be converted into euros at the Morocco and France makes provision for a 15% withholding tax exchange rate in Paris on the dividend payment date. If there is on dividends (the same rate as under ordinary law). Under the no exchange rate on that day, the average exchange rate from a agreement between Morocco and UAE: sufƓ ciently close date is applied. – a rate of 5% applies if the equity held in the Company paying They are initially subject to the following withholding: dividends is 10% or more; – Ŵ at-rate withholding (tax) of 21% of the gross amount. However, – a rate of 10% applies if the equity held is less than 10%. persons whose taxable income for the previousbyear but one is Similarly, these persons are usually entitled to a tax credit with the tax less than EURb50,000 (single, divorced or widowed taxpayers) or authorities in their country for the tax paid in Morocco, in accordance EURb75,000 (joint taxpayers) may apply no later than Novemberb30 with the procedures to avoid double taxation, where this is allowed of thebyear preceding that of payment for an exemption from this under the tax regulations in their country. withholding; Moroccan exchange regulations allow foreign shareholders to – miscellaneous withholding and social security contributions transfer dividends abroad, on the condition that they present a totaling 15.5%, including the general social contribution, which certain number of documents to an approved intermediary, primarily: is partly deductible from taxable income for 5.1%. – transfer orders; Notebthat when the company paying the dividend is based in – the balance sheets and income statements, as these are France, it is responsible for withholding these payments. Otherwise, understood by the Tax Authorities, as well as the supporting shareholders must remit them voluntarily by the fifteenth of documents relating to the Ɠ scalbyear in respect of which the transfer thebmonth following payment of the dividends to the tax authority is requested, and the statement of non-accounting corrections in their country of residence: applied to obtain the taxable income; – they are subsequently declared by the shareholder with other – thebminutes of the Ordinary Shareholders’ Meeting(s) at which income for the calendarbyear (in May/Junebof the followingbyear), the Company’s results were discussed, showing the distribution when 60% of their gross amount is subject to a progressive tax; of proƓ ts and the amount of dividends paid out; – the withholding tax of 21% and the Ŵ at-rate tax credit of 25% are – the list of shareholders and foreign or Moroccan Directors residing offset against the tax due. abroad, indicating their identity, nationality, address and the number of shares held by each of them; Legal entities subject to corporate income tax – documentary evidence of the withholding tax paid. A distinction should be made depending on whether or not the shareholder is the parent company of Maroc Telecom. FRENCH TAX TREATMENT Legal entities qualifying for the parent-subsidiary Shareholders should note that the French tax treatment is described tax treatment below only for guidance and is not an exhaustive description of the tax situation applicable to each shareholder. Shareholders should Legal entities meeting the requirements of Articlesb145 and 216 of therefore take advice from their tax advisers regarding the tax the General Tax Code may, at their option, claim an exemption for applicable to their speciƓ c situation and in particular concerning the dividends received, in accordance with the parent-subsidiary tax acquisition, ownership or transfer of the Company’s shares. treatment. Articleb216 I of the General Tax Code stipulates however that a portion of the costs and expenses, set at a Ŵ at rate of 5% of Individuals holding shares as part of their private assets the amount of dividends received, tax credit included, are to be and not habitually executing trades on the stock exchange added back into the taxable income of the legal entity beneƓ ciary of such dividends. The tax credit cannot be offset against corporate In accordance with the provisions of Articleb25-2 of the Tax Treaty income tax, but can be offset against any withholding tax that may be signed on Mayb29, 1970 by and between the Republic of France and due in the event of further dividends being paid in the subsequent the Kingdom of Morocco (the “Tax Treaty”), a shareholder resident in Ɠ vebyears.
MAROC TELECOM ____ 2017 Registration Document 43 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 GENERAL INFORMATION ABOUT THE COMPANY 2 Information about the Company and corporate governance
Legal entities not qualifying for the parent-subsidiary The Ŵ at-rate tax credit set out in Articleb25-3 of the Tax Treaty at tax treatment 25% of the amount of dividends distributed can be offset against Companies are taxed on their dividend income: corporate income tax. However, the tax credit cannot exceed the amount of corporate income tax for French companies in respect (1) – at the normal rateb of corporate income tax, plus the 3.3% social of such dividends. The surplus tax credit cannot be refunded or security contribution on corporate income tax if the amount of carried forward. corporate income tax exceeds EURb763,000 per 12-month period.
2.2.3 CORPORATE GOVERNANCE
2.2.3.1 MANAGEMENT AND SUPERVISORY The members of the Management Board members must be BODIES individuals. All the members of the Management Board must be employees of the Company and/or resident in Morocco for more than 183bdays abyear, unless an exception has been authorized at a 2.2.3.1.1 Management Board Supervisory Board meeting by a qualiƓ ed majority of three-quarters of the members present or represented. COMPOSITION OF THE MANAGEMENT BOARD If the current term of ofƓ ce of a member of the Management Board is terminated, the Supervisory Board must appoint a replacement Composition in the manner provided for by law and by the Company’s Bylaws. The Management Board is composed of Ɠ ve (5) members. It manages and directs the Company under the control of the Supervisory Board.
MEMBERS OF THE MANAGEMENT BOARD
Current Position Maturity of Name and primary occupation Date of appointment oW ce ends Date of Ɠ rst appointment: Februaryb20, 2001 Abdeslam Ahizoune Chairman Appointment renewed: Februaryb24, 2017 Marchb1, 2019 Date of Ɠ rst appointment: Februaryb20, 2001 Larbi Guedira Managing Director Services Appointment renewed: Februaryb24, 2017 Marchb1, 2019 Date of Ɠ rst appointment: Decemberb5, 2014 Hassan Rachad Managing Director, Networks and Systems Appointment renewed: Februaryb24, 2017 Marchb1, 2019 Managing Director, Legal and Regulatory Date of Ɠ rst appointment: Julyb22, 2016 Brahim Boudaoud Affairs Appointment renewed: Februaryb24, 2017 Marchb1, 2019 François Vitte Chief Financial OfƓ cer Date of Ɠ rst appointment: Octoberb2, 2017 Marchb1, 2019
(1) Or, as applicable, at the reduced rate of 15% for companies whose revenues are less than an amount being modified by the Finance Act for 2017 and within the limit of an amount of profit also being modified by the same law.
44 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 GENERAL INFORMATION ABOUT THE COMPANY Information about the Company and corporate governance
BIOGRAPHICAL DETAILS AND OTHER POSITIONS HELD BY MEMBERS OF THE SUPERVISORY BOARD
Abdeslam AHIZOUNE Larbi GUEDIRA CHAIRMAN OF THE MANAGEMENT BOARD MEMBER OF THE MANAGEMENT BOARD Nationality: Moroccan Nationality: Moroccan Business address: Business address: Maroc Telecom – Avenue Annakhil, Hay Riad, Rabat, Morocco Maroc Telecom – Avenue Annakhil, Hay Riad, Rabat, Morocco 2 Skills and experience Skills and experience
Born on Aprilb20, 1955, married with three children. Mr.bAbdeslam Born on Novemberb22, 1954, Mr.bLarbi Guedira has a graduate Ahizoune has a graduate degree in engineering from Paris Tech (1977). degree in engineering from École Nationale Supérieure des He has been Chairman of Maroc Telecom’s Management Board since Télécommunications in Paris and a Master’s degree in Mathematics Februaryb2001 and was a member of Vivendi’s Management Board from the University of Paris XI (Orsay) and a Post-graduate Diploma from Aprilb2005 to Juneb2012. Mr. Ahizoune has been Chairman of the (DESS) in Management from the University of Lille. Association of Moroccan Telecom Professionals (Association Marocaine Mr.b Larbi Guedira is the Managing Director of the Services des Professionnels des Télécoms, or MATI) since 2008. Chairman Division of Maroc Telecom; prior to that, he served as General and Chief Executive OfƓ cer of Maroc Telecom from 1998 to 2001, Manager of the Commercial Division, General Manager of the Mr.bAbdeslam Ahizoune was previously Minister of Telecommunications Telecommunications Division, Chief Financial OfƓ cer and Regional in four governments, from 1992 to 1995 and from 1997 to 1998, while Director for Casablanca. He is also a Director of various companies holding the position of Director General of the National OfƓ ce of of the Maroc Telecom Group. He was also Chairman of the National Postal Services and Telecommunications (OfƓ ce National des Postes Association of Telecommunications Engineers (Association Nationale et Télécommunications, “ONPT”) from 1992 to 1997. From 1983 to des Ingénieurs des Télécommunications) between 2000 and 2002. 1992, he was Director of Telecommunications in the Ministry for Postal Services and Telecommunications. Mr.bAbdeslam Ahizoune has been Chairman of the Royal Moroccan Athletics Federation (Fédération Current of¿ ces Royale Marocaine d’Athlétisme) since 2006, and Chairman of the Maroc Telecom Group: Moroccan Culture Association (Association Maroc Cultures) since 2015. – SotelmabSA (Mali), Permanent Representative of Maroc Telecom, Current of¿ ces Director – MT FlybSA (Morocco), Chairman of the Board of Directors – Mohammed V Foundation for Solidarity (Fondation MohammedbV – Other: None pour la Solidarité, Morocco), member of the Board of Trustees – Lalla Salma Foundation for the Prevention and Treatment of Of¿ ces expired during the last ¿ ve years Cancer (Fondation Lalla Salma de Prévention et Traitement des Cancers, Morocco), member of the Board of Trustees – MauritelbSA (Mauritania), Director – Mohammed VI Foundation for the Environment (Fondation – Gabon TelecombSA (Gabon), Permanent Representative of Maroc Mohammed VI pour la Protection de l’Environnement, Morocco), Telecom, Director member of the Board of Trustees – OnatelbSA (Burkina Faso), Permanent Representative of Maroc – Moroccan Culture Association (Association Maroc Cultures, Telecom, Director Morocco), Chairman – CasanetbSA (Morocco), Director – Al Akhawayn University (Morocco), member of the Board of Trustees – CMC S.A. (Mauritania), Director – Royal Moroccan Athletics Federation (Fédération Royale – Mauritel MobilesbSA (Mauritania), Director Marocaine d’Athlétisme, Morocco), Chairman – – LibertisbSA (Gabon), Permanent Representative of Maroc Telecom, Confederation of African Athletics, Deputy Chairman Director – Association of Moroccan Telecom Professionals (Association – MobisudbSA (France), Chairman of the Board of Directors Marocaine des Professionnels des Télécoms, or MATI), Chairman – Mobisud (Belgium), Director Of¿ ces expired during the last ¿ ve years Decoration – General Business Confederation of Morocco (Confédération Générale des Entreprises du Maroc, or CGEM), Deputy Chairman Wissam Order of Merit, Exceptional Class – Royal Institute of Amazighe Culture (Institut Royal de la Culture Amazighe), member of the Governing Board – International Chamber of Commerce, member of the Executive Committee – Axa Assurances (Morocco), Director – Holcim S.A. (Morocco), Director Decorations In Morocco: 1985: WISSAM Order of Merit, Exceptional Class; 1991: WISSAM Knight of the Order of the Throne, 1995: WISSAM OfƓ cer of the Order of the Throne In France: 2003: Knight of the National Order of the Legion of Honor
MAROC TELECOM ____ 2017 Registration Document 45 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 GENERAL INFORMATION ABOUT THE COMPANY 2 Information about the Company and corporate governance
Hassan RACHAD Brahim BOUDAOUD MEMBER OF THE MANAGEMENT BOARD MEMBER OF THE MANAGEMENT BOARD Nationality: Moroccan Nationality: Moroccan Business address: Business address: Maroc Telecom – Avenue Annakhil, Hay Riad, Rabat, Morocco Maroc Telecomb– Avenue Annakhil, Hay Riad, Rabat, Morocco Skills and experience Skills and experience
Born on Augustb 6, 1962, Mr.b Hassan Rachad has a graduate Born on Aprilb7, 1968, Mr. Brahim Boudaoud graduated in 1995 with degree in engineering from École Nationale Supérieure des an MBA in Network Company Management from École Nationale Télécommunications in Paris. des Postes et Télécommunications in Paris and holds a degree in postal and telecommunications administration. After joining Maroc Telecom in 1988 as Telecom Engineer, he has held several management positions within the same group, including Since 2000 Mr.b Brahim Boudaoud has held several senior Director of Human Resources and Regional Director for Greater management positions within the same group, including Head of Casablanca, Marrakesh and Oujda. Sales, Head of Consumer Sales, Head of Marketing and Acting Chief Legalb& Regulatory OfƓ cer. He is married with two children. Current of¿ ces Current of¿ ces Maroc Telecom Group: Maroc Telecom Group: – Gabon TelecombSA (Gabon), Director – MauritelbSA (Mauritania), Director – MT FlybSA (Morocco), Director – CasanetbSA (Morocco), Director – Other: None – MT FLY SA (Morocco), Permanent Representative of Maroc Telecom, Director Of¿ ces expired during the last ¿ ve years – Other: None – OnatelbSA (Burkina Faso), Director Of¿ ces expired during the last ¿ ve years – Atlantique Telecom Côte d’Ivoire (Ivory Coast), Director – Gabon TelecombSA (Gabon), Director – Atlantique Telecom Togo (Togo), Director – OnatelbSA (Burkina Faso), Director – Etisalat Benin (Benin), Director – SotelmabSA (Mali), Director – SotelmabSA (Mali), Director – Atlantique Telecom TogobSA (Togo), Chairman of the Board ofbDirectors François VITTE MEMBER OF THE MANAGEMENT BOARD Nationality: French Business address: Maroc Telecom – Avenue Annakhil, Hay Riad, Rabat, Morocco Skills and experience
Born on Marchb4, 1968, François Vitte is a graduate of the Ecole Supérieure de Commerce in Toulouse, France. Mr. Vitte has had a varied international Ɠ nancial career, mostly within the Orange Group, which he joined in 1996. During part of his time there, he was Deputy Chief Executive OfƓ cer in Egypt and Ethiopia. Previously, he held several Ɠ nancial positions in France and the UK before going to the Dominican Republic to serve as Vice President of Finance. Mr. Vitte began his career in the Club Med Group, where he held various Ɠ nancial positions, mainly in Paris. Current of¿ ces
None Of¿ ces expired during the last ¿ ve years
None
46 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 GENERAL INFORMATION ABOUT THE COMPANY Information about the Company and corporate governance
APPOINTMENT, OPERATION AND RESPONSIBILITIES assign the same power of representation to one or more members of OF THE MANAGEMENT BOARD the Management Board who then hold the title of executive ofƓ cer. Appointment and removal of members The provisions of the Bylaws restricting the Company’s power of of the Management Board representation to the Chairman or, if applicable, the executive ofƓ cer are not binding on third parties. Members of the Management Board are appointed by a simple majority of the members of the Supervisory Board present or The Chairman of the Management Board or the executive ofƓ cer(s) represented. The Supervisory Board appoints one of them as may grant powers of attorney to a third party. However, the authority Chairman. granted by such power of attorney must be limited and relate to one or more speciƓ c purposes. 2 They may be removed from ofƓ ce by the Ordinary Shareholders’ Meeting. If the removal is without just cause, it may result in the With regard to third parties, all acts binding the Company are valid payment of damages. if carried out by the Chairman of the Management Board or any member appointed by the Supervisory Board as an executive ofƓ cer. The removal from ofƓ ce of a member of the Management Board does not have the effect of terminating the employment contract that the Reporting obligations person concerned may have signed with the Company. The Supervisory Board may at any time ask the Management Board Term of oWce to submit a report on its management and ongoing operations. At the request of the Supervisory Board, this report may be supplemented Members of the Management Board are appointed for a renewable by a provisional Ɠ nancial statement of the Company. term of twob(2)byears. As and where necessary, the Management Board delivers to the If the appointment of a member of the Management Board is Supervisory Board a report explaining the possible application or terminated during such member’s term in ofƓ ce, the Board member’s implementation of the items to be adopted by the Supervisory Board replacement is appointed for the time remaining until the re- in accordance with Articlesb10.5.3 to 10.5.5 of the Bylaws. appointment of the Management Board. At least once in every quarter, the Management Board presents a Members of the Management Board may always be reappointed. report on the Company’s operations to the Supervisory Board. Operation Within threeb(3)bmonths of the end of each Ɠ scalbyear, the Management Board must approve the Company’s annual Ɠ nancial statements The Management Board manages collectively the affairs of the (balance sheet, income statement and accompanying notes) and Company. submit them to the Supervisory Board so that it can exercise control. The members of the Management Board may, with the approval The Management Board must also deliver to the Supervisory Board of the Supervisory Board, allocate management tasks among the report to be presented to the Ordinary Shareholders’ Meeting themselves. called to approve the Ɠ nancial statements for the previous Ɠ scalbyear, However, this allocation may not in any way have the effect of so that it may, if necessary, prepare comments that will be presented removing from the Management Board its characteristic collective to the meeting. responsibility for the management of the Company. Its decisions are made by a majority vote of the members present or represented, Compensation each of them having one vote. Larbi Guedira and Hassan Rachad As part of its appointment decision, the Supervisory Board sets the represent the Kingdom of Morocco, while Abdeslam Ahizoune, method and the amount of the compensation for each Management Oussama François Vitte and Brahim Boudaoud represent Etisalat. Board member. Meetings of the Management Board may be held outside the registered ofƓ ce or by videoconferencing or equivalent methods Liability enabling members to be identified, as provided for by current Without prejudice to the speciƓ c liability resulting from receivership regulations. or liquidation of the Company’s assets, the members of the Minutes of Management Board deliberations, if kept, are entered in Management Board are jointly and severally liable, as applicable, to a special register and signed by the Chairman of the Management the Company or third parties, for violations of legal and regulatory Board and one other member. Copies or extracts of thesebminutes provisions applicable to corporations, for breaches of the Bylaws, or are certiƓ ed by the Chairman of the Management Board or by an for misconduct in their management. executive ofƓ cer. In 2017, the Management Board met more than 40 times with an average attendance rate of 99%. Powers The Management Board is vested with the broadest powers to act 2.2.3.1.2 Supervisory Board in all circumstances in the name of the Company, within the limits of its corporate purpose, and subject to the powers expressly granted COMPOSITION OF THE SUPERVISORY BOARD to the Supervisory Board by law and by Articlesb10.5.3 to 10.5.5 of the Bylaws. Composition In its dealings with third parties, the Company is bound even by The Supervisory Board is composed of at least eight (8) and no action taken by the Management Board which falls outside the more than twelve (12) members; the number of members may be corporate purpose and Bylaws, unless it proves that the third party increased to Ɠ fteen (15) since the Company’s shares are listed for knew that the action was ultra vires and/or that the action exceeded trading on the Casablanca Stock Exchange. statutory provisions or that the third party must have been aware of Each member of the Supervisory Board must own at least one share this, given the circumstances. of stock in the Company during the member’s entire term of ofƓ ce. The provisions of the Bylaws restricting the powers of the The members of the Supervisory Board are elected by the Ordinary Management Board are not binding on third parties. Shareholders’ Meeting. The Chairman of the Management Board represents the Company in its relations with third parties. The Supervisory Board may, however,
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If, on the day of appointment, a member of the Supervisory Board does not own at least one share in the Company or if, during the member’s term, he or she ceases to own said share, the Board member will be deemed to have automatically resigned from ofƓ ce if the situation is not rectiƓ ed within threeb(3)bmonths.
Current title and primary Primary Occupation Name occupation Date of appointment Maturity of oW ce ends or Employment Mohamed Boussaïd Chairman Supervisory Board meeting Ordinary Shareholders’ Minister of Economy ofbOctoberb23, 2013 Meeting called to approve the andbofbFinance 2018 Ɠ nancial statements Eissa Mohammed Deputy Supervisory Board meeting Ordinary Shareholders’ Chairman of Etisalat Group Ghanem Al Suwaidi Chairman ofbMayb15, 2014 Meeting called to approve the 2018 Ɠ nancial statements AbdelouaƓ Laftit Member Supervisory Board meeting Ordinary Shareholders’ Minister of the Interior ofbJulyb21, 2017 Meeting called to approve the 2018 Ɠ nancial statements Abderrahmane Member Supervisory Board meeting Ordinary Shareholders’ Director for Public Enterprises Semmar ofbJulyb22, 2016 Meeting called to approve the and Privatization at the Ministry 2018 Ɠ nancial statements for Economy and Finance Hatem Dowidar Member Supervisory Board meeting Ordinary Shareholders’ Managing Director of Etisalat ofbJulyb22, 2016 Meeting called to approve the International 2018 Ɠ nancial statements Saleh Al Abdooli Member Supervisory Board meeting Ordinary Shareholders’ Managing Director ofbDecemberb9, 2016 Meeting called to approve the ofbEtisalatbGroup 2021 Ɠ nancial statements Mohammed Saif Member Supervisory Board meeting Ordinary Shareholders’ Director General of Abu Dhabi AlbSuwaidi ofbMayb15, 2014 Meeting called to approve the Fund for Development 2018 Ɠ nancial statements Mohammed Hadi Member Supervisory Board meeting Ordinary Shareholders’ Director of Etisalat Group AlbHussaini ofbMayb15, 2014 Meeting called to approve the 2018 Ɠ nancial statements Serkan Okandan Member Shareholders’ Meeting of Ordinary Shareholders’ Chief Financial OfƓ cer Septemberb23, 2014 Meeting convened to approve ofbEtisalat Group the 2019 Ɠ nancial statements
Term of oWce It must immediately inform the Company of its decision. The same The term of ofƓ ce of members of the Supervisory Board is sixbyears. procedure is followed in the event of the death or resignation of the permanent representative. The term of ofƓ ce of a member of the Supervisory Board expires at the close of the Ordinary Shareholders’ Meeting that approved the Vacancies – Cooptation Ɠ nancial statements for the previous Ɠ scalbyear and that is held in thebyear in which the term of ofƓ ce of the Supervisory Board member If one or more seats on the Supervisory Board become vacant expires. They may always be reappointed. because of the death, resignation or other impediment of a member, the Board may make provisional appointments between twob(2) They may be removed by the Ordinary Shareholders’ Meeting at Shareholders’ Meetings. any time. If the number of members of the Supervisory Board falls below No member of the Supervisory Board and no employee or ofƓ cer eightb(8), the Supervisory Board must make provisional appointments of a legal entity that is a member of the Supervisory Board may be a to Ɠ ll the Board within threeb(3)bmonths from the date on which the member of the Management Board. If a member of the Supervisory vacancy occurs. Board is appointed to the Management Board, the term of ofƓ ce of such member on the Supervisory Board ends upon the member’s Provisional appointments made by the Supervisory Board are entry into ofƓ ce on the Management Board. subject to ratiƓ cation at the next Ordinary Shareholders’ Meeting; the member appointed to replace another will remain in ofƓ ce only A legal entity may be appointed to the Supervisory Board. On its for the rest of his or her predecessor’s term. appointment, the legal entity is required to appoint a permanent representative who is subject to the same conditions and obligations If provisional appointments are not ratified, the resolutions and who incurs the same civil and criminal liability as if the adopted and the actions taken previously by the Supervisory Board representative were a member of the Supervisory Board in his or nonetheless remain valid. her own name, without prejudice to the joint liability of the legal If the number of members of the Supervisory Board falls below entity he or she represents. threeb(3), the Management Board must call an Ordinary Shareholders’ When a legal entity revokes the appointment of its representative, Meeting to Ɠ ll the Board within thirty (30)bdays from the date on which it is required, at the same time, to appoint another representative the vacancy occurs. in its place.
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BIOGRAPHICAL DETAILS AND OTHER POSITIONS HELD BY MEMBERS OF THE SUPERVISORY BOARD
Mohamed BOUSSAÏD Eissa Mohammed GHANEM AL SUWAIDI CHAIRMAN DEPUTY CHAIRMAN Nationality: Moroccan Nationality: Emirati 2 Business address: Business address: Ministry of Economy and Finance Etisalatb– intersectionbof Sheikh Zayed the First Street and Sheikh Skills and experience Rashid bin Saeed Al Maktoum Road, PO 3838, Abu Dhabi Skills and experience Mohamed Boussaïd, who was appointed Minister of Economy and Finance by HRH King Mohammed VI on Octoberb10, 2013, was born Mr.bAl Suwaidi has been Chairman of the Etisalat Group since 2012. on Septemberb26, 1961 in Fez. He is also Director General of Abu Dhabi Investment Council, United Arab Emirates. He began his career at the Abu Dhabi Investment He holds a graduate degree in Engineering from École Nationale des Authority in 1982. Ponts et Chaussées (ENPC) in Paris (major in Industrial Engineering, 1986) and an MBA from ENPC’s International School of Business Mr. Al Suwaidi is also Chairman of Abu Dhabi Commercial Bank (2000). and a member of the Board of Directors of several organizations such as the Abu Dhabi National Oil Company for Distribution, the From 1986 to 1992, Mr.bBoussaïd worked as a consulting engineer International Petroleum Investment Company, the Abu Dhabi Fund at Banque Commerciale du Maroc. After that, he was Deputy General for Development and the Emirates Investment Authority. Manager of a chemicals manufacturing and trading company (1992-1994). He holds a BA in Economics from Northeastern University in Boston, From 1994 to 1995, he was a Portfolio Manager in the Corporate Massachusetts, USA. Banking Department of Banque Marocaine du Commerce et de l’Industrie (BMCI). Current of¿ ces Mr.bBoussaïd, a member of Rassemblement national des indépendants (RNI, the National Rally of Independents), also served as Chief of Staff – Etisalat Group, Chairman of the Minister of Public Works from 1995 to 1998, then Chief of Staff – Abu Dhabi Investment Council, Managing Director of the Minister of Agriculture, Equipment and the Environment. – Abu Dhabi Commercial Bank, Chairman From 1998 to 2001, he was Director of Programs and Studies at the – Abu Dhabi National Oil Company for Distribution, Director Ministry of Equipment, before becoming, between 2001 and 2004, Director of Public Institutions and Stakeholdings, then Director of – International Petroleum Investment Company, Director Public Enterprises and Privatization at the Ministry of Finance and – Abu Dhabi Fund for Development, Director Privatization. – Emirates Investment Authority, Director In 2004, he was appointed Minister of Public Sector Modernization and, in Octoberb2007, Minister of Tourism and Crafts. Of¿ ces expired during the last ¿ ve years In Marchb2010, Mr.bBoussaïd was appointed Wali of the region – Emirates Integrated Telecommunication Company “DU,” Director of Souss-Massa-Draa, Governor of the prefecture of Agadir Idda – Outanane, and then Wali of Casablanca and Governor of the Arab Banking Corporation (BSC), Director Prefecture of Casablanca in Mayb2012.
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AbdelouaU LAFTIT Hatem DOWIDAR Nationality: Moroccan Nationality: Egyptian Business address: Business address: Ministry of the Interior Etisalatb– intersectionbof Sheikh Zayed the First Street and Sheikh Skills and experience Rashid bin Saeed Al Maktoum Road, PO 3838, Abu Dhabi Skills and experience AbdelouaƓ Laftit was born Septemberb29, 1967 in Tafrist. On Aprilb5, 2017, he was appointed by HM King Mohammed VI as Minister of Mr. Dowidar has been Managing Director of Etisalat International the Interior. since Marchb2016. He joined Etisalat in Septemberb2015 as Executive Director of Group Operations. A graduate of the Ecole Polytechnique of Paris in 1989 and the Ecole Nationale des Ponts et Chaussées in 1991, Mr. Laftit started He was Chairman of the Board of Directors of Vodafone Egypt and his professional career in the Ɠ nancial Ɠ eld in France before joining Deputy Executive Director of Vodafone Group. Mr. Dowidar has more the port operating ofƓ ce where between 1992 and 2002 he held the than 25byears of experience in multinational companies. post of Director of Ports in Agadir, SaƓ and Tangiers, before being He Ɠ rst joined Vodafone Egypt in 1999 as Marketing Director, then appointed, in Mayb2002, Director of the Tangier – Tetouan Regional served as Executive Director of Vodafone Malta, followed by the Investment Center. position of Executive Director of Vodafone Egypt from 2009 to 2014. On Septemberb13, 2003, Mr. Laftit was appointed by HM the King to Mr. Dowidar, 46, holds a Bachelor’s degree in Communication and be Governor of Fahs-Anjra Province, and in Octoberb2006, he was Electrical Engineering from the University of Cairo and an MBA from then appointed Governor of the Province of Nador, a position he the American University of Cairo. held until his appointment in Marchb2010 as Chairman and Managing Director of the Société d’Aménagement pour le Reconversion de la Zone Portuaire de Tanger. Current of¿ ces On Januaryb24, 2014, he was appointed by HM the King to be Wali of the – Etisalat Egypte, Director Rabat-Sale-Zemmour-Zaer Region, Governor of the Rabat Prefecture. – PTCL (Pakistan), Director – Ufone (Pakistan), Director – Barclays (Egypte), Director Abderrahmane SEMMAR Nationality: Moroccan Of¿ ces expired during the last ¿ ve years Business address: – GSMA (Angleterre), Director Ministry of Economy and Finance – Etisalat Nigeria, Director Skills and experience – Vodafone Egypte, Chairmain – Abderrahmane Semmar is Director for Public Enterprises and Vodacom (South Africa), Director Privatization at the Ministry for Economy and Finance. For nearly 34byears, including 32byears in the Ministry of Economy and Finance, he served as Head of the Division of Programming and Restructuring and Deputy Director for Information Design and Systems. He also serves as Chairman of the Interministry Commission on Public-Private Partnership and Chairman of the Permanent Committee of the National Accounting Board. Mr. Semmarhas a degree in Business Administration from the University of Casablanca, a post-graduate degree in Economics from the University of Rabat and a doctoral degree from École Nationale d’Administration Publique of Rabat.
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Saleh AL ABDOOLI Mohammed Saif AL SUWAIDI Nationality: Emirati Nationality: Emirati Business address: Business address: Etisalatb– intersectionbof Sheikh Zayed the First Street and Sheikh Etisalatb– intersectionbof Sheikh Zayed the First Street and Sheikh Rashid bin Saeed Al Maktoum Road, PO 3838, AbubDhabi Rashid bin Saeed Al Maktoum Road, PO 3838, AbubDhabi Skills and experience Skills and experience
Saleh Al Abdooli is the Chief Executive OfƓ cer of the Etisalat Group Mr.bAl Suwaidi holds a Bachelor’s Degree in Business Administration 2 and serves as Etisalat CEO in the United Arab Emirates. He is also (1992) from California Baptist University, USA. Vice-Chairman of the Board of Directors, Chairman of the Executive Mr.bAl Suwaidi is currently Director General of Abu Dhabi Fund for Committee of Etisalat Misr, a member of the Board of Directors of Development. He was also Head of the Operations Department of Etisalat Services Holding, and the Etisalat representative on the this fund for 11byears where he managed all the projects Ɠ nanced Board of Directors of Mobily. by the Fund. Mr.bAl Abdooli launched his career with Etisalat in 1992 as a planning Mr. Al Suwaidi is Chairman of Al Ain Farms for Livestock Production engineer for mobile network systems, and went on to hold several and Deputy Chairman of Arab Bank for Investment and Foreign executive positions, including the position of Chief Executive OfƓ cer Trade. of Etisalat Misr. Mr. Al Abdooli, an engineer, holds a Master’s degree in Current of¿ ces Telecommunications technology, and an electrical engineering degree from the University of Colorado in the United States. – Abu Dhabi Fund for Development, Director General – Arab Bank for Investment and Foreign Trade, Deputy Chairman Current of¿ ces – First Gulf Bank, Director – Etisalat Egypte, Vice-Chairman – Center of Food Security of Abu Dhabi, Director – Etisalat Services Holding Company (UAE), Chairman – Al Ain Farms for Livestock Production, Chairman – Mobily (Saoudi Arabia), Director, representing Etisalat – UAE Red Crescent, Director – Thuraya (UAE), Chairman – Aghtia, Director – CEPSA, Director Of¿ ces expired during the last ¿ ve years Of¿ ces expired during the last ¿ ve years – None – Al Hilal Bank, Director
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Mohammed Hadi AL HUSSAINI Serkan OKANDAN Nationality: Emirati Nationality: Cypriot Business address: Business address: Etisalatb– intersectionbof Sheikh Zayed the First Street and Sheikh Etisalatb– intersectionbof Sheikh Zayed the First Street and Sheikh Rashid bin Saeed Al Maktoum Road, PO 3838, Abu Dhabi Rashid bin Saeed Al Maktoum Road, PO 3838, Abu Dhabi Skills and experience Skills and experience
Mr.bAl Hussaini, holds a Master’s degree in International Commerce Mr.bOkandan is a recognized expert in regional and international from Switzerland and has professional experience in banking/ telecoms. In Januaryb2012, he joined the Etisalat Group as Chief Ɠ nance, real estate and investments. He currently serves on the Financial OfƓ cer following a long and fruitful spell at Turkcell where Board of Directors of Ɠ ve listed companies: Etisalat, Emirates NBD, he served as Group Chief Financial OfƓ cer between 2006 and 2011 Emirates Islamic Bank, Dubai Refreshments and Emaar Malls. He also and as Acting CEO for Ukraine operations in 2010. He began his serves on the Board of Directors of Dubai Real Estate Corporation. professional career at PwC in 1992. Prior to his appointment as a He comes from a long line of entrepreneurs whose main line of GCFO at Turkcell, he was entrusted with the job of Group Financial work is commerce. Controller at Turkcell. In his prior assignment as a GCFO he led the Finance function of Turkcell, a publicly listed company, and Current of¿ ces its operations across eight different countries. He is known for his wealth of experience in IFRS, debt capital markets, syndicated loans, – Etisalat Group, Director acquisitions and disposals at the regional and international level. – Emirates NBD, Director Mr. Okandan has 23byears of experience, four of which were spent – Emirates Islamic Bank, Director at Etisalat. – Dubai Refreshments, Director Mr.bOkandan was awarded a degree in Economics from Bosphorus – Emaar Malls, Director University, Istanbul, Turkey, in 1992. – Dubai Real Estate Corporation Current of¿ ces Of¿ ces expired during the last ¿ ve years – Etisalat Group, Chief Financial OfƓ cer – National General Insurance, Director – EMTS (Etisalat Nigeria), Director and Chairman of the Audit – Takaful House, Director Committee – – Dubai Bank, Acting President Ufone (Pakistan), Director and Chairman of the Audit Committee – – Emirates Financial Services, Chairman PTCL (Pakistan), Director and Chairman of the Audit Committee – – Economic Zones World, Director Etisalat Services Holding (ESH), Director and Chairman of the Audit Committee – Mobily (Saudi Arabia), Director and member of the Audit Committee Of¿ ces expired during the last ¿ ve years – Turkcell (Turkey), CFO – Turkcell (Ukraine), Acting CEO – Mobily (Saudi Arabia), Deputy CEO
52 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 GENERAL INFORMATION ABOUT THE COMPANY Information about the Company and corporate governance
OPERATION AND RESPONSIBILITIES – the appointment of members of the Management Board in OF THE SUPERVISORY BOARD accordance with applicable laws and the provisions of Articleb9 of the Bylaws; Chairman – Deputy Chairman – the creation of committees, the drafting, approval or amendment The Board elects from among its members a Chairman andbabDeputy of their bylaws or their mission; Chairman who each have the power to convene thebBoard and to – approval of the proposed resolutions to be submitted to the chair its deliberations and who hold office for their term on the Company’s Shareholders’ Meeting concerning appropriation Supervisory Board. of the earnings of the Company and its subsidiaries (dividends, The Chairman and the Deputy Chairman must be individuals. reserves, etc.) under the terms stipulated in Articlesb16 and 10.5.4 2 The Board may appoint a secretary at each meeting who may be of the Bylaws; chosen from outside the members of the Board. – any change in the Company’s accounting policies not required by law or by the applicable regulations, unless such change has Calling of meetings – Deliberations a signiƓ cant impact on the distributable proƓ t of the Company, in The Supervisory Board meets when called by its Chairman or which case the decision should be taken by qualiƓ ed majority in Deputy Chairman, whenever the interests of the Company require, accordance with Articleb10.5.4 (i) of the Bylaws; at the registered ofƓ ce or any other location speciƓ ed in the notice – any transfer of a shareholding in an entity holding one or more of meeting. The notice of meeting may be sent by registered mail operating licenses for Ɠ xed-line and mobile telecommunications with return receipt or by email with acknowledgment of receipt networks open to the public, if the annual Ɠ nancial statements or by international express courier, Ɠ fteenbdays before the date of of said entity, certiƓ ed by the Statutory auditors, show negative the meeting; this period may be reduced if all the members of the EBITDA for the last two consecutivebyears, calculated in accordance Supervisory Board agree. with accounting standards currently in force within the Company (such an entity is hereinafter referred to as “Loss-Making Entity”); The Supervisory Board may validly deliberate only if at least half of the members of the Supervisory Board are in fact present. – determining the transfer price and terms of the sale agreement on disposal of an interest in an entity that has one or more network If this quorum is not reached, the Chairman or the Deputy Chairman operating licenses of Ɠ xed-line and mobile telecommunications of the Supervisory Board will convene a second meeting, in the same open to the public, if it is not a Loss-Making Entity, as referred to manner as the Ɠ rst called meeting, seven businessbdays before the in Articleb10.5.4 (x) of the Bylaws. date of the meeting, where the postmark, the certiƓ cate of delivery or the electronic acknowledgment of receipt is authentic. The However, as an exception to the provisions of Articleb10.5.3 described notiƓ cation of the second meeting must, in any event, be delivered at above and the provisions of Articleb10.5.4 of the Bylaws, the following the latest during the week following the holding of the Ɠ rst meeting. decisions must be approved by a qualiƓ ed majority of three-fourths If a quorum is still not reached, a third meeting is called and held in of the members of the Supervisory Board present or represented: accordance with the terms and conditions for a minimum quorum – any signiƓ cant change in the Company’s accounting policies having established by Moroccan law. It is agreed that in the event that a a material impact on the Company’s distributable proƓ t, unless quorum is not reached at the time speciƓ ed in the notice for the such change is required by law or the applicable regulations; meeting of the Supervisory Board, the beginning of the meeting will – the revocation, surrender or transfer of licenses or the granting of be postponed by onebhour. major operating facilities; Members of the Supervisory Board attending a meeting of the – any decision aiming to oblige the Company or its AfƓ liates, in Supervisory Board by videoconference or equivalent means that respect of any action or any legal, administrative or arbitration allow identification as stipulated by the regulations in force are proceedings, involving the Company or its AfƓ liates, and sums deemed present for calculating the quorum and majority. due or receivable by the Company or its AfƓ liates, in an amount This provision does not apply when the agenda refers to the greater than three hundredbmillion dirhams; appointment and removal of the Chairman of the Board, approval – any decision concerning the entering into, amendment and/ of the Company’s financial statements and the convening of or termination of any contract for the provision of services, or Shareholders’ Meetings. any other agreement between, on one hand, the Company or In addition to the transactions subject by law to prior approval of its AfƓ liates and on the other, the controlling shareholder or its the Supervisory Board and in accordance with Articleb10.5.3 of the AfƓ liates, excluding agreements relating to current arm’s length Bylaws, the following decisions require the prior approval of the transactions; Supervisory Board, voting by simple majority of the members present – any proposal to the Shareholders’ Meeting to appoint the second or represented: Statutory auditor of the Company; – – the examination, approval and revision of the business plan; any decision for a merger, in any form whatsoever, between the Company’s businesses and any business(es) controlled by the – the examination, approval and revision of the budget (without majority shareholder which compete(s) with the Company in prejudice to the provisions of Articleb10.5.4 (iii) of the Bylaws); Fixed-line, Mobile or Internet telecommunications sectors and in – the prior approval of any services agreement or any other contract exchanges of data; between the Company or its Affiliates and one of its minority – any decision to dispense with the requirement that a member of shareholders or one of its AfƓ liates, excluding contracts relating the Management Board must be an employee of the Company to current arm’s length transactions; and/or must be present in Morocco for more than one hundred – the annual or multi-annual labor policy, including policies for eighty-threebdays abyear; compensation, training, human resources management and the – any overrun of more than 30% of the limits set in the Budget for creation of incentive plans for employees or senior managers of investments or divestments or for borrowing or lending; the Company; – any creation of a Company AfƓ liate or Company AfƓ liates with – subject to Articleb10.5.4 (v) in the Bylaws, any proposal to the share capital or initial stockholders’ equity in excess of three Shareholders’ Meetings to appoint one of the two auditors of the hundredbmillion dirhams, and any acquisition(s) or sale(s) of Company; ownership interest in any group or entity in an amount of more than three hundredbmillion dirhams;
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– any acquisition of ownership interest in an entity holding The Supervisory Board may set up, within the Board and with one or more operating licenses for fixed-line and mobile the assistance, if deemed necessary, of third parties, whether telecommunications networks open to the public; and any shareholders or not, technical committees to study questions it refers decision in principle to sell the ownership interest in such an entity to them for an opinion. The activities of these committees and advice if it is not a Loss-Making Entity; given or recommendations made are reported at Board meetings. – any decision(s), including in the event of internal restructuring, These committees have advisory powers and act under the authority concerningb (a) a merger, spin-off, partial transfer or lease of the Supervisory Board that has created them and to which they management of all or part of the goodwill of the Company or its report. AfƓ liates, andb(b) any decision to wind up, liquidate or terminate a substantial business belonging to the Company or its AfƓ liates, Committee members are appointed by the Supervisory Board. provided that the decisions referred to inb(a) andb(b) above may Unless otherwise decided by the Supervisory Board, the term of only be made by qualiƓ ed majority if they concern an AfƓ liate ofƓ ce of committee members is the same as their term as members whose estimated value or business exceeds five hundred of the Supervisory Board. (500)bmillion dirhams; and Each committee establishes its own rules of procedure which must – any exemption from an obligation under the dividend distribution be approved by the Supervisory Board. policy set out in Articleb16 of the Bylaws to distribute dividends in an amount at least half the distributable proƓ t. Compensation In addition, and pursuant to the provisions of Articleb10.5.5 of the The Shareholders’ Meeting may allocate to members of the Bylaws described below, the Supervisory Board may not submit Supervisory Board, as compensation for their work, an annual Ɠ xed the following resolutions to the Shareholders’ Meeting unless they sum as Directors’ fees. The Supervisory Board may also allocate have been adopted by at least three-fourths of the members of the exceptional compensation for the duties or offices held by its Supervisory Board present or represented: members. – a proposal to change the Company’s Bylaws concerning, among Liability other things, an increase or decrease in the Company’s share capital; The members of the Supervisory Board are liable, individually or jointly as applicable, to the Company or to third parties, either for – a proposal for the Company to issue new types of shares or violations of the laws or regulations applicable to corporations, or securities; for breaches of the Bylaws, or for misconduct in their management. – a proposal to modify substantially the corporate purpose and/ If several members of the Supervisory Board have contributed or principal business of the Company, or any of its Affiliates together to the same acts, the court will determine the contribution holding one or more operating licenses for Ɠ xed-line and mobile of each in the reparation for damages. telecommunications networks open to the public; – a proposal to amend the rights and obligations attached to the The members of the Supervisory Board are liable for personal Company’s shares; misconduct committed in the performance of their duties. They incur no liability in respect of management actions and their outcome. They – a proposal to change the closing or opening dates of the may be found civilly liable for offenses committed by members of Company’s Ɠ scalbyear; the Management Board if, having knowledge of such offenses, they – a proposal to revoke the appointment of members of the have not disclosed them to the Shareholders’ Meeting. Management Board or of the Supervisory Board appointed at In 2017, the Supervisory Board met threeb(3) times, to approve both the request of one of the minority shareholders pursuant to the the performance of the business and its growth prospects in the provisions contained in Articlesb9 and 10 of the Bylaws; medium to long term, with an average attendance rate of nearly 67%. – any proposal to rebrand the Company’s trading name or to change the brand or trade name of the Company in Morocco or among Mohamed Boussaïd, AbdelouaƓ Laftit and Abderrahmane Semmar the Company’s afƓ liates. (three members) were appointed to the Supervisory Board on the recommendation of the Kingdom of Morocco and Eissa Mohamed Duties and Powers of the Supervisory Board Al Suwaidi, Mohammed Hadi Al Hussaini, Hatem Dowidar, Saleh Abdooli, Mohammed Saif Al Suwaidi and Serkan Okandan (six The Supervisory Board exercises permanent oversight over the members) were appointed on the recommendation of Etisalat. Management Board’s management of the Company. At any time of thebyear, it performs the checks and controls that it considers appropriate, and may request any documents that it considers necessary for the performance of its duties. 2.2.3.2 AUDIT COMMITTEE AND CODE The members of the Supervisory Board may review any information OF ETHICS or data relating to the life of the Company. The Supervisory Board may, within the limits it sets and subject to 2.2.3.2.1 Audit Committee the provisions of Articleb10.5 of the Bylaws cited above, authorize Morocco Telecom has an Audit Committee, the main purpose of the Management Board to sell real estate, sell all or some holdings, which is to assist the Supervisory Board in exercising its oversight set up security interests as well as sureties, pledges, endorsements responsibilities relating to financial reporting, internal control or guarantees in the name of the Company. systems, risk management, audits, and compliance with the laws It presents its comments on the Management Board report and the and regulations in force and with the Code of Ethics. Ɠ nancial statements for the Ɠ scalbyear to the Annual Shareholders’ Meeting.
54 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 GENERAL INFORMATION ABOUT THE COMPANY Information about the Company and corporate governance
COMPOSITION namely two representatives of the Kingdom of Morocco and three Since Julyb17, 2014, following the completion on Mayb14, 2014 representatives of the Etisalat Group, including the Chairman. of Etisalat’s purchase of the 53% held by Vivendi in the capital of Maroc Telecom, the Audit Committee is composed of Ɠ ve members,
The composition of the Audit Committee is as follows: 2 Date of Name Current position appointment Primary Occupation or Employment Mohamed Hadi Al Hussaini Chairman 2014 Member of the Board of Directors of Etisalat Samir Mohamed Tazi Member 2017 Wali, Managing Director of the Municipal Equipment Fund Abderrahmane Semmar Member 2016 Director for Public Enterprises and Privatization at the Ministry for Economy and Finance Serkan Okandan Member 2014 Chief Financial OfƓ cer of Etisalat Group Mohammed Dukandar Member 2016 Acting Director of internal control and audit of the Etisalat Group (UAE and International Operations)
Biographical details and other positions held by members Serkan Okandan of the Audit Committee Mr. Serkan Okandan joined Etisalat in Januaryb2012 as Chief Financial OfƓ cer of the Etisalat Group. Previously, he was Group Chief Financial Mohamed Hadi Al Hussaini OfƓ cer at Turkcell. Mr.Okandan began his professional career with Mr. Mohamed Al Hussaini, an Emirati national, holds a Master’s degree PricewaterhouseCoopers in 1992, and worked for DHL and Frito Lay in International Commerce from Switzerland and has professional as a Management Controller before joining Turkcell. Mr. Okandan experience in banking/finance, real estate and investments. He is a member of the Board of Directors and Chairman of the Audit currently serves on the Board of Directors of Ɠ ve listed companies: Committee of Etisalat Nigeria, PTCL and Ufone, and a member of Etisalat, Emirates NBD, Emirates Islamic Bank, Dubai Refreshments the Board of Directors of Etisalat Services Holding. and National General Insurance. He comes from a long line of entrepreneurs whose main line of work is commerce. Mr.bOkandan holds a degree in Economics from Bosphorus University.
Samir Mohamed Tazi Mr. Mohamed Dukandar Samir Mohammed Tazi holds the position of Wali and Managing Mohamed Dukandar, Acting Director of internal control and audit, Director of the Municipal Equipment Fund following his directs the consolidated functions of internal control and audit appointment by HM King Mohammed VI on Juneb25, 2017. He (UAEb& International Operations). Mr. Dukandar is a Certified holds an engineering degree from the Ecole Polytechnique and an Accountant, Certified Internal Auditor (CIA) and Certified Self engineering degree from the Ecole Nationale des Ponts et Chaussées Control Assessment (CCSA) with more than 20byears experience in obtained respectively in 1983 and 1988. governance, including Enterprise Risk Management (ERM), Insurance, Internal/External Audits, and Legal Analysis (Forensics). He has served In Mayb2001, Mr. Tazi was appointed Deputy Budget Director in as Director of Internal Audit in the Telkom Group (South Africa) since charge of the Coordination of Industry and Synthesis Structures, a 2009. In this position, he was responsible for providing to the Board position he held until his appointment in Juneb2010 to Head of the and Management assurance about the control environment and the Public Sector Entities and Privatization Department. In Februaryb2016, areas with high exposures to material risks. he was appointed by HM King Mohammed VI to be Managing Director of Local Authorities. Mr.bDukandar began his career as an Auditor with KPMG Inc. in 1996 and then worked for the National Treasury and the City of Joburg In 2011, Mr. Tazi was decorated Wissam OfƓ cer of the Order of the (South Africa). Throne. He is a member of the Competition Authority and a director of several public sector entities including the National Ports Agency, OPERATION the National Railways OfƓ ce, the National Airports Authority and Crédit Agricole du Maroc. The Audit Committee was set up by the Supervisory Board in 2003 to respond to calls from shareholders to adopt international standards Abderrahmane Semmar for corporate governance and internal control at Maroc Telecom. Mr. Abderrahmane Semmar is Director of Public Companies and The Audit Committee was convened for the Ɠ rst time in Mayb2004, Privatization in the Ministry of the Economy and Finance. For nearly and held Ɠ ve meetings in 2017. Its role is to make recommendations 34byears, including 32byears in the Ministry of Economy and Finance, and proposals to the Supervisory Board on matters such as: he served as Head of the Division of Programming and Restructuring and Deputy Director for Information Design and Systems. He also – review of statutory and consolidated Ɠ nancial statements before serves as Chairman of the Interministry Commission on Public- their submission to the Supervisory Board; Private Partnership and Chairman of the Permanent Committee of – consistency and effectiveness of the Company’s internal audit the National Accounting Board. Mr. Semmarhas a degree in Business process; Administration from the University of Casablanca, a post-graduate – supervision of audit programs of internal and external auditors degree in Economics from the University of Rabat and a doctoral and review of their audit Ɠ ndings; degree from École Nationale d’Administration Publique of Rabat.
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– accounting policies and methods, and consolidation scope; INTERNAL AUDIT – the Company’s off-balance-sheet risks and commitments; The internal control procedures established within Maroc Telecom – monitoring of the Company’s insurance policies; Group have the following objectives: – – procedures for the selection of the Statutory auditors, formulation to ensure that management conduct, business transactions, and of an opinion on the fees requested for the performance of their employee behavior are consistent with the operational guidelines audit duties, and the monitoring of compliance with the rules set by the management bodies, and that they comply with guaranteeing auditor independence; and applicable laws and regulations; and – – any issues that the committee believes might pose risks or serious to ascertain that the accounting, financial and management procedural problems for the Company. information provided to the Company’s management bodies presents fairly the Company’s operations and Ɠ nancial position. One of the objectives of the internal control system is to prevent or mitigate risks arising both from the Company’s business affairs and from error and fraud, particularly in the areas of Ɠ nance and accounting. As is the case for all audit systems, there is no guarantee that such risks will be fully eliminated.
Maroc Telecom risk control is performed using the three control lines model:
Control line Entity Role First control line Operational Management Implements the Company’s strategy and the resources necessary to control its activities Second control line Risk Management and other support functions Ensure the management of risks, internal control (IT,bHR, Legal, Finance, Management Control, etc.) andbcompliance Third control line Internal Audit (General Control Department) Provides independent assurance and assessment
To perform its task of assessing and validating the Company’s internal – operational audit (12 auditors at Decemberb31, 2017), for matters control systems, the Audit Committee is supported by the Internal regarding operational units (Retail branches, technical centers, Audit and Inspection Departments. It deƓ nes the action plan for stores, regions, etc.). Operational audits consist of analyzing the Internal Audit and Inspection Departments and analyzes their procedures for the management of resources, networks and Ɠ ndings. customer services. The average attendance rate among Audit Committee members at The annual audit plan consists of a program of engagements whose meetings held in 2017 was 88%. implementation is entrusted to the Internal Audit Department. These engagements have the following main objectives: INTERNAL AUDIT, RISK MANAGEMENT & INSPECTION – to verify the existence and adequacy of controls in the areas of Internal audit Ɠ nance, data processing, and operations, to ensure that the main risks have been identiƓ ed and are suitably covered; Maroc Telecom’s Internal Audit Department (Operational Audit and Financial Audit) reports to the General Control Department. It is an – to review the robustness of Ɠ nancial information, including controls independent function that has direct access to the Audit Committee. relating to security of the communication, storage and backup of The Internal Audit Department is governed by a charter approved information; by the Audit Committee. – to review the operational units and systems to ensure adequacy The role of the Internal Audit Department is to provide the Company in respect of policies, procedures, and legal and regulatory with an analysis of the level of risk of its operations and to monitor the requirements; quality of internal control at each level of the Company’s organization. – to review the means for safeguarding assets and for advising The Internal Audit Department helps the Company to achieve its management as to the efƓ ciency and effectiveness of the utilization objectives by assessing procedures for risk management, control of resources; and corporate governance. – to ensure that recommendations have been carried out during The effectiveness of the internal control process is assessed by follow-up engagements. the Internal Audit Department, according to an annual audit plan The Internal Audit Department (Operational Audit and Financial approved by the Audit Committee. Summaries of the comments and Audit) communicates and coordinates with the Company’s external recommendations formulated by the Internal Audit Department are auditors to maximize the effectiveness of the audit scope of coverage. provided to the Audit Committee. Internal audits performed in 2017 involved the main items of The audit plan is deƓ ned according to an analysis of the business the balance sheet and income statement, i.e., revenues, assets, risks, which include Ɠ nancial risks, IT risks, and risks speciƓ c to the inventories, and liquidity, as well as other key corporate processes. operational units of the Group. Risk Management To meet this twofold objective, the Internal Audit Department has two divisions, each of which has the following complementary functions: In a context marked by tougher competition, growing regulatory pressure, and strong environmental concerns, risk management is – Ɠ nancial audit (8 auditors at Decemberb31, 2017), for processes an essential management concern. with an accounting and Ɠ nancial impact;
56 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 GENERAL INFORMATION ABOUT THE COMPANY Information about the Company and corporate governance
The Risk Management entity, created in late 2015 under the General 2.2.3.2.2 Code of Ethics & Compliance Control Department, has set up an ongoing, dynamic process to Keen to maintain a high degree of fairness, transparency, market manage risks in accordance with the COSO 2 standards. Its goal is integrity and customer focus, Maroc Telecom established a Code to identify, delineate and manage the risks faced by the Company of Ethics in 2006. and to keep them at a tolerable level. The code is not intended to replace existing rules, but serves as a For this purpose, it directs the risk management process by relying reminder of the ethical principles and rules that generally apply, on a network of risk ofƓ cers in the operational departments and the and the need to adhere scrupulously to them. The code aims to risk managers in the Group’s subsidiaries. make each employee of the Company accountable, setting out the 2 Inspection principal rules governing the use of inside information, so as to raise awareness of best practice among all employees and inform and In conjunction with the Internal Audit Department, the Inspection guide their professional conduct. Department (11 inspectors at Decemberb31, 2017) is also responsible for assessing and approving the Company’s internal control system. The Code of Ethics includes rules for dealing with real or apparent It reports to the General Control Department. conŴ icts of interest in order to avoid situations such as insider trading or the suspicion that it might occur. At the request of the aforementioned bodies or on its own initiative, the Inspection Department conducts periodic audits, spot checks, In accordance with the provisions of the Moroccan Capital Markets and speciƓ c reviews, for the following purposes: Authority (AMMC), the Management Board appoints an Ethics OfƓ cer, who is responsible for ensuring compliance with the rules – to protect the assets, property, resources and means employed; set forth by law and the Code of Ethics. – to verify compliance with management procedures, instructions, Several measures are taken by the Maroc Telecom Ethics OfƓ cer to policies and rules; ensure compliance with the Code of Ethics: – to ensure the quality, adequacy and reliability of data and the – issuance of a copy of the Code of Ethics to all employees who optimization of resource allocation; sign a document stating that they have reviewed them (operation – to demonstrate and determine any possible liabilities in the event started in 2006, ongoing for new recruits); that the Company becomes aware of deƓ ciencies, irregularities – induction seminars by the Ethics Officer for new recruits to or fraud. raise awareness about the provisions of the Code of Ethics with The Inspection Department may be called on to contribute to the exposure, for educational purposes, to some situations involving operational audit by completing speciƓ c, periodic missions and to conŴ icts of interest that employees may face; set up a team to study, analyze, and make recommendations on the – ongoing awareness campaigns for compliance with the Code of operations of the Company. Ethics; IIA CERTIFICATION OF MAROC TELECOM’S INTERNAL – invitation issued to all insiders (internal and external) to sign AUDIT ACTIVITIES conƓ dentiality agreements for privileged information acquired in the exercise of their functions/terms of ofƓ ce, in accordance with In Januaryb2017, Maroc Telecom obtained IIA (Institute of Internal AMMC provisions. Auditors) certiƓ cation for its internal audit activities from the IFACI (French Audit and Internal Control Institute) certiƓ cation committee, Employees may also consult the Chief Compliance OfƓ cer, who is in in accordance with the Professional Internal Audit Guidelines (RPAI), charge of ensuring compliance with the law and the rules enshrined which are based on International Internal Audit Standards. in the Code of Ethics. Maroc Telecom is the Ɠ rst company listed on the Casablanca Stock Exchange to obtain this certiƓ cation, which demonstrates that its 2.2.3.3 MANAGEMENT’S INTEREST internal audit activities meet strict criteria of independence and competence and make a strong contribution to the continuous improvement of operational processes. 2.2.3.3.1 Compensation paid to members IFACI certiƓ cation guarantees compliance with and implementation of the management and supervisory of the 25 requirements of the 2015 Professional Internal Audit bodies Guidelines, which are classified into three levels: the resources available to Maroc Telecom’s Internal Audit (independence, As part of its appointment decision, the Supervisory Board sets the objectivity, charter, ethics, etc.), the services it implements (risk-based method and the amount of the compensation for each Management audit plan, corporate governance, audit methodology and process, Board member. A Compensation Committee consisting of the etc.) and audit management and control (supervision, insurance & Chairman and Deputy Chairman of the Supervisory Board meets quality improvement program, etc.). once abyear to review the aggregate compensation of the members of the Management Board, including any variable portion, and This international recognition is a further guarantee of Maroc submits its recommendation to the Supervisory Board. Telecom’s professionalism and a reŴ ection of its stated desire to align its audit and control activities with international standards. The total gross compensation paid by the Company, its subsidiaries, and all controlling companies to members of the Management Board for their work on behalf of Maroc Telecom Group for fiscalbyear 2017 totaled MADb84bmillion. Variable compensation for 2017 was calculated for members of the Management Board in accordance with the following criteria:b(a) Ɠ nancial targets of Maroc Telecom andb(b) the priority actions for their business segment.
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The following table summarizes the compensation paid over the past three Ɠ scalbyears:
(in MAD million) 2017 2016 2015 Short-term beneƓ ts 84 55 48 Severance packages 105 65 55
Based on compensation for 2017, the minimum amount to be paid 2.2.3.3.6 Loans and guarantees granted by the Company in the event of termination of employment contracts to senior managers of members of the Management Board, except in case of gross negligence or willful misconduct, would amount to MADb105bmillion. None. Furthermore, the Company bears the cost of entertainment and travel expenses incurred by members of the Management Board in the course of their duties. 2.2.3.4 RELATED-PARTY TRANSACTIONS The impact of beneƓ ts in kind and special complementary pension plans set up for corporate ofƓ cers is included in the Ɠ gures in the 2.2.3.4.1 Legal Framework above table. Under Articlesb95 et seq. of Moroccan Law 17-95 on corporations, For members of the Supervisory Board, the Shareholders’ Meeting as amended and supplemented by Law 20-05 and Law 78-12, any of Aprilb26, 2016 voted to allocate the aggregate annual amount of agreement between the Company and, whether directly or indirectly, twobmillion Ɠ ve hundred fortybthousand dirhams in Directors’ fees a member of the Management or Supervisory Boards, or between to the members of the Supervisory Board and the Audit Committee. the Company and any shareholder directly or indirectly holding more This decision remains valid until a new decision is made by the than 5% of the share capital and voting rights, is subject to prior Shareholders’ Meeting. The conditions and criteria for distributing authorization from the Supervisory Board. the fees must be set by the Supervisory Board. The same applies to agreements in which one of the persons referred to in the preceding paragraph is indirectly involved or in which he or 2.2.3.3.2 Ownership of company shares by she deals with the Company by proxy. members of the management body Agreements between the Company and another company are At Decemberb31, 2017, the members of the Management Board also subject to the same authorization if one of the members of directly or indirectly held 76,303 shares in Maroc Telecom. the Management Board or the Supervisory Board is the owner, an indeƓ nitely associated partner, manager, director, Chief Executive OfƓ cer or member of the Management Board or Supervisory Board 2.2.3.3.3 ConVicts of interest and other of the company. relevant considerations Accordingly, related-party agreements signed in previous Ɠ scalbyears Over the past Ɠ vebyears, no member of Maroc Telecom’s Management that remained in effect in 2017 are described below and detailed in Board or Supervisory Board has been convicted of fraud; no member the special report of the Statutory auditors that can be found on page of the Management Board or Supervisory Board has been associated 189 and following, of this document. with a bankruptcy, receivership or liquidation; and no ofƓ cial public indictment and/or sanction has been issued against them by legal 2.2.3.4.2 RelatedĆparty transactions renewed or regulatory authorities or professional organizations. Similarly, no corporate ofƓ cer of Maroc Telecom has been prevented by a Court in Uscal year 2017 from acting as a member of an executive, management or supervisory body of an issuer, or from participating in the management or the AGREEMENT WITH THE MOROCCAN ROYAL FEDERATION business of an issuer. OF TRACK AND FIELD ʂFRMAʃ Finally, the appointment of members of the Management Board The agreement between Maroc Telecom and FRMA, of which Mr. and Supervisory Board is governed by a Shareholders’ Agreement Abdeslam Ahizoune is also Chairman, expired in Septemberb2017. under the terms and conditions described in Sectionb2.2.2.2.4 During the 2017 Ɠ nancialbyear, the renewal of that same agreement “Shareholders’ Agreement.” was authorized by the Supervisory Board on Decemberb8, 2017 for one (1) additionalbyear, for an amount of MADb3bmillion, and to which 2.2.3.3.4 Management’s interest was added support for expenses related to the travel and missions in key customers or suppliers of the President of the FRMA None. 2.2.3.4.3 RelatedĆparty transactions from prior Uscal years still 2.2.3.3.5 Service agreements in eTect in 2017 With the exception of employment contracts between members of the Management Board and the Company, there are currently BRAND LICENSING AGREEMENTS no contracts between members of the Management Board or As of Januaryb 26, 2015, Maroc Telecom became the majority Supervisory Board and the Company and/or its subsidiaries that shareholder of Atlantique Telecom Côte d’Ivoire, Etisalat Benin, bestow any particular beneƓ ts. Atlantique Telecom Togo, Atlantique Telecom Niger, Atlantique Telecom Gabon (entity absorbed by Gabon Telecom on
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Juneb29,b2016, effective from Januaryb1, 2016) and Atlantique SERVICE AGREEMENT WITH ONATEL Telecom Centrafrique. As a result, Maroc Telecom acquired the rights In Septemberb2007, Onatel signed an agreement with Maroc Telecom related to the Brands “Moov” and “No Limit” belonging to the Etisalat under which Maroc Telecom provides services to Onatel in the Group as well as related Brand Licensing agreements with regard to following areas: strategy and development, organization, networks, the above subsidiaries. marketing, finance, purchasing, human resources, information systems and regulations. TECHNICAL ASSISTANCE AGREEMENTS These services are carried out mostly by expatriate employees. As of Januaryb 26, 2015, Maroc Telecom became the majority shareholder of Atlantique Telecom Côte d’Ivoire, Etisalat Benin, Maroc Telecom is the majority shareholder of Onatel. 2 Atlantique Telecom Togo, Atlantique Telecom Niger, Atlantique Telecom Gabon (entity absorbed by Gabon Telecom on SERVICE AGREEMENT WITH MAURITEL Juneb29,b2016, effective from Januaryb1, 2016) and Atlantique In Ɠ scalbyear 2001, MauritelbSA signed an agreement with Maroc Telecom Centrafrique. As a result, Maroc Telecom acquired the rights Telecom under which Maroc Telecom provides services and technical stemming from the Technical Assistance agreements by and between assistance and transfers equipment to MauritelbSA. these companies and the Etisalat Group. Maroc Telecom is the majority shareholder of MauritelbSA and the Maroc Telecom is a majority shareholder of those entities, and member of the management bodies in common is Mr.bHassan for Gabon Telecom Mr. Boudaoud is also a member of the joint Rachad. management bodies. AGREEMENT RELATING TO THE ACQUISITION AND FINANCING AGREEMENTS FOR CURRENT-ACCOUNT ADVANCES OF SUBSIDIARIES OF THE COMPANY ETISALAT As of Januaryb 26, 2015, Maroc Telecom became the majority The agreement concerns the settlement by Itissalat Al-Maghrib (IAM) shareholder of Atlantique Telecom Côte d’Ivoire, Etisalat Benin, of the purchase price in Ɠ ve interest-free maturities and the granting Atlantique Telecom Togo, Atlantique Telecom Niger, Atlantique of a zero interest loan of USD 200bmillion from Etisalat which the Telecom Gabon (entity absorbed by Gabon Telecom on company reallocated to certain acquired subsidiaries. Juneb29,b2016, effective from Januaryb1, 2016) and Atlantique Etisalat is the major shareholder of IAM. The members of the Telecom Centrafrique and Prestige Telecom Côte d’Ivoire. Maroc management bodies for Etisalat are Eissa Mohammad Al Suwaidi, Telecom also acquired the current accounts of the Etisalat Group in Mohammad Hadi Al Hussaini, HatembDowidar, Saleh Abdooli and these subsidiaries. Serkan Okandan. Maroc Telecom is a majority shareholder of those entities, and for Gabon Telecom Mr. Boudaoud is also a member of the joint CONTRACT WITH CASANET management bodies. Since 2003, Maroc Telecom has signed several agreements with its TECHNICAL SERVICES AGREEMENT WITH ETISALAT subsidiary Casanet, the purpose of which is, among other goals, the maintenance in operation conditions of the Menara internet portal PARTIES CONCERNED of Maroc Telecom, the supply and development and hosting services In Mayb2014, Maroc Telecom signed a service agreement with for the mobile portal of the Maroc Telecom websites. Emirates Telecommunications Corporation (Etisalat), under which Maroc Telecom is the majority shareholder of Casanet and the the latter is to provide Maroc Telecom, at its request, directly or member of the management bodies in common is Mr. Hassan indirectly, with technical support services, including in the following Rachad. areas: digital media, insurance, and Ɠ nancial ratings. These services may be performed by expatriate staff. CURRENT-ACCOUNT ADVANCE – CASANET On Mayb14, 2014, Etisalat became the principal shareholder of Maroc Maroc Telecom decided to entrust its business directory activities to Telecom via SPT. Members of the management bodies common to its subsidiary Casanet. both parties are: Mssrs. Eissa Mohammad Al Suwaidi, Hatem Dowidar, In relation to this, the Supervisory Board on Decemberb4, 2007 Saleh Abdooli, Serkan Okandan and Mohammad Hadi Al Hussaini. authorized the payment by the Company of the necessary investments costs, which will be financed through non-interest- SERVICE AGREEMENT WITH GABON TELECOM bearing current-account advances. In Novemberb2016, Gabon Telecom signed an agreement with Maroc Telecom is the majority shareholder of Casanet and the Maroc Telecom under which it provides services in the following member of the management bodies in common is Mr. Hassan Rachad. areas: strategy and development, organization, networks, marketing, finance, purchasing, human resources, information systems and regulation. These services are carried out mostly by expatriate employees. Maroc Telecom is a majority shareholder of Gabon Telecom and the member of the management bodies in common is M.bBrahim Boudaoud.
SERVICE AGREEMENT WITH SOTELMA In 2009, Sotelma and Maroc Telecom signed an agreement under which Maroc Telecom provides it with technical support and services. Maroc Telecom is a majority shareholder of Sotelma and the member of the management bodies common to both parties is Mr.bLarbibGuedira.
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3.1 DESCRIPTION OF THE GROUP 62 3.1.1 History and overview 62 3.1.2 Human resources 63 3.1.3 Maroc Telecom’s sustainable development policy 65 3.1.4 Real property 68 3.1.5 Intellectual property, research and development 69 3.1.6 Insurance 69
3.2 BUSINESS ACTIVITIES 70 3.2.1 Morocco 70 3.2.2 Subsidiaries 90
3.3 LEGAL AND ARBITRATION PROCEEDINGS 103
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3.1 _ Description of the Group
3.1.1 HISTORY AND OVERVIEW
Maroc Telecom is the incumbent telecommunications operator in Maroc Telecom is organized by “Business Units” around its business the Kingdom of Morocco. It is operates in the Fixed-line telephony, activities and services. The Fixed-line and Mobile operating segments Mobile telephony and Internet segments. Since 2001 Maroc are combined within the Services Division (DGS) and the Networks Telecom Group has focused on international development. The and Systems Division (DGRS), while support functions are covered Group acquired a controlling interest in the incumbent operators by the Regulatory and Legal Affairs Division (DGRAJ) and the of Mauritania (Mauritel, via CMC holding), Burkina Faso (Onatel) in Administration and Finance Division (DGAF). Within the strategic Decemberb2006 and Mali (Sotelma) in Julyb2009. The Group acquired framework defined by the Group’s management bodies, these a 51% controlling interest in Gabon Telecom in Februaryb2007. divisions ensure oversight of subsidiaries and compliance with the rules of Maroc Telecom Group. In Januaryb2015, Maroc Telecom Ɠ nalized the acquisition, started on Mayb4, 2014, of the six subsidiaries of Etisalat in Benin, Ivory Coast, Maroc Telecom is decentralized, with eight Regional OfƓ ces each with Gabon, Niger, the Central African Republic and Togo. their own operating structure and support functions. In addition, Maroc Telecom owns 100% of Casanet, a leading internet service provider in Morocco and host of the menara.ma web portal.
The Maroc Telecom Group’s organizational chart at Decemberb31, 2017, was as follows:
Abdeslam AHIZOUNE Chairman of the Management Board
Larbi GUEDIRA François VITTE Brahim BOUDAOUD Hassan RACHAD :G:@BG@BK>
>@BHG:EW<>LĎ}ď N;LB=B:KB>L
62 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 DESCRIPTION OF THE GROUP, BUSINESS ACTIVITIES, LEGAL AND ARBITRATION PROCEEDINGS Description of the Group
Since Mayb14, 2014, Maroc Telecom has been part of Etisalat Group, The transition from the 2005 to the 2013 version of ISOb27001 was the UAE’s incumbent operator with operations in 16bcountries in the completed successfully in Septemberb2015. Middle, Asia and Africa. Etisalat began its international expansion The transition from the 2008 version to the 2015 version of in 2004 when it acquired its Ɠ rst 3G mobile license in Saudi Arabia. ISOb9001 took place during the follow-up audit in Decemberb2017 Since then, the operator has continued to grow, becoming one of which concluded positively with a report proving the Company’s the most dynamic operators in the world. commercial, technical and IT performance. The certiƓ cation covers Source: Etisalat the design and development of products, marketing, installation/ uninstallation, activation/deactivation, billing and collection, after- sales service, information and support for all products and services ISO CERTIFICATION and for all consumer and business customers across Maroc Telecom’s various sites. Our Company has been: Maroc Telecom is certiƓ ed by Bureau Veritas. – ISOb9001 – Quality Management System certiƓ ed since 2004; – ISOb27001 – Security Management System certiƓ ed since 2007. Personal data protection 3 The integrated Qualityb& Safety management system introduced by Maroc Telecom in 2008 has yielded the following beneƓ ts for the With the establishment of the National Commission to Control the Company: Protection of Personal Data (CNDP) on Novemberb15, 2010, Maroc Telecom had a period of twob(2)byears (until Novemberb15, 2012) – solid business performance based on active market intelligence to comply with the provisions of Lawb09-08 on the protection of and an ongoing network-based sales campaign; individuals in the processing of personal data. – dynamic adaptation of the organization according to the A legal representative of Maroc Telecom was named to ensure, overarching strategic issues; in collaboration with the National Commission to Control the – increased security for the Company’s assets and personal data; Protection of Personal Data (CNDP), compliance with the law and – guaranteed continuity of business-critical processes; the maintenance of compliance with said law. – across-the-board compliance with internal, regulatory and legal Maroc Telecom notiƓ ed the CNDP of all personal data processing requirements. operations it performs and obtained approval from the Commission in Decemberb2013. The certiƓ cation, awarded by internationally recognized bodies, is a guarantee of the quality of the services provided by Maroc Since the effective date in 2013 of Lawb09-08 on the protection of Telecom and proof of its commitment to satisfying and retaining its individuals in the processing of personal data, Maroc Telecom has stakeholders through constant customer care. continuously ensured compliance and the maintenance of its level of compliance with that Law.
3.1.2 HUMAN RESOURCES
Human resources management is the mainstay of the MT Group’s Maroc Telecom’s human resources policy is based on the recognition performance. The Group’s development essentially relies on the of performance, skills development, fairness and equal opportunities. expertise, know-how and commitment of its employees.
3.1.2.1 MAROC TELECOM GROUP EMPLOYEES
Group workforce The tables below illustrate the changes in workforce at Maroc Telecom during the three Ɠ scalbyears ended Decemberb31, 2015, 2016 and 2017:
2017 2016 2015 Maroc Telecom 7,920 8,878 9,036 Subsidiaries 2,959 3,098 3,358 GROUP 10,879 11,976 12,394
MAROC TELECOM ____ 2017 Registration Document 63 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 DESCRIPTION OF THE GROUP, BUSINESS ACTIVITIES, LEGAL AND ARBITRATION PROCEEDINGS 3 Description of the Group
NB: for the average number of employees of Maroc Telecom Group A voluntary employee redundancy plan was launched in Morocco see Noteb19 to the consolidated Ɠ nancial statements in Chapterb4. and Burkina Faso to bring in younger workers and help them adapt to the Company’s new businesses. It beneƓ ted 1,024 employees in Morocco and 44 in Burkina Faso.
Age and seniority The average age in the Group is 45.6 years, and the average seniority is 19.6byears.
StaT turnover
StaT turnover % 2017 2016 2015 Maroc Telecom 1.0 0.9 0.9 Subsidiaries 1.5 2.1 2.5 GROUP 1.1 1.2 1.4
The low staff turnover at Maroc Telecom and its subsidiaries is a testament to employee loyalty.
Change in staT compensation Payroll costs have changed as follows over the past three Ɠ scalbyears:
(in MAD million) 2017 2016 2015 Maroc Telecom 2,190 2,237 2,202 Maroc Telecom Group 3,138 3,260 3,245
3.1.3.2 PROFESSIONAL DEVELOPMENT Maroc Telecom also offers its employees Ɠ nancial aid covering up to 80% of tuition costs for those wishing to pursue undergraduate and postgraduate degrees (up to master’s level) at the same time Recruitment as working. Aware of the strategic challenges in the changing telecommunications Skills development within the Group’s African subsidiaries is also a sector, Maroc Telecom is continually adapting its recruitment policy key part of its modernization strategy. In addition to locally provided to consolidate its leadership position. The Group’s recruitment training, Maroc Telecom regularly holds seminars, workshops and approach is transparent, equitable, rigorous and highly selective. immersion sessions for the employees of its subsidiaries in order to This attracts the best talent from national and international colleges share with them the Group’s business know-how. and universities. Mobility Training INTERNAL MOBILITY Continuing professional development plays a major part in the skills development of Maroc Telecom employees. The Group provides Maroc Telecom encourages internal mobility in the interests of training in its core activities across its business lines. The training nurturing its employees’ professional development and ensuring the program is regularly updated in light of the latest advances in Company’s Ŵ exibility in a constantly changing environment. Several technology, markets and organizational theory. programs are in place to help employees get accustomed to their new duties. To meet its training needs Maroc Telecom has a Training Center in Rabat as well as numerous in-house trainers. The Company also relies INTERNATIONAL MOBILITY on in-house part-time trainers to transfer business skills. Altogether, 51% of training is undertaken by the Group’s own staff. Maroc International career opportunities are available to employees wishing Telecom also uses external service providers for speciƓ c training. to give their careers with the Maroc Telecom Group a new impetus. Talented employees can take up expatriate opportunities in various In 2017, the equivalent of nearly 22,000 training days were provided subsidiaries as part of the Group’s modernization strategy. In this way for 4,100 employees. Each employee receives three days of training the Group encourages the sharing of skills and best practices with per year on average. its sub-Saharan subsidiaries.
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Skills development – additional health insurance to improve the coverage of medical costs incurred by employees; Skills development is at the center of all Maroc Telecom’s HR processes. It rests in large part on the Annual Performance Appraisal – death or disability cover; (EAP). The EAP is an opportunity to discuss formal targets and – an annual Ŵ u shot campaign; performance and to assess an employee’s expectations and career – a program to help smokers quit; prospects. – vacation centers in several Moroccan towns and subsidized vacation packages. 3.1.3.3 EMPLOYEE BENEFITS
Maroc Telecom offers a number of fringe beneƓ ts to its employees 3.1.3.4 DIALOGUE BETWEEN MANAGEMENT and their families: AND LABOR – grants to purchase a means of transport (car or motorbike); Dialogue between management and labor is a tradition at Maroc – grants for the hajj; Telecom. It serves as a platform to discuss the concerns and 3 – housing loan agreements with several banks to facilitate home aspirations of the Company’s employees with the unions. ownership. The housing loan rates are negotiated with the banks In 2017 dialogue and discussions continued between management and supplemented by Maroc Telecom; and employee and union representatives. – assistance and insurance contracts for medical transport;
3.1.3 MAROC TELECOM’S SUSTAINABLE DEVELOPMENT POLICY
The challenges of sustainable development and social, societal – acting as a responsible corporation by upholding ethical principles, and environmental challenges lie at the center of the policies of maintaining transparency in its dealings with customers, suppliers, many countries. The objective is to value human capital and natural employees and all stakeholders, and by making every effort to resources in economic development policies and reduce inequality limit the impact of the Company’s activities on the environment. and poverty. Maroc Telecom has chosen to adopt world-renowned sustainable As a major telecommunications operator in Africa, the Group has development standards to measure, promote and build on its integrated the concerns of sustainable development in its growth performance. strategy for severalbyears. This strategy has also been based on In 2014 Maroc Telecom obtained the CSR Label from the the three principles of economic efficiency, social equity and Confédération Générale des Entreprises du Maroc (CGEM). The label environmental responsibility. shows that Maroc Telecom’s commitments comply with universal The Group has been working for a number ofbyears to facilitate access principles of social responsibility and sustainable development to communications services for the greatest number of people and in line with objectives from the CGEM charter of corporate social conducts a number of programs for the well-being of the population. responsibility. The charter meets Moroccan legal requirements, It maintains responsiveness-based relationships of trust with all its complies with the standards, agreements and recommendations of stakeholders, whether employees, customers, shareholders or international organizations such as the UN, ILO and OECD, and is in suppliers. line with the guidelines of ISOb26000. Maroc Telecom’s sustainable development policy is built around In 2017, Maroc Telecom pursued its strategy of continuous three major challenges: improvement in terms of sustainable development by calling on an – independent third-party expert to measure its social responsibility bridging the digital divide, whether in geographic or social terms, performance against the internationally recognized ISOb26000 to make information and communication technologies accessible standard. to everyone in every region, no matter how remote; The audit was conducted by Vigeo-Eiris, a leading European provider – contributing to the social and economic development of the of non-Ɠ nancial analysis, which gave Maroc Telecom its “Vigeo-Eiris country by encouraging business and job creation, facilitating 26,000” attestation with an “Advanced” score which is the highest access to education and knowledge, supporting humanitarian level on the consultancy’s corporate performance ratings scale. The initiatives to help those in need, and continuing to support culture score conƓ rms the convincing results regularly obtained by external and sports; assessments of Maroc Telecom’s environmental measures and its HR and quality policies.
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KEY ACTIONS IN 2017 Protecting young people The internet is a formidable development tool for children and young NICTs for all adults. It facilitates access to knowledge and learning and fosters social interaction and intellectual debate. However, the internet also Maroc Telecom strives for maximum network coverage across its poses a risk to young people, mainly due to the inappropriate content regions. Long committed to reducing the digital divide, it deploys of some websites and the publication of personal information. its telecommunications infrastructure in the remotest areas. Maroc Telecom has put several measures in place to protect young Maroc Telecom covers nearly 7,300 no-coverage areas under the people from risks related to the use of new technologies, such as PACTE universal service program, a major contribution of nearly 80% selecting content based on strict criteria, enabling parental control to this program. Outside the PACTE program Maroc Telecom also of internet and streaming content, and moderating the Company’s covers 20,000 remote rural locations. Facebook page for messages that are racist, hateful, pedophile, In 2017, Maroc Telecom became the Ɠ rst global operator to offer pornographic or degrading. broadband satellite internet access (via VSAT) covering the entire Moroccan territory. Satellite internet access provides stable and Developing young talent broadband internet access even to the most remote parts of Morocco. Maroc Telecom has joined a number of initiatives encouraging young Maroc Telecom’s subsidiaries are also involved in efforts to connect people to express their creativity and showcasing their talents, thus remote areas and in 2017 covered 115 remote communities in furthering their involvement in social and cultural life. Burkina Faso, Ivory Coast, Gabon, Mali, Mauritania and Niger. In 2017, Maroc Telecom renewed its support for “Ftour 2.0”, abmeeting Various initiatives to promote the use of new technology were of young Web and new technology designers in an Ftour to exchange launched in 2017 such as Mobile Postpaid rolling plans starting ideas and express themselves. At the seventh installment of Ftour at MAD 59 a month and half-price offers for ultra-broadband Ɠ ber 2.0 in 2017, which drew nearly 200 members of the Moroccan internet subscription packages running at 100bMb/s . web community, two major initiatives were launched: Digital Act, Morocco’s Ɠ rst digital think tank, and the Digital Trophies, awards set Training young people up to encourage and recognize the best talent and entrepreneurs. Maroc Telecom is committed to supporting young people who Maroc Telecom also sponsored the Oasis Festival, the largest are a major part of Morocco’s human capital and a driver of its electronic music festival, where young Moroccan musicians share development. It is increasing actions to facilitate their access to the stage with successful international artists. learning so that they can expand their knowledge. Maroc Telecom has its own sports school, created in 2001. The school Maroc Telecom is the leading contributor to national measures provides soccer classes for children ages 6 to 16. It takes in 200 to 250 seeking to integrate ICT into education and vocational training. children every year. The children of employees account for more than one third of the children enrolled. In addition, Maroc Telecom has The roll-out of the third phase of the Génie Program continued in been a partner of the Mohammed VI Soccer Academy since 2007. 2017. Under it Maroc Telecom won the contract to equip more than The Academy provides high level training and contributes to the 3,200 schools with ADSL internet access with Ɠ lters to protect students preparation of professional players. from sensitive internet content, representing a major participation of 41% among four operators. During the Ɠ rst and second phases of Supporting jobs and the economy Genie, Maroc Telecom connected nearly 1,300 schools. Under the Injaz Program Maroc Telecom offers innovative products Maroc Telecom is continuing to roll out high-speed broadband. that so far have provided broadband mobile internet access as well This is an important economic issue for Morocco and a key factor as laptops and tablets at competitive prices to over 88,600 students. in attracting investment throughout the country, enabling Ɠ rms to be more competitive and harnessing technology to develop new Maroc Telecom also continued its involvement in the Nafida@ services. Program under which over 249,000 teachers have obtained internet access at attractive prices. In 2017, Maroc Telecom accelerated the roll-out of its 4G+ mobile network and its FTTH (fiber to the home) network which is now Thus, Maroc Telecom is contributing 69% and 71% to the Injaz and available in all big cities in the country. NaƓ d@ programs respectively. Maroc Telecom also promotes the use of new technologies in Small To date, the Maroc Telecom Association (MT2E), currently known as and Medium-Sized Enterprises (SME) and start-ups by offering them “MOSSANADA”, has helped 720 bright young people from modest discounts on telecom products. In addition the Ɠ rm’s investments and backgrounds to continue their education at universities in Morocco businesses have a positive impact on employment with the creation or abroad by offering them Ɠ ve-year scholarships. of nearly 125,000 indirect jobs in Morocco and 1.17bmillion jobs in all the countries where the Group operates in activities as diverse as retailing, subcontracting and call centers...
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Embracing humanitarian causes Federation, as their ofƓ cial sponsor since 2000 and 1999 respectively. Maroc Telecom also supports other disciplines, such as equestrian Because it is important to promote solidarity for inclusive, fair and sports, golf, and tennis. sustainable development, Maroc Telecom is engaged with a number of national foundations and associations that perform humanitarian actions to beneƓ t those who are sick or economically disadvantages, Environmental protection including the MohammedbV Foundation for Solidarity, the Lalla Salma Maroc Telecom’s environmental policy is based on several Foundation, the prevention and treatment of cancer, the Heure commitments both to reduce the environmental impact of the Joyeuse Association,betc. Company’s activities and to mobilize, alongside civil society, to meet The Company also supports children’s charities and organizations, great environmental challenges. such as the Moroccan Down Syndrome Association, the Lalla Asmaa In 2017, Maroc Telecom continued efforts to reduce the consumption Foundation for Deaf Children, and the National Institute for Children’s of electricity and raw materials, for example by using renewable Rights. energy, switching to energy-saving technology (Single RAN), and encouraging electronic top-ups. Supporting culture and sports After identifying and classifying all the waste resulting from its 3 Maroc Telecom promotes art and culture in all their diversity, which operations, Maroc Telecom is implementing the measures necessary are elements vital to individual and collective human development. to recycle each type of waste in accordance with the regulations in force and good practices in the sector. Every year since 2002, Maroc Telecom has held its summer beach festival in the major cities along Morocco’s coast. The free beach Maroc Telecom is involved in the Voluntary Carbon Offsetting festival attracts several million visitors each year. Program, run by the Mohammed VI Foundation for Environmental Protection, and is continuing its work for the Clean Beaches With over 140 concerts and shows, the 2017 beach festival drew program, set up by the same Foundation. The firm also helped over 5 million revelers, featuring some of the biggest names in the build the Foundation’s Centre de Sensibilisation à la Protection de Moroccan and Arabic music scene as well as local artists. l’Environnement (an environmental awareness center) in Bouknadel. Everybyear, Maroc Telecom partners with the largest and most famous The Maroc Telecom Tower was designed to reduce energy festivals in the Kingdom, which highlight the Moroccan artistic consumption and optimize water use: heritage and welcome the greatest national and international artists. It has also been a patron of the Théâtre National Mohammed V de – low energy consumption, through centralized management Rabat since 2002 and has been instrumental in publishing various of blinds, air conditioning, lighting,betc., with a double-skinned books on Moroccan history and culture. façade, motion detectors and windows that reduce the need for artiƓ cial lighting; Maroc Telecom continues to enhance its offers with a priority on art and entertainment. In 2017, the Group introduced a new on-demand – optimal water management due to rainwater harvesting for content service called DIGSTER, which offers users a wide and diverse outdoor irrigation, timed faucets with infrared sensors, Ɠ ltering range of music, on top of its Ɠ rst music streaming service Anghami of gray water,betc. and its two video on-demand services ICFLIX and Starz Play. To preserve the beauty of the natural landscape, Maroc Telecom The Maroc Telecom auditorium, with a capacity of 600, was designed uses mobile phone masts that are appropriate to the surrounding to be modular and Ŵ exible so that it could host a wide variety of environment (for example, masts that resemble a palm or pine events, including conferences, concerts, shows and Ɠ lm screenings. tree). It also uses equipment, materials and other techniques By opening it to the public, Maroc Telecom underscores its (painting, disguising antenna to look like palm fronds, concealed commitment to fostering cultural diversity and universal shared access base transceiver stations) to make its mobile sites as unobtrusive to culture. By opening it to the public, Maroc Telecom underscores as possible. its commitment to fostering cultural diversity and universal shared Finally, the environmental awareness of Maroc Telecom employees access to culture. Since its inauguration in Juneb2013, the auditorium is increased through training related to sustainable development. has already hosted numerous events. At the Maroc Telecom Museum, knowledge is transferred to young GSM and health: strict adherence with standards people through learning and games. Open to the public and with Maroc Telecom keeps close watch over health issues related to free admission, it arranges regular guided tours and activities for Mobile telephony and engages in constructive dialogue with local children who account for over 70% of its visitors. The aim is to explain residents and customers who want to be better informed. In addition the history of telecommunications. to tests carried out by the regulator, Maroc Telecom conducts its own Forbyears Maroc Telecom has supported Moroccan sport, which annual surveys to measure the intensity of electromagnetic waves are emblematic of national values and a means of boosting the near relay masts. In 2017, measurements were carried out at almost country’s economy. It has formed long-term partnerships with the 460 sites. The results showed that all sites met international standards. Royal Moroccan Soccer Federation and the Royal Moroccan Athletics
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CSR audit of commercial partners the environment, its employees, and stakeholders. Some of the data are published. In 2017, Maroc Telecom compiled data for more than Since 2010, “sustainable development” clauses have been included in 170 non-Ɠ nancial performance indicators (48 social indicators, 23 all supplier agreements. These clauses cover respect for fundamental environmental indicators and more than 100 employee-related human rights and labor rights as well as commitments relating to indicators). The non-Ɠ nancial data is audited eachbyear by the internal environmental protection and anti-corruption measures. auditors. These audits guarantee that reporting is in line with the Since 2012, Maroc Telecom’s Internal Audit Department has relevant procedures and meets the criteria for completeness and performed annual supplier audits to verify compliance with these reliability. clauses. Since 2014, a charter of these same principles has been deployed with Maroc Telecom distributors and “Full Image” retailers. GOALS FOR 2018
Since 2015, it has included the distributors and “Full Image” retailers In 2018, the Corporate Social Responsibility policy will be within the scope of the audits. strengthened. The scope of the reporting will be extended to new At end 2017, 60 audits had been conducted with 55 partners. social indicators in the subsidiaries. New initiatives such as managing waste, landscaping cell towers, reducing energy consumption, and NonĆUnancial reporting promoting and assessing the CSR performance of suppliers will continue. Maroc Telecom introduced non-Ɠ nancial reporting in 2009. Since then, the Company has compiled non-Ɠ nancial data eachbyear on
3.1.4 REAL PROPERTY
Maroc Telecom runs its networks and retail, support and 2017 HIGHLIGHTS administrative operations from more than 8,090 sites (buildings, land) throughout Morocco, of which approximately 85% are leased and – Two large sites with a combined estimated value of MMAD 26 15% are owned by the Group. These facilities are primarily on sites million registered in the name of Maroc Telecom. historically owned by the Kingdom of Morocco which were legally – Two large sites with a current estimated value of MMAD 63 million transferred to Maroc Telecom at the time of its incorporation in 1998 at an advanced stage of registration. in accordance with Law 24-96 against a contribution in kind. Maroc Telecom is in the process of obtaining formal legal title to these sites. Sites under dispute or subject to expropriation primarily involve land parcels owned by the government or local authorities, for which legal The registration rates for the sites on which Maroc Telecom holds title follows a speciƓ c administrative procedure, and privately owned property rights are 97.5% composed of the following: land where there is no proof of ownership. The estimated costs of – 84.87% of the sites have a deed in the name of Maroc Telecom; these procedures (e.g., payment of land-registration fees) and/or the potential Ɠ nancial risks likely to arise from any dispute over the legal – 12.63% of the sites are being requisitioned from land conservancies. title of ownership are deemed to be insigniƓ cant. Requisition is a claim to a property right. It is issued by the land A similar process is taking place at Maroc Telecom’s sub-Saharan registrar once the application for land registration has been made. It subsidiaries. Mauritel, Onatel, Gabon Telecom, and Sotelma are is transformed into a property title after completion of the regulatory former state-owned companies in which Maroc Telecom took a administrative formalities: publication of the application for land controlling stake when they were privatized. requisition, boundary marking, land survey, notiƓ cation of closed requisition and registration. This procedure is subject to statutory In these four transactions, the property holdings were transferred by time limits; the various states to the entities acquired by Maroc Telecom. Maroc Telecom is current in the process of obtaining legal title to these – 2.5% of the sites are thus pending and consist of 15 premises for property assets. which legal title is in the works (three of these are at an advanced stage of registration) and 12 premises for which legal disputes The same regularization approach was adopted for the new are underway. subsidiaries (Moov) recently acquired by Maroc Telecom. Maroc Telecom does not have legal title for a further 42 other sites: – 36 sites are being expropriated; – 6 sites are under dispute.
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3.1.5 INTELLECTUAL PROPERTY, RESEARCH AND DEVELOPMENT
At Decemberb31, 2017, Maroc Telecom owned some 846 trademarks its trademarks, including Mobicash and Nomadis, to France, Benelux, and brand names, five patents, four industrial models, and two Germany, Spain, Portugal, Italy, Algeria, the European Union and the industrial designs registered with the Moroccan OfƓ ce for Industrial African Intellectual Property Organization. and Commercial Property (OMPIC). Moreover, when it acquired new subsidiaries in Januaryb2015, Maroc Itissalat Al-Maghrib, Maroc Telecom, Jawal, El Manzil, Kalimat, Telecom also acquired the title to trademarks registered with the Menara, Fidelio, the Maroc Telecom pages jaunes (yellow pages), African Intellectual Property Organization (OAPI) and in select African Maghribcom, Mouzdaouij, Solutions Entreprises, Phony and countries, notably Angola, Rwanda, Burundi and Gambia. Mobicash are among the main trademarks and brand names owned These consist of the Moov trademarks and a few Moov-derived by Maroc Telecom Group. trademarks. The trademarks and brand names currently owned by Maroc In addition, Maroc Telecom is committed to taking all necessary 3 Telecom are protected throughout Morocco. For the 285 trademarks and appropriate measures to protect the trademarks, patents and registered prior to Decemberb18, 2004, when Lawb17-97 concerning industrial models it has developed. the protection of industrial property rights took effect, the patent protection period is 20byears, renewable indeƓ nitely; for the 561 The rights to use the trademarks and brand names granted to Maroc trademarks registered after this date, the patent protection period Telecom are described in the service agreements signed with its is 10byears, also renewable indeƓ nitely. contractors. Certain contracts for the sale of services or products grant retailers the right to use Maroc Telecom’s trademarks for the Since 2006, in order to protect its industrial and intellectual property term of the agreement, in accordance with the procedure agreed rights abroad, Maroc Telecom has extended the protection of 32 of on by the parties.
3.1.6 INSURANCE
Maroc Telecom’s risks are covered by a centralized policy of coverage With regard to civil liability insurance, the Group program affords by appropriate insurance policies set up in addition to prevention Maroc Telecom additional coverage extending to major losses and procedures and business recovery plans in the event of a loss. Maroc their potentially substantial Ɠ nancial consequences. Telecom has a policy of continual review of its insurance policies Maroc Telecom also renewed the disability insurance policies through regular bid tenders to beneƓ t from the best technical and covering its employees against the risks of work-related accidents Ɠ nancial terms in the market. These insurance programs are set up and occupational illness. In addition, employees are covered by with the main national and international insurers in order to obtain supplemental health insurance (on top of social security) and by a optimum coverage of Maroc Telecom’s risks. death and disability policy that pays out a lump sum in the event of In 2017, Maroc Telecom put out an invitation to tender for an death or total and permanent disability. international Group insurance program offering its subsidiaries The Maroc Telecom Building in Rabat is covered by property damage the best cover available on the market. The program consists of insurance and a ten-year civil liability warranty, providing broad property & business interruption insurance, civil liability insurance coverage of the potential risks surrounding this large-scale project. and directors & ofƓ cers liability insurance. Along with these insurance policies, for more than a decade Maroc At the international level, Maroc Telecom’s principal insurance Telecom has been committed to a major prevention program to policy is comprehensive and covers its as well as its subsidiaries’ protect its sites against property risks. This program is conducted business and assets against property damage and indirect operating in close collaboration with Maroc Telecom’s insurance partners. The losses. Under the program, inspections of the Group’s main sites are insurer’s technical department performs audits regularly to review conducted annually by the insurers before each program renewal the existing protection and prevention measures and generally date. These inspections give the insurers a better assessment of assess Maroc Telecom’s safety system and the vulnerability of its key the risks covered and allow the Group to better protect its sites and sites in general. After their visits the auditors prepare and send their optimize conditions for negotiating the corresponding insurance reports to Maroc Telecom’s various departments which then examine policies. recommendations for improving site protection. Maroc Telecom also transmits its insurance and risk management experience to its subsidiaries.
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3.2 _ Business activities
3.2.1 MOROCCO
GLOBAL OPERATING ENVIRONMENT COMPETITIVE ENVIRONMENT AND EXISTING OPERATORS The introduction of minimum voice and data rates under the regulatory framework put in place by the ANRT since 2016 stabilized At Decemberb31, 2017, a total of 27 telecommunications licenses prices after several years of falling tariffs. In an unrelentingly had been awarded in Morocco. competitive market and a more stringent regulatory setting the per- minute rate for outgoing mobile calls was MAD 0.24 at end ofb2017 . The telecommunications market by operator and type of service is summarized below: By dint of its innovative products and excellent service quality, Maroc Telecom conƓ rmed its leading position in all market segments in 2017. However, Maroc Telecom once again conƓ rmed its leadership Number Technology of licenses Operator in all market segments, thanks to a policy of competitive offers in mobile, Ɠ xed-line and internet, added value in its offer and constantly Fixed-line 3 Maroc Telecom improving service quality. Despite the 20% premium on top of the Medi Telecom minimum rate imposed by the ANRT on Maroc Telecom for its Mobile INWI Voice services, the Group had a 42% share of the mobile voice market Mobile (2G) 3 Maroc Telecom at end-Septemberb2017. This is in comparison with 35% for Meditel Medi Telecom and 23% for Inwi. Maroc Telecom’s share of the Internet market was INWI 49 % compared with 23 % for Inwi and 28 % for Meditel . Mobile (3G) 3 Maroc Telecom In the prepaid segment Maroc Telecom added new x12 promotional Medi Telecom offer for calls and 4G+ internet starting at 5 Dirham. In 2017 the INWI Multiple Top-up promotional offer included bonus data as well as Mobile (4G) 3 Maroc Telecom domestic and international calls. Medi Telecom Maroc Telecom also made international calls more affordable INWI through its prepaid and postpaid mobile products by lowering the GMPCS 6 Thuraya Maghreb cost of calling big international cities and including all international Soremar destinations in its Pass International *4 offer. Orbcomm Maghreb Global Star North Africa The Group also reworked its prepaid products by making the Jawal European Datacomm Passes permanent, launching new promotions, introducing x10 and Maghreb x12 multiple top-ups starting at 50 Dirham, launching promotional Al Hourria Telecom offers on a frequent basis and raising data volumes on internet VSAT 6 Spacecom passes. In the postpaid segment Maroc Telecom launched a new Cimecom (Nortis) 59 Dirham rolling plan with 3GB of data, 3 hours of airtime and 300 Gulfsat Maroc Telecom SMS. In this way the Company is increasing access to postpaid and Maroc Telecom encouraging migration from prepaid. Wana Corporate Moreover, to support its customers’ shift toward data Maroc Telecom Société d’Aménagement et de launched a new data-friendly postpaid package with 25GB of data Développement Vert (SADV) and 10 hours of airtime for 199 Dirham alongside its existing call- 3RP 3 Cires Telecom friendly package with 20 hours of airtime and 6GB of data all the while Moratel adjusting its range so as to comply with regulations by withdrawing Société d’Aménagement et de its Ŵ at-rate Liberté plan and replacing it with a data-focused plan Développement Vert (SADV) and a call-focused plan. The postpaid line was also expanded with a call-data balanced Ŵ at-rate plan at 159 Dirham. Source: ANRT and decrees for VSAT licenses and 3RP granted in 2015. Turning to mobile internet, in 2017 Maroc Telecom’s mobile network was Maroc Telecom’s principal competitors are as follows: rated the fastest in the country for the second year in a row. Based on – the globally recognized Speedtest by the Ookla internet performance the operator Medi Telecom (“Meditel”), which has held a mobile testing website, these results are the fruit of sustained investment to license since Augustb 1999, was renamed Orange Maroc on highlight 4G+ technology with download speeds of up to 225 Mb/s . Decemberb8, 2016; Orange Maroc is held by the Orange Group (49%), the FinanceCom Group (25.5%) and the CDG Group (25.5%); The spread of 4G was generalized through a simpliƓ ed customer – Wana, in which SNI Group holds a 69% stake, with the remaining procedure (no SIM swap and no additional fees) and by promoting 31% held by the consortium composed of Al Ajial Investment Fund 4G+ technology, the most advanced version of fourth generation Holding and Zain Telecommunications Group. mobile. The Fixed-line segment in 2017 saw the accelerated technical and marketing roll-out of fiber optic packages to Business and Residential customers with download speeds of up to 200 Mb/s starting at 500 Dirham a month (incl. tax). Finally, the ADSL segment was revamped with the commercial launch in Octoberb2017 of the 12 Mb/s Double Play package for 249 Dirham a month (incl. tax) which appealed to many customers.
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PRINCIPAL PERFORMANCE INDICATORS FixedĆline telephony segment FOR THE MOROCCAN TELECOMMUNICATIONS (including restricted mobility) SECTOR FIXED-LINE CUSTOMER BASE IN MOROCCO OVER THE 2010 -2017 PERIOD CHANGE IN MOBILE, FIXED-LINE ʂINCL. RESTRICTED (inbmillions of customers) MOBILITYʃ, AND INTERNET PENETRATION RATES IN MOROCCO OVER THE 2010 -2017 PERIOD 3.7 3.6 3.3 2.9 2.5 2.2 2.1 2.0 3
2010 2011 2012 2013 2014 2015 2016 2017 2010 2011 2012 2013 2014 2015 2016 2017
Mobile Fixed-line incl. restricted mobility Internet
Until 2010, the Fixed-line market enjoyed steady growth from the The mobile penetration rate reached 126% at the end of introduction of restricted-mobility offers. Since 2010, the Fixed-line Septemberb2017. The change is due to investments made to expand market has been in steady decline owing to deep price cuts in the coverage and enhanced packages. Mobile segment. However, as a result of the success of ADSL plans, particularly Double Play, the number of Ɠ xed wirelines increased in The Fixed-line penetration rate is currently 6%, down as a result of 2017 for the seventh consecutivebyear. the decrease in the customer base (limited mobility accounted for by the ANRT in the Ɠ xed-line base). Internet segment The Internet market continued its strong growth driven by mobile internet and the ADSL Double Play package with the penetration rate INTERNET CUSTOMER BASE IN MOROCCO going from 6% in 2010 to 64% at the end of 2017 . OVER THE 2010 -2017 PERIOD (in thousands of customers) CUSTOMER BASE TRENDS 22.2 Mobile telephony segment CHANGE IN THE MOBILE CUSTOMER BASE IN MOROCCO 17.1 FOR THE 2010 -2017 PERIOD (in millions of customers) 14.5
44 43 44 42 42 9.9 39 20.8 37 32 15.9 5.8 13.3 3.9 8.9 3.2 1.9 4.9 3.3 1.4 2.6 0.5 0.6 0.7 0.8 0.9 1.1 1.2 1.4 2010 2011 2012 2013 2014 2015 2016 2017
ADSL (including low speed and links) 3G/4G
2010 2011 2012 2013 2014 2015 2016 2017 Growth in the Internet market has gathered pace since 2008, mainly because of the introduction of 3G/4G Internet offers that expand internet access at increasingly lower prices, as well as the launch in The Mobile telephony market is dominated by prepaid 2012 of ADSL Double Play plans to revive the Ɠ xed-line and Internet customers, who represent 93% of the total customer base. market. At the end of 2017, the Internet customer base comprised Atbend-Septemberb2017, the total mobile customer base comprised 22.2 million customers of which 20.8 million customers around 94% 44bmillion customers. were mobile internet customers.
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3.2.1.1 MOBILE TELEPHONY PREPAID MOBILE SEGMENT Maroc Telecom is continuing to promote call and data bundles with its Jawal Passes. Market and competitive environment To attract new customers, Maroc Telecom has priced the Jawal card In a mature market characterized by intense competition and a at MADb30 for 1bhour of domestic airtime, 1GB of data, a credit of tougher regulatory environment, Mobile telephony in Morocco MADb50 for domestic and international calls and a 150MB MT Talk features generous call plans, repeat and aggressive promotional pass. A Bonus Smartphone Pack promotional offer to encourage offers, and more targeted marketing efforts to build customer loyalty, customers to buy smartphones and prepaid airtime was also increase usage and win new customers. launched. To boost growth in this segment, call plans are often combined with Market share in the mobile prepaid telephony market overbthebpast data, whose usage is growing rapidly thanks to the accessibility of threebyears smartphones and the introduction of mobile broadband.
YEARS IN WHICH MOBILE TECHNOLOGIES WERE Market share 2017 2016 2015 LAUNCHED ON THE MARKET BY THE THREE OPERATORS Maroc Telecom 41.27% 43.20% 41.40% Orange Maroc 35.28% 33.29% 32.22% Maroc Orange Telecom Maroc INWI INWI 23.45% 23.51% 26.38%
GSM 2G 1994 2000 2010 Source: ANRT. GPRS 2002 2004 2010 POSTPAID MOBILE SEGMENT Roaming MMS andbGPRS 2004 2006 2010 Maroc Telecom is continuing to focus on customer loyalty by offering 3G 2008 2008 2008 a full range of low-cost plans combining free data and voice services, 4G 2015 2015 2015 as well as an unlimited plan offering customers everything they need at highly competitive rates. VSAT 2017 - 2017 Market share in the mobile postpaid telephony marketbover thebpast threebyears MOBILE MARKET SHARE OVER THE PAST THREE YEARS
Market share 2017 2016 2015 Market share 2017 2016 2015 Maroc Telecom 52.76% 56.93% 58.82% Maroc Telecom 42.13% 44.18% 42.48% Orange Maroc 28.74% 26.44% 26.87% Orange Maroc 34.79% 32.80% 31.89% INWI 18.50% 16.63% 14.31%. INWI 23.08% 23.02% 25.63% Source: ANRT. Source: ANRT. Despite the challenging competitive environment, Maroc Telecom In 2017, a new rolling plan was launched at MADb59 with 3GB of data, has remained the market leader in the Mobile segment. At end- 3bhours of airtime and 300 SMS, targeting Residential customers. 2017 Maroc Telecom had a market share of 42.13%, compared with 34.79% for Orange Maroc and 23.08% for Inwi. Postpaid plans were enhanced with bonus data to meet the needs of customers and offer competitive products. In the B2B segment basic and medium plans were readjusted as follows: – the business & corporate 8bhour plan for MADb99 incl. tax was bumped up to 10bhours of airtime plus 2GB of data plus intragroup; – a new data-savvy plan targeting the corporate market with 12bhours of airtime, 12GB of data and intragroup for MADb159 incl. tax was launched; – the corporate Mobile Intra Only plan with an initial 500MB of data plus intragroup at MADb72 (incl. tax) was bumped up to 2GB of data, 4bhours of airtime and intragroup. In the 3G+ and 4G+ Internet segment Maroc Telecom continued its strategy of acquiring and retaining customers through higher data allowances with the launch of a new 7GB data plan priced at MADb59.
72 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 DESCRIPTION OF THE GROUP, BUSINESS ACTIVITIES, LEGAL AND ARBITRATION PROCEEDINGS Business activities
Performance
PRINCIPAL MOBILE PERFORMANCE INDICATORS
2017 2016 2015 Gross mobile revenue (in MAD millions) 13,335 14,115 14,276 Mobile customers (in thousands) 18,533 18,375 18,298 o/w postpaid 1,767 1,729 1,649 Blended ARPU (in MAD/customer/month) 58.0 61.1 62.5 3 Following sharp price drops, Mobile segment revenues in Morocco — ongoing x4 offer for all top ups from MADb5 and Multiple Top Up fell by a moderate 5.5% from 2016 levels to MADb13,335bmillion, due Promotions alternating depending on the competitive situation: to the strict regulatory framework and the development of VoiP uses. x10 top up or x12 top up); Maroc Telecom’s total customer base rose by 0.9% to more than – Customers can choose from a wide range of passes: 18.5bmillion customers, driven mainly by strong momentum in the — Pass *1 for texts only, *2 for voice and data, *3 for data only, *4 for postpaid customer base, which recorded growth of 2.2%. Blended international calls (plus other passes for value-added services), ARPU for 2017 was MADb58.0, down by 5.0%. *6 for social media access and *8 for data roaming. PREPAID MOBILE SEGMENT POSTPAID RATE PLANS Prepaid plans have become more popular thanks to the accessibility Postpaid rate plans are available to Retail, Business and Corporate of data with SIM card packs and pass credits and promotions launched customers: by Maroc Telecom on top-ups and calls to boost consumption and – The Retail segment has a range of Ɠ xed rate plans from MADb59 customer loyalty. and unlimited offers from MADb399 Maroc Telecom’s active prepaid Mobile customer base was slightly — basic “Liberté” plans: comprehensive and affordable plans with up in 2017 (+0.7% vs. 2016) at more than 16.8b million customers. domestic and international calls plus data bundles starting at MADb59; POSTPAID MOBILE SEGMENT — medium and top of the range plans: starting at 11bhours of The Postpaid Mobile customer base rose 2.2% in 2017 to airtime at MADb159 incl. tax for domestic and international calls 1.767b thousand customers. This positive change reflects the (with capping option at MADb23 incl. tax) plus generous data availability of affordable plans providing easy access to postpaid bundles. These plans are also eligible for the Fidelio plan with plans for customers migrating from prepaid mobile. access to a wide selection of competitively priced handsets, INTERNET MOBILE — unlimited plans: unlimited domestic and zoneb1 international calls, unlimited texts and unlimited Internet Mobile depending The prepaid Internet Mobile customer base is currently about on the plan, 8bmillion with data only being replaced by data + voice. In fact, the — additional paying options are also available: unlimited paying data only customer base dropped by 70,000 customers in 2017. numbers, internet mobile pass, Double and Triple Top Up in Maroc Telecom thus reconƓ rmed its position as leader in Internet addition to the standard plan, SMS Pass, domestic voice pass Mobile with a market share of 45.5% art end-Decemberb2017. and international voice pass to all countries; With the enthusiasm shown by customers for Internt Mobile, the – concerning the Corporate segment, a range of Ɠ xed price plans Data pentration rate reached 51% and Data usage increased by for free internal calls is available for between 12 and 165bhours of 44% thanks to 4G customers consuming 2.3 times more than 3G airtilme from MADb159 per month incl. tax and a range of unlimited customers. Revenue from Internet Mobile grew by 53% thus enabling offers from MADb399; continued solid revenue growth from outgoing services of 2%. – the Business segment has offers with free internal calls: intragroup plan with 4bhours airtime from MADb72 per month and Optimis Mobile oTers and services plans from MADb159 per month as well as two unlimited plans from MADb399 per month offering unlimited Voice and SMS to all PREPAID PLANS domestic operators, international calls and Internet Mobile; Maroc Telecom markets its prepaid plans under the Jawal brand. – additional offers are also available making it possible to top up Prepaid plans are aimed primarily at the consumer market, which when reaching the extragroup ceiling with Jawal top ups that demands affordable SIM-only offers with frequent promotions on ebenƓ t from ongoing free calls, the possibility of subscribing to top-ups and calls. Maroc Telecom’s prepaid plans are sold in the form voice and SMS passes and an international pass to all countries. of packages (handset and SIM card) and SIM card packs (SIM only) with a single price for calls to all national operators. MOBILE INTERNET (MADb0.07 (incl. tax) per second and MADb0.96 (incl. tax) per SMS). To guarantee easy browsing for all users of Internet Mobile, Maroc Telecom has rolled out the 4G+ browsing speed at 225 Mb/s for International call and text rates vary depending on the country and all prepaid and postpaid internet plans. In areas not covered by international pricing zone. the 3G+/4G+ network, Maroc Telecom’s GPRS network provides – Pay as you go plans are continuously promoted by bonuses seamless mobile internet access. (depending on the value of the top up and the promotional To continue browsing once the volume ceiling has been reached, period): for postpaid plans the customers (data+voice) can buy internet top-
MAROC TELECOM ____ 2017 Registration Document 73 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 DESCRIPTION OF THE GROUP, BUSINESS ACTIVITIES, LEGAL AND ARBITRATION PROCEEDINGS 3 Business activities
ups (5bGB for MADb50 or 2bGB for MADb25). These can be held Other features include driving behavior indicators to improve vehicle concurrently and any remaining credit can be rolled over to the management over weekly or monthly periods, various dashboards followingbmonth. and route management reporting.
Postpaid customers also have a number of volume capped plans beIN Connect depending on usage and from 15MB at MADb99 incl. tax per month. Maroc Telecom has teamed up with leading sports channel beIN to The prepaid mobile internet plan provides an internet connection via offer its Mobile customers the streaming solution “beIN Connect.” modem or telephone on a pay-as-you-go basis with nobmonthly bill. Maroc Telecom extended the Data Pass in 2017, which now ranges By downloading an app to their mobile devices, Maroc Telecom from 400b MB for MADb5 to 20bGB for MADb200. customers can watch major sporting events such as the Champions League, UEFA Europa League, La Liga and Formula 1 live. BeIN TV VALUE-ADDED SERVICES programs can be streamed in HD on several connected devices: smartphones, tablets, PC, game consoles and smart TV. The catalog of value-added services was expanded signiƓ cantly in 2017, offering our customers brand-new and exclusive services: beIN Connect is available as a monthly plan priced at MADb149 (incl. tax) in several languages (Arabic, French, English and Spanish) and Smart devices offers the beJUNIOR, JeemTV and Baraem kids channels.
Smart Kids VOD services: ICFLIX & STARZ PLAY This is the first range of smart devices targeting child safety in Morocco. By linking a smart tag to a single mobile voice and data Maroc Telecom exclusively offers its customers two unlimited Video- plan, Smart Kids lets parents keep an eye on their children at all times. on-Demand (VoD) services for connected devices. With a Mobile Android or iOS app downloaded to the smartphone, ICFLIX: parents can locate their child and view the location history, or receive Launched in 2015, ICFLIX is Morocco’s Ɠ rst ofƓ cial videos streaming notiƓ cations if the child enters or leaves predeƓ ned areas (unlimited service. It gives customers unlimited access to an extensive catalog number of areas). of Hollywood content, Bollywood content, children’s programs and major Moroccan Ɠ lm productions. The platform offers access to a The child can also make emergency calls to a single preset number diverse catalog of HD video content (over 40,000bhours), including by simply pressing the SOS button on the tag. movies, TV series, animations, documentaries and cartoons. It can be Smart Home accessed on Ɠ ve connected devices simultaneously (smartphone, Maroc Telecom has positioned itself as a pioneer in home automation tablet, PC and smart TV). with Africa’s first “Smart Home” service. This comprises a full STARZ PLAY: equipment pack (central box, Wi-Fi IP camera, wireless door sensor Launched in Octoberb2016, Starz Play is an unlimited VoD service and motion sensor) to improve security at home, in one’s business or offering a wide range of content – especially big US productions – for at work, conduct remote surveillance and receive email or text alerts adults and children alike. Content can be streamed to two devices if someone tries to break in. simultaneously (smartphone, smart TV, tablet, computer or games The system is very easy to set up. For example, it can be programmed console). to capture images if one of the door or motion sensors is activated. Maroc Telecom offers free one-month and three-day trial periods These images can then be viewed directly online. on ICFLIX and Starz Play respectively. At the end of this period, the Additional equipment options can also be purchased (e.g. smart services cost MADb50 abmonth and MADb15 a week and can be electrical sockets, receivers for shutters, curtains or garage doors, canceled at any time. In addition, ICFLIX offers a four-day plan for smoke detectors,betc.) to take full advantage of the system and MADb9. benefit from other features, such as intelligent and automated lighting, heating and power management. Music services: ANGHAMI & DIGSTER Smart Car Maroc Telecom teamed up with Universal Music and Anghami to Maroc Telecom became the Ɠ rst company in Morocco to launch an offer its customers world-class music content. integrated smart vehicle management system called “Smart Car”. DIGSTER: Now customers can manage and locate their vehicle(s) remotely and Digster is a music service offering weekly playlists compiled by thus better manage their vehicle(s) or Ŵ eets. leading playlisters. It acts as a personal DJ catering to every mood The system consists of a terminal (dongle) inserted into the vehicle’s and musical style from rock, pop and hip-hop to rai, Nouvelle OBD-II connector and a cloud management platform accessed via Chanson, Oriental and Golden Oldies. a Web portal or a smartphone application. It is simple and easy to install via plug and play. Users can locate their vehicles in real time ANGHAMI: and set up email alerts and push notiƓ cations. Anghami is the leading ofƓ cial music streaming app in the Middle East and North Africa. Customers have unlimited access to a wide and diverse music catalog with over 20bmillion songs and special features. Anghami is available on any connected device (smartphone, tablet, smart TV, smartwatch, computer). All new Digster and Anghami customers get up to one month and a full two months free content respectively. The services are then billed monthly at MADb25 (incl. tax) and MADb30 (incl. tax) respectively. Cheaper options are also available with Pass Hebdo at MADb10 (incl. tax) for one week of Digster and Pass 10 Jours at MADb15 (incl. tax) for 10 days of Anghami.
74 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 DESCRIPTION OF THE GROUP, BUSINESS ACTIVITIES, LEGAL AND ARBITRATION PROCEEDINGS Business activities
Handset plans 2017 also saw the application of new rates for Roaming Out for which Jawal prepaid packs the rates for all product segments were revised downwardb(outgoing calls and texts, incoming calls and Data), as well as a change of A wide variety of Jawal prepaid packs are available at different Zoning. This review went hand in hand with two cycles of Roaming prices. Maroc Telecom strives to offer customers the latest handsets promotions (Umrah & Hajj /Summer and year-end 2017). Pilgrims and cutting-edge functionalities, as well as the development of once again benefited from free incoming calls on all the Saudi smartphone equipment. In 2017, Maroc Telecom offered Jawal packs networks in 2017. with smartphones from MADb449 (incl. tax). Postpaid packs The postpaid-customer acquisition policy is based on the 3.2.1.2 FIXED-LINE TELEPHONY attractiveness of the call plan, the variety of associated products and services, and the range of handsets on offer. Cobranded offers create momentum for handset launches and upgrades, often simultaneous Market and competitive environment with their international campaigns, by offering customers new Maroc Telecom is Morocco’s leading provider of Fixed-line telephony, products with state-of-the-art design and cutting-edge technologies. internet and data transmission services. It is also the only provider 3 Maroc Telecom offers a diverse range of packs. In 2017 Maroc of ADSL/Ɠ ber optic TV in markets that were fully liberalized in 2005. Telecom continued to increase the uptake of smartphones (including 4G) by selling competitively priced handsets and promotional offers The main Ɠ xed-line telecommunications services provided by Maroc on packs. Telecom are: – telephony services; CUSTOMER LOYALTY – interconnection services with domestic and international Customer loyalty is one of Maroc Telecom’s strategic strengths which operators; has helped it prepare for the advent of competition. – data transmission services provided to businesses, internet service Fidelio was the firstbpoints-based loyalty program introduced providers and other telecommunications operators; in Morocco. It allows Maroc Telecom’s postpaid customers to – high-speed and very-high-speed broadband with the associated accumulate points based on usage (customers earn one Fidelio point value-added services; for every MADb10 (excl. tax) billed) and to receive beneƓ ts in the form – of free or discounted handsets or free call time, texts and free Data IPTV offer, Triple Play offer and SVoD. Passes. The Fidelio 24-month plan allows customers to renew their Competitors launched their own Ɠ xed telephony and/or internet contracts and change their handsets for even less. plans after the ANRT published its decision in 2015 setting the technical and pricing terms of the unbundling offer. Maroc Telecom’s Gold Club offers customers exclusive deals and customized beneƓ ts throughout the year such as special private In Aprilb2016, the ANRT issued new guidelines for the pricing of plans offers, previews, season’s greetings and regular invitations to cultural, offered by telecoms operators. sporting and other events. FIXED-LINE RESIDENTIAL TELEPHONY MARKET Club members are longstanding mobile postpaid customers who consume a certain amount of airtime and data. Maroc Telecom offers a wide range of innovative plans tailored to the different needs of its customers: INTERNATIONAL ACTIVITIES – phony, which allows customers to make unlimited calls to Maroc Telecom Ɠ xed-line numbers, as well as up to 8bhours perbmonth International roaming of free calls to domestic mobile numbers; In 2017, MarocbTelecom had 641 Roaming agreements, signed with – Double Play ADSL is targeted at customers wanting very affordable partner operators based in 227bdestinations and/or countries. data 4 Mb/s or 12 Mb/s ADSL internet access from MADb199 incl. tax roaming, actually 4G Roaming, is available incoming and outgoing per month; with the main partners, ie. 147boperators in 82 destinations and/or – countries (including 81bdestinations and/or countries for Roaming MT Box, the Ɠ rst Triple Play plan on the Moroccan market, includes Out). Forb3G Roaming, MarocbTelecom has entered into agreements unlimited Fixed-line telephony, free calls to mobile numbers, with 446 operators in 196bdestinations and/or countries (including ultra-broadband ADSL optic Ɠ ber internet access and various TV 195 destinations and/or countries for 3G Out). For 2.5G Roaming and packages; GPRS/ MMS Roaming, MarocbTelecom has entered into agreements – Multiscreen VoD provides access to an unlimited range of movies with 471boperators in 194 destinations and/or countries (including and series from big US studios such as Paramount, Sony, Disney 196bdestinations and/or countries for GPRS Out). Prepaid Roaming and ABC. and prepaid data roaming are also available: 189bdestinations and/ Fixed-line (including restricted mobility) Residential market share or countries thanks to agreements with 349boperators (including 188 trend over the past threebyears destinations and/or countries for Roaming Out) for the Ɠ rst and 171 destinations and/or countries with 276 operators for prepaid data roaming. Market share 2017 2016 2015 Services for sending international SMS and MMS are also available in Maroc Telecom 84.34% 77.06% 66.50% over 213 destinations and/or countries covering tjhe Ɠ ve continents, INWI 15.17% 22.94% 33.50% as well as short-code numbers (333 for voice mail and 777 for customer service). Source: ANRT. At the end of Decemberb2017, Maroc Telecom had a 84% market share of the Residential segment.
MAROC TELECOM ____ 2017 Registration Document 75 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 DESCRIPTION OF THE GROUP, BUSINESS ACTIVITIES, LEGAL AND ARBITRATION PROCEEDINGS 3 Business activities
PUBLIC TELEPHONY MARKET Market share trend in the Fixed-line Corporate telephony market To cope with the slowdown in this activity, a wide range of 2bhour to over the past threebyears 60bhour packages is offered to telestore customers. Telestore operators with Maroc Telecom Indoor Public Phones (PIC) Market share 2017 2016 2015 in their telestores receive 25% compensation. Maroc Telecom 83.92% 86.04% 87.43% With the Phone Card product, Maroc Telecom offers aggressive rates Orange Maroc 12.95% 10.83% 9.68% for national and international calls. A MADb20 Pass includes onebhour of call time to national and major international destinations (area 1). INWI 3.13% 3.13% 2.89%
Market share trend in the Public Telephony market over thebpast Source: ANRT. threebyears At end-Decemberb2017, there were 490,023 Corporate and Business lines in Morocco. Market share 2017 2016 2015 Maroc Telecom’s share of this market was 83.92%, versus 12.95% for Maroc Telecom 68.20% 65.20% 76.61% Orange Maroc and 3.13% for Inwi. Orange Maroc 31.76% 34.80% 23.39% SPECIFIC SOLUTIONS
Source: ANRT. Maroc Telecom offers its Corporate customers tailored plans based on the latest technology that address the speciƓ c needs of each At end-Decemberb2017, the total number of public telephones (across customer. all operators and all types of technology) was estimated at 7,679. Atbend-Decemberb2017, Maroc Telecom’s public telephony market Indeed, in 2017, Maroc Telecom has accompanied several Key share was 68.2% versus 31.76% for Orange Maroc (Source: ANRT). Accounts customers for the installation of speciƓ c solutions and to meet the needs in terms of turnkey solution meeting customer CORPORATE AND BUSINESS FIXED-LINE requirements. TELEPHONY MARKET INTERNET For its Corporate customers, Maroc Telecom offers a wide range of plans tailored to the needs of this market: The Internet market continued to expand in 2017 with the growth of ADSL (mainly Double Play) and 3G+ mobile internet. – InfiniFix includes free unlimited calls to all of the Company’s domestic fixed-line numbers and Maroc Telecom mobiles Maroc Telecom continued to roll out its Ɠ ber network across the intragroup. In addition, customers get 10bhours of free calls to country. The Group offers a Ɠ ber-to-the-home (FTTH) internet service domestic mobiles and major international destinations; with download speeds of up to 200 Mb/s from MADb500 incl. tax per month. – ForfaiFix Business includes a wide range of packages including phone line subscription and call time to national and major FTTH coverage was expanded throughout Morocco even as international destinations. Residential and Business Fiber Optic rates were brought down and new beneƓ ts introduced, with the aim of making this technology Additional options are available to tailor plans to the speciƓ c needs available as widely as possible. of each business and offer customers preferential rates: In order to ensure fast and reliable internet connectivity in every part – Intragroup Fixed-line or Mobile: free unlimited calls to all company of the country, Maroc Telecom launched satellite internet access with landlines; generous data plans and download speeds of up to 20 Mb/s . This – Privilège Mobile: preferential rates to all domestic mobiles; makes Maroc Telecom the Ɠ rst telecoms operator in Morocco to offer – Privilège International: preferential rates to all international internet access and VPN via satellite. destinations. At end-Decemberb2017, Maroc Telecom held a very strong position For its Business customers, Maroc Telecom offers the following: in the ADSL market with a market share of 99.99% (Source: ANRT). – Phony Pro offers unlimited calls to all Maroc Telecom Ɠ xed-line numbers and 10bhours of free calls to domestic mobile numbers Performance and major international destinations; – ForfaiFix Pro is a wide range of packages including subscription PRINCIPAL PERFORMANCE INDICATORS FOR FIXED-LINE to the telephone line andbhours of calls to national and major AND INTERNET international destinations; – MT Box Pro is a Triple Play offer which includes unlimited calls 2017 2016 2015 to Maroc Telecom landlines and up to 20bhours of free calls to domestic mobiles, internet access, several TV packages and value- Gross revenue added services specially designed for this type of customer. (in MAD millions) 8,962 8,829 8,728 Fixed-line customers (a) (in thousands) 1,725 1,640 1,583 Broadband access (b) (in thousands) 1,363 1,241 1,136
(a) The customer base includes all Ɠ xed-line subscriptions, irrespective of the technology used (PSTN or ISDN). It does not include Maroc Telecom’s proprietary base. (b) Includes low speed and rented lines.
76 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 DESCRIPTION OF THE GROUP, BUSINESS ACTIVITIES, LEGAL AND ARBITRATION PROCEEDINGS Business activities
In 2017, Ɠ xed-line and internet operations in Morocco generated ADDITIONAL SERVICES revenues of MADb8,962bmillion, an increase of 1.5%. This change Maroc Telecom offers its Residential and Business customers various was due largely to the rise in incoming international calls (direct services: and transit mode), growth of internet (especially ADSL) sales, and – increased revenues from Ɠ xed-line voice subscriptions. convenience services: voicemail, itemized billing in Arabic or French, caller ID display, call-waiting notiƓ cation, call transfer, At end-2017, the Fixed-line customer base in Morocco had grown three-way calling, an option for subscribers with capped rate to by 5.2%byear onbyear, to 1,725 thousand lines. Strong growth in the monitor their accounts and to top up their accounts remotely; ADSL customer base (+10%), to 1,361 thousand subscribers was – value-added services: Maroc Telecom offers add-on services for underpinned by growth in MT DUO and Phony DUO (Double Play). its broadband plans, including home automation solutions, smart Growth in the Fixed-line customer base (5.2%byear onbyear) was devices, parental control, IP addresses, national and international obtained as a result of sales and marketing efforts carried out since domain names,betc. 2011. The development of the Double Play ADSL and Optic Fiber bundled plans helped to expand the customer base. LOYALTY PROGRAM FOR RESIDENTIAL AND BUSINESS CUSTOMERS 3 CHANGE IN CONSUMER HABITS Maroc Telecom has developed abpoints-based loyalty program for Despite the fall in rates, outgoing usage declined by 18%, with Fixed- its customers. All Fixed-line customers (excluding capped rate) are line services affected by mobile plans from competitors. automatically enrolled in the Ɠ xed-line loyalty program. They can earnbpoints based on the amount of theirbmonthly bill. Points can then The impact of mobile competition was keenly felt in the Telestores be exchanged for a range of gifts at Maroc Telecom stores. segment, where trafƓ c was down by 43% from 2016. A rewards brochure is published on www.iam.ma and is available Since 2012, various rate reductions and changes for international from all retail outlets. and mobile destinations, including the widespread application of a rate of MADb0.5 (incl. tax) per minute to major destinations and the enhancement of Ɠ xed-line unlimited plans, have helped to curb the Corporate oTers decline in Fixed-line usage. TELEPHONY OFFERS “Residential” and “Business” plans To meet the Fixed-line telephony needs of Corporate customers, Maroc Telecom proposes a wide range of offers and rate plans using FIXED-LINE OFFERS AND SERVICES the Public Switched Telephone Network (PSTN) or the Marnis digital network. As the leading Ɠ xed-line operator, Maroc Telecom has always been renowned for the wide range of plans and services it offers its Retail The main plans are: customers. The Fixed-line offers include: – ForfaiFix: a range of multi-destination plans, including subscritpion – abundance deals: through the brand “Phony” having a great to the telephone line and airtime of 30 to 165bhours valid for calls success, and allowing free and unlimited calls to all Maroc Telecom to Fixed, Mobile andbcertain international destinations; Ɠ xed numbers and free passes to national mobile; – InƓ niFix: abundance plan to national Ɠ xed lines and company – packaged offerings: Maroc Telecom mobiles, with freebhours of communication to national, mobiles and the main international destinations; — Double Play, combining Voice and Data, with advantages over voice and/or speed depending on customer needs, – rate options: intragroup Fixed & Mobile, Privilège Mobile & International (discounts on rates per minute for all destinations); — and Triple Play combining Voice, internet and multimedia content, with a variety of television and radio channels. – Maroc Telecom has an Integrated Services Digital Network (ISDN) called Marnis that allows businesses to connect several telephones INTERNET OFFERS to a single access point. Companies then have a direct number for Maroc Telecom has a determined policy to allow the Moroccan each employee and a large number of value-added services, such population access to ADSL internet and provides solutions adapted as videoconferencing, remote monitoring and payment services; to the customers’ needs. This is reŴ ected in the introduction of the – customer-service number: Maroc Telecom has a range of customer- Double Play ADSL 4 Mb/s product for customers with limited budgets service numbers, toll-free numbers (08000xxxxx), reduced- and the new 12 Mb/s service in 2017 to meet customer needs in rate numbers (08010xxxxx) and direct numbers (08020xxxxx), terms of accessibility, usage and quality of service as well as regular accessible throughout Morocco at a Ŵ at rate, making it easier and frequent promotions throughout the year, such as discounted for customers to reach a business and for businesses to offer hardware packs and higher internet bandwidth for the same price. personalized customer service. Maroc Telecom is also the first operator to launch optic fiber FIXED-LINE INTERCONNECTION AND TRANSIT broadband with speeds of up to 200 Mb/s thus guaranteeing unparalleled connection speeds and convenience. Three plans are International trafƓ c in transit via MarocbTelecom decreased by 8.7% available under this offer: internet only, Double Play or Triple Play. in volume and 7.2% in value in 2017 vs. 2016. This change, although negative, remains acceptable in view of the substantial decreases For customers located in areas not covered by ADSL, Maroc Telecom experienced by the other Ŵ ows of international trafƓ c that suffered sells Internet services through CDMA technology. drops of more than 30%.
MAROC TELECOM ____ 2017 Registration Document 77 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 DESCRIPTION OF THE GROUP, BUSINESS ACTIVITIES, LEGAL AND ARBITRATION PROCEEDINGS 3 Business activities
This performance was achieved mainly thanks to a strengthening of Maroc Telecom offers Moroccan companies an efƓ cient, secure and the relationships with Group subsidiaries and also an improvement affordable solution. Customers can boost their competitiveness in the partnerships with the big international operators. by launching IT solutions and sharing them online with no initial investment. With abmonthly contract that can be canceled at any time, Concerning incoming IAM Ɠ xed-line trafƓ c IAM, the volume for this Maroc Telecom offers companies enormous Ŵ exibility when it comes network suffered a major decrease of -29% in 2017 vs. 2016 despite to their IT resources, which they can scale up or down as required. the fact that the call rates from a number of international destinations remained affordable. G-Suite BUSINESS INTERNET SERVICES G Suite is a range of cloud-based messaging, storage and collaborative tools developed by Google for businesses (software Maroc Telecom’s range of Internet services for business customers as a service or SaaS) which Maroc Telecom provides to its Business was launched to enable companies to optimize their communication and Corporate customers along with technical support and locally with co-workers, customers, partners, and suppliers by means based assistance. In return for a singlebmonthly user subscription, of Ŵ exible, upgradeable access. For businesses, Maroc Telecom companies have access to all the software tools they need to provides broadband via ADSL, Ɠ ber optic, leased lines or satellite. communicate (personal Gmail, shared calendar, instant messaging ADSL and Ɠ ber broadband for business customers are currently and professional social network), store their Ɠ les and data and share enjoying high demand, given their affordability and the add-on them easily and quickly (with Google Drive), and collaborate (desktop services they offer (e.g., secure email access, domain name, optional publishing tools for documents, spreadsheets and presentations, and Ɠ xed IP address,betc.). Leased lines remain popular among large document editing and sharing tools). organizations owing to their performance, reliability (guaranteed symmetrical high-speeds) and end-to-end security. Satellite internet Secure Web & Email access connects businesses to their remote sites all over the country with download speeds of up to 20 Mb/s and 100% coverage of Maroc Telecom’s internet security pack protects customers from Moroccan territory. threats when browsing the Web and using email. The cloud-based SaaS offers Ɠ rms a simple means of securing employees’ access to DATA SERVICES the internet at all times wherever they are and from any device. The Secure Web and Secure Email services are offered separately and Maroc Telecom offers its customers a comprehensive range of data come with their own advanced IT security management tools. plans: VPN IP, Ethernet, leased lines and international plans for interconnection of customer sites, with speeds of up to 1bGB/s and Datacenter hosting a choice of point-to-multipoint or any-to-any architecture. This service offers Ɠ rms a turnkey solution to host their IT equipment To encourage customers to upgrade to faster data and internet such as servers, routers and disk arrays in a data center designed access, Maroc Telecom waives the upgrade fees for all customers in line with the latest international standards and boasting 24/7 who have been with Maroc Telecom for more than 12bmonths. security with video surveillance, access control, security guards, Ɠ re Moreover, Maroc Telecom supports its access solutions by relief and detection and extinguishing mechanisms, and monitoring systems. burden sharing deals to ensure continuity of customer activity in case Customers can choose between full and half racks with dedicated of failure. access where they can host their own servers, routers, disk arrays and other infrastructure over which they have complete control and DATA TRANSMISSION CHARGES which they can administer on-site or remotely. The pricing structure for data transmission consists of a one-off DDoS security connection fee plusbmonthly subscription charges, depending on the data plan. Discounts based on volume and contract length apply This SaaS is a turnkey solution to protect Ɠ rms from loss and damage tobmonthly subscription charges. caused by distributed denial-of-service (DDoS) attacks. It is a based on a local cloud architecture and comes in bronze, silver and gold In addition, Maroc Telecom adapts its offers and rate plans to the editions. speciƓ c needs of each client. Business OWce 365 ValueĆadded services Business Office 365 is a business SaaS cloud-based suite of The catalog of value-added services was expanded signiƓ cantly in messaging, storage and collaborative tools offered by Microsoft which 2017, offering our Corporate customers brand-new and exclusive MarocbTelecom provides to its Business and Corporate customers services, such as: with local support and additional options. With it Ɠ rms have access to all the software they need to communicate (customized Outloook, MT Cloud shared calendar, instant messaging and professional social network), store and easily share Ɠ les and data (One Drive), and collaborate Through MT Cloud, the Ɠ rst infrastructure as a service (IaaS) hosted (desktop publishing and document editing and sharing). in Morocco, Maroc Telecom has positioned itself as a pioneer in cloud services for Moroccan businesses. With its new service,
78 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 DESCRIPTION OF THE GROUP, BUSINESS ACTIVITIES, LEGAL AND ARBITRATION PROCEEDINGS Business activities
3.2.1.3 CUSTOMER SERVICES Information The 24-hour telephone information line has been enhanced by new In addition to diversifying the services it offers its customers, Maroc value-added services, such as the ability to receive information by Telecom uses resources, tools and processes enabling it to anticipate SMS and automatic connection. and respond to queries, information or support requests and complaints from customers. 3.2.1.4 SEASONALITY Call centers For consumers, call centers specialized by product segment (Fixed- In Morocco, the fortnight preceding the Eid al-Adha festival and line, Mobile, and Internet) are on hand to answer queries and provide the summerbmonths (periods when Moroccans living abroad return support. Corporate customers have their own call center with a home) traditionally see a spike in mobile usage and pay-as-you-go dedicated telephone number. activation. Thebmonth of Ramadan represents a seasonal trough for the Fixed-line and Mobile segments, with a fall in the number of Ɠ xed- The call centers provide information on Maroc Telecom’s products line and mobile contracts activated during this period. and services and on activating or switching service plans, advice 3 on using products and services, after-sales support and customer The Moroccan general election and the Marrakech Climate Change complaint processing. Customer complaints are referred to Conference (COP 22) generated a large number of provisional ISDN specialized call centers through various channels (call centers, Retail access requests in Septemberband October. branches,betc.).
Billing 3.2.1.5 REGULATORY ENVIRONMENT AND POSSIBLE DEPENDENCIES Maroc Telecom has taken a number of actions to reduce and optimize its consumption of paper and raw materials. With the adoption of Lawb24-96, the Prime Minister (the Head of The electronic billing service is highly appreciated, particularly Government, in accordance with the new constitution of 2011) by Business customers. It allows customers to consult their bills established a public agency and separate legal entity that is online and download them and monitor consumption using Ɠ nancially independent and subject to the government’s Ɠ nancial tables and graphs. It has also been upgraded to include the Maroc supervision and control: Autorité Nationale de Réglementation Telecom customer selfcare service in the spirit of the global digital des Télécommunications (ANRT), the Moroccan national transformation. telecommunications regulatory agency. The e-billing service is destined to replace paper bills, in line with Maroc Telecom’s environmental objectives. Roles and responsibilities of the ANRT As regulatory authority for the telecommunications sector, the Digitalization role of the ANRT is traditionally to deƓ ne the legal and regulatory framework (draft laws, decrees and ministerial decisions concerning Maroc Telecom continues with its digital transformation by launching telecommunications, contract speciƓ cations for operators, etc.) for innovative projects for its customers: the telecommunications sector, to monitor and ensure compliance – Interactive multi-service terminals with tactile screens have been with the antitrust laws applying to telecommunications operators, installed in the branch network in order to improve the customer and to resolve disputes. experience. In just a few minutes, customers can pay ther Mobile, The ANRT prepares the procedures for the award of licenses by Fixed or Internet bills, identify a prepaid card and also top up their competitive bids, processes applications for licenses, and treats mobile line quickly and independently. preliminary declarations for activities subject to reporting. The ANRT – The digitalization of customer identiƓ cation with an innovative grants authorizations and prepares related licenses and contract self-identiƓ cation system in the branches enables the customer speciƓ cations. It ensures that operators comply with the terms of to reliably and securely identify themselves. Sales staff also have a their licenses. smartphone identiƓ cation application for the digital and paperless processing of the identiƓ cation procedure. The ANRT is also involved in legal action taken against – telecommunications operators that fail to comply with current Special attention is given to Customer Relationship Management regulations. (CRM) systems, which are constantly being reƓ ned to improve customer service (e.g., maximizing real-time request processing) It is also the ANRT’s duty to resolve disputes over interconnection and ensure that customers are offered the right products. This is and infrastructure sharing. essential for building customer loyalty. In addition to this service, Following the passage of Law 104-12 on open markets and customers can activate certain services themselves via interactive competition, the Decree of Mayb31, 2016 amending and completing voice servers or on the website (expansion of self-care). the Decree of Julyb13, 2005 on bringing disputes and allegations of – Maroc Telecom also offers its customers a wide range of innovative anticompetitive and monopolistic practices to the ANRT granted it payment options: by direct debit, on the Maroc Telecom website, new powers to curb anticompetitive and monopolistic practices in at an ATM, or using the Mobicash service. the telecommunications sector as well as new powers to penalize – IAM encourages customers to pay their bills online using the such practices. mobile apps of Maroc Telecom and its partner banks, offering free, remote, rapid and secure 24/7 service. These apps are set Legal and regulatory framework to become the most widely used payment and top-up methods. of the telecommunications industry in Morocco This sectionb contains a summary of the legal and regulatory framework for the telecommunications industry in Morocco. It is not intended to be exhaustive.
MAROC TELECOM ____ 2017 Registration Document 79 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 DESCRIPTION OF THE GROUP, BUSINESS ACTIVITIES, LEGAL AND ARBITRATION PROCEEDINGS 3 Business activities
OVERVIEW The provision of value-added services is unrestricted, subject to Since the adoption of Lawb24-96 of Augustb7, 1997, abolishing Office prior declaration to the ANRT and compliance with applicable National des Postes et Télécommunications (Morocco’s national post laws and regulations. The list of value-added services was set by and telecommunications agency, ONPT), Morocco has had a modern Decreeb2-97-1024 of Februaryb25, 1998, supplemented by Order regulatory framework establishing the conditions for liberalization of 618-08 of Marchb13, 2008, and included the administration of the the telecommunications sector. “.ma” domain name. The dissolution of the ONPT led to the creation of three separate All equipment to be connected to a public telecommunications legal entities: Itissalat Al-Maghrib (Maroc Telecom), a privately held network and all radio systems is subject to the ANRT’s prior approval. corporation (société anonyme); Barid Al Maghrib (the postal service, Corporate networks and radio systems consisting solely of low- hereinafter “BAM”), a Ɠ nancially independent public utility which in capacity or short-range devices may be established without Novemberb2011 became a corporation (société anonyme) wholly restriction. Restrictions against the use of DECT short-range devices owned by the Moroccan government and the ANRT. in certain parts of Morocco were removed in 2013 for devices with Liberalization continued with the adoption of a series of implementing an embedded antenna. decrees concerning the operation of the ANRT, interconnection, the general terms of operation for public telecommunications networks, LICENSES AWARDED TO MAROC TELECOM the provision of value-added services and the provision of leased Under Lawb24-96, the telecommunications networks and services lines. previously operated by the ONPT (i.e., mainly Ɠ xed-line and mobile In Novemberb2004, Lawb24-96, as amended by Lawb55-01, Ɠ nalized telecommunications networks and services, and the right to use the liberalization process begun in 1997 and clariƓ ed the existing the radio frequencies allocated or assigned to the ONPT) were statutory framework. In 2005 the decrees on interconnection and transferred to Maroc Telecom. the general terms of operation of the public telecommunications As the incumbent operator, Maroc Telecom is subject to contract networks were amended and added to. speciƓ cations ratiƓ ed by Decreeb2-97-1028 of Februaryb25, 1998, as The liberalization of Morocco’s telecoms sector was based on a amended by Decreeb2-00-1333 of Octoberb9, 2000 and Decreeb2-05- General Policy Document covering the period 2004-2008 which 1455 of Aprilb21, 2006, which deƓ ne the conditions for the operation resulted in two Ɠ xed-line licenses, three 3G (UMTS) mobile licenses of all networks and services initially operated by the ONPT. and a third 2G mobile license being awarded. These contract speciƓ cations state the conditions under which Maroc A second General Policy Document covered the period from Telecom is to establish and operate, for an unlimited duration: Februaryb25, 2010 to Januaryb1, 2013. – local and nationwide Ɠ xed landline telecommunications services A General Policy Document for 2014-2018 was adopted by the (including data transmission services, leased lines and the Management Board of the ANRT on Marchb18, 2015. integrated services digital network (ISDN); – GSM-standard Mobile telephony services; AMENDMENT OF THE STATUTORY AND REGULATORY – international telecommunications services. FRAMEWORK With regard to other telecommunications networks or services, Maroc Draft law 121-12 amending and complementing Law 24-96 adopted Telecom, like other operators, is subject to the provisions of Law 24-96 by the Expanded Cabinet on Januaryb3, 2014 and the Cabinet on and holds a license to deploy and operate public telecommunications Januaryb20, 2014. networks using third-generation (3G) technology. Maroc Telecom This project is currently on standby. was granted this license by Decree 2-06-498 of Decemberb29, 2006. On Aprilb10, 2015, Maroc Telecom was awarded by Decreeb2-15-277 Rules governing the establishment and a 4G license that was assigned for a period ofb20byears, renewable operation of telecommunication networks and for periods of 10- then by 5-year periods. services in Morocco Lastly, on Novemberb5, 2015, Maroc Telecom was awarded a 10-year VSAT license. Lawb24-96, as amended and supplemented, introduces separate rules depending on the type of telecommunications networks and The following table summarizes all the licenses held by Maroc services provided. Telecom: Operators seeking to establish public telecommunications networks using public rights-of-way or radio-frequency spectra are required to License ET ective date Term obtain a license (granted by decree). A license may only be granted Fixed-line +2G Octoberb9, 2000 undeƓ ned following an invitation to tender conducted by the ANRT. Licenses are granted by decree of the Prime Minister. They are unique to the 3G license Januaryb18, 2007 25byears license holder and may only be transferred to third parties by decree. 4G license Aprilb11, 2015 20 years The establishment and operation of any independent network VSAT license Novemberb5, 2015 10byears other than a corporate network require a license from the ANRT. Independent networks are nonproƓ t telecommunications networks Universal service Decemberb31, 2007 10byears that are reserved for private use (i.e., where use is reserved for the establishing company or individual) or shared use (i.e., where use is reserved for the exchange of internal communications between subsidiaries and/or branches of a single group of companies).
80 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 DESCRIPTION OF THE GROUP, BUSINESS ACTIVITIES, LEGAL AND ARBITRATION PROCEEDINGS Business activities
MAIN OTHER LICENSES GRANTED In Aprilb2016, the ANRT adopted new guidelines for the review of – GSM (2G) Mobile telephony: granting of a license to Medi Telecom operators’ rate plans. Unlike Maroc Telecom, non-dominant operators in Augustb1999, for a renewable term of 15 years, extended to are able to practice on-net and off-net rate differentiation for prepaid 25 years in 2005; granting of a license to Wana in Februaryb2009 customers. Promotions are subject to the replicability test on a full- (commercial launch in Februaryb2010); cost basis. The minimum margin required by Maroc Telecom for the replicability test for Ɠ xed-line and mobile voice is currently 20%. – Ɠ xed-line next-generation telephony: in 2005, two licenses were awarded for next-generation Fixed-line telephony; Regulation of wholesale rates – in Julyb2005, a Ɠ xed-line license including local loop (without restricted mobility) and national and international transmission Interconnection rates (Ɠ xed-line and mobile voice & SMS termination), was awarded to Medi Telecom; leased line rates, local loop unbundling rates (physical, virtual and – in Septemberb2005, a Ɠ xed-line license including local loop (with bitstream) and infrastructure access rates are set by the ANRT for and without restricted mobility) and national and international several years and integrated each year into Maroc Telecom’s technical transmission was awarded to Wana; and pricing terms which are subject to ANRT approval. – 3G and 4G Mobile telephony: in addition to the licenses granted 3 to Maroc Telecom, 3G and 4G mobile licenses were awarded to Interconnection the existing operators Medi Telecom and Wana in 2006 (3G) and in 2015 (4G); BACKGROUND – VSAT licenses: in addition to the license awarded to Maroc Interconnection is governed by Lawb24-96 and Decreeb2-97-1025, as Telecom in Novemberb2015, Ɠ ve other VSAT licenses were granted. amended and supplemented by Decreeb2-05-770 of Julyb13, 2005, which deƓ nes the technical and pricing terms for interconnection to RetailĆpricing regulations public telecommunications networks. Retail rates may be freely set by operators, subject to compliance Every operator of a public telecoms network is required to accept with antitrust rules and uniformity of domestic rates. Operators must requests for interconnection from a holder of a license to operate a notify the ANRT of their rates 30bdays before publishing or applying public telecom network. them. As the dominant operator, Maroc Telecom is required to justify its rates with regard to its costs and whether third-party operators are INTERCONNECTION RATES effectively able to replicate its offers. In Februaryb2017, the ANRT reintroduced asymmetric mobile call In addition, the duration and frequency of promotions are governed termination rates. This took effect on Marchb1, 2017. The mobile call by the Order of Juneb3, 2008, which sets out the terms for the termination rate for IAM is now MAD 0.1169/min (incl. tax) and that promotion of telecommunications services. for Médi Telecom and Inwi is MAD 0.1399/min (incl. tax).
The table below shows the changes in call termination rates on national mobile networks (MADbexcl. tax per minute) since 2011:
Mobile Maroc Telecom Mobile Medi Telecom Mobile Inwi
OT ĆPeak Peak (a) OT ĆPeak Peak OT ĆPeak Peak From 1/1/2011 to 6/30/2011 0.8317 0.4158 0.998 0.499 1.2309 0.6154 From 7/1/2011 tob12/31/2011 0.6238 0.3119 0.7186 0.3593 0.8801 0.44 From 1/1/2012 tob6/30/2012 0.3924 0.1962 0.452 0.226 0.5536 0.2768 From 7/1/2012 tob12/31/2012 0.2755 0.1377 0.3052 0.1526 0.3378 0.1689 From 1/1/2013 tob12/31/2016 0.1339 0.1339 0.1339 Since 03/01/2017b (b) 0.1169 0.1339 0.1339
(a) Peakbhours are 8am-8pm while off-peakbhours are 8pm-8am and on Saturdays, Sundays and public holidays. The peak/off-peak distinction fell away onbJanuaryb1, 2013. (b) Until a new decision is made.
MAROC TELECOM ____ 2017 Registration Document 81 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 DESCRIPTION OF THE GROUP, BUSINESS ACTIVITIES, LEGAL AND ARBITRATION PROCEEDINGS 3 Business activities
The table below shows the changes in rates for call termination on national Ɠ xed-line networks (MADbexcl. tax per minute) since 2011:
FixedĆline Médi Wana restricted FixedĆline Maroc Telecom Telecom Wana U xedĆline mobility
Peak OT Ćpeak
intra Simple Double intra Simple Double CAA Transit Transit CAA Transit Transit Peak OT Ćpeak Peak OT Ćpeak Peak OT Ćpeak From 1/1/2011 tob6/30/2011 0.1155 0.2817 0.3860 0.0578 0.1409 0.1930 0.2693 0.1347 0.2693 0.1347 0.6238 0.3119 From 7/1/2011 tob12/31/2011 0.1079 0.2479 0.3531 0.0540 0.1240 0.1766 0.2410 0.1205 0.2410 0.1205 0.4678 0.2339 From 1/1/2012 tob6/30/2012 0.0740 0.1645 0.2411 0.0370 0.0823 0.1206 0.1617 0.0809 0.1617 0.0809 0.2277 0.1139 From 7/1/2012 tob12/31/2012 0.0591 0.1258 0.1894 0.0296 0.0629 0.0947 0.1252 0.0626 0.1252 0.0626 0.1798 0.0899 From 1/1/2013 tob12/31/2016 0.0360 0.0740 0.1130 0.0360 0.0740 0.1130 0.0740 0.0740 0.1160 Since 3/1/2017b (a) 0.0360 0.0740 0.1130 0.0360 0.0740 0.1130 0.0740 0.0740 0.1160 (a) Until a new decision is made .
Since 2012, the rates for SMS termination on the mobile networks of the three operators have been as follows:
From 01/01/2012 From 01/01/2013 to 12/31/2012 to 12/31/2016 SMS termination rate (MAD excl. tax per SMS) 0.08 0.03
These rates were in force in 2017.
DOMINANT OPERATORS Decemberb9, 2015, it identiƓ ed Maroc Telecom as the only dominant Eachb year the ANRT imposes specific obligations in terms of operator in all of those markets in 2017. Medi Telecom and Wana are interconnection on the operators it designates as exercising identiƓ ed as operators with signiƓ cant inŴ uence in the mobile SMS a significant influence over a particular market. An operator is call termination market. This has led to the renewal, for 2017, of the considered to exercise signiƓ cant inŴ uence if, individually or jointly asymmetric regulation of the civil engineering and wired local loop with others, it has a dominant position enabling it to conduct its physical infrastructure introduced in 2014/2015. business independently of its competitors, its customers and As a result of these decisions Maroc Telecom is required to provide consumers. the following wholesale offers (apart from interconnection): The guidelines regulating the ANRT’s reviews of the rates offered – physical unbundling of the local loop and sub-loop; by operators of public communication networks also impose – virtual unbundling; a requirement on dominant operators for their retail offers to be able to be replicated by third-party operators (taking into account – access to the dark-Ɠ ber local loop for unbundling purposes; current speciƓ c market rates, which results in price squeeze tests – bitstream; being implemented as part of the preliminary audit by the regulator – access to infrastructure throughout the country. of retail offers). For unbundling, please refer to the relevant section below. The initial list of speciƓ c markets approved by the ANRT for 2012, 2013 and 2014 included the market for Ɠ xed-line termination rates In terms of infrastructure, the ANRT’s decision of Decemberb9, 2014 (including for restricted mobility), voice mobile call termination rate, determines the technical and pricing terms of access to Maroc SMS mobile termination rates and wholesale rates for leased lines. Telecom’s urban and suburban underground infrastructure and requires it to provide technical and pricing terms for access to its Following the ANRT’s decisions of Decemberb30, 2013 relating to overhead infrastructure. specific markets and operators exercising a significant influence there, two new speciƓ c markets have been deƓ ned: “access to the physical infrastructure of the wired local loop” and “access to the civil Local loop unbundling engineering infrastructure throughout the national territory”, for which Since Januaryb1, 2008 Maroc Telecom has established technical and Maroc Telecom was declared the only dominant operator in 2014. pricing terms for total and shared access to its local loop approved by By decision dated Novemberb24, 2014, the ANRT extended the the ANRT in like manner as its interconnection technical and pricing list of speciƓ c markets for 2015, 2017 and 2017. By its decision of terms.
82 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 DESCRIPTION OF THE GROUP, BUSINESS ACTIVITIES, LEGAL AND ARBITRATION PROCEEDINGS Business activities
IAM’s physical unbundling technical and pricing terms have Decision 08/12 of Decemberb6, 2012 established a consistent been successively modiƓ ed. This was the case in 2013 when the framework for regulatory statements of cost refunds and income unbundling of inactive lines was added to the technical and pricing which operators are required to submit annually to the ANRT. terms and in 2017 when some pricing was overhauled. In 2017, the main unbundling rates were as follows: Universal service – physical unbundling for MAD 73/month (excl. tax) at the local loop Universal service includes at least one telephone service of a level and MAD 60/month (excl. tax) at the “local sub-loop” level speciƓ ed quality, at an affordable price; it also includes a service (MSAN); enabling access to the internet, the routing of emergency calls, the – Ɠ ber optic links for unbundling for MAD 10/m/year (excl. tax); provision of telephone kiosks on the public highway, an information – service and a printed or electronic directory (the last two services virtual unbundling for MADb41.25/month (excl. tax) for partial are mandatory). access and MADb82.50/month (excl. tax) for full access; collection rates vary depending on speed, level of collection and class of Lawb55-01, amending and supplementing Lawb24/96, established service for regional collection. the principle of Pay or Play and set the contribution of operators of public telecom networks to the universal service at 2% of revenue 3 Numbering and portability of numbers before tax (net of interconnection fees, handset sales and repayments to value-added service providers). The ANRT allocates numbers, blocks of numbers and preƓ xes to These operators may either perform the universal service tasks operators of public telecom networks in an objective, transparent and themselves, or pay a contribution into a special trust account, the non-discriminatory manner. These numbers and blocks of numbers Universal Service Fund (referred to as the “SU”). may not be transferred without ANRT’s prior express consent. The manner in which each operator provides universal service tasks The portability of fixed-line and mobile numbers has been are set out in one particular set of speciƓ cations, approved by decree. operational since Mayb31, 2007. In 2008-2011, the ANRT launched a consultation with all the national The terms and conditions for its implementation were set by the operators for the realization of a vast universal service program, ANRT in its Decision 10/06 of Octoberb4, 2006, concerning the called “PACTE,” the objective of which was to provide coverage terms and conditions for number portability, and in its Decision for telephone services and internet access to all the blank areas in 10/07 of Julyb18, 2007, setting the pricing terms of portability for Morocco, namely 9,263 villages. The Telecommunications Universal Maroc Telecom’s Ɠ xed-line and mobile numbers and Medi Telecom’s Service Management Board selected Maroc Telecom for 7,338 of mobile numbers. The decision of Octoberb4, 2006 was repealed by them. the ANRT’s Decision ANRT/DG 1/11 of Februaryb1, 2011, in turn amended and supplemented by Decision 09/12 of Decemberb6, Today, more than 99% of the program has been completed and 2012, which was primarily intended to shorten the cancelation period Maroc Telecom has reminded the ANRT that, except for a few sites, offered to customers under this procedure. completion of the PACTE program depends only on completion of the electriƓ cation program by OfƓ ce National d’Électricité. The ANRT’s decision of Octoberb8, 2015 on the terms and conditions of portability is intended to further streamline the portability Notebthat the General Policy Document for the period 2014-2018 process by reducing porting times (three businessbdays vs. seven provides for the expansion of the universal service to include calendarbdays) and by requiring operators to set up, under the aegis broadband, and that accordingly in Juneband Augustb2016 the ANRT of the ANRT, a centralized database of ported numbers within a launched two universal service consultations for the implementation maximum of 18bmonths. of the National Broadband Development Plan (PNHD). The first concerns mobile broadband coverage of 10,651 locations; the In Octoberb2016, the ANRT launched a consultation for the selection second, the rollout of Ɠ ber (backbone and backhaul). Maroc Telecom of the third party responsible for setting up and managing the central participated in both consultations which are ongoing. database of ported numbers. The consultation is underway. Moreover, Maroc Telecom contributes to implementation of Provision of infrastructure the “Nafid@” and “INJAZ” programs, which have been selected as universal service programs by the Universal Service for Lawb55-01, amending and supplementing Lawb24/96, introduced a Telecommunications Management Committee and partly funded provision under which public-sector entities, utilities licensees and by the Fund for Universal Service for Telecommunications (Fond de operators of public telecom networks are required, to the extent Service Universel des Télécommunication or FSUT). this does not interfere with public use, to make available to the In particular, these programs concern the general application of operators of public telecoms networks which request them the information and communication technologies in education: easements, rights of way, civil engineering works, roads, cables, highbpoints,betc., which they have, in order to install and operate – the INJAZ program aimed at graduate students from a large transmission materials. These must be made available on acceptable, number of teaching institutions, colleges and universities in the objective and non-discriminatory technical and Ɠ nancial terms and Ɠ eld of engineering, science and information and communication conditions, which ensure fair competition. technology, and consists of giving them access to the mobile broadband internet service and a laptop; Separate accounting – the NaƓ d@ program, which supplements the GENIE program (which consists in equipping schools with computers and internet According to the terms of Decreeb2-97-1026, as amended and access), is intended to encourage the education sector to use supplemented by Decreeb2-05-771 of Julyb13, 2005 and Decreeb information and communication technologies in the educational 2-97-1025, as amended and supplemented by Decreeb2-05-770 system, by making available to it the means appropriate for this of Julyb13, 2005, operators are required to maintain an analytical purpose (laptops, internet access). accounting system which determines the costs, revenues and proƓ ts of each network they operate or service they offer. The financial statements must be submitted, for audit, to a body designated by the ANRT.
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Contributions to research, training DISTRIBUTION STRATEGY and standardization of telecoms The extent and organization of Maroc Telecom’s distribution network is a major strategic asset for the Company. Lawb55-01, amending and supplementing Lawb24/96, states that the contribution of operators of public telecoms networks to training and The operator’s distribution strategy is mainly focused on the following standardization is set at 0.75% of revenues, before tax and net of areas: interconnection fees, generated by the telecoms operations covered – expand its direct branch network by opening new Retail branches by their license. The contribution for research is set at 0.25% of the and refurbishing old ones everybyear, to maximize customer revenues referred to above. This amount is paid into a special fund satisfaction while keeping up with the technological trends; for research. Operators providing equivalent funding for research – programs under agreements with officially designated research increase digital distribution via indirect channels to forge closer agencies are exempt from the payment. ties with customers; – strengthen the role of all those involved directly or indirectly, to Since 2007, Maroc Telecom no longer enters into agreements promote its offerings and meet everyone’s needs; with such agencies and pays the entirety of the abovementioned contribution into an account earmarked for research. – diversify the distribution media (electronic top-ups, ATMs, express top-ups, online top-ups, paybpointsbetc.); IdentiUcation of customers – ensure synergy between direct and indirect channels in order to offer customers a very high-quality service. The ANRT has informed the operators of public telecoms networks about Decision 04/11 of Julyb13, 2011 relating to the identiƓ cation DIRECT DISTRIBUTION NETWORK of 2G and 3G Mobile customers. In order to maintain the central and dynamic role of the direct network The ANRT issued a new decision on Novemberb8, 2013, amended in its marketing and sales strategy, Maroc Telecom has continued with by a decision on Januaryb31, 2014, pursuant to which the sale of pre- its program to expand and modernize its proprietary sales network in activated prepaid SIM cards was prohibited as from Aprilb1, 2014. accordance with the new-generation retail branch concept. With Ɠ ve newly opened Retail branches and 14 branches totally Dispute resolution refurbished by the end of Decemberb2017, 359 of Maroc Telecom’s sales outlets now feature the new design scheme. The procedure followed before the ANRT concerning litigation, anti- competitive practices and economic concentration transactions, At the end of Decemberb2017 Maroc Telecom’s network of Retail particularly taking into account ANRT’s new authority in competition branches consisted of 444 branches, with eight regional ofƓ ces, matters, is described in Decreeb2-05-772 of Julyb13, 2005. ensuring optimal coverage and density. The network has 417 Retail branches and 27 Corporate branches. And four dedicated branches with nationwide coverage for key 3.2.1.5 DISTRIBUTION AND COMMUNICATION accounts.
INDIRECT DISTRIBUTION NETWORK Distribution At the end of Decemberb2017, the indirect distribution network ORGANIZATION consisted of a wide range of licensed resellers, top-up outlets and regional and national distributors. Maroc Telecom has the largest distribution network nationally. It includes more than 75,000 distribution outlets for direct and indirect The resellers network is composed mainly of convenience stores sales. In 2017, Maroc Telecom’s various distribution channels were: and other distributors of telecoms products which have signed agreements to sell Maroc Telecom products and services. A new – the direct network, composed of 448 branches at end- category of resellers (“Revendeurs Plus”) has been added in the form Decemberb2017. This network is growing fast and everybyear new of Full Image salesbpoints, which sell all Maroc Telecom prepaid and Retail branches are added and existing branches are refurbished; postpaid products. This network, which has a similar design scheme – more than 460 full-image resellers, managed directly by Maroc to Maroc Telecom Retail branches, currently has more than 460 stores. Telecom’s own network, which market consumer products and These make a valuable contribution to business performance and services; customer service, as well as providing visibility and sales coverage – the indirect network comprises independent local shops, some at the local level. of which have exclusivity agreements and are managed by the Overall, the indirect network comprised more than 75,000 prepaid nearest retail branch. Nationwide distributors whose main activity resellers in 2017. More than 52,700 resellers offer the express top- is not telecoms, such as Canal M, M2T,betc.; up service. – four national distributors, two of which operate exclusively in the Individual agreements with each partner serve to reinforce the Ɠ eld of telecoms for Corporate customers. The business of the network and to ensure local distribution. Partners are paid through other two concerns different customer segments and all Maroc commissions on the products and services sold. Telecom’s product ranges and services; Maroc Telecom has also signed agreements with partners for the – Ɠ ve partners for sales and installation of the PABX product. international distribution of electronic top-ups.
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DISTRIBUTION AGREEMENTS At end-Decemberb2017, Maroc Telecom held distribution agreements with the following companies:
Date of partnership Type of business agreement Maroc Telecom products distributed GSM Al-Maghrib Distribution of telecom 11/2003 Prepaid mobile and Ɠ xed-line phone cards mobile, Ɠ xed-line, products internet subscriptions and electronic top-ups Canal Market Electronic payment service 11/2002 Mobile and Ɠ xed-line electronic top-ups provider and distributor of 11/2006 mobile, Ɠ xed-line, and internet subscriptions for Corporate electronic top-ups customers in Marrakesh Sicotel Distributor of telecom 11/2006 Prepaid mobile and Ɠ xed-line phone cards mobile, Ɠ xed-line and products internet subscriptions 3 Lineatec Distributor of telecom 11/2006 Prepaid mobile and Ɠ xed-line cards; products 11/2008 mobile, Ɠ xed-line and internet subscriptions for Corporate customers in Rabat and Tangier mobile, Ɠ xed-line and internet subscriptions for Corporate customers in Casablanca and Fez M2T Local customer services (bill 04/2010 Mobile products (electronic and online top-ups) payment,betc.) CMI E-commerce 06/2010 Mobile, Ɠ xed-line and internet top-ups 12/2015 Top-ups and billing via online banking with CDM 04/2016 Top-ups and billing via online banking with BMCE 05/2016 Top-ups and billing via online banking with ABB 06/2016 Top-ups and billing via online banking with AWB 06/2016 Top-ups and billing via online banking with CIH 09/2016 Top-ups and billing via online banking with BMCI 09/2016 Top-ups and billing via online banking with CFG Transfer To International distribution of 02/2011 Top-up transfer from abroad telecom products Vox Telecom International distribution of 11/2013 Top-up transfer from abroad telecom products PrepayNation International distribution of 12/2016 Top-up transfer from abroad telecom products Pintail (Indigo) Distribution of international 03/2017 Top-up transfer from abroad airtime Attijariwafa Bank Bank 12/2007 Jawal top-up at ATM Al Barid Bank Bank 07/2005 Jawal top-up at ATM Crédit Du Maroc Bank 11/2004 Jawal top-up at ATM Banque Populaire Bank 12/2005 Jawal top-up at ATM E-mania Electronic banking, mobile 03/2015 Online top-up top-up distributor BIM Turkish hard discounter 01/2017 Online top-up
Communication its social, cultural and environmental responsibility to the public throughout the year through public relations initiatives at every In 2017, Maroc Telecom consolidated its position as one of artistic, cultural, social and sporting event it sponsored in the interests Morocco’s top advertisers, continuing to spend a signiƓ cant part of of promoting general wellbeing. its advertising budget on its mobile, Ɠ xed-line, and internet products, targeting the Retail and Corporate segments. Corporate, Ɠ nancial For example, in 2017, Maroc Telecom reaffirmed its support for and event-driven communications were also increased through national and international festivals (Beach Festival, Festival Mawazine multiple targeted actions. Musique du Mondes, Afrique du Rire) and continued to sponsor Moroccan soccer in domestic as well as international competitions CORPORATE COMMUNICATION (African Cup of Nations, 2018 FIFA World Cup qualiƓ ers). In 2017, the general aim of corporate communications was to Corporate communications in 2017 was all about building a maintain Maroc Telecom’s strong brand awareness and increase its continental brand and emphasizing the Group as a whole. As such popularity with all its market segments. The Company advertised Maroc Telecom sought to connect and anchor the public relations
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images of the subsidiaries to the Group’s brand and thus promote the ONLINE ADVERTISING values and common strengths that deƓ ne the Group’s success. The In 2017 Maroc Telecom Ɠ rmly established its reputation on Moroccan Group’s Ɠ rst pan-African campaign was launched in Octoberb2017 social media, particularly through its Facebook page, which has more in all the countries where it is active under the banner of “Maroc than threebmillion fans. Telecom, la performance vous ouvre le monde” (Maroc Telecom, bringing the world to you). The Group’s common values of respect, Maroc Telecom is now the leading Moroccan community-based transparency, mutual prosperity, performance and sustainable company and brand on both Facebook and Twitter. It is also widely development led Maroc Telecom to choose Teddy Riner, the world- present on YouTube, Instagram and other social networks. renowned two-time Olympic and nine-time world judo champion, Similarly, Maroc Telecom continues to diversify its digital marketing to be its brand ambassador. to advertise the business and reach out to customers online: As the ofƓ cial sponsor of the national soccer team Maroc Telecom – interactive tie-ins with product and corporate campaigns (games, cheered on the “Lions of the Atlas” in their successful bid to qualify competitions, quizzes,betc.); for the 2018 FIFA World Cup in Russia with a massive public support – organization of cultural, sporting and artistic events sponsored campaign. by Maroc Telecom; – RETAIL AND CORPORATE ADVERTISING help and advice for customer requests for information and complaints. In 2017, Maroc Telecom maintained a steady communication and media program to support promotional offers and the rollouts of Maroc Telecom’s website (www.iam.ma) is designed to meet the new products. Again thisbyear, both young talent and big names current needs and user habits of its different audiences and features from the Moroccan and foreign arts scene joined their image with the latest internet trends and digital and technical standards. Maroc Telecom as brand ambassadors for the enjoyment of young It provides a comfortable and user-friendly customer experience and old alike. with content and layout that adapt to all device types (computers, An extensive campaign promoting the spirit of community and smartphones and tablets). sharing dear to Maroc Telecom was broadcast during the peak TV The website has versions in French and Arabic with the corporate viewing month of Ramadan featuring stars such as Gaye Turgut, the section available in English and offers many functionalities and beloved heroine of Samhini [the local Arabic dubbed version of Beni features: Affet, a Turkish soap opera], Fadela Benmoussa, a popular Moroccan – rapid access to information (in a maximum of three clicks); actress, and Rachid Allali, a top television presenter. The campaign touted Maroc Telecom’s voice and data plans and network quality – possibility of sharing the content viewed on social media on all in a humorous tone through the everyday experiences of a mother pages of the site; trying to stay in touch with her extended friends and family and tell – showcase of customer decision-making tools: them all in almost real-time everything that is happening. — “Simulators” for the Mobile, Fixed-line, Fidelio and International Maroc Telecom also sponsored a musical collaboration with the Roaming offers; popular group Tagadda in a remake of the famous Moroccan classic — “Compare” functionality to evaluate the features of mobile Ach Kayen Ach Kayen and refreshed its recurring Jawal campaign handsets. with the launch of the Ɠ rst Recharge Multiple X12 promotional offer. The website also features a Game Zone where visitors can play any Also to the tune of musical collaborations. of a number of online games and win various prizes. Musical collaborations with Moroccan artists continued with the Jawal Considered the commercial showcase for Maroc Telecom offers and yajmaouna campaign for the Recharge Multiple X12 promotional services, the Group’s website is designed as a customer relations offer in a remake of “L’moussem” by the popular singer Hamid platform offering a better consumer experience for telecom products Bouchnak. Shot in a dynamic and bouncy urban setting, the campaign and making customers’ everyday lives easier. promoted being part of the Jawal community with its exclusive wide network coverage and fantastic rates. SPONSORSHIP AND CORPORATE PHILANTHROPY Maroc Telecom cemented its lead in the Fixed-line and Internet Maroc Telecom focuses its efforts on four areas of sponsorship and segments by updating its Ɠ ber optic campaign to include its new corporate philanthropy: enhanced plans with speeds of up to 200 Mb/s . For the Business and Corporate targets, communication campaigns Beach Festival on the expansion of the line of Business and Corporate Ŵ at-rate plans From July 14 to Augustb21, 2017 the Group held the 15th Maroc were conducted to meet the requirements of these customers while Telecom Beach Festival across six of Morocco’s main coastal towns highlighting Maroc Telecom’s leadership in these segments. and cities. First launched in 2002, the Maroc Telecom Beach Festival Lastly, Maroc Telecom launched a campaign to advertise its annual is a must-see national event featuring a program of entertainment, Big RafŴ e during which players can win a luxury car or a furnished celebrations and free concerts. Evening concerts featuring the seaside holiday Ŵ at every week. The rafŴ e is an important part of the biggest national and Arab stars draw jubilant crowds numbering in Group’s entertainment and customer loyalty strategy. the millions. Maroc Telecom is also involved, as it has been eachbyear since 1999, in the Clean Beaches campaign, paying for equipment and facilities for some Ɠ fteen beaches.
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Community and humanitarian actions Cultural sponsorships Aware of its important role to play in society, Maroc Telecom Maroc Telecom is actively involved in cultural events through its supported several foundations and charities in 2017, including: sponsorship of many prestigious Moroccan and international festivals such as the Mawazine music festival, the Gnaoua World Music Festival, – Mohamed V Foundation for Solidarity; the Afrique du Rire comedy festival, the World Festival of Sacred – Fondation Lalla Salma Prévention et Traitement des Cancers (Lalla Music in Fes, the International festival of Amazigh Culture in Fes, the Salma Foundation for the Prevention and Treatment of Cancer); Jawhara International Festival in El Jadida, the Ifrane International – National Institute for Children’s Rights; Festival, the Voix de Femmes music festival in Tétouan, the Festival – The Lalla Asmaa Foundation for Deaf Children; des raisins in Bouznika and the Oasis dance festival in Marrakech. – Moroccan Down Syndrome Association; Maroc Telecom also sponsors forums and conferences such as the Crans Montana Forum in Dakhla, the Africa IT & Telecom Forum in – Heure Joyeuse children’s charity. Abidjan and the Africa CEO Forum. Sports sponsorships In addition, the Group is a proud patron of the arts as ofƓ cial partner Maroc Telecom is closely involved in sports at the national and local of the Théâtre National Mohammed V and the JIDAR street art festival 3 levels. It was once again the ofƓ cial sponsor of the following bodies: in Rabat. – Moroccan Royal Soccer Federation; FINANCIAL COMMUNICATION – Mohammed VI Royal Soccer Academy; The objective of financial communication is to raise investor – Moroccan Royal Federation of Track and Field; confidence while providing precise, relevant, transparent and – Moroccan Royal Federation for Equestrian Sports; accurate information on the Group’s position in order to facilitate investor decision-making. Maroc Telecom’s Ɠ nancial communication – Moroccan Royal Rugby Federation; also complies with the statutory and regulatory requirements. – Moroccan Royal Tennis Federation; – As such, information is regularly disclosed to the markets through Dar Es Salam Royal Golf Club Association; press releases, interim and annual results, financial reports, – Hassan II Golf Trophy Association; Registration Documents and the like while the Group remains in close – Moroccan Royal Boxing Federation; and permanent contact with analysts via roadshows, conference calls, analyst meetings, webcasts and other means. – World Judo Open Championships (Ɠ rst time held in Africa). The Investor Relations section of the Group’s website (www.iam.ma) aimed at institutional investors is kept current and up to date at all times.
3.2.1.6 NETWORK AND SYSTEMS INFRASTRUCTURE
Key performance indicators
2017 2016 2015 Radio sites 9,583 9,114 8,544 Internet bandwidth (Gbps) 1,120 550 370 Mobile failure rate 0.77% 1.30% 1.54% Mobile dropped-call rate 0.58% 0.91% 1.05% 2G coverage rate (as a % of the population) 99.5% 99.53% 99.5% 3G coverage rate (as a % of the population) 95.6% 86.75% 86.5% 4G coverage rate (as a % of the population) 93.4% 73.3% 60%
Mobile infrastructure MOBILE CORE NETWORK AND SERVICE PLATFORMS Maroc Telecom’s mobile network is based on GSM technology and Maroc Telecom’s mobile switching network is equipped with has been rolled out across almost the entire country. The network Next-Generation Network (NGN) technology that supports IP and has a well-developed infrastructure, high international connectivity 2G/3G/4G simultaneously for optimal resource allocation. and a service quality comparable to that of international operators. Maroc Telecom has technical platforms enabling the provision of After the GSM 2G network came a 3G/HSPA+ network and a 4G/ high-quality voice and data services to customers (voicemail, SMS, LTE network launched on Julyb13, 2015 to carry calls and data with MMS, prepaid management systems,betc.). Maroc Telecom constantly potential download speeds of up to 225 Mb/s (on compatible adjusts the capacity of these platforms to cope with the increased devices and in certain zones only). usage of value-added services.
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Packet switching and service platforms use highly redundant Morocco’s major cities) and ADSL TV (more than 100 TV channels infrastructures in order to guarantee the highest network availability with direct control and VoD), Maroc Telecom has continued to deploy possible. its optical local-loop technology with the aim of offering ultra-high- speed broadband to business customers, particularly by means of COVERAGE VPN IP technology. Since the introduction of next-generation Single RAN (radio access In 2017 the Group continued bolstering its fixed-line network node) technology, which combines 2G, 3G and 4G technologies, by means of next-generation multiservice access node (MSAN) Maroc Telecom has continued to broaden its radio coverage while equipment. MSAN equipment makes it possible to route voice and upgrading and boosting the capacity of its radio-access equipment. Ɠ xed data trafƓ c on the Maroc Telecom network and supports FTTH At end-Decemberb2017, some 9,583 Maroc Telecom radio sites with theoretical download speeds of up 200 Mb/s. covered 99.5% of its 2G customers and 96% of its 3G customers Maroc Telecom added to its internet range with satellite internet (compared with 87% at end-Decemberb2016). access via VSAT offering download speeds of up to 20 Mb/s. Maroc Telecom continued with its 4G coverage program that covered Lastly, as part of the universal service, Maroc Telecom installed more 93% of the population at the end of Decemberb2017 (73% at end- than 600 Code Division Multiple Access (CDMA) base stations in the Decemberb2016). most remote areas, in order to deliver voice and Internet services to The base station network is continually being optimized by: rural populations previously outside wireline coverage. – a continuous program of equipment redeployment and extension; DOMESTIC TRANSMISSION NETWORK – the latest software upgrades; Maroc Telecom’s transmission network is entirely composed of Ɠ ber – voice-compression technology to cope with spikes in trafƓ c during optic cable linking all of the country’s cities. public holidays and promotional periods. Based on the latest hybrid NG-SDH and NG-WDM transmission MOBILE SERVICE QUALITY technologies, and thanks to the introduction of 100GE services, the backbone can transmit up to 8Tbps on a single pair of Ɠ bers. These Maintaining and enhancing Mobile service quality is a permanent broadband connections are ultra-secure thanks to mesh networking priority for Maroc Telecom’s engineers. The call completion rate was and ASON (Automatically Switched Optical Network) technology. 99.2% at end-Decemberb2017, while the average dropped-call rate was 0.58%; the incoming SMS success rate was 99.96%. SWITCHING PLATFORMS AND FIXED-LINE SERVICES Maroc Telecom is conscious of public health issues and follows the Fixed-line switching is provided by next-generation equipment to guidelines for human exposure to electromagnetic radiation Ɠ elds provide value-added services (Voice over IP, three-way calling, call issued by the International Commission on Non-Ionizing Radiation waiting, call transfers) while optimizing service quality. Protection (ICNIRP), and conducts regular measurement campaigns to ensure compliance with international standards. INTERNATIONAL NETWORK Maroc Telecom connects Morocco to the world through its FixedĆline network infrastructure infrastructure and agreements with large international operators: Maroc Telecom has a state-of-the-art network enabling it to deliver a – two international transit centers in Casablanca and Rabat; wide range of voice and data services to its Residential and Business – four Ɠ ber optic submarine cables linking Morocco to Europe. At customers. end-Decemberb2017, these cables had a combined capacity of This network comprises network access with copper and Ɠ ber optic 1,120bGBps to meet the connectivity needs of Maroc Telecom technologies, a transmission backbone, switching centers and service customers; platforms. – a nearly 5,300km overland Ɠ ber optic cable connecting Maroc Telecom with its sub-Saharan subsidiaries in Mauritania, Mali and INTERNET- AND DATA-ACCESS NETWORK Burkina Faso; To supplement its copper wireline access network, which enables high-speed broadband access (up to 20b MB via ADSL 2+ in
Introduced Cable name From To Length (services etc.) Atlas Offshore Asilah (Morocco) Marseilles (France) 1,634km 2007 Loukkos Asilah (Morocco) Rota (Spain) 187km 2012 Tétouan-Estepona Tétouan (Morocco) Estepona (Spain) 113km 1994 SEA-ME-WE3b(a) Tétouan (Morocco) Sesimbra (Portugal) 500km 2009 Trans-Africa Gueguerat (Morocco) Ouagadougou (Burkina Faso) 5,300km 2013
(a) IAM stake in a consortium of over 50 operators.
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Map of Maroc Telecom international submarine and overlandbƓ ber optic cables
ATLAS OFFSHORE LOUKKOS
TÉTOUAN-ESTEPONA MOROCCO SEA-ME-WE3 TRANS-AFRICA 3 MAURITANIA MALI NIGER
CENTRAL AFRICAN REPUBLIC
BÉNIN IVORY COAST BURKINA TOGO FASO GABON
– satellite links connect the most remote parts of the country to the – opening of a business data center in Casablanca; Maroc Telecom backbone. – adaptation and upgrade of the Information Systems (e.g. data collection and provisioning) to support network technology INFORMATION SYSTEMS developments; The Information Systems Department is responsible for providing – technical and functional upgrade of business line information the IT infrastructure and software applications required by Maroc systems (CRM and branches), decision support systems/Big Data Telecom’s various business segments. tools, human resources management systems, and QoS.network Several major IT projects were completed in 2017: performance tools; – support measures for the 2017 marketing plan; – enhanced security for data and Information Systems.
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3.2.2 SUBSIDIARIES
3.2.2.1 CONSOLIDATED DATA
Population (a) Customers (b) Revenue (b) (000) (000) (MAD millions) 111,427 33,376 15,733
BREAKDOWN BY POPULATION (a) BREAKDOWN BY CUSTOMER (b)
3% Mauritania/ 6% Mauritel Mauritania/ 17% Mauritel Burkina Faso/ 21% Onatel Burkina Faso/ 61% 2% 47% Onatel Moov Gabon/ Moov 5% Gabon Telecom Gabon/ 17% Gabon Telecom Mali/ Sotelma 21% Mali/ Sotelma
3.2.2.2 MAURITEL the CMC Group acquired 0.527% of MauritelbSA from SOCIPAM, a non-commercial company created by employees of the Mauritanian subsidiaries. On completion of this transaction, CMC held 51.527% Macroeconomic indicators of MauritelbSA. Under Lawb2007-049 of Septemberb3, 2007, which in Septemberb2007 repealed Articleb73 of the Telecommunications Lawb(Lawb99-019), 2017 2016 2015 MauritelbSA was forced to spin off all its competitive businesses, Population (000) 3,881 3,794 3,706 namely its Mobile business. On Novemberb27, 2007, the Extraordinary Shareholders’ Meetings of Mauritelb SA and Mauritel Mobiles GDP per capita (in USD) 4,474 4,336 4,308 subsequently ratiƓ ed plans to merge the two companies. MauritelbSA GDP growth +3.8% +1.7% +0.9% has since become a global operator able to take advantage of InŴ ation +2.1% +1.5% +0.5% synergies between all its Fixed-line, Mobile, and Internet businesses. Maroc Telecom’s representatives sit on the Board of Directors of Source: IMF, Octoberb2017. MauritelbSA. Maroc Telecom has no Executive Directors within the Company. The consolidation methods for the CMC/Mauritel sub- Mauritelb SA is the incumbent operator in Mauritania. It was group are summarized in Notesb1, 2 and 28 to the consolidated formed in 1999 following the break-up of Office des Postes et financial statements. In addition, Chapterb2.3.4 “Related-party Télécommunications, the national postal and telecommunications transactions” illustrates the type of Ɠ nancial Ŵ ows between Maroc operator. In 2000, MauritelbSA created its wholly owned subsidiary Telecom and the Mauritel sub-group. Mauritel Mobiles, which has since obtained its second GSM Mobile telephony network license. FixedĆline telephony, data and internet On Aprilb12, 2001, following an international call for tenders issued by the Mauritanian government, Maroc Telecom acquired a 54% stake Mauritel provides Fixed-line telephony services (voice and data) in MauritelbSA. as well as ADSL and FTTH internet access to residential customers, companies and the public sector. In Januaryb2002, Maroc Telecom created Compagnie Mauritanienne de Communication (CMC), to which it transferred the shares it At the end of 2017, Mauritania had 153,000 Ɠ xed telephone lines held in MauritelbSA. On Juneb6, 2002, Maroc Telecom sold 20% of (source: Dataxis) with a penetration rate of 3.9%. Mauritel holds a CMC to Mauritanian investors. In Ɠ scalbyear 2003, CMC sold 3% of 61% market share. MauritelbSA to its employees for MADb17bmillion, in accordance with In addition to Mauritel, Mattel and Chinguitel have had Ɠ xed-line the commitments made during its privatization in 2001. licenses since 2009 that allow them to operate in this market. Once the Moroccan government gave up its veto over Mauritel Nevertheless, to date, the former has developed neither networks SA on Julyb1, 2004, Maroc Telecom gained exclusive control of its nor Fixed-line offers, while Chinguitel provides Fixed-line services subsidiary which became a fully consolidated Group entity. In 2006, through its CDMA network. As a result, Mauritel remains the sole wireline operator in Mauritania.
(a) Forecasts at end-Decemberb2017 (source: IMF, Octoberb2017). (b) Data at end-Decemberb2017 (source: Maroc Telecom).
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At end-Decemberb2017, Mauritel had a Fixed-line customer base M 1.%0 *% * M+ %(! ) .'!0 /$ .! 0 D! !) !. , of 50,527 lines, 6.4% more than in 2016. Mauritel also has an ADSL network via its Ɠ xed-lines whereby it can offer broadband, a fast- 21% growing segment, to its customers. At end-Decemberb2017, Mauritel Chinguitel 59% also had 12,776 internet subscribers, an increase of 18.6%, most of Mauritel whom are connected via the ADSL network (99% of the base). To meet its international bandwidth needs, Mauritel participates in a consortium that has capacity on the Africa Coast to Europe (ACE) 20% submarine cable and includes all Mauritanian telecom operators and Mattel the Mauritanian post ofƓ ce.
Mobile telephony Source: Dataxis At Decemberb31, 2017, the Mauritanian market had 3.6bmillion Mauritel’s Mobile business consists of prepaid and postpaid services. Mobile customers, representing a penetration rate of 94%, down Mobile services include voice, value-added services (SMS, MMS,betc.), 3bpoints in one year. 3 3G mobile internet and roaming. In addition, Mauritel launched its m-payment service under the Mobicash brand in 2013. Mauritel operates alongside two other operators, Société Mauritano- Tunisienne de Télécommunications Mattel and Chinguitel. Chinguitel To provide these services Mauritel relies on a network of 1,321 base launched a GSM service in 2011. Chinguitel launched a GSM service transceiver stations (BTS) located throughout the country, offering in 2011. In 2006, the ARE awarded 3G licenses to Mauritel and 2G and 3G technology with the latter coming into service in 2009. In Chinguitel; Mattel did not obtain its 3G license until Marchb2009. Julyb2015, Mauritel renewed its 2G license for a period of 10byears in return for a Ɠ xed share (MRO 10bbillion) and an annual variable share At Decemberb31, 2017 Mauritel’s mobile customer base was 2.1 corresponding to 2.5% of 2G revenues for the term of the license. million (almost all prepaid), a 7.8% increase year-on-year despite heightened competition and regulatory customer identification COMPETITION AND MARKET SHARE requirements. Mauritel maintained its leadership position with a M+ %(! ) .'!0 0.!* / %* M 1.%0 *% market share of 59% at end-Decemberb2017. PERFORMANCE 98% 94% The following table shows Mauritel’s key operating data: 91% 3.6 3.6 Unit 2017 2016 2015 3.4 Mobile customer base (000) 2,139 1,984 2,121 Fixed-line (000) 51 48 45 Broadband access (000) 13 11 10
Seasonality In Mauritania, the peak period is generally from Junebto September. Other spikes in usage occur during religious holidays, providing signiƓ cant sales opportunities. Fixed-line and mobile usage tends to be lower during Ramadan.
Regulations 2015 2016 2017 OVERVIEW Customer base (in millions) Penetration rate The regulatory framework for telecommunications in Mauritania was modified by Lawb2013-025 of Julyb15, 2013 on electronic Source: IMF and Dataxis communications (hereinafter the “Law”). This Lawbsupplements in particular the prerogatives of the ARE and gives it powers to curb unfair business practices in the sector. These prerogatives are in addition to the ARE’s regulatory, audit, and oversight powers with regard to industry operators, as set forth in Lawb2001-18 of Januaryb25, 2001 establishing the ARE. The ARE is an independent public-sector entity with multi-sector authority and full financial and managerial autonomy. The ARE reports directly to the Prime Minister.
MAROC TELECOM ____ 2017 Registration Document 91 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 DESCRIPTION OF THE GROUP, BUSINESS ACTIVITIES, LEGAL AND ARBITRATION PROCEEDINGS 3 Business activities
MAIN REGULATORY OBLIGATIONS APPLYING TO MAURITEL Onatel’s Extraordinary Shareholders’ Meeting of Decemberb29, Mauritel is required to pay industry fees and contributions. These 2010 approved plans to merge with Onatel’s mobile subsidiary. include an annual universal-service contribution of no more than 3% Since then, Onatel has become a global operator, beneƓ ting from of revenues, net of interconnection charges. It is also required to pay synergy between its Fixed-line, Mobile and Internet businesses. regulatory fees of no more than 2% of revenues, net of interconnection Maroc Telecom’s representatives sit on the Board of Directors of charges, and an annual research and training contribution of no more Onatel. Maroc Telecom holds has no operating positions within than 1% of revenues, net of interconnection charges. For 2017, the these companies. amount of this fee was set at 0.6% of revenues. Lastly, Mauritel pays The consolidation methods for Onatel and its subsidiaries are annual fees for the use of radio frequencies and numbers as well as summarized in Notesb1, 2 and 28 to the consolidated financial a levy of €0.08/min on inbound international trafƓ c. statements. In addition, Chapterb2.3.4 “Related-party transactions” describes the type of Ɠ nancial Ŵ ows between Maroc Telecom and MAURITEL LICENSES Onatel.
Licenses and authorization Award date Expiration Date Term FixedĆline telephony, data and internet Onatel provides Fixed-line telephony services (voice and data) as Fixed-line well as ADSL and FTTH internet access to residential customers, authorization 4/12/2001 4/12/2021 20 years companies and the public sector. 2G license 7/18/2015 7/18/2025 10byears Onatel lost its monopoly on basic services (domestic Fixed-line 3G license 7/27/2006 7/27/2021 15byears telephony, telex and telegraph) on Decemberb31, 2005. However, it currently remains the only Fixed-line telephony operator in Burkina 2017 HIGHLIGHTS Faso. By contrast, Onatel competes with other service providers in the Internet market. Regulatory highlights for 2017: – At end-Decemberb2017, Onatel had a Fixed-line customer base of the decrease in the mobile call termination rates (from MROb3.5/ 76,000 lines, an increase of 0.4% over 2016 despite competition min to MROb3/min) from Julyb1, 2017 following the ARE decision from Mobile services. The Ɠ xed-line penetration rate is still low, at of Juneb21, 2016 approving interconnection catalogs; only 0.4% of the population at end-Decemberb2017. – the MROb285 million Ɠ ne imposed by the ARE in Januaryb2017 for The operator also offers its customers broadband plans via its failing to put sufƓ cient customer identiƓ cation measures in place; ADSL network. At end-Decemberb2017 Onatel had 13,500 internet – the MROb216 million and MROb591.7 million Ɠ nes imposed by subscribers, relatively unchanged from 2016 despite the impact of the ARE in June and Decemberb2017 for failing to provide an competition from 3G internet, an effective alternative to Ɠ xed-line adequate quality of service; internet. Of these customers, 65% have ADSL broadband. – the subsidiary has prepared in advance for the change of currency which is planned for 2018 so that its billing process will not be Mobile telephony disturbed. Onatel’s Mobile business, operated under the Telmob brand, provides prepaid and postpaid services. Mobile services are offered 3.2.2.3 ONATEL for voice, value-added services (SMS, MMS,betc.), 3G mobile internet and roaming. In 2013, Onatel launched its m-payment service under the Mobicash brand, as well as other 3G services. Macroeconomic indicators COMPETITION AND MARKET SHARE 2017 2016 2015 M+ %(! ) .'!0 0.!* / %* B1.'%* F /+ Population (000) 18,935 18,420 18,106 94% GDP per capita 81% 84% (in USD) 1,884 1,790 1,698 17.6 GDP growth +6.4% +5.9% +4.0% 15.4 InŴ ation +1.5% -0.2% +0.9% 14.4
Source: IMF, Octoberb2017. Onatel (Office National des Télécommunications) is the incumbent operator of Burkina Faso. It was formed following the break-up of Office des Postes et Télécommunications in 1987, and became a state- owned company in 1994. In Octoberb2002, the government created Telmob, Onatel’s wholly owned mobile subsidiary, which has been licensed to operate a GSM mobile network since Aprilb2004. On Decemberb29, 2006, following an international competitive privatization process, Maroc Telecom acquired 51% of Onatel. On Aprilb29, 2009, Onatel was listed for trading on the regional 2015 2016 2017 stock exchange in Abidjan, Ivory Coast. This enabled the Burkina Faso government to sell 23% of the telecommunications operator Customer base (in millions) Penetration rate on the market. Source: IMF and Dataxis
92 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 DESCRIPTION OF THE GROUP, BUSINESS ACTIVITIES, LEGAL AND ARBITRATION PROCEEDINGS Business activities
BURKINA FASO MOBILE MARKET SHARE The main implementing decrees of the Telecommunications AT DECEMBER 31, 2017 Lawbare: Decreeb2010-451 of Augustb12, 2010, deƓ ning the general conditions for network interconnection and access to those networks; 17% Decreeb2010-245 of Mayb20, 2010, deƓ ning the procedures and Telecel Fasco 41% conditions attached to individual licenses, general authorizations, Onatel and declarations; Decreeb2010-246 of Mayb20, 2010, establishing the rates and charging arrangements for fees, contributions and expenses. 42% Orange MAIN REGULATORY OBLIGATIONS APPLYING TO ONATEL Burkina Faso Onatel is required to pay industry fees and contributions. This includes the regulatory fee of 1% of revenues excluding interconnection Source: Dataxis charges, the annual contribution to training and research of 0.5% of At Decemberb31, 2017, Burkina Faso had 17.6 million Mobile revenues excluding interconnection charges, and a contribution of customers, representing a penetration rate of 94%, up 8 points in 2% of revenues excluding interconnection charges to the Universal 3 one year. Service Fund. The market continued to grow in 2017, thus allowing the three mobile In addition, Onatel pays fees for the use of frequencies and numbers. operators in Burkina Faso to develop at the same time. These three operators were granted 3G licenses in 2012, for MADb25bmillion each. In 2013, the 5% limit on the amount of fees and contributions was lifted. At Decemberb31, 2017, Onatel had 7.2bmillion Mobile customers (mainly prepaid), abyear-on-year increase of 2.6%. Onatel has Finally, since Januaryb1, 2014, Onatel has paid a special tax on therefore consolidated its leadership by investing in capacity and telecom operators equivalent to 5% of their revenue excluding Fixed- coverage, accompanied by a targeted marketing strategy and better line services, international interconnection charges and revenue from quality of service. The new BTS brought into service during 2017, handset sales. raised the operator’s total to 1,337 BTS. ONATEL LICENSES PERFORMANCE The following table summarizes Onatel’s key operating data: Licenses and authorization Award date Expiration Date Term Fixed-line license 12/29/2006 12/29/2026 20 years Unit 2017 2016 2015 2G license 6/21/2010 6/21/2020 10byears Mobile customer base (000) 7,196 7,017 6,760 3G license 5/22/2013 5/22/2023 10byears Fixed-line (000) 76 76 75 Broadband access (000) 13 14 15 2017 HIGHLIGHTS Regulatory highlights for 2017: Seasonality – the reduction of mobile call termination rates from 20 CFA/min In Burkina Faso, the annual rainy season (Augustband September) has to 15 CFA/min. a negative impact on sales and on network quality of service. This has repercussions for both Ɠ xed-line and mobile revenues. 3.2.2.4 GABON TELECOM Regulations Macroeconomic indicators OVERVIEW Burkina Faso’s current regulatory framework for telecommunications was established by Lawb061-2008/AN of Novemberb27, 2008, as 2017 2016 2015 amended, relating to General Regulations for networks and electronic (000) communication services in Burkina Faso and its implementing Population 1,908 1,881 1,855 decrees. GDP per capita (in USD) 19,266 19,018 18,655 The Electronic Communications and Postal Services Regulatory Authority GDP growth +1.0% +2.1% +3.9% (Autorité de Régulation des Communications Électroniques et de la Poste, InŴ ation +2.5% +2.1% -0.1% hereinafter “ARCEP”) is an independent public-sector administration under the technical supervision of the Prime Minister’s ofƓ ce. Source: IMF, Octoberb2017. It is responsible for ensuring that operators comply with their contract speciƓ cations, managing and controlling radio frequencies, Gabon TelecombSA is the incumbent operator in Gabon. It was formed establishing and managing the national numbering plan, and from the break-up in 2001 of Office des Postes et Télécommunications managing conciliation and arbitration proceedings among pursuant to Lawb004/2001 of Juneb27, 2001 on the reorganization of telecommunications operators and between operators and the postal and telecommunications sector. consumers.
MAROC TELECOM ____ 2017 Registration Document 93 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 DESCRIPTION OF THE GROUP, BUSINESS ACTIVITIES, LEGAL AND ARBITRATION PROCEEDINGS 3 Business activities
In Marchb1999, Gabon Telecom created Libertis, its wholly owned COMPETITION AND MARKET SHARE mobile subsidiary, which obtained a second license to operate a M+ %(! ) .'!0 0.!* / %* G +* GSM Mobile telephony network in 2007.bUntil 2006, Gabon Telecom was wholly owned by the Gabonese government. In Februaryb2007, 175% following an international invitation to tender, the Gabonese government sold a 51% stake in the company to Maroc Telecom. 152% 158% The transaction was finalized on Decemberb23, 2010, following 3.3 completion of the agreements signed in 2008. 2.8 2.9 Gabon Telecom’s Extraordinary Shareholders’ Meeting of Decemberb20, 2011 approved plans to merge with Gabon Telecom’s Mobile subsidiary. Since then, Gabon Telecom has become a global operator, capitalizing on the synergy between its Fixed-line, Mobile and Internet businesses. In addition, after the acquisition of Moov Gabon in Januaryb2015, and to comply with the country’s regulatory requirements, a merger between Gabon Telecom and Moov Gabon was necessary. The merger-absorption process for Gabon Telecom and Moov Gabon was Ɠ nalized in Juneb2016.
On Juneb20, 2017 Gabon Telecom’s universal license was renewed 2015 2016 2017 for a period of 10 years at a cost of MAD 148 million. Maroc Telecom’s representatives sit on the Board of Directors of Customer base (in millions) Penetration rate Gabon Telecom. Maroc Telecom has no Executive Directors within Source: IMF and Dataxis these companies. M+ %(! ) .'!0 /$ .! %* G +* 0 D! !) !. , The consolidation methods for Gabon Telecom and its subsidiaries are summarized in Notesb1, 2 and 28 to the consolidated Ɠ nancial statements. In addition, Sectionb2.3.4 “Related-party transactions” 5% illustrates the type of Ɠ nancial Ŵ ows between Maroc Telecom and Azur the Gabon Telecom sub-group. 54% Gabon Telecom FixedĆline telephony, data and internet
Gabon Telecom provides Fixed-line telephony services (voice 41% and data) as well as ADSL and FTTH internet access to residential Airtel customers, companies and the public sector. Gabon Telecom lost its monopoly on basic services (domestic Fixed-line telephony, telex, and telegraph) on Decemberb31, 2005. However, it currently remains the sole national Ɠ xed-line operator Source: Dataxis in Gabon. By contrast, Gabon Telecom competes with other service At Decemberb31, 2017, there were 3.3bmillion Mobile customers providers in the internet and VSAT markets. (commercial customer base), representing a penetration rate of At end-Decemberb2017, the operator had a Fixed-line customer base 175%, up 11 points in one year. of 21,235 lines, an increase of 12.6%. The Ɠ xed-line penetration rate The Gabon Mobile market is highly competitive, with three operators still remains low, at only 1% at end-Decemberb2017. for 2G networks. In addition to Gabon Telecom, Airtel and Azur Gabon Telecom also offers internet access via its Ɠ xed-line network (network launched in mid-2009) are very active in the country. (high-speed ADSL and Ɠ ber optic). At end-Decemberb2017, Gabon Despite this competitive landscape, Gabon Telecom succeeded in Telecom had 16,187 internet subscribers, up 23.4%byear-on-year. capturing a leading market share of 56% at end-Decemberb2017. Gabon Telecom has access to thebSAT-3 submarine cable, which At Decemberb31, 2017, Gabon Telecom had 1.5 million customers enables it to cover its own international bandwidth needs and to offer (almost all prepaid), an 8.4% decrease (due to the merger between international services (internet, voice) to other telecoms operators Gabon Telecom and Moov Gabon). Gabon Telecom continued to and Gabonese Ɠ rms. build its mobile network in 2017, raising its total number of BTS to 1,184. Mobile telephony PERFORMANCE Gabon Telecom’s Mobile segment, marketed under the Libertis The following table shows Gabon Telecom’s key operating data: and Moov brands, provides prepaid and postpaid services and offers voice and data plans (mainly SMS and mobile internet). It also provides roaming services for its mobile subscribers abroad Unit 2017 2016 2015 for customers of foreign partner operators visiting Gabon. In 2014 Gabon Telecom launched its m-payment service under the Mobicash Mobile customerbbase (000) 1,547 1,690 1,157 brand as well as other 3G and 4G services. Fixed-line (000) 21 19 19 Broadband access (000) 16 13 11
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Seasonality 2017 HIGHLIGHTS In Gabon, Decemberband the summerbmonths (Julybto September) Regulatory highlights for 2017: generally see a surge in activity due to end-of-the-year festivities – the decrease in the mobile call termination rate from 14 CFA to (Christmas and New Year), holidays in the country’s rural regions, 10 CFA; family gatherings, the celebration of national independence and the – the renewal of Gabon Telecom’s technologically neutral license back-to-school period. for a period of 10 years starting on Mayb28, 2017; November, Januaryb and February, in contrast, are generally – the designation of Gabon Telecom as a dominant operator in the quietbmonths, the aftereffects of the summer andbyear-end peaks. mobile telecommunications market with a ban on it applying on- net/off-net rate differentiation. Regulations
OVERVIEW 3.2.2.5 SOTELMA The regulatory framework for telecommunications in Gabon was established by Act 005/2001 of Juneb27, 2001 regulating the Macroeconomic indicators 3 telecommunications sector in the Gabonese Republic as amended by Order 006/PR/2014 of Augustb20, 2014. Agence de Régulation des Communications Électroniques et de 2017 2016 2015 Postes, the Electronic Communications and Postal Services Regulatory Population (000) 18,893 18,289 17,703 Authority (hereinafter, “ARCEP”) is responsible for the regulation, control and monitoring of the telecommunications sector. ARCEP GDP per capita (in USD) 2,169 2,091 2,017 is an independent administrative authority under the supervision of GDP growth +5.3% +5.8% +6.0% the Ministry of the Digital Economy, Communication and Post OfƓ ce and the Ministry of Economy and Finance. InŴ ation +0.2% -1.8% +1.4%
The main laws governing the telecommunications sector are: Order Source: IMF, Octoberb2017. 08/PR/2012 of Februaryb13, 2012, on the creation and organization of ARCEP, as amended by Order 005 of Augustb20, 2014; Decreeb054 SotelmabSA is the incumbent operator in Mali: it emerged in 1990 from of Juneb15, 2005, on interconnection procedures and infrastructure the break-up of the former OfƓ ce des Postes et Télécommunications. sharing; Decreeb0844 of Octoberb26, 2006, on duties, fees and The company was created by Order 89-32 of Octoberb9, 1989 and contributions payable by telecommunications operators. ratiƓ ed by Lawb90-018 ANRM of Februaryb27, 1990. MAIN REGULATORY OBLIGATIONS APPLYING On Julyb31, 2009, following an international competitive privatization TO GABON TELECOM process, Maroc Telecom acquired 51% of Sotelma. Maroc Telecom’s representatives sit on the Board of Directors of Sotelma. Maroc Gabon Telecom is required to pay industry fees and contributions. Telecom has no Executive Directors within this company. These include a contribution to the Universal Service Fund of an amount equal to 2% of revenues, net of interconnection The consolidation methods for the Sotelma sub-group are charges for the Fixed-line business, and 1% of revenues, net of summarized in Notesb1, 2 and 28 to the consolidated financial interconnection charges, for the Mobile business, plus a contribution statements. In addition, Chapterb2.3.4 “Related-party transactions” to telecommunications research, training and standardization of an illustrates the type of Ɠ nancial Ŵ ows between Maroc Telecom and amount equal to 2% of revenues, net of interconnection charges. the Sotelma sub-group. In addition, Gabon Telecom is required to pay annual fees for the use of radio frequencies and numbers. FixedĆline telephony, data and internet The regulatory fees are capped at 5% of total revenues excluding Sotelma provides Fixed-line telephony services (voice and data) interconnection charges for the Mobile business and at 6% of as well as ADSL and FTTH internet access to residential customers, revenues excluding interconnection charges for the Fixed-line companies and the public sector. business. To date, Sotelma is the most active operator in the Fixed-line market. Finally, all operators pay a tax on incoming international calls. The At end-Decemberb2017, the operator had a Fixed-line customer amount of this tax is 47 CFAbfranc/min. base of 154,594 lines, an increase of 3.8%, primarily driven by the development of CDMA technology, which allows rapid nationwide GABON TELECOM LICENSES expansion of coverage at a lower cost. The Ɠ xed-line penetration rate is still low, however, at only 0.8% of the population at end- Decemberb2017. Licenses and authorization Award date Expiration Date Term The operator is able to offer its Fixed-line customers ADSL broadband Fixed-line packages. It also offers internet access via its CDMA network. At authorization 2/9/2007 2/9/2022 15byears end-Decemberb2017, Sotelma had 64,361 internet subscribers, a 4.9% increase, despite the impact of competition from the Mobile 2G license 5/15/2007 5/15/2017 10byears segment. 3G/4G license 3/2/2015 3/2/2025 10byears
MAROC TELECOM ____ 2017 Registration Document 95 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 DESCRIPTION OF THE GROUP, BUSINESS ACTIVITIES, LEGAL AND ARBITRATION PROCEEDINGS 3 Business activities
Mobile telephony PERFORMANCE Sotelma’s Mobile business consists of prepaid and postpaid services The following table summarizes Sotelma’s key operating data: through voice and data plans. It also provides roaming services for Sotelma mobile subscribers abroad and for customers of foreign partner operators visiting Mali. Sotelma launched its m-payment Unit 2017 2016 2015 service under the Mobicash brand in 2014. Mobile customer base (000) 7,190 7,087 7,431 COMPETITION AND MARKET SHARE Fixed-line (000) 155 149 138 M+ %(! ) .'!0 0.!* / %* M (% Broadband access (000) 64 61 58
109% 106% 100% Seasonality 19.3 19.7 Telecommunications activity in Mali rises during the rainy season, 18.3 from Junebto September, when large numbers of Malian students abroad return home for their summer vacation. Other brief events give rise to major commercial opportunities, including religious holidays such as Tabaski (generally the day of the holiday and the followingbdays) andbyear-end holidays (December). However, mobile and Ɠ xed-line trafƓ c falls substantially in thebmonth of Ramadan, except for the last fewbdays.
Regulations
OVERVIEW The regulatory framework for telecommunications in Mali is now 2015 2016 2017 governed by Order 2011-023/P-RM of Septemberb28, 2011 on telecoms and information and communication technologies in Mali Customer base (in millions) Penetration rate and Order 2011-024/P-RM of Septemberb28, 2011 on the regulations of the telecommunications sector. These two orders abrogate Order 99-043/P-RM of Septemberb30, 1999, and all previous regulatory Source: IMF and Dataxis provisions to the contrary. M+ %(! ) .'!0 /$ .! %* M (% 0 D! !) !. , The Malian Regulatory Authority for Telecommunications and Postal Services (Autorité Malienne de Régulation des Télécommunications et des Postes, AMRTP), created by Order 2011-024, is an independent 37% governmental body under the supervision of the Ministry of Postal Sotelma Services and New Technologies. The main provisions adopted to date under the Order on Telecommunications are Decreeb2011-867 of Decemberb20, 2011 64% laying down the detailed rules for implementation of national Orange Mali roaming and Decreeb2011-872 of Decemberb30, 2011 on the sharing of infrastructure.
Source: Dataxis MAIN REGULATORY OBLIGATIONS APPLYING TO SOTELMA Sotelma is required to pay a set of sector fees and contributions. At Decemberb31, 2017, the Mali market had 20.43bmillion Mobile Since 2013, Sotelma has been paying a total contribution of 3% of customers, representing a penetration rate of 109%. its revenues, net of interconnection charges, plus annual fees for the Two mobile operators are currently active in Mali. Sotelma and use of radio frequencies and numbering resources. Orange have 2G and 3G licenses there. The third mobile license, In addition, following the enactment of the law increasing the Tax on granted to the Planor Group in Mali, was conƓ rmed in 2013. This new Access to Public Telecommunications Networks (TARTOP), this tax competitor plans to launch its mobile service in early 2018. is now 5% of total revenues. As a reminder, the tax was introduced At Decemberb31, 2017 Sotelma had 7.2 million Mobile customers, a in 2013 and had previously been set at 2% of revenues, excluding 1.5% increase from a year earlier. interconnection charges, product sales and equipment rental (Ɠ xed- line and mobile) and services relating to incoming international trafƓ c. Sotelma continued to build its mobile network in 2017, raising its total number of BTS to 2,085. SOTELMA LICENSES
Licenses and authorization Award date Expiration Date Term Fixed-line license 2G, 3G 7/31/2009 7/31/2024 15byears
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2017 HIGHLIGHTS I2+.5 C+ /0 ) .'!0 /$ .! 0 D! !) !. , Regulatory highlights for 2017: – the increase in the Operator contribution rate to the Universal 24% Access Fund from 1% to 2% of revenue excluding interconnection Moov Côte d’Ivoire 43% costs from Augustb1, 2017; Orange CI – the decrease in the mobile call termination rate from 16 CFA to 15.8 CFA; – the granting of a 4G license to Sotelma. 33% MTN 3.2.2.6 MOOV OPERATORS Source: Dataxis On Januaryb26, 2015 Maroc Telecom completed the acquisition of Etisalat’s subsidiaries in Benin, Ivory Coast, Gabon, Niger, the Moov Côte d’Ivoire’s Mobile business consists of prepaid and 3 Central African Republic and Togo. In terms of business activity, these postpaid services through voice and data (mainly SMS) plans. It also subsidiaries only have operations in the Mobile segment, divided provides roaming services for its mobile subscribers abroad and into prepaid and postpaid. for customers of foreign partner operators visiting Ivory Coast. To provide these services, Moov Côte d’Ivoire relies on a network of The acquisition also included Prestige Telecom which provides IT 3,041 BTS throughout the country, offering 3G and 4G technology services on behalf of Etisalat’s subsidiaries in those countries but (commercial rollout of 4G in Juneb2016). Moov Côte d’Ivoire also ceased trading in Juneb2017. offers an m-payment service under the Moov Money brand. At Decemberb31, 2017, Ivory Coast had 33bmillion Mobile customers, IVORY COAST representing a penetration rate of 133%, up 15bpoints in one year. In this market, two major operators are active alongside Moov Côte d’Ivoire: Orange Côte d’Ivoire and MTN Côte d’Ivoire, following the Macroeconomic indicators market consolidation in Aprilb2016.
PERFORMANCE 2017 2016 2015 AT Côte d’Ivoire’s mobile customer base changed as follows: Population (000) 24,960 24,327 23,711 GDP per capita (in USD) 3,857 3,614 3,399 Unit 2017 2016 2015 GDP growth 7.6% 7.7% 8.9% Mobile customer base (000) 7,734 6,840 5,151 InŴ ation 1.0% 0.7% 1.2%
Source: IMF, Octoberb2017. At Decemberb31, 2017 Moov Côte d’Ivoire had 7.7 million Mobile customers (mainly prepaid), a year-on-year increase of 13% Mobile telephony despite heightened competition and customer identification requirements. Moov Côte d’Ivoire had a market share of 23% at COMPETITION AND MARKET SHARE end-Decemberb2017. M .'!0 0.!* / %* I2+.5 C+ /0 Regulations
133% OVERVIEW 118% 107% The regulatory framework for telecommunications in Ivory 32.7 Coast is governed by Order 2012-293 of Marchb 21, 2012 on telecommunications and information and communications 28.7 technology. 25.3 The Ivory Coast Regulatory Authority for Telecommunications (ARTCI) is an independent administrative authority in charge of regulation on behalf of the state. The main legislative instruments adopted to date pursuant to the Order concerning telecommunications are: Decree 2012-934 of Septemberb19, 2012 relating to the organization and functioning of ARTCI; Decree 2013-300 of Mayb2, 2013 relating to interconnection of telecommunications networks and services and local loop unbundling; Decree 2014-104 of Marchb12, 2014 ratifying the specifications of concession and license holders for the establishment of telecommunications networks and provision of telecommunications/ 2015 2016 2017 ICT services; Decree 2015-80 of Februaryb4, 2015 defining the categories of Telecommunications/ICT activities and laying down the rules for access to scarce resources. Customer base (in millions) Penetration rate
Source: IMF and Dataxis
MAROC TELECOM ____ 2017 Registration Document 97 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 DESCRIPTION OF THE GROUP, BUSINESS ACTIVITIES, LEGAL AND ARBITRATION PROCEEDINGS 3 Business activities
MAIN REGULATORY OBLIGATIONS APPLYING Mobile telephony TO AT CÔTE D’IVOIRE AT CI is subject to various sector fees and contributions. These COMPETITION AND MARKET SHARE include the annual regulatory fee equal to 0.5% of its revenue; the M .'!0 0.!* / %* B!*%* Research, Training and Normalization Contribution equal to 0.5% of its revenue; the universal service contribution equal to 2% of its 86% revenue, as well as the fees for the use of radio frequencies and 80% 83% numbering resources. In addition to these royalties and contributions, there is a tax on 9.3 8.8 9.4 communications equal to 3% of their price before tax, and a tax on telecommunications companies set at 5% of revenue before tax (including interconnection receipts and income). AT CI is also subject to a tax for the promotion of culture in the amount of 0.2% of revenue.
AT CÔTE D’IVOIRE LICENSES
Licenses and authorization Award date Expiration Date Term Global license Marchb2016 Marchb2033 16byears 2015 2016 2017
2017 HIGHLIGHTS Customer base (in millions) Penetration rate
Regulatory highlights for 2017: Source: IMF and Dataxis – the regulator’s decision to ban on-net/off-net tariff differentiation B!*%* ) .'!0 /$ .! 0 D! !) !. , which applies to all operators. AT CI appealed the decision; – the 1.15 billion CFA Ɠ ne imposed by the regulator on AT CI for failing to provide an adequate quality of service. Other operators 11% were also penalized. AT CI appealed the decision; Glo Mobile Bénin – the adoption of a decree on digital subscriber identiƓ cation. 46% MTN Bénin BENIN 42% Macroeconomic indicators Moov Bénin
2017 2016 2015 Source: Dataxis Population (000) 11,395 11,128 10,859 Moov Benin’s Mobile business consists of prepaid and postpaid services through voice and data (mainly SMS) plans. It also provides (in USD) GDP per capita 2,219 2,119 2,061 roaming services for its mobile subscribers abroad and for customers GDP growth +5.4% +4.0% +2.1% of foreign partner operators visiting Benin. In addition to 3G and 4G services (the latter launched in Aprilb2017), Moov Bénin offers an InŴ ation +2.0% -0.8% +0.3% m-payment service under the Moov Money brand. Source: IMF, Octoberb2017. At Decemberb31, 2017, Benin had 9.4 million down Mobile customers, representing a penetration rate of 83%, up threebin one year. In this market three other operators are active alongside Moov Benin, namely MTN Bénin, Bénin Telecoms and Glo Bénin (which lost its license in Decemberb2017).
PERFORMANCE Moov Bénin’s mobile customer base changed as follows:
Unit 2017 2016 2015 Mobile customer base (000) 3,960 3,960 3,266
At Decemberb 31, 2017, Moov Benin had 3.96b million Mobile customers (mainly prepaid), abyear-on-year increase of 6.2%. Moov Bénin had a market share of 42% at the end of Decemberb2017. The operator placed 186 new BTS online during thebyear, raising its total to 1,056.
98 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 DESCRIPTION OF THE GROUP, BUSINESS ACTIVITIES, LEGAL AND ARBITRATION PROCEEDINGS Business activities
Regulations TOGO
OVERVIEW Macroeconomic indicators The regulatory framework for telecommunications in Benin is governed by Lawb 2014-14 of Julyb 9, 2014 on electronic communications and postal services in the Republic of Benin. 2017 2016 2015 The Regulatory Authority for Electronic Communications and Population (000) 7,714 7,509 7,310 Postal Services (ARCEP) is in charge of the regulation, control and monitoring of the telecommunications sector, in accordance with GDP per capita (in USD) 1,612 1,550 1,497 Decreeb2014-599 of Octoberb9, 2014 on the powers and organization GDP growth +5.0% +5.0% +5.3% of ARCEP, adopted pursuant to Lawb2014-14. In addition, the main legislative instruments now in force are Decreeb2010-273 of Juneb11, InŴ ation +0.8% +0.9% -1.8% 2010 and Decreeb2011-583 of Septemberb5, 2011 relating to the identiƓ cation requirement and Decreeb2015-455 amending the 2015 Source: IMF, Octoberb2017. Budget Act and introducing new taxes and royalties for the sector. 3 Mobile telephony MAIN REGULATORY OBLIGATIONS APPLYING TO ETISALAT BENIN COMPETITION AND MARKET SHARE Etisalat Benin is required to pay various sector fees and contributions. M .'!0 0.!* / %* T+#+ These include the annual contribution to Ɠ nance universal service access capped at 1% of its revenue, excluding interconnection 71% 70% charges, the regulatory fee of a maximum 1% of revenue excluding 64% interconnection charges, the annual contribution to training and research up to a maximum of 0.5% of its revenue excluding 5.3 5.3 interconnection charges, and the territorial development and 4.6 environmental protection fee of 0.5%. Under a decree notiƓ ed to operators on Septemberb17, 2015, Etisalat is now also subject to the payment of a development levy equivalent to 2% of its revenues net of interconnection charges. Etisalat Bénin must also pay a levy of 10% of its revenue. Lastly, Etisalat Bénin pays fees for the use of frequencies and numbers.
ETISALAT BENIN LICENSES 2015 2016 2017
Licenses and Customer base (in millions) Penetration rate authorization Award date Expiration Date Term
Mobile 6/7/2013 6/7/2033 20 years Source: IMF and Dataxis T+#+(!/! ) .'!0 /$ .! 0 D! !) !. , 2017 HIGHLIGHTS Regulatory highlights for 2017: – the resolution of the dispute on the annual fees for the use of 55% frequencies; Moov Togo – the reduction of mobile call termination rates from 27 CFA/min 45% to 10 CFA/min; Togocell – the adoption by the cabinet of the new digital code bill (telecom law); – the loss of Glo’s operating license. Source: Dataxis
Moov Togo’s Mobile business consists of prepaid and postpaid services through voice and data (mainly SMS) plans. It also provides roaming services for its mobile subscribers abroad and for customers of foreign partner operators visiting Togo. To provide these services Moov Togo relies on a network of 654 BTS, including 168 3G BTS, located throughout the country. Moov Togo launched 3G in Mayb2017. An m-payment service under the Flooz brand is also offered. At Decemberb31, 2017, Togo had 5.3bmillion Mobile customers, representing a penetration rate of 70%, a decline of 2 points in one year.
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Two mobile operators are currently active in Togo: Moov Togo and NIGER Togocell.
PERFORMANCE Macroeconomic indicators Moov Togo’s mobile customer base changed as follows: 2017 2016 2015 Unit 2017 2016 2015 Population (000) 18,758 18,194 17,647 Mobile customer base (000) 2,943 2,463 2,141 GDP per capita (in USD) 1,153 1,121 1,086 GDP growth +4.2% +5.0% +4.0% At Decemberb31, 2017, Moov Togo had 2,943bmillion Mobile InŴ ation +1.0% +0.3% +1.0% customers (almost all prepaid), abyear-on-year increase of 19.5%, with a market share of 47%. Source: IMF, Octoberb2017.
Regulations Mobile telephony
OVERVIEW COMPETITION AND MARKET SHARE The regulatory framework for telecommunications in Togo is M .'!0 0.!* / %* N%#!. governed by Lawb2012-018 of Decemberb17, 2012 on electronic communications, as amended by Lawb2013-003 of Februaryb19, 2013. 45% The Telecommunications Regulatory Authority (Autorité de Régulation 39% 41% des Télécommunications, ART&P) is a legal entity with independent 8.4 management and financial autonomy. It is under the technical 7.4 supervision of the ministry responsible for the telecommunications 6.9 sector. The responsibilities of ART&P include implementing and monitoring the application of the legislation in force. The main legislative instruments adopted to date to implement the Telecommunications Act are Decreeb2014-088/PR of Marchb31, 2014 governing the legal arrangements applicable to electronic communications and Decreeb2014-112/PR of Aprilb30, 2014 on interconnection and access to electronic communications networks.
MAIN REGULATORY OBLIGATIONS APPLYING TO AT TOGO AT Togo is required to pay annual operating royalties equivalent 2015 2016 2017 to 3% of taxable annual revenues. This contribution is allocated as follows: 66.66% for the universal telecommunications service, Customer base (in millions) Penetration rate 22.23% for regulation and 11.11% for telecommunications research and development. Source: IMF and Dataxis AT TOGO LICENSES N%#!.% * ) .'!0 /$ .! 0 D! !) !. ,
Licenses and % authorization Award date Expiration Date Term 6 Niger Telecom 2G Decemberb2009 Decemberb2021 12byears 25% 3Gb(a) Januaryb2016 Decemberb2021 6 years 46% Moov Niger Airtel (a) 2G license extended to include 3G.
2017 HIGHLIGHTS 22% Regulatory highlights for 2017: Orange Niger – continuing discussions with the authorities to grant a 4G license; – creation of the Togo Internet Exchange Point (TGIX). Source: Dataxis
Moov Niger’s Mobile business consists of prepaid and postpaid services through voice and data (mainly SMS) plans. It also provides roaming services for its mobile subscribers abroad and for customers of foreign partner operators visiting Niger. To provide these services, Moov Niger relies on a network of 514 BTS located throughout the country. In addition to its 3G service (launched in Julyb2017), Moov Niger offers an m-payment service under the Flooz brand.
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At Decemberb31, 2017, Niger had 8.4 million Mobile customers, 2017 HIGHLIGHTS representing a penetration rate of 45%, up 10 points in one year. Regulatory highlights for 2017: In this market, three operators are active alongside Moov Niger: Airtel – the invitation to tender issued by the regulator in Augustb2017 Niger, Orange Niger and Niger Telecom (formed on Septemberb28, for a 4G license; 2016 by the merger of two Nigerien state-owned telecom companies – the cancellation of the levy on inbound international trafƓ c, the Sonitel and Sahelcom). cancellation of part of the TURTEL (250 CFA/SIM sold or attached) PERFORMANCE and the lowering of the SU contribution from 4% to 2% of revenue; – a Ɠ ne of 423 million CFA imposed by the regulator for failing to Moov Niger’s mobile customer base changed as follows: provide an adequate quality of service. Third-party operators were also penalized. AT Niger appealed the decision. Unit 2017 2016 2015 Mobile customer base (000) 2,114 1,418 810 CENTRAL AFRICAN REPUBLIC 3 At Decemberb31, 2017 Moov Niger had 2.1 million Mobile customers Macroeconomic indicators (mainly prepaid), a year-on-year increase of 49%. Moov Niger increased its market share by 5 points in one year to reach 24.3% at end-Decemberb2017 and become the second-largest mobile 2017 2016 2015 operator in Niger. Population (000) 4,983 4,888 4,794 Regulations GDP per capita (in USD) 681 652 628 GDP growth +4.7% +4.5% +4.8% OVERVIEW InŴ ation +3.8% +4.6% +4.5% The regulatory framework for telecommunications in Niger is governed by Order 99-045 of Octoberb26, 1999 on the regulation Source: IMF, Octoberb2017. of telecommunications, as amended by Order 2010-89 of Decemberb16, 2010. Mobile telephony The Regulatory Authority for Telecommunications and Postal Services (ARTP) is responsible for regulating, controlling and monitoring the COMPETITION AND MARKET SHARE telecommunications sector, in accordance with Lawb2012-70 of M .'!0 0.!* / %* C!*0. ( A".% * R!,1 (% Decemberb31, 2012.
The main legislative instruments implementing the 20% Telecommunications Law are Decreeb2000-399 of Octoberb20, 2000 19% 18% relating to the general terms and conditions of interconnection, Decree 2000-371 laying down the terms for setting and monitoring 0.98 rates for telecommunications services and Decree 2012-527 of 0.93 0.90 Decemberb6, 2012 on the sharing of infrastructure.
MAIN REGULATORY OBLIGATIONS APPLYING TO AT NIGER AT Niger is required to pay various sector fees and contributions. These include an annual universal-service contribution of no more than 2% of revenues, net of taxes. It is also required to pay regulatory fees of no more than 2% of revenues, net of taxes, and an annual research and training contribution of no more than 1% of revenues, net of interconnection charges. Since Julyb1, 2016, AT Niger has also had to pay a Tax on the 2015 2016 2017 Use of Telecommunications Networks (TURTEL) equal to 3% of revenue excluding interconnection charges and a levy on incoming Customer base (in millions) Penetration rate international trafƓ c of 25 CFA/min (previously 88 CFA/min).
AT NIGER LICENSES Source: IMF and Dataxis
Licenses and authorization Award date Expiration Date Term 2G Decemberb2015 Decemberb2030 15byears 3G Juneb 2015 Juneb 2032 15byears
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CAR ) .'!0 /$ .! 0 D! !) !. , The process of notiƓ cation of the regulatory framework, which was suspended following the events in the Central African Republic, was 16% relaunched and is expected to be Ɠ nalized in 2017. 21% Moov Centrafrique Telecel RCA MAIN REGULATORY OBLIGATIONS APPLYING TO AT CENTRE AFRIQUE 18% AT Centre Afrique is required to pay sector contributions and royalties, Azur RCA which may not exceed 3.5% of its annual revenue, and pays a tax on incoming international trafƓ c in the amount of 40bCFAbfranc/min. 45% Orange Centrafrique On Decemberb14, 2015 AT Centre Afrique signed the speciƓ cations for its technologically neutral license.
Source: Dataxis AT CENTRE AFRIQUE LICENSES
Moov Centrafrique’s Mobile business consists of prepaid and postpaid services through voice and data (mainly SMS) plans. It also Licenses and provides roaming services for its mobile subscribers abroad and for authorization Award date Expiration Date Term customers of foreign partner operators visiting the CAR. Global mobile Juneb2008 Juneb2038 30 years At Decemberb31, 2017, the Central African Republic had 895bthousand Mobile customers, representing a penetration rate of 18%. 2017 HIGHLIGHTS In this market, three operators are active alongside Moov Regulatory highlights for 2017: Centrafrique: Telecel RCA, Orange Centrafrique and Azur RCA. – the suspension and later withdrawal of the decree raising the levy Moov Centre Afrique relies on an 82 BTS network to provide its on inbound international calls from 40 CFA/min to 260 CFA/min; services. – the granting of a 3G license to AT RCA. PERFORMANCE Moov Centreafrique’s mobile customer base changed as follows: 3.2.2.7 CASANET
A wholly owned Maroc Telecom subsidiary, Casanet is a major player Unit 2017 2016 2015 in New Information and Communication Technologies (NICT) in Morocco. These services are organized into networks and systems, Mobile customer base (000) 144 144 149 IT solutions, Cloud Computing and online content and services. – Networks and Systems: At Decemberb31, 2017 Moov Centrafrique had 144,000 Mobile customers (almost all prepaid), more or less unchanged from — networks; 2016. Moov Centrafrique had a market share of 15% at end- — security;
Decemberb2017. — systems; seamless communications. Regulations — – IT solutions: OVERVIEW — speciƓ c development; The legal framework applicable to the electronic communications — business solutions (CRM tool). sector in the Central African Republic is essentially based – Cloud services: on Lawb 07.020 of Decemberb 28, 2007 on the regulation of — hosting; telecommunications in the Central African Republic and Lawb07.021 integration of SMS campaign solutions; of Decemberb28, 2007 on taxes and royalties for the operation of — telecommunications networks and services applicable throughout — GPS technology; the national territory. — collaboration;
Agence de Régulation des Télécommunications (ART), the — My Cloud. Telecommunications Regulatory Agency, is an independent public – Online Content and services: agency under the supervision of the Telecommunications Minister. — production of digital content and online services for Menara. The principal implementing texts of the laws of Decemberb28, 2007 ma (editorial team of the online newspaper Menara.ma, various are: Decreeb09.209 deƓ ning the conditions for implementation of services for the public such as Menara Jobs, Menara Real Estate 07.020; Order 013/MPTNT/09 of Decemberb3, 2009 establishing and classiƓ ed ads); the international receiving rates for the Central African Republic, — online directory service www.pj.ma; amended by Order 013 of Octoberb29, 2010; Decreeb020/MPTNT/09 of Julyb31, 2009 deƓ ning the regulatory fee procedures for existing — mobile sites. licenses for the establishment and operation of telecommunications networks and services throughout the national territory; and Order 489/MPTNT/DIRCAB/DGART of Novemberb17, 2008 stipulating the general conditions for the establishment and operation of public telecommunications networks and services.
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3.3 _ Legal and arbitration proceedings
To the Company’s knowledge, there are no pending or potential Notebthat Telecel Benin is not one of the companies that Itissalat government, legal, or arbitration proceedings that may have or have Al-Maghrib acquired from Etisalat Group in 2015. had in the past 12bmonths a signiƓ cant effect on the Company and/ SARCIbhas taken measures to enforce this decision against Itissalat Al- or the Group’s Ɠ nancial position or proƓ ts, with the exception of the Maghrib subsidiaries (Etisalat Benin, Atlantique Telecom TogobSA and following disputes: Atlantique Telecom CentrafriquebSA). However, Itissalat Al-Maghrib considers these enforcement measures to be unfair on the grounds SARCI SARL dispute (subsidiary) that these subsidiaries have no direct involvement with the original dispute. It has therefore commenced defense proceedings, some of A dispute between Société Africaine des Relations Commerciales which have already led to the measures being lifted. et Industrielles (SARCI) and Atlantique TelecombSA, a subsidiary of Etisalat Group, resulted in an arbitral award ordering the latter to pay Furthermore, Etisalat Group has commenced proceedings to set 3 damages of 271,957,733,645bCFAbfranc (around MADb4.5bbillion), aside the initial arbitral award that prompted these actions. plus interest, for the loss thatbSARCI estimates that it incurred as a shareholder of Telecel Benin during the period of 2002-2007.
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4.1 CONSOLIDATED RESULTS OF THE PAST THREE YEARS 106 4.1.1 Consolidates results in moroccan dirhams 106 4.1.2 Consolidated results in euros 107
4.2 OVERVIEW 109 4.2.1 Scope of consolidation 109 4.2.2 Comparison of results by geographical area 110 4.2.3 Transition from separate Ɠnancial statements to consolidated Ɠnancial statements 119
4.3 CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2015, 2016 AND 2017 120 Statutory auditors’ report on the consolidated Ɠnancial statements year ended 31 December 2017 121 Consolidated statement of Ɠnancial position 122 Consolidated statement of comprehensive income 123 Consolidated statement of cash Ŵow 124 Consolidated statement of changes in equity 125
4.4 STATUTORY FINANCIAL STATEMENTS 166 Statutory auditors’ general report year ended December 31, 2017 167 Assets 168 Shareholders’equity and liabilities 169 Statement of comprehensive income (exclusive of VAT) 170 Statement of operating data 171 Statement of cash Ŵows 172 Statutory Auditors’ Special Report on the Ɠnancial statements for the Ɠscal year January 1 to December 31, 2017 191
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4.1 _ Consolidated results of the past three years
Maroc Telecom Group’s consolidated Ɠ nancial data is summarized in consolidated financial statements prepared in compliance with the following table. Selected Ɠ nancial data from the three Ɠ scalbyears International Financial Reporting Standards (IFRS) as adopted by the ended 31bDecemberb2015, 2016, and 2017, were drawn from Group European Union (EU) and audited by the Statutory Auditors.
4.1.1 CONSOLIDATES RESULTS IN MOROCCAN DIRHAMS
STATEMENT OF COMPREHENSIVE INCOME
(in MAD million) 2017 2016 2015 REVENUES 34,963 35,252 34,134 Operating expenses 24,653 24,784 23,794 EARNINGS FROM OPERATIONS 10,310 10,468 10,340 Earnings from continuing operations 10,278 10,421 10,294 NET EARNINGS 6,579 6,628 6,577 Attributable to equity holders of the parent 5,706 5,598 5,595 EARNINGS PER SHARE (IN MAD) 6.49 6.37 6.36 Diluted earnings per share (in MAD) 6.49 6.37 6.36
STATEMENT OF FINANCIAL POSITION
ASSETS
(in MAD million) 2017 2016 2015 Non-current assets (a) 48,879 46,322 45,660 Current assets 13,803 14,974 14,889 TOTAL ASSETS 62,682 61,296 60,549
(a) In accordance with IFRSb3, the Ɠ nancial statements at 31bDecemberb2015 (goodwill and trade accounts payable) have been restated for the impact of the Ɠ nal purchase price allocation for Moov subsidiaries.
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SHAREHOLDERS’ EQUITY AND LIABILITIES
(in MAD million) 2017 2016 2015 Share capital 5,275 5,275 5,275 Shareholders’equity, attributable to equity holders of the parent 15,835 15,476 15,344 Non-controlling interests 3,916 3,822 4,360 Shareholders’equity 19,750 19,298 19,704 Non-current liabilities 5,014 5,402 6,855 Current liabilities (a) 37,918 36,596 33,990 TOTAL SHAREHOLDERS’EQUITY AND LIABILITIES 62,682 61,296 60,549
(a) In accordance with IFRSb3, the Ɠ nancial statements at 31bDecemberb2015 (goodwill and trade accounts payable) have been restated for the impact of the Ɠ nal purchase price allocation for Moov subsidiaries.
4.1.2 CONSOLIDATED RESULTS IN EUROS 4
The Group reports its Ɠ nancial data in Moroccan dirhams. This sectionbis intended to provide investors with comparable data in euros.
For EUR 1 2017 2016 2015 The closing rate at the balance sheet 11. 2012 10. 6284 10. 8194 Average rate used for the income statement 10. 9257 10. 8505 10. 8196
The above table shows the average dirham/euro conversion rates expressed in dirhams were, could have been or could be converted used in preparing the Ɠ nancial statements for Ɠ scal years 2015, 2016 to euros at those exchange rates or at any other rate. and 2017. The following table shows selected Ɠ nancial data for Maroc Telecom The exchange rates are shown for indicative purposes only, to Group, presented in euros at the exchange rate used in preparing help the reader. The Group does not guarantee that the amounts the Group’s consolidated statement of Ɠ nancial position and income statement for Ɠ scal years 2015, 2016 and 2017.
STATEMENT OF COMPREHENSIVE INCOME
(in EUR million) 2017 2016 2015 REVENUES 3,200 3,249 3,155 Cost of purchases 2,256 2,284 2,199 EARNINGS FROM OPERATIONS 944 965 956 Earnings from continuing operations 941 960 951 NET EARNINGS 602 611 608 Attributable to equity holders of parent 522 516 517 EARNINGS PER SHARE (IN EUR) 0.59 0.59 0.59 DILUTED EARNINGS PER SHARE (IN EUR) 0.59 0.59 0.59
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STATEMENT OF FINANCIAL POSITION
ASSETS
(in EUR million) 2017 2016 2015 Non-current assets (a) 4,364 4,358 4,220 Current assets 1,232 1,409 1,376 TOTAL ASSETS 5,596 5,767 5,596
SHAREHOLDERS’ EQUITY AND LIABILITIES
(in EUR million) 2017 2016 2015 Share capital 471 496 488 Shareholders’equity, attributable to equity holders of the parent 1,414 1,456 1,418 Non-controlling interests 350 360 403 Shareholders’equity 1,763 1,816 1,821 Non-current liabilities 448 508 634 Current liabilities (a) 3,385 3,443 3,142 TOTAL SHAREHOLDERS’EQUITY AND LIABILITIES 5,596 5,767 5,596
(a) In accordance with IFRSb3, the Ɠ nancial statements at 31bDecemberb2015 (goodwill and trade accounts payable) have been restated for the impact of the Ɠ nal purchase price allocation for Moov subsidiaries.
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4.2 _ Overview
The discussion and analysis that follow should be read in conjunction with the entire document, particularly with the audited consolidated Ɠ nancial statements that comprise the statement of Ɠ nancial position, the statement of comprehensive income, the statement of cash Ŵ ows, the statement of changes in equity, and the notes to the Ɠ nancial statements for the years ended 31bDecemberb2015, 2016, and 2017.
4.2.1 SCOPE OF CONSOLIDATION
At 31bDecemberb2017, Maroc Telecom consolidated in its Ɠ nancial Etisalat Benin statements the entities: On 26bJanuaryb2015, Maroc Telecom acquired 100% of the capital of the Benin Mobile operator. Etisalat Benin has been fully consolidated Mauritel in the Ɠ nancial statements of Maroc Telecom since 31bJanuaryb2015. Maroc Telecom acquires on 12bAprilb2001, 51.5% of the voting rights 4 of Mauritel, the incumbent operator in Mauritania and operator of a Atlantique Telecom Togo Fixed-line and Mobile telecommunications network, subsequent to On 26bJanuaryb2015, Maroc Telecom acquired a 95% stake in the the merger of Mauritel SA (Ɠ xed line) and Mauritel Mobile. Mauritel capital of the Togo Mobile operator. Atlantique Telecom Togo has SA is owned by the holding company Compagnie Mauritanienne been fully consolidated in the Ɠ nancial statements of Maroc Telecom de Communications (CMC), in which Maroc Telecom holds an 80% since 31bJanuaryb2015. equity stake and consequently a 41.2% interest in Mauritel. Mauritel has been fully consolidated by Maroc Telecom since 1bJulyb2004. Atlantique Telecom Niger Onatel On 26bJanuaryb2015, Maroc Telecom acquired 100% of the capital of the Niger Mobile operator. Atlantique Telecom Niger has been On 29b Decemberb 2006, Maroc Telecom acquired 51% of the fully consolidated in the Ɠ nancial statements of Maroc Telecom since capital of the Burkina Faso operator Onatel, and 100% of its Mobile 31bJanuaryb2015. subsidiary, Telmob. Onatel has been fully consolidated by Maroc Telecom since 1bJanuaryb2007. Atlantique Telecom Centrafrique Gabon Telecom On 26bJanuaryb2015, Maroc Telecom acquired 100% of the capital of the Central African Republic Mobile operator. Atlantique Telecom On 9bFebruaryb2007, Maroc Telecom acquired 51% of the capital RCA has been fully consolidated in the Ɠ nancial statements of Maroc of Gabon Telecom. Gabon Telecom has been fully consolidated by Telecom since 31bJanuaryb2015. Maroc Telecom since 1bMarchb2007. Gabon Telecom bought out Maroc Telecom to acquire 100% of Prestige Telecom Côte d’Ivoire the subsidiary Atlantique Telecom Gabon, which was absorbed by Gabon Telecom on 29bJuneb2016. On 26bJanuaryb2015, Maroc Telecom acquired 100% of the capital of Prestige Telecom, the IT provider for the Atlantique Telecom Sotelma subsidiaries. Prestige Telecom has been fully consolidated in the Ɠ nancial statements of Maroc Telecom since 31bJanuaryb2015. On 31bJulyb2009, Maroc Telecom acquired a 51% stake in Mali’s incumbent operator, Sotelma. Sotelma has been fully consolidated Other nonconsolidated investments by Maroc Telecom since 1bAugustb2009. Investments whose impact is not material on Morocco Telecom Casanet Ɠ nancial statements or in which Maroc Telecom has no direct nor indirect exclusive control, joint control or signiƓ cant inŴ uence are not Casanet is a Moroccan provider of internet access created in 1995. consolidated and are accounted for in “Non-current Ɠ nancial assets”. In 2008, the company became a 100% subsidiary of Maroc Telecom This is the case for MT Fly as well as minority interests held in Médi1bTV, and expands its activities by specializing in information engineering. RASCOM, Autoroute Maroc, Arabsat and other participations. Casanet has been fully consolidated by Maroc Telecom since 1bJanuaryb2011.
Atlantique Telecom Côte d’Ivoire On 26bJanuaryb2015, Maroc Telecom acquired an 85% stake in the capital of the Ivory Coast Mobile operator. Atlantique Telecom Côte d’Ivoire has been fully consolidated in the Ɠ nancial statements of Maroc Telecom since 31bJanuaryb2015.
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4.2.2 COMPARISON OF RESULTS BY GEOGRAPHICAL AREA
Results by geographical area are as follows:
IFRS Changes at constant (i n MAD million) 2017 2016 Changes exchange rates (a) REVENUES 34,963 35,252 -0.8% -0.9% Ebitda 17,160 16,909 +1.5% +1.5% Margin (%) 49.1% 48.0% +1.1pts +1.2pts Adjusted Ebitab(c) 10,553 10,426 +1.2% +1.2% Margin (%) 30.2% 29.6% +0.6pt +0.6pt Group share of adjusted net incomeb(c) 5,871 5,622 +4.4% +4.1% Margin (%) 16.8% 15.9% +0.8pt +0.8pt Capexb(b) 8,232 7,983 +3.1% o/w frequencies & licenses 217 888 CAPEX/revenues (excluding frequencies & licenses) 22.9% 20.1% +2.8pt Adjusted CFFOb(c) 11,019 10,686 +3.1% Net debt 13,042 12,289 +6.1% Net debt/EBITDA 0.8 0.7
(a) At a constant exchange rate for the MAD, Ouguiya and CFA franc. (b) CAPEX corresponds to purchases of tangible and intangible assets recognized for the period. (c) Details of the Ɠ nancial indicator adjustments are provided in Appendixb1.
4.2.2.1 COMPARISON OF FINANCIAL DATA EARNINGS FROM OPERATIONS FOR FISCAL YEARS 2017 AND 2016 At 2017-end, Group consolidated adjusted earnings from operations (EBITA)b(2) amounted to MAD 10,553 million, up 1.2% vs. 2016 due to EBITDA growth. The adjusted EBITA margin improved by 0.6 points 4.2.2.1.1 Group Consolidated results to 30.2%.
REVENUES GROUP SHARE OF NET INCOME As of December-end 2017 Maroc Telecom Group’s consolidated The Group share of adjusted net income was MAD 5,871 million, revenuesb(1) amounted to MAD 34,963 million, slightly decreasing up 4.4%. This increase reŴ ects, in Morocco, the good resistance to by 0.8% (-0.9% at constant exchange rates). The 2.4% increase in VoIP applications and the substantial growth in net income from subsidiaries’ revenues at constant exchange rates offset the impact in International operations and particularly the new Moov subsidiaries, Morocco of the deregulation of IP telephony since Novemberb2016 which overall, at December-end 2017, produce a very substantially and the decline in call termination rates. Revenues from outgoing positive net income. services were up 3.7% thanks mainly to the growth in the customer base and increased Data usage. CASH FLOW The adjusted cash flow from operations (CFFO)b (3) amounted EARNINGS FROM OPERATIONS BEFORE DEPRECIATION AND to MAD 11,019 million, up 3.1% from 2016-end thanks to the AMORTIZATION increase in EBITDA, the close management of Working Capital At 2017-end, Maroc Telecom Group earnings from operations before Requirement (WCR) and despite the increase in capital expenditure depreciation and amortization (EBITDA) amounted to MAD 17,160 that represented 23% of revenues over the full year (excluding million, up 1.5% from the previous year (+1.5% at constant exchange frequencies and licenses). rates). The EBITDA margin increased by 1.2 points over the year (at constant exchange rates) to 49.1% thanks to signiƓ cant optimization efforts resulting in a 2.3% decrease in Group’s operating costs, as well as the impact of the decreases in Mobile call termination rates in the subsidiaries.
(1) Maroc Telecom consolidates the following companies in its financial statements: Mauritel, Onatel, Gabon Telecom, Sotelma and Casanet, as well as the new African subsidiaries (in the Ivory Coast, Benin, Togo, Niger, and the Central African Republic) and Prestige Telecom, which has provided IT services to those companies since their acquisition on 26bJanuaryb2015. (2) EBITA corresponds to EBIT before the amortization of intangible assets acquired through business combinations, write-downs of goodwill and other intangible assets acquired through business combinations, and other income and expenses relating to financial investment transactions and transactions with shareholders (except when recognized directly in equity). (3) CFFO includes net cash flow from operations before tax, as set out in the cash flow statement, as well as the dividends received from companies booked at equity and non-consolidated equity investments. CFFO also includes net capital expenditure, which corresponds to net uses of cash for acquisitions and disposals of tangible and intangible assets.
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As of 31bDecemberb2017, the consolidated Maroc Telecom Group net MAROC TELECOM GROUP OUTLOOK FOR 2018 debtb(1) was up 6.1% at MAD 13 billion. Nevertheless, this represents On the basis of the recent changes in the market, to the extent that only 0.8 times the Group’s annual EBITDA. no new major exceptional event impacts the Group’s business, Maroc Telecom is projecting the following for 2018, at constant scope and DIVIDENDS exchange rates: The Supervisory Board of Maroc Telecom will propose to the General – Stable revenues; Shareholders’Meeting on 24bAprilb2018 to effect the payment of – Stable EBITDA; an ordinary dividend of MAD 6.48 per share, up 1.9% vs. 2016, representing a total amount of MAD 5.7 billion and corresponding – Capex amounting to around 23% of revenues, excluding to 100% of the Net ProƓ t. The dividend payment date would be from frequencies and licenses. 5bJuneb2018.
4.2.2.1.2 Activities in Morocco Details of the Ɠ nancial indicator adjustments for “Morocco” and “International” are provided in Appendixb1.
IFRS (in MAD million) 2017 2016 Changes REVENUES 20,481 21,244 -3.6% Mobile 13,335 14,115 -5.5% 4 Services 13,214 13,806 -4.3% Equipment 121 309 -60.9% Fixed-line 8,962 8,829 +1,5% including Fixed-line data (a) 2,664 2,427 +9.8% Eliminations and other revenues -1,816 -1,700 EBITDA 10,804 11,004 -1.8% Margin (%) 52.8% 51.8% +1.0pt Adjusted EBITA 6,954 7,157 -2.8% Margin (%) 34.0% 33.7% +0.3pt CAPEX 4,589 3,905 +17.5% including licenses and frequencies 61 CAPEX/Rev. (excluding licenses and frequencies) 22.1% 18.4% +3.7pt Adjusted CFFO 7,319 7,124 +2.7% Net debt 11,009 10,937 +0. 7% Net debt/EBITDA 1.0 1.0
(a) Fixed-line data includes internet, ADSL TV and data services to businesses.
In 2017, operations in Morocco generated revenues of MAD 20,481 Adjusted earnings from operations were MAD 6,954 million, down million, down 3.6%. The decline in incoming international trafƓ c 2.8% due to the decline in EBITDA. The adjusted EBITA margin induced by the deregulation of IP telephony in Novemberb2016 improved by 0.3 points vs. prior year to 34.0%. and the asymmetry of Mobile call termination rates since the Ɠ rst of Cash Ŵ ow from operations in Morocco was up 2.7% to more than Marchb2017 have weighed on Mobile revenues but are nevertheless MAD 7 billion, thanks to continued efforts to optimize Working partially offset by the increase in Fixed-line and Internet activities. Capital Requirements (WCR). The Fixed-line and Internet activities’growth combined to the savings coming from the voluntary redundancy plan and efforts to optimize costs have increased the EBITDA margin by 1.0 points to 52.8%.
(1) Borrowings and other current and non-current liabilities less cash and cash equivalents, including cash held in escrow for bank loans.
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MOBILE
Unit 2017 2016 Changes Customer baseb(a) (000) 18,533 18,375 +0.9% Prepaid (000) 16,766 16,645 +0.7% Postpaid (000) 1,767 1,729 +2.2% including internet 3G/4G+b(b) (000) 9,481 7,844 +20.9% ARPUb(c) (MAD/month) 58.0 61.1 -5.0%
(a) The active customer base consists of prepaid customers who have made or received a voice call (excluding ERPT or Call-Center calls) or received an SMS/MMS or used data services (excluding ERPT services) during the past three months, and postpaid customers who have not terminated their agreements. (b) The active customer base for 3G and 4G+ Mobile internet includes holders of a postpaid subscription agreement (with or without a voice offer) and holders of a prepaid internet subscription agreement who have made at least one top-up during the past three months or whose top-up is still valid and who have used the service during that period. (c) ARPU is deƓ ned as revenues (generated by inbound and outbound calls and by data services) net of promotional offers, excluding roaming and equipment sales, divided by the average customer base for the period. In this instance, blended ARPU covers both the prepaid and postpaid segments.
As of 31bDecemberb2017, the Mobile customer baseb(1) numbered Mobile Data continues to be very popular. The Mobile data customer 18.5 million customers, up 0.9% year-on-year, thanks to the 2.2% base increased by 21% and its trafƓ c by 78%, supported mainly by rise in postpaid customers and the 0.7% rise in prepaid customers. the extension of 4G+ network which covered 93% of the population at December-end 2017. Mobile revenues amounted to MAD 13,335 million, down 5.5% from 2016, suffering from the impact of deregulation of IP telephony Blended 2017 ARPUb (2) amounted to MAD 58, down by 5.0% since 2016 and the asymmetry of Mobile call terminations since compared to the same period in 2016 due to the decline in incoming Marchb2017. revenues. Outgoing revenues increased by 1.9% to MAD 10,511 million, driven by the sharp growth in Mobile data (+53%), which more than offset the decrease in Voice.
FIXED LINE AND INTERNET
Unit 2017 2016 Changes Fixed lines (000) 1,725 1,640 +5.2% Broadband accessb(a) (000) 1,363 1,241 +9.8%
(a) The broadband customer base includes ADSL and FTTH (Ɠ ber optic) access and leased lines in Morocco, as well as the CDMA customer base for the historical subsidiaries.
The Fixed-line customer base was 1.7 million lines at year-end 2017, Fixed-line and internet posted MAD 8,962 million in revenues, up up by a sustained 5.2%, thanks to the ADSL services. The broadband 1.5% vs. 2016 driven by the growth in customer base. customer base increased by 9.8% to nearly reach 1.4 million subscribers, driven by the enhancement of Double-Play packages and success of FTTH offers.
(1) The active customer base consists of prepaid customers who have made or received a voice call (excluding ERPT or Call-Center calls) or received an SMS/ MMS or used data services (excluding ERPT services) during the past three months, and postpaid customers who have not terminated their agreements. (2) ARPU is defined as revenues (generated by inbound and outbound calls and by data services) net of promotional offers, excluding roaming and equipment sales, divided by the average customer base for the period. In this instance, blended ARPU covers both the prepaid and postpaid segments.
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4.2.2.1.3 International activities
FINANCIAL INDICATORS
Changes IFRS on a likeĆforĆlike ( in MAD million) 2017 2016 Changes basis (a) REVENUES 15,733 15,326 +2.7% +2.4% o/w Mobile Services 14,274 13,815 +3.3% +3.1% EBITDA 6,357 5,905 +7.6% +7.6% Margin (%) 40.4% 38.5% +1.9pt +1.9pt Adjusted EBITA 3,599 3,268 +10.1% +10.2% Margin (%) 22.9% 21.3% +1.6pt +1.6pt CAPEX 3,643 4,077 -10.7% o/w licenses and frequencies 156 888 CAPEX/Rev. (excluding licenses and frequencies) 22.2% 20.8% +1.4pt Adjusted CFFO 3,700 3,563 +3.9% 4 Net Debt 5,767 4,670 +23.5% Net debt/EBITDA 0.9 0.8
(a) At a constant exchange rate for the MAD, Ouguiya and CFA franc.
At 2017-end, the Group’s International operations posted revenues to 40.4%, driven by the call termination rates and operating costs of MAD 15,733 million, up 2.7% (+2.4% at constant exchange rates) (-1.0% at constant exchange rates) decreases. driven by the 11.9% revenue increase (at constant exchange rates) Adjusted earnings from operations (EBITA) were MAD 3,599 million, of the new subsidiaries, offsetting the impacts of the drop in call up 10.2% at constant exchange rates mainly due to the increase in termination rates, of the erosion of the international incoming trafƓ c EBITDA. The EBITA margin rose by 1.6 points (at constant exchange and of the deactivation of unidentiƓ ed customers. rates) to 22.9%. At 2017-end, earnings from operations before depreciation and Adjusted cash Ŵ ow (CFFO) from international activities was up 3.9% amortization (EBITDA) amounted to MAD 6,357 million, up 7.6% at to MAD 3,700 million, despite the acceleration in capital expenditure constant exchange rates. The EBITDA margin increased by 1.9 points which reached more than 22% of revenues.
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OPERATING INDICATORS
Unit 2017 2016 Changes MOBILE Customer baseb(a) (000) 34,967 32,370 Mauritania 2,139 1,984 +7.8% Burkina Faso 7,19 6 7,017 +2.6% Gabon 1,547 1,690 -8.4% Mali 7,190 7,087 +1.5% Ivory Coast 7,734 6,840 +13.1% Benin 3,960 3,727 +6.2% Togo 2,943 2,463 +19.5% Niger 2,114 1,418 +49.0% Central African Republic 144 144 +0.1% FIXED-LINE Customer base (000) 302 291 Mauritania 51 48 +6.4% Burkina Faso 76 76 +0.4% Gabon Telecom 21 19 +12.6% Mali 155 149 +3.8% FIXED-LINE BROADBAND Customer baseb(b) (000) 107 99 Mauritanie 13 11 +18.6% Burkina Faso 13 14 -0.2% Gabon 16 13 +23.4% Mali 64 61 +4.9%
(a) The active customer base consists of prepaid customers who have made or received a voice call (excluding ERPT or Call-Center calls) or received an SMS/ MMS or used Data services (excluding ERPT services) during the past three months, and postpaid customers who have not terminated their agreements. (b) The broadband customer base includes ADSL and FTTH (Ɠ ber optic) access and leased lines in Morocco, as well as the CDMA customer base for the historical subsidiaries.
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APPENDIX 1 CHANGE FROM ADJUSTED FINANCIAL INDICATORS TO PUBLISHED FINANCIAL INDICATORS
Adjusted earnings from operations, Group share of adjusted net income, and adjusted cash Ŵ ow from operations, are not strictly accounting measures and should be considered as additional information. They are a better indicator of the Group’s performance as they exclude non- recurring items.
FY 2017 FY 2016
(in MAD million) Morocco International Group Morocco International Group Adjusted EBITA 6,954 3,599 10,553 7,157 3,268 10,426 NON-RECURRING ITEMS: Real estate sales +297 +297 Restructuring costs -193 -49 -243 -255 -255 PUBLISHED EBITA 6,760 3,550 10,310 6,902 3,565 10,468 Group share of adjusted net income 5,871 5,622 NON-RECURRING ITEMS: 4 Real estate sales +152 Restructuring costs -165 -176 PUBLISHED NET EARNINGS – GROUPbSHARE 5,706 5,598 Adjusted CFFO 7,319 3,700 11,019 7,124 3,563 10,686 NON-RECURRING ITEMS: Real estate sales +317 +317 Restructuring costs -579 -41 -620 License payments -61 -578 -639 -33 -33 PUBLISHED CFFO 6,679 3,081 9,761 7,124 3,847 10,970
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4.2.2.2 COMPARISON OF FINANCIAL DATA on a like-for-like basis), after incorporation of a MAD-255-million FOR FISCAL YEARS 2016 AND 2015 restructuring provision for a voluntary redundancy plan in Morocco. Excluding restructuring, Group EBITA would be MAD 10,723 million, up 3.7% (+3.5% on a like-for-like basis), with a margin of 30.4%, up 4.2.2.2.1 Group Consolidated results 0.3 points on a like-for-like basis.
REVENUES NET INCOME – SHARE OF THE GROUP As of December-end 2016, the Maroc Telecom Group reported Group share of net income was MAD 5,598 million, unchanged from consolidated revenues of MAD 35,252 million, up 3.3% on the 2015. Excluding restructuring expenses for the voluntary redundancy previous year (+2.4% on a like-for-like basis). This performance plan, net income would be up 3.2% to MAD 5,774 million reŴ ecting reŴ ects revenue growth from Moroccan activities (+1.0%) along with the increasing contribution of subsidiaries, especially those a steady international growth (+7.1% on a like-for-like basis). recently acquired which beneƓ t from business stimulation and cost optimization plans. EARNINGS FROM OPERATIONS BEFORE DEPRECIATION AND AMORTIZATION CASH FLOW At 2016-end, Maroc Telecom Group earnings from operations Cash Ŵ ow from operating activities (CFFO) was MAD 10,970 million, before depreciation and amortization (EBITDA) amounted to MAD up 17.2% compared to end-2015 due to the cash impact of MAD 2.7 16,909 million, up 1.0% from the previous year (+0.9% on a like-for- billion from 2015 license renewals (MAD 33 million in 2016) despite like basis). This like-for-like improvement comes from a 5.0% rise in continuing heavy Group capital expenditure in networks amounting international EBITDA which more than offsets the 1.3% decline in to 20.1% of 2016 revenue. EBITDA of Moroccan activities. Despite a slight 0.7 point like-for-like Although launched in Decemberb2016, the restructuring plan will decline, Group EBITDA margin remained high at 48.0%. not impact Group cash Ŵ ow until 2017.
EARNINGS FROM OPERATIONS As of 31bDecemberb2016, consolidated Maroc Telecom Group debt was down 2.1% to reach MAD 12.3 billion. This represents only 0.7 At 2016-end, Group consolidated earnings from operations (EBITA) times the Group’s annual EBITDA. were MAD 10,468 million, up 1.2% compared to 2015 (+1.7%
4.2.2.2.2 Activities in Morocco
IFRS (in MAD million) 2016 2015 REVENUES 21,244 21,033 Mobile 14,115 14,276 Services 13,806 14,058 Equipment 309 219 Fixe line 8,829 8,728 o/w Fixed-lineb(a) Data 2,427 2,263 Elimination and other revenues -1,700 -1,971 EBITDA 11,004 11,144 Margin (%) 51.8% 53.0% EBITA before restructuring 7,157 7,386 Margin (%) 33.7% 35.1% EBITA after restructuring 6,902 7,386 CAPEX 3,905 4,792 o/w licenses & frequencies - 926 CAPEX/Revenues (excluding licenses and frequencies) 18.4% 18.4% CFFO 7,124 6,576 Net debt 10,937 11,741 Net debt/EBITDA 1.0x 1.0x
(a) Fixed-line data included internet, ADSL TV, and data services to businesses.
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During Ɠ scal year 2016, operations in Morocco generated revenues Earnings from operations were MAD 6,902 million, down 6.5% of MAD 21,244 million, up 1.0%. Fixed-line and Internet activities reŴ ecting the decline in EBITDA, the 2.3% increase in depreciation continued growing (+1.1% compared to 2015) and, along with the charges and the restructuring provisions for the voluntary redundancy larger contribution from subsidiaries, offset the 1.1% decline in plan amounting to MAD 255 million. Excluding restructuring, EBITA Mobile revenues due to a more stringent regulatory environment was down by 3.1% to MAD 7,157 million, representing a margin of and the cannibalization of international trafƓ c by VoIP. 33.7%. Earnings from operations before interest, amortization and Cash Ŵ ow from operations in Morocco was up 8.3% at MAD 7,124 depreciation (EBITDA) were MAD 11,004 million, down 1.3% from million, after paying MAD 926 million in 2015 for 4G licenses and 2015 due to lower gross margin and a slight increase in operating frequencies and despite the faster pace of capital investment in Very costs (+2.4%). Although down 1.2 points, EBITDA margin was still High Speed Fixed and Mobile technology that reached 18.4% of high at 51.8%. 2016 revenue.
MOBILE
Unit 2016 2015 Customer base (000) 18,375 18,298 Prepaid (000) 16,645 16,649 Postpaid (000) 1,729 1,649 4 o/w internet 3G/4G+ (000) 7,844 6,502 ARPU (in MAD/month) 61.1 62.5
31b Decemberb 2016, the Mobile customer base comprised weighed on Mobile revenues which amounted to MAD 13,806 18.4bmillion clients, up 0.4% year-on-year, driven by the 4.9% increase million, down 1.8% from 2015. in postpaid customers and Mobile internet subscribers who were Blended 2016 ARPU was nearly MAD 61, slightly down by 2.2% up 21% over the year. As for the prepaid customer base was steady compared to the same period in 2015. over the year. With an 96% increase in trafƓ c, Mobile data continued to take off, The drop in Mobile revenues continued to lessen (-1.1% in 2016 vs. supported by the rapid expansion of 3G and 4G+ networks covering -6.2% in 2015) thanks to increased Data trafƓ c. The 12.7% decline in 87% and 73% of the population respectively. prices and the impact of VoIP on the international incoming trafƓ c
FIXED-LINE AND INTERNET
Unit 2016 2015 Fixed-line (000) 1,640 1,583 Broadband access (000) 1,241 1,136
The Fixed-line customer base was 1.6 million lines at December-end Fixed-line and internet continued their solid growth with MAD 2016, up 3.6%, driven by the Residential segment which increased its 8,829 million in revenues, up 1.1% compared to the same period customer numbers by 6.0%. Driven by Double-Play plans, the ADSL the previous year, sustained by the growth of Data whose revenues base grew by 9% to 1.2 million subscribers. grew by 7.2%.
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4.2.2.2.3 International activities
FINANCIAL INDICATORS Since 26bJanuaryb2015, the acquisition completion date, international activities include the new subsidiaries in Ivory Coast, Benin, Togo, Niger and Central African Republic, as well as Prestige Telecom which provides IT services to those entities.
IFRS Changes on a (in MAD million) 2016 2015 Changes likeĆforĆlike basis REVENUES 15,326 14,010 +9.4% +7.1% o/w Mobile services 13,815 12,589 +9.7% +7.2% EBITDA 5,905 5,599 +5.5% +5.0% Margin (%) 38.5% 40.0% -1.4pt -0.8pt EBITA 3,565 2,954 +20.7% +22.0% Margin (%) 23.3% 21.1% +2.2pt +2.9pt CAPEX 4,077 4,043 +0.9% o/w licenses & frequencies 888 1,696 CAPEX/Revenues (excl. licenses and frequencies) 20.8% 16.8% +4.0pt CFFO 3,847 2,785 38.1% Net Debt 4,670 4,679 Net debt/EBITDA 0.8x 0.8x
At December-end 2016, Group international activities reported Earnings from operations amounted to MAD 3,565 million, up 20.7% MAD 15,326 million revenue, up 9.4% (+7.1% on a like-for-like basis) (+22.0% on a like-for-like basis) reŴ ecting the increase in EBITDA, and reŴ ecting increasing revenues by new subsidiaries (+14.6% on a like- the capital gain realized from the sale of a real estate asset (MAD 297 for-like basis), especially Ivory Coast and Niger, as well as historic million). The EBITA margin was 23.3%, up 2.2 points (+2.9 points on subsidiaries (+3.6% at constant change). a like-for-like basis). Earnings from operations before interest and depreciation (EBITDA) Cash Ŵ ow from international operations was up 38.1% compared at end-2016 amounted to MAD 5,905 million, up 5.5% (+5.0% to 2015, driven by EBITDA growth, the sale of real estate, and on a like-for-like basis) despite new taxes and royalties and non- the positive comparative effect from licenses payment in 2015 (in recurring charges. Excluding scope effects (full-year consolidation Mauritania, Niger, Gabon, and Côte d’Ivoire) amounting to MAD of new subsidiaries), and non-recurring items, EBITDA margin on 1,787 million. Capital expenditure in networks increased to 20.8% international operations would remain stable, with cost optimization of revenues (compared to 16.8% in 2015) to support business growth programs offsetting new taxes and royalties. particularly in Fixed-line and Mobile data, and the gain in market share.
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OPERATIONAL INDICATORS
Unit 2016 2015 Change MOBILE Customer base (000) 32,370 29,424 Mauritania 1,984 2,121 -6.4% Burkina Faso 7,017 6,760 +3.8% Gabon Telecom 1,690 1,597 +5.8% Mali 7,087 7,431 -4.6% Ivory Coast 6,840 5,151 +32.8% Benin 3,727 3,266 +14.1% Togo 2,463 2,141 +15.0% Niger 1,418 810 +75.2% Central African Republic 144 149 -3.1% FIXED LINE 4 Customer base (000) 291 277 Mauritania 48 45 +5.6% Burkina Faso 76 75 +0.9% Gabon Telecom 19 19 +0.6% Mali 149 138 +8.2% BROADBAND ACCESS Customer base (000) 99 93 Mauritania 11 10 +10.0% Burkina Faso 14 15 -9.0% Gabon Telecom 13 11 +18.3% Mali 61 58 +6.4%
4.2.3 TRANSITION FROM SEPARATE FINANCIAL STATEMENTS TO CONSOLIDATED FINANCIAL STATEMENTS
The consolidated Ɠ nancial statements are derived from the separate – elimination of capitalized costs from the balance sheet and financial statements of Maroc Telecom and its subsidiaries, as recognition in the income statement of the change in the period; prepared under the generally accepted accounting principles of – recognition in the income statement of foreign currency each country. Various adjustments have been made to these separate translations adjustments (liabilities); financial statements, in compliance with IFRS consolidation and – presentation requirements. recognition of the impact of unwinding the retirement beneƓ ts provision discounting in Ɠ nancial income; The main adjustments to the presentation of the statement of – capitalization of deferred taxes on temporary differences arising comprehensive income are the: from the separate Ɠ nancial statements, IFRS adjustments and tax – elimination of revenues related to cancelled subscriptions between loss carryforwards; the date of cancellation and the end of the subscription period; – reclassification under net operating income of noncurrent – reclassiƓ cation of thebFidelio (loyalty awards program) provision, operating items, and under net Ɠ nancial income of noncurrent which is netted against revenues; Ɠ nancial items; – recognition of resellers’commissions as consolidated operating – reclassiƓ cation under current assets of assets held for sale; expenses. These costs were initially netted against revenues in the – reclassiƓ cation of the corporate income tax liability component separate Ɠ nancial statements; of tax debts; – activation of payroll costs relating to the deployment of Ɠ xed – reclassiƓ cation under current items, of loan, Ɠ nancial debt and assets; provision components maturing in less than a year. – recognition of SIM cards in intangible assets; Other consolidation adjustments concern to all consolidation – inventory values of handsets sold but not activated are adjusted to transactions (elimination of consolidated securities, intercompany account for the recognition of revenues upon activation; transactions and internal capital gains or losses, etc.).
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4.3 _ Consolidated financial statements at 31 December 2015, 2016 and 2017
LIST OF CONTENTS TO THE NOTES TO THE FINANCIAL STATEMENTS
Pursuant to regulation (EC) no.b1606/2002 of the European Parliament of 19bJulyb2002, Maroc Telecom Group’s consolidated Ɠ nancial statements have been prepared in accordance with International Financial Reporting Standards (IAS/IFRS), as endorsed by the European Union. STATUTORY AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2017 121 CONSOLIDATED STATEMENT OF FINANCIAL POSITION 122 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 123 CONSOLIDATED STATEMENT OF CASH FLOW 124 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 125 NOTE 1 ACCOUNTING PRINCIPLES AND VALUATION METHODS 127 NOTE 2 SCOPE OF CONSOLIDATION 134 NOTE 3 GOODWILL 136 NOTE 4 OTHER INTANGIBLE ASSETS 137 NOTE 5 PROPERTY, PLANT, AND EQUIPMENT 139 NOTE 6 INVESTMENTS IN EQUITY AFFILIATES 142 NOTE 7 NONCURRENT FINANCIAL ASSETS 142 NOTE 8 CHANGE IN DEFERRED TAXES 143 NOTE 9 INVENTORIES 144 NOTE 10 TRADE ACCOUNTS RECEIVABLE AND OTHER 145 NOTE 11 CURRENT FINANCIAL ASSETS 146 NOTE 12 CASH AND CASH EQUIVALENTS 146 NOTE 13 DIVIDENDS 147 NOTE 14 PROVISIONS 147 NOTE 15 BORROWINGS AND OTHER FINANCIAL LIABILITIES 149 NOTE 16 TRADE ACCOUNTS PAYABLE 152 NOTE 17 REVENUES 153 NOTE 18 COST OF SALES 153 NOTE 19 PAYROLL COSTS 153 NOTE 20 TAXES, DUTIES, AND FEES 154 NOTE 21 OTHER OPERATING INCOME AND EXPENSES 154 NOTE 22 DEPRECIATION, IMPAIRMENT AND PROVISIONS 154 NOTE 23 INCOME FROM EQUITY AFFILIATES 155 NOTE 24 NET FINANCIAL INCOME OR EXPENSE 155 NOTE 25 TAX EXPENSE 156 NOTE 26 NONCONTROLLING INTERESTS 157 NOTE 27 EARNINGS PER SHARE 157 NOTE 28 SEGMENT DATA 158 NOTE 29 RESTRUCTURING PROVISIONS 160 NOTE 30 RELATED-PARTY TRANSACTIONS 160 NOTE 31 CONTRACTUAL COMMITMENTS AND CONTINGENT ASSETS AND LIABILITIES 161 NOTE 32 RISK MANAGEMENT 164 NOTE 33 EVENTS AFTER THE END OF THE REPORTING PERIOD 165
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STATUTORY AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2017
To shareholders of Itissalat Al Maghrib “IAM” SA in accordance with Moroccan Standards on Auditing. Those Avenue Annakhil, Hay Riad standards require that we comply with ethical requirements and Rabat, Maroc plan and perform the audit to obtain reasonable assurance that the consolidated financial statements are free from material We have audited the accompanying consolidated financial misstatement. statements of ITISSALAT Al MAGHRIB (IAM) SA and its subsidiaries An audit involves performing procedures to obtain audit evidence (the Group), which comprise the consolidated statement of Ɠ nancial about the amounts and disclosures in the consolidated Ɠ nancial position as at Decemberb31st 2017, the consolidated statement of statements. The procedures selected depend on the auditor’s comprehensive income, the consolidated statement of changes in judgment, including the assessment of the risks of material equity and the consolidated statement of cash Ŵ ows for the years then misstatement of the consolidated financial statements, whether ended, and a summary of signiƓ cant accounting policies and other due to fraud or error. In making those risk assessments, the auditor explanatory information. These consolidated Ɠ nancial statements considers internal control relevant to the entity’s preparation and show an amount of consolidated equity of MMAD 19.750 including fair presentation of the consolidated Ɠ nancial statements in order to a consolidated net proƓ t of MMAD 6.579. design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness 4 MANAGEMENT’S RESPONSIBILITY FOR THE of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting CONSOLIDATED FINANCIAL STATEMENTS policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the Management is responsible for the preparation and fair presentation consolidated Ɠ nancial statements. of these consolidated financial statements in accordance with International Financial Reporting Standards as adopted by the We believe that the audit evidence we have obtained is sufƓ cient and European Union (EU). This responsibility includes planning, appropriate to provide a basis for our audit opinion. implementing, and monitoring internal controls relating to the preparation and presentation of Ɠ nancial statements that are free of material misstatement, whether due to fraud or error, and selecting OPINION accounting estimates that are appropriate for the circumstances. In our opinion, the consolidated Ɠ nancial statements referred to in the Ɠ rst paragraph above provide in all material aspects a true and fair AUDITOR’S RESPONSIBILITY view of the Ɠ nancial position of the Group comprising the persons and entities of Itissalat Al-Maghrib (IAM) SA at Decemberb31st 2017, Our responsibility is to express an opinion on these consolidated and the Ɠ nancial performance and cash Ŵ ows for the Ɠ scal year then Ɠ nancial statements based on our audit. We conducted our audit ended, in accordance with the International Financial Reporting Standards (IFRS), as adopted by the European Union.
Casablanca, Februaryb16th 2018 The Statutory auditors DELOITTE AUDIT ABDELAZIZ ALMECHATT French original sign by French original sign by Sakina Bensouda-Korachi Abdelaziz Almechatt Partner Partner
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION
ASSETS
(in MAD million) Note Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2015 Goodwill (a) 3 8,695 8,360 8,440 Other intangible assets 4 7,485 7,378 7,123 Property, plant, and equipment 5 32,090 29,981 29,339 Investments in equity afƓ liates 6000 Noncurrent Ɠ nancial assets 7 335 327 329 Deferred tax assets 8 273 276 429 NONCURRENT ASSETS 48,879 46,322 45,660 Inventories 9 296 324 375 Trade accounts receivable and other 10 11,325 12,001 11,192 Short term Ɠ nancial assets 11 119 156 126 Cash and cash equivalents 12 2,010 2,438 3,082 Assets available for sale 54 54 113 CURRENT ASSETS 13,803 14,974 14,889 TOTAL ASSETS 62,682 61,296 60,549
SHAREHOLDERS’ EQUITY AND LIABILITIES
(in MAD million) Note Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2015 Share capital 5,275 5,275 5,275 Retained earnings 4,854 4,604 4,474 Net earnings 5,706 5,598 5,595 Shareholders’equity attributable to equity holders of the parent 13 15,835 15,476 15,344 Noncontrolling interests 3,916 3,822 4,360 SHAREHOLDERS’EQUITY 19,750 19,298 19,704 Noncurrent provisions 14 570 470 535 Borrowings and other long-term Ɠ nancial liabilities 15 4,200 4,666 6,039 Deferred tax liabilities 8 244 266 282 Other noncurrent liabilities 0 0 0 NONCURRENT LIABILITIES 5,014 5,402 6,855 Trade accounts payable (a) 16 25,627 24,626 22,827 Current tax liabilities 563 651 714 Current provisions 14 838 1,208 834 Borrowings and other short term Ɠ nancial liabilities 15 10,890 10,110 9,615 CURRENT LIABILITIES 37,918 36,596 33,990 TOTAL SHAREHOLDERS’EQUITY AND LIABILITIES 62,682 61,296 60,549
(a) In accordance with IFRSb3, the Ɠ nancial statements at 31bDecemberb2015 (goodwill and trade accounts payable) have been restated for the impact of the Ɠ nal purchase price allocation for Moov subsidiaries.
122 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT Consolidated U nancial statements at 31 December 2015, 2016 and 2017
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(in MAD million) Note 2017 2016 2015 REVENUES 17 34,963 35,252 34,134 Cost of purchases 18 -5,937 -6,223 -6,046 Payroll costs 19 -3,138 -3,260 -3,245 Taxes and duties 20 -2,838 -2,971 -2,377 Other operating income (expenses) 21 -6,183 -5,486 -5,323 Net depreciation, amortization, and provisions 22 -6,557 -6,845 -6,804 EARNINGS FROM OPERATIONS 10,310 10,468 10,340 Other income and charges from ordinary activities -32 -47 -46 Income from equity afƓ liates 23000 EARNINGS FROM CONTINUING OPERATIONS 10,278 10,421 10,294 Income from cash and cash equivalents 6 10 14 4 Gross borrowing costs -497 -333 -454 Net borrowing costs -491 -322 -439 Other Ɠ nancial income and expenses -1 -124 -126 Net Ɠ nancial income (expense) 24 -491 -446 -565 Income tax 25 -3,208 -3,347 -3,152 NET INCOME 6,579 6,628 6,577 Exchange gain or loss from foreign activities 463 -276 -78 Other income and expenses -45 -23 1 TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 6,997 6,329 6,499 NET INCOME 6,579 6,628 6,577 Attributable to equity holders of the parent 5,706 5,598 5,595 Noncontrolling interests 26 873 1,031 982 TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 6,997 6,329 6,499 Attributable to equity holders of the parent 5,940 5,438 5,547 Noncontrolling interests 26 1,014 891 953
Earnings per share Note 2017 2016 2015 Net earnings attributable to equity holders of the parent (inbMADbmillion) 5,706 5,598 5,595 Number of shares at Decemberb31st 879,095,340 879,095,340 879,095,340 NET EARNINGS PER SHARE (IN MAD) 27 6.49 6.37 6.36 DILUTED NET EARNINGS PER SHARE (IN MAD) 27 6.49 6.37 6.36
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CONSOLIDATED STATEMENT OF CASH FLOW
(in MAD million) Note 2017 2016 2015 Earnings from operations 10,310 10,468 10,340 Depreciation, amortization and other non-cash movements 6,582 6,548 6,804 GROSS CASH FROM OPERATING ACTIVITIES 16,892 17,016 17,143 Other changes in net working capital 1,189 -145 444 NET CASH FROM OPERATING ACTIVITIES BEFORE TAX 18,081 16,871 17,587 Income tax paid -3,170 -3,388 -3,018 NET CASH FROM OPERATING ACTIVITIESb(A) 12 14,911 13,483 14,569 Purchase of PP&E and intangible assets -8,370 -6,251 -8,352 Purchases of consolidated investments after acquired cash 0 -66 -51 Investments in equity afƓ liates 0 0 0 Increase in Ɠ nancial assets -319 -219 -467 Disposals of PP&E and intangible assets 0 414 2 Decrease in Ɠ nancial assets 622 22 30 Dividends received from nonconsolidated investments 6 5 9 NET CASH USED IN INVESTING ACTIVITIESb(B) -8,061 -6,094 -8,828 Capital increase -122 Dividends paid by Maroc Telecom 13 -5,598 -5,590 -6,065 Dividends paid by subsidiaries to their noncontrolling interests -921 -1,210 -996 CHANGES IN EQUITY -6,519 -6,922 -7,061 Proceeds from borrowings and increase in other long-term Ɠ nancial liabilities 1,681 307 2,800 Payments on borrowings and decrease in other noncurrent Ɠ nancial liabilities 000 Proceeds from borrowings and increase in other short-term Ɠ nancial liabilities 910 1,352 2,813 Payments on borrowings and decrease in other current Ɠ nancial liabilities -2,545 -2,299 -2,012 Change in net current accounts 0 0 0 Net interest paid (cash only) -784 -265 -446 Other cash expenses (income) used in Ɠ nancing activities -9 -153 -103 CHANGE IN BORROWINGS AND OTHER FINANCIAL LIABILITIES -747 -1,058 3,053 NET CASH USED IN FINANCING ACTIVITIES (D) 12 -7,266 -7,979 -4,008 TRANSLATION ADJUSTMENT AND OTHER NONCASH ITEMS (G) -13 -53 91 TOTAL CASH FLOWSb(A)+(B)+(D)+(G) 12 -428 -644 1,823 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 2,438 3,082 1,259 CASH AND CASH EQUIVALENTS AT END OF PERIOD 12 2,010 2,438 3,082
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Earnings Other Non Share and retained comprehensive Total controling (in MAD million) capital earnings income Group share interest Total RESTATED POSITION AT JANUARY 1, 2015 5, 275 10, 833 -223 15, 884 4, 278 20, 163 Total comprehensive income for the period 5, 595 -48 5, 547 953 6, 500 Change in gains and losses recognized directly in equity and recyclable in proƓt or loss 0 -49 -49 -29 -78 Gains and losses on translation -49 -49 -29 -78 Change in gains and losses recognized directly in equity and recyclable in proƓt or loss 1 1 0 1 Actuarial difference 0000 Change in percentage with assumption/loss of control 0 215 215 Dividends -6, 065 -6, 065 -1, 089 -7, 154 4 Treasury stock 00 Other adjustements -22 -22 3 -19 RESTATED POSITION AT DECEMBER 31, 2015 5, 275 10, 341 -271 15, 344 4, 360 19, 704 Total comprehensive income for the period 5, 598 -142 5, 456 901 6, 357 Change in gains and losses recognized directly in equity and recyclable in proƓt or loss 0 -142 -142 -130 -271 Gains and losses on translation -142 -142 -130 -271 Change in gains and losses recognized directly in equity and recyclable in proƓt or loss -14 -14 -10 -23 Actuarial difference -14 -14 -10 -23 Actuarial gains and loses 00 Capital increase 00 Capital decrease 00 Change in percentage without assumption/loss of control 282 282 -337 -55 Change in percentage with assumption/loss of control 0 0 Dividends -5, 590 -5, 590 -1, 118 -6, 708 Treasury stock 40 40 40 Other adjustements -42 -42 25 -17 POSITION AT DECEMBER 31, 2016 5, 275 10, 628 -427 15, 476 3, 822 19, 298
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Total comprehensive income for the period 5, 706 319 6, 025 1, 014 7, 039 Change in gains and losses recognized directly in equity and recyclable in proƓt or loss 0 319 319 144 463 Gains and losses on translation 319 319 144 463 Change in gains and losses recognized directly in equity and recyclable in proƓt or loss -42 -42 -2 -45 Actuarial difference -5 -5 -2 -8 Actuarial gains and loses -37 -37 -37 Capital increase 00 Capital decrease 00 Share-based compensation 00 Change in percentage without assumption/loss of control 0 0 Change in percentage with assumption/loss of control 0 0 Dividends -5, 591 -5, 591 -918 -6, 509 Treasury stock -31 -31 -31 Other adjustements -2 -2 -2 -4 POSITION AT 31 DECEMBER 2017 5,275 10,710 -150 15,835 3,916 19,750
At 31bDecemberb2017, Maroc Telecom’s share capital comprised The reserves consist mainly of accumulated prior year retained 879,095,340 ordinary shares. Ownership of the shares was divided earnings of which MAD 3,424 million of undistributable reserves at as follows: 31bDecemberb2017 and Group part net income for the current year. – Etisalat: 53% through a holding company 91.3%-owned by Etisalat and 8.7% owned by the Abu Dhabi Development Fund; – Kingdom of Morocco: 30%; – Other: 17%.
126 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT Consolidated U nancial statements at 31 December 2015, 2016 and 2017
NOTE 1 — ACCOUNTING PRINCIPLES AND VALUATION METHODS
Group companies are consolidated on the basis of their Ɠ scal year opted not to adjust the Ɠ gures published for the previous year as ending Decemberb31st, except for CMC, whose Ɠ scal year ends the IFRS 9 adoption allows. This change has had a non-signiƓ cant 31bMarchb2017. impact on the Group’s consolidated statements. The Ɠ nancial statements and notes thereto were approved by the Management Board on 29bJanuaryb2018. 1.3 PRESENTATION AND PRINCIPLES GOVERNING THE PREPARATION OF THE 1.1 BASIS OF PREPARATION FOR CONSOLIDATED FINANCIAL STATEMENT THE CONSOLIDATED FINANCIAL STATEMENTS FOR 2017, 2016, Pursuant to IFRS principles, the consolidated Ɠ nancial statements have been prepared on an historical-cost basis, with the exception AND 2015 of certain asset and liability categories.
Pursuant to regulation (EC) no.b 1606/2002 of 19b Julyb 2002, The categories concerned are mentioned in the notes below. The concerning the adoption of international accounting standards, consolidated Ɠ nancial statements are presented in Dirham and all the consolidated Ɠ nancial statements of Maroc Telecom Group for values are rounded to the nearest million unless otherwise noted. 4 the year ended 31bDecemberb2017, were prepared in accordance They include the accounts of Maroc Telecom and its subsidiaries with the International Financial Reporting Standards (IFRS) issued by after elimination of intra-group transactions. the International Accounting Standards Board (IASB), applicable as endorsed by the European Union (EU). For purposes of comparison, 1.3.1 Statement of comprehensive income the 2017 Ɠ nancial statements also include Ɠ nancial information on 2016 and 2015. Maroc Telecom has chosen to present its statement of comprehensive income in a format that breaks down income and expenses by type.
1.3.1.1 EARNINGS FROM OPERATIONS AND EARNINGS 1.2 COMPLIANCE WITH ACCOUNTING FROM CONTINUING OPERATIONS STANDARDS Earnings from operations, which in documents previously issued by Maroc Telecom was called operating income, includes revenues, The consolidated Ɠ nancial statements of Itissalat Al-Marghrib SA have cost of purchases, payroll costs, taxes and duties, other operating been prepared in accordance with International Financial Reporting income and expenses, as well as net depreciation, amortization and Standards (IFRS) and International Financial Reporting Interpretations provisions. Committee (IFRIC) interpretations endorsed by the European Union Earnings from continuing operations includes earnings from and mandatory at 31bDecemberb2017. The accounting standards operations, other income from continuing operations, other expenses applied to the consolidated Ɠ nancial statements do not differ from on continuing operations (including impairment of goodwill and those issued by the International Accounting Standards Board (IASB). other intangible assets), as well as the share of net earnings of equity associates. 1.2.1 Standards and interpretations applied by Maroc Telecom for Uscal year 2017 1.3.1.2 FINANCING COSTS AND OTHER FINANCIAL INCOME AND EXPENSES All the new standards, interpretations and amendments published by Net Ɠ nancing costs comprise: the IASB and mandatory in the European Union since 1bJanuaryb2017 have been applied. – gross Ɠ nancing costs which includes interest payable on loans calculated using the effective-interest rate method; 1.2.2 Impact of application of the standards – Ɠ nancial income received from cash investments. and interpretations adopted in 2017 Other financial income and expenses mainly include gains and losses on currency translation (other than those relating to operating The annual improvements of the cycle 2011-2013 has an impact on activities recognized under earnings from operations), dividends the IFRS1, IFRS3, IFRS13 and IAS40 without material impact on Maroc received from non-consolidated companies, earnings from Telecom’s annual Ɠ nancial statements. consolidated activities or companies not recognized under earnings Following the publication by the IASB on 07/24/2014 of the Ɠ nal from discontinued activities or in the process of being discontinued. version of the new IFRS 9 and the adoption of the new standard by the European Union via European Regulation 2016/2067 of 1.3.2 Statement of Unancial position 11/22/2016 published in the ofƓ cial journal of the European Union on 29bNovemberb2016, IFRS 9 “Financial instruments” comes into Assets and liabilities with maturities shorter than the operating cycle, effect on 1bJanuaryb2018. An early application of this new standard i.e. generally less than 12 months, are recognized under current is authorized from 1bJanuaryb2017. assets or liabilities. If their maturities are longer than this, they are recognized under noncurrent assets or liabilities, except for operating Maroc Telecom Group has early adopted IFRS 9 “Financial expenses. Instruments” (Julyb 2014 revised version) and corresponding amendments to other IFRS since 1bJanuaryb2017. The Group has
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1.3.3 Consolidated statement of cash Vows FULL CONSOLIDATION All companies in which Maroc Telecom has a controlling interest, Maroc Telecom prepares its consolidated statement of cash Ŵ ows namely those in which it has the power to govern financial and using the indirect method. Working capital requirements correspond operational policies to obtain beneƓ ts from their operations, are to changes in items on the statement of Ɠ nancial position related fully consolidated. to trade receivables, inventories, provisions, and accounts payable. The new standard for consolidation, introduced by IFRS 10 as 1.3.4 Use of estimates and assumptions replacement of IAS 27 (amended) - Consolidated and Separate Financial Statements and by SIC 12 Special Purpose Vehicles, is based The preparation of consolidated financial assets in accordance on the following three criteria that must be met simultaneously for with IFRS requires Maroc Telecom to make certain estimates and Maroc Telecom to assume control: assumptions that it deems reasonable and realistic. Despite regular – Maroc Telecombhas power over the subsidiary when it has existing reviews of these estimates and assumptions based on past or rights that give it the ability to direct the relevant activities (i.e., the anticipated achievements, facts and circumstances may lead to activities that signiƓ cantly affect the investee’s returns); Power arises changes in these estimates and assumptions that could have an impact from existing and/or potential voting rights and/or contractual on the carrying value of Group assets, liabilities, equity, or earnings. arrangements. The voting rights must be substantial (i.e., they may The main estimates and assumptions concern changes in the be employed at any time and without limitation, particularly during following items: votes on important activities). Assessment of whether a parent has – power over a subsidiary depends on the relevant activities of the provisions: risk estimates, performed on an individual basis; the subsidiary, it’s decision-making procedures, and the breakdown occurrence of events during risk-measurement procedures may lead of votes among the other shareholders; at any time to a reassessment of the risk in question (see Noteb14); – – Maroc Telecom has exposure or rights to variable returns from impairment of trade receivables and inventories: estimates of its involvement with the subsidiary. These returns may vary in nonrecovery risk for trade receivables and obsolescence risk for accordance with the subsidiary’s performance. The notion of inventories; return is deƓ ned broadly and includes dividends and other forms – employee benefits: assumptions, updated annually, include of distributed economic beneƓ ts, the investment’s valuation, cost the probability of employees remaining with the Group until savings, synergies, etc.; retirement, expected changes in future compensation, the – Maroc Telecombhas the ability to exercise its power to affect the discount rate, and the inŴ ation rate (see Noteb14); returns. Any power that cannot affect returns is considered non- – revenue recognition: estimates of benefits granted as part of controlling. customer-loyalty programs, to be deducted from certain revenue The Group’s consolidated Ɠ nancial statements are presented as those items, and of deferred revenue relating to distributors (see of a single economic entity with two types of owners: 1. the owners Noteb17); of Maroc Telecom Group (shareholders of Maroc Telecom SA), and – goodwill: valuation methods adopted for the identification of 2. holders of non-controlling interests (minority shareholders of the intangible assets acquired through business combinations (see subsidiaries). A non-controlling interest is deƓ ned as a stake in a Noteb3); subsidiary that cannot be directly or indirectly attributed to a parent – goodwill, indeƓ nite useful lives of intangible assets, and assets in company (hereinafter “non-controlling interests”). Consequently progress: assumptions are updated annually for impairment tests any changes in percentage of ownership of a parent company in a performed on each of the Group’s cash-generating units (CGUs), subsidiary that do not result in the loss of control affects only equity, determined by future cash Ŵ ows and discount rates; because control is not changed within the economic entity. – deferred taxes: estimates concerning the recognition of deferred TRANSACTION ELIMINATED IN THE CONSOLIDATED tax assets are updated annually; estimates include the Group’s FINANCIAL STATEMENTS future tax results and expected changes in temporary differences between assets and liabilities (see Noteb8). Revenues, expenses, and balance-sheet positions resulting from intragroup transactions are eliminated during the preparation of 1.3.5 Consolidation methods the consolidated Ɠ nancial statements. The generic name Maroc Telecom refers to the group of companies 1.3.6 Business combinations composed of the parent company Itissalat Al-Maghrib SA and its subsidiaries. BUSINESS COMBINATIONS FROM JANUARY 1, 2009 A list of the Group’s principal subsidiaries is presented in Noteb2, The acquisition method is used to account for business combinations. “Scope of consolidation at 31bDecemberb2017, 2016, and 2015. Under this method, upon the initial consolidation of an entity over Maroc Telecom’s scope of consolidation comprises wholly owned which the Group has acquired exclusive control: companies exclusively; therefore the only consolidation method – the identiƓ able assets acquired and the liabilities assumed are employed by the Group is that of full consolidation. measured at their fair value on the acquisition date; The accounting method described below was applied consistently – the noncontrolling interests are measured either at fair value or at to all the periods presented in the consolidated Ɠ nancial statements. their proportionate share of the acquiree’s identiƓ able net assets. This accounting method was applied consistently by all Group entities. This option is available on a transaction-by-transaction basis.
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On the acquisition date, goodwill is measured as the difference 1.3.7 ForeignĆcurrency translation between: Foreign-currency transactions are initially recorded in the functional – the fair value of the consideration transferred plus the amount currency at the exchange rate prevailing on the date of the of noncontrolling interest in the acquiree, and, in a business transaction. At the end of the period, monetary assets and liabilities combination achieved in stages, the acquisition-date fair value of denominated in a foreign currency are translated into the functional the equity interest held previously by the acquirer in the acquiree; currency at the exchange rate prevailing on that date. All translation and differences are recognized in proƓ t or loss for the period. – the net amount on the acquisition date for identifiable assets acquired and liabilities assumed. 1.3.8 Translation of Unancial statements The fair-value measurement of noncontrolling interests increases for foreign activities goodwill up to the share attributable to the noncontrolling interests, thereby resulting in the recognition of full goodwill. The purchase Assets and liabilities relating to foreign activities, including goodwill price and its allocation must be completed within 12 months of and fair-value adjustments arising from consolidation, are translated the acquisition date. If goodwill is negative, it is recognized as into Moroccan dirhams at the exchange rate prevailing at the end proƓ t directly in proƓ t or loss. After the acquisition date, goodwill is of the period. measured at its initial amount, less any recorded impairment losses. Income and expenses are translated into dirhams at the average The following principles also apply to business combinations: exchange rate over the period. – beginning on and after the acquisition date, to the extent possible, Foreign exchange differences arising from translation are recorded goodwill is allocated to each cash-generating unit likely to beneƓ t as foreign currency translation differences, as a separate component from the business combination; of shareholders’ equity. 4 – any adjustment to the purchase price is recorded at fair value on the acquisition date, and any subsequent adjustment after the 1.3.9 Assets purchase-price allocation period is recognized in proƓ t or loss; – acquisition-related costs are recognized as expenses when 1.3.9.1 OTHER INTANGIBLE ASSETS incurred; Intangible assets acquired separately are recorded at cost, and – in the event of acquisition of an additional interest in a consolidated intangible assets acquired in connection with a business combination subsidiary, Maroc Telecom recognizes the difference between are recorded at their fair value at the acquisition date. Subsequent to the acquisition cost and the carrying value of noncontrolling initial recognition, the historical cost model is applied to intangible interests as a change in equity attributable to shareholders of assets that are amortized when they are ready for use. Depreciation Maroc Telecom; is recorded for assets with limited useful life. The useful lives are – goodwill is not amortized. reviewed at each closing. BUSINESS COMBINATIONS PRIOR TO JANUARY 1, 2009 The estimated useful lives are between 2 and 5 years. Pursuant to IFRS 1, Maroc Telecom elected not to restate business IAS 38 does not recognize brands, subscriber bases and market combinations that occurred before Januaryb1, 2004. IFRS 3, as segments generated internally as intangible assets. published by the IASB in Marchb2004, had already retained the Licenses for the operation of telecommunications networks are acquisition method. Its provisions, however, differed from those of recorded at historical cost and are amortized on a straight-line basis the revised standard on the following main points: as of the effective date of the service for the period of validity of – noncontrolling interests were measured on the basis of their the license. proportionate share in the acquired net identiƓ able assets; the The Maroc Telecom Group chose not to use the option offered by option of fair-value measurement did not exist; IFRS 1 to choose to measure certain intangible assets at fair value on – contingent consideration was recognized in the cost of acquisition Januaryb1, 2004 at this date. only if payment was likely to occur and the amounts could be Expenditures posted to intangible enterprises are capitalized only measured reliably; if they enhance the future economic beneƓ ts associated with the – costs attributable directly to the acquisition were recognized under asset. Other expenses are recognized as expenses when incurred. the cost of the business combination; 1.3.9.2 RESEARCH AND DEVELOPMENT COSTS – In the event of acquisition of an additional interest in a consolidated subsidiary, Maroc Telecom recognizes as goodwill the difference Research costs are expensed when incurred. Development expenses between the acquisition cost and the carrying value of acquired are capitalized when the project can reasonably be considered noncontrolling interests. feasible.
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Pursuant to IAS 38 Intangible Assets, development costs are Assets not yet in service are recorded as assets in progress. Assets capitalized only after the technical and Ɠ nancial feasibility of the asset Ɠ nanced through Ɠ nance leases are recorded at the lower of the for sale or use have been established, where it is likely that the future fair value of the asset and the present value of the minimum lease economic beneƓ ts attributable to the asset will Ŵ ow to the company, payments, and related debt is recorded under “Borrowings and other and where the cost of the asset can be measured reliably. Ɠ nancial liabilities.” These assets are depreciated on a straight-line basis over their estimated useful lives. 1.3.9.3 PROPERTY, PLANT, AND EQUIPMENT Depreciation of assets acquired under Ɠ nance leases is recorded as Property, plant, and equipment are carried at historical cost less any a general depreciation expense. accumulated depreciation and impairment losses. Historical cost Maroc Telecom has elected not to apply the option provided in IFRS includes acquisition or production costs as well as costs directly 1 to remeasure property, plant, and equipment at fair value as at attributable to transporting the asset to its physical location and Januaryb1, 2004. to preparing it for use in operations. For the purposes of IAS 23, borrowing costs directly attributable to the acquisition, construction, The carrying value of an item of property, plant, and equipment or production of a qualifying asset are included in the cost of the includes the replacement cost of a component of such an item if asset. Other borrowing costs are recognized as an expense for this cost is incurred, if it is probable that the future economic beneƓ ts the period in which they are incurred. When property, plant, and associated with the asset will Ŵ ow to Maroc Telecom Group, and if equipment include signiƓ cant components with various useful lives, the cost can be measured reliably. the components are recorded and depreciated separately. All maintenance costs are expensed when incurred. Property assets comprising the items “land” and “buildings” are derived in part from the contribution in kind granted in 1998 by the 1.3.9.4 IMPAIRMENT OF FIXED ASSETS Moroccan government (in connection with the breakup of ONPT) to Goodwill and other intangible assets with indeƓ nite useful lives are Maroc Telecom when it was established. subject to an impairment test at the close of each annual period, When these assets were transferred, the property titles could not be and are also tested whenever there is an indication that they may registered with the property registry. be impaired. The carrying value of other Ɠ xed assets is also subject to an impairment test whenever events or circumstances indicate Fully 97% of such assets had been assigned property titles at the end that the carrying value of such assets may not be recoverable. The of 2017. Although uncertainty over the property titles remains, the impairment test compares the asset’s carrying amount with its risk is limited, because the Moroccan government has guaranteed recoverable amount (i.e., the higher of fair value less disposal costs Maroc Telecom use of the transferred property as at the end of 2013, and value in use). and because to date there have been no signiƓ cant incidents related to this situation. The recoverable amount is determined for an individual asset as long as the asset generates cash inŴ ows that are largely independent of The assets transferred by the Moroccan government on Februaryb26, those from other assets or groups of assets. If such is the case, as it 1998, to establish Maroc Telecom as a public operator were recorded is for goodwill, the recoverable amount is determined for the cash- as a net amount in the opening statement of Ɠ nancial position, as generating unit. Maroc Telecom has selected as its cash generating approved by: units its Ɠ xed and Mobile business units (BU). – the Postal Services and Information Technology Act no.b24–96; – the joint order no.b341–98 of the Ministry of Telecommunications 1.3.9.5 FINANCIAL ASSETS and the Ministry of Finance, Commerce, and Industry, approving IFRS 9 establishes a new classiƓ cation of Ɠ nancial assets permitting the inventory of assets transferred to Maroc Telecom Group. subsequent rather than initial recognition. Under IFRS 9, Ɠ nancial Depreciation is calculated using the straight-line method over the assets may be classiƓ ed in the following 3 categories: estimated useful lives of the assets. Useful lives are reviewed at the – Ɠ nancial instruments as assets at amortized cost; end of each reporting period and are as follows: – financial instruments as assets at fair value through other – Construction and buildings 20 years comprehensive income; – Civil engineering projects 15 years – Ɠ nancial instruments as assets at fair value through net income. – Network equipment: Furthermore, the classiƓ cation is based on two criteria: — Transmission (Mobile) 10 years – the economic model adopted by the entity to manage its Ɠ nancial — Switching 8 years assets; – Transmission (Ɠ xed line) 10 years – the contractual cash Ŵ ow of Ɠ nancial assets. – Fixtures and Ɠ ttings The Group has applied IFRS 9 to Ɠ nancial instruments that were not derecognized at the initial application date, which was — various facilities 10 years 1bJanuaryb2017. All recognized Ɠ nancial assets falling under IFRS 9 — Ɠ tting out of buildings 20 years must subsequently be valued at amortized cost or at fair value based – Computer equipment 5 years on the basis of two criteria mentioned above. – OfƓ ce equipment 10 years Financial assets classified as held-to-maturity and loans and – Transportation equipment 5 years receivables under IAS 39 measured at amortized cost continue to be measured at amortized cost under IFRS 9 as they are held in a
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business model to collect contractual cash Ŵ ow. Those cash Ŵ ows – handsets not activated within nine months of the delivery date are consist only of capital and interest payments on the remaining recorded as revenue; principal owed. – equipment and supplies corresponding to general network Equity investments classified as available-for-sale under IAS 39 equipment (these inventories are measured at their average have been irrevocably classiƓ ed as assets at fair value through other purchase price); comprehensive income, with the exception of treasury shares held – Inventories are valued at the lower of cost and net realizable for trading purposes. These continue to be measured at fair value value. Impairment is recognized based on the outlook for disposal through proƓ t or loss. (whether for Mobile, Fixed-line, internet or technical assets). Financial assets measured at fair value under IAS 39 continue to be 1.3.9.7 TRADE ACCOUNTS RECEIVABLE AND OTHER measured as such under IFRS 9, as those investments are managed RECEIVABLES as a trading portfolio and the rule considers the changes in the fair value of the underlying securities and interest. This item comprises trade receivables and other receivables, initially recognized at fair value and subsequently at amortized cost less Therefore, no changes to the classiƓ cation of the Group’s Ɠ nancial impairment losses. assets instruments have been identiƓ ed resulting from the application of IFRS 9, nor any signiƓ cant impact on the Ɠ nancial statements have Trade accounts receivable includes trade receivables and been recorded. government receivables: Depending on the accounting options adopted by Maroc Telecom, – trade receivables: held against individuals, distributors, businesses, there are two categories of Ɠ nancial assets measured at fair value and national and international operators; that correspond to other comprehensive income. – Government receivables: held against local authorities and the Moroccan government. 4 FAIR VALUE AS COUNTERPART OF OTHER ITEMS OF COMPREHENSIVE INCOME WITH RECYCLING Impairment is recognized when the carrying value of an asset exceeds the present value of its estimated future cash Ŵ ows. Changes in the carrying amount of these instruments may result in foreign exchange gains or losses at consolidation, impairment gains 1.3.9.8 CASH AND CASH EQUIVALENTS or losses, or credit interest at the effective interest rate. The changes “Cash and cash equivalents” include cash on hand, sight deposits, must be recognized in the consolidated statement of net income. current accounts, and short-term, highly liquid investments with Furthermore, all other changes in the carrying value of these maturities of three months or less. instruments are recognized in Other Items of Comprehensive Income (OCI) and aggregated in the Revaluation Reserve. When these instruments are derecognized in the entity’s balance sheet, 1.3.10 Assets held for sale and discontinued the aggregated gains or losses, previously recognized under OCI, operations are reclassiƓ ed in the consolidated statement of net income. A noncurrent asset or a group of assets and liabilities qualiƓ es as FAIR VALUE AS COUNTERPART OF OTHER ITEMS OF held for sale when its carrying value may be recovered principally through its disposal and not by its continued utilization. To qualify COMPREHENSIVE INCOME WITHOUT RECYCLING as held for sale, the asset must be available for immediate sale and For Maroc Telecom Group, this means a Ɠ nancial instrument that the disposal must be highly probable. Such assets and liabilities are fulƓ lls any of the following conditions: reclassiƓ ed as assets held for sale and as liabilities associated with – assets that is part of a portfolio managed to obtain proƓ t: e.g. assets held for sale, without possibility of offset. The reclassiƓ ed equity holdings not consolidated by the Group; assets are recorded at the lower of fair value (net of disposal fees) – and cost less accumulated depreciation and impairment losses, and derivative instruments. are no longer depreciated. These assets are measured at fair value as and when, so that gains An operation is qualified as discontinued when the criteria for and losses resulting from changes in fair value are recognized in classification as an asset held for sale have been met or when other comprehensive income and aggregated in the investments Maroc Telecom has sold the operation. Discontinued operations revaluation reserve. The aggregated gain or loss will not be are reported on a single line of the statement of comprehensive reclassiƓ ed in the statement of net income on the sale of the Ɠ nancial income for the periods reported, comprising the earnings after tax instruments, but will be transferred to unappropriated income. of the discontinued operations until the divestiture date and the gain 1.3.9.6 INVENTORIES or loss after tax on the sale or fair-value measurement, less costs to sell the assets and liabilities of the discontinued operations. In Inventories comprise: addition, operating, investing, and Ɠ nancing cash Ŵ ows generated by – goods held for sale to customers upon line activation, Fixed-line, discontinued operations are reported on the statement of cash Ŵ ows. Mobile internet or Multimedia terminals and their accessories. These inventories are accounted for using the weighted average FINANCIAL LIABILITIES cost method; Financial liabilities comprise borrowings, accounts payable, and bank – handsets delivered to distributors and not activated at year-end overdrafts. are recorded as inventory;
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BORROWINGS – for deductible temporary differences arising from investments All borrowings are initially accounted for at fair value of the amount in subsidiaries, afƓ liates, and joint ventures, deferred tax assets received, net of borrowing costs. are recorded to the extent that it is probable that the temporary difference will reverse in the foreseeable future and that taxable The allocation of borrowings to current and noncurrent liabilities is proƓ t will be available against which the temporary difference can performed on the basis of contractual maturity. be utilized. The borrowings granted by Etisalat have not been updated due to The carrying value of deferred tax assets is reviewed at each closing their insigniƓ cant nature. date and reduced to the extent that it is no longer probable that a taxable proƓ t will be available to allow the deferred tax asset to be DERIVATIVE FINANCIAL INSTRUMENTS utilized. Maroc Telecom uses a currency hedging in the form of purchases Deferred tax assets and liabilities are measured at the expected tax and sales of foreign currencies. rates for the year during which the asset will be realized or the liability settled, on the basis of tax rates (and tax regulations) enacted or 1.3.11 Provisions substantially enacted by the closing date. Taxes for items credited or charged directly to equity are recognized Provisions are recognized when, at the end of the reporting period, in equity, not in proƓ t or loss. the Group has a legal, regulatory, or contractual obligation as a result of past events, when it is probable that an outŴ ow of resources (without any expected related inŴ ow) will be required to settle the 1.3.13 Trade accounts payable obligation, and when the obligation can be estimated reliably. Where the effect of the time value of money is material, provisions Trade accounts payable include trade payables and other accounts are discounted to their present value using a pretax discount rate payable. These are measured initially at historical cost and that reŴ ects current market assessments of the time value of money. subsequently at amortized cost. 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 1.3.14 ShareĆbased compensation consolidated Ɠ nancial statements. Pursuant to IFRS 2, share-based compensation is recorded as a Restructuring provisions are recorded when the Group has approved payroll cost at the value of the equity instruments granted, which are a formal and detailed restructuring program and has either begun assessed using a binomial model. However, depending on whether to implement the program or has announced the program publicly. the equity instruments granted are settled through the issuance of Future operating expenses are not provisioned. Maroc Telecom shares or in cash, the valuation of the expense differs: A provision for pension obligations has been recorded for senior – for equity-settled instruments, the value of the instruments granted executives of Maroc Telecom. For the subsidiaries, this provision is is initially estimated and Ɠ xed at grant date, then allocated over estimated using the actuarial method. the vesting period on the basis of features of equity-settled instruments. The obligation is recorded in equity; 1.3.12 Deferred taxes – for cash-settled instruments, the value of the instruments granted Deferred taxes are accounted for using the liability method, for is initially estimated and fixed at grant date and is then re- differences at closing between the tax-base value of assets and estimated at each reporting date; the expense is adjusted pro liabilities and their carrying value on the balance sheet. rata for subsequent changes in the value of the vested rights. The obligation is allocated over the vesting period on the basis of Deferred tax liabilities are recognized for all taxable temporary features of cash-settled instruments. The corresponding obligation differences: is recorded as a noncurrent provision. – except for temporary differences generated by the initial Pursuant to the transitional provisions of IFRS 1 for IFRS 2, Maroc recognition of goodwill; Telecom elected to apply IFRS 2 retroactively, to Januaryb1, 2004. – for taxable temporary differences arising from investments in In 2017, 2016 and 2015 no compensation paid in shares is subsidiaries, afƓ liates, and joint ventures, unless the date on which recognized. the temporary difference will reverse can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. 1.3.15 Revenues Deferred tax assets are recognized for all deductible temporary Revenues from continuing operations are recorded when it is differences, tax-loss carry forwards, and unused tax credits, insofar probable that the risks and future economic beneƓ ts incident to as it is probable that a taxable proƓ t will be available, or when a ownership of fixed assets will flow to the Group, and when the current tax liability exists to make use of those deductible temporary revenues can be measured reliably. differences, tax-loss carryforwards, and unused tax credits: Revenues comprise sales of telecommunications services in – except where the deferred tax asset associated with the deductible Mobile, Fixed-line, and Internet activities, as well as the sale of temporary difference is generated by initial recognition of an asset telecommunications products, essentially Mobile and Fixed-line or liability in a transaction that is not a business combination and handsets and multimedia equipment. Almost all of Maroc Telecom’s that at the transaction date does not impact accounting earnings, revenues are generated by services. taxable income, or taxable losses;
132 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT Consolidated U nancial statements at 31 December 2015, 2016 and 2017
Revenues from telephone subscriptions are recognized on a straight- 1.3.18 Net Unancing costs line basis over the subscription contract period. Revenues from incoming and outgoing call trafƓ c are recognized when the service Net Ɠ nancing costs include interest payable on loans (calculated is provided. For prepaid services, revenues are recognized as calls using the effective-interest method) and interest on investments. are made. Investment income is recognized in the statement of earnings when Revenues from Fixed-line, Internet, and Mobile activities comprise: acquired. – the yield of conventional subscription as well as postpaid package amounts; 1.3.19 Tax expenses – the yield of prepaid national and international outgoing calls Tax expense includes income tax payable and deferred tax expense excluding postpaid and Fixed-line rates, as and when consumed; (or income). Tax is expensed unless it applies to items recorded – prepaid and postpaid incoming national and international directly to equity. communications revenue; – revenue generated by ADSL and Mobile internet offers (prepaid and postpaid); 1.4 CONTRACTUAL COMMITMENTS AND – revenue generated by non-resident Mobile customers in Morocco CONTINGENT ASSETS AND LIABILITIES using the Maroc Telecom network (Roamers); – revenue generated by the data transmission provided to the Once a year, Maroc Telecom and its subsidiaries prepare detailed professional market and Internet service providers as well as other reports on all contractual obligations, commercial and financial telecom operators; commitments, and contingent obligations for which they are jointly 4 – revenue resulting from the sale of advertising inserts in the printed and severally liable. These detailed reports are updated regularly and electronic directories which are taken into account in the result by the relevant departments and reviewed by Group senior when they are published. management. Revenue from the sale of terminals, net of rebates granted to The assessment of off-balance-sheet commitments relating to customers and commissioning fees, is recognized when activating suppliers of Ɠ xed assets is bears on the following: the line. – for master service agreements and associated amended Value Added Services (VAS) revenue consists of: agreements valued at more than MAD 25 million, the calculation – corresponds to difference between minimum commitments and sales of services developed by Maroc Telecom which are commitments actually fulƓ lled; presented in gross; – – for all other contracts, it corresponds to the difference between sales of services to customers managed by Maroc Telecom Ɠ rm orders and orders actually fulƓ lled. on behalf of content providers (mainly special numbers), are systematically presented net of related charges. Commitments arising from real-estate leases are estimated on the basis of one month’s rental expense, because virtually all termination When sales are made via a third-party distributor supplied by the clauses require one month’s notice. Group and involve a discount from the retail price, revenues are recorded as gross revenues and commissions granted are recognized as operating expenses. Awards granted by Maroc Telecom and its subsidiary companies 1.5 SEGMENT DATA to their customers in connection with customer loyalty programs, in the form of free or discounted goods or services are recorded in A segment is a distinguishable component of the Group that is accordance with IFRIC 13 and IAS 18. engaged in providing a product or service in a speciƓ c economic environment (geographical segment), or in providing products or The IFRIC 13 interpretation is based on the principle of measuring related services (business segment) that are subject to risks and customer-loyalty award credits at fair value (deƓ ned as the excess rewards different from those of other business segments. price over the sales incentive that would be granted to any new customer) and that would result (should any such excess price exist) In order to benchmark the performance indicators used for internal in deferred recognition of the portion of the revenue associated with reporting, as required by IFRS 8, Maroc Telecom has opted to the subscription in the amount of such excess price. report key Ɠ nancial and operating indicators by geographical area. This reporting has been achieved through the creation of a new international segment – separate from the Morocco segment – that 1.3.16 Cost of purchases combines the 10 existing subsidiaries in Mauritania, Burkina Faso, Gabon, Mali, Ivory coast, Benin, Togo, Niger and Central African Cost of purchases comprises the purchase of Mobile and Fixed-line Republic. handsets and interconnection costs.
1.3.17 Other operating income and expenses 1.6 NET CASH POSITION This item comprises mainly commissions to distributors, network- maintenance expenses, advertising and marketing costs, and This corresponds to cash and cash equivalents minus borrowings, restructuring charges. cash equivalents and cash earmarked for borrowings repayable in more than 3 months’ time.
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1.7 EARNINGS PER SHARE – by the average number of shares outstanding over the period plus the average number of ordinary shares that would have been Earnings per share, as presented in the statement of comprehensive issued upon conversion of all potentially dilutive instruments that income, are calculated by dividing net earnings (Group share) for the are convertible into ordinary shares. period by the average number of shares outstanding over the period. At 31bDecemberb2017, there were no potentially dilutive instruments Diluted earnings per share are calculated by dividing: – net proƓ t of the Ɠ scal year (Group share); and
NOTE 2 — SCOPE OF CONSOLIDATION
Consolidation Company Legal form % Group interest % Capital held method Maroc Telecom SA 100% 100% FC Avenue Annakhil Hay Riad Rabat-Maroc Compagnie Mauritanienne de Communication (CMC) SA Dec, 31,17 80% 80% FC Dec, 31,16 80% 80% FC Dec, 31,15 80% 80% FC Avenue Roi Fayçal Nouakchott-Mauritanie Mauritel SA SA Dec, 31,17 41% 52% FC Dec, 31,16 41% 52% FC Dec, 31,15 41% 52% FC Avenue Roi Fayçal Nouakchott-Mauritanie Onatel SA Dec, 31,17 51% 51% FC Dec, 31,16 51% 51% FC Dec, 31,15 51% 51% FC 705, AV. de la nation 01 BP10000 Ouagadougou – Burkina Faso Gabon Telecom SA Dec, 31,17 51% 51% FC Dec, 31,16 51% 51% FC Dec, 31,15 51% 51% FC Immeuble 9 étages, BP 40 000 Libreville-Gabon Sotelma SA Dec, 31,17 51% 51% FC Dec, 31,16 51% 51% FC Dec, 31,15 51% 51% FC Route de Koulikoro, quartier Hippodrome, BP 740, Bamako-Mali Casanet SA Dec, 31,17 100% 100% FC Dec, 31,16 100% 100% FC Dec, 31,15 100% 100% FC Avenue Annakhil Hay Riad Rabat-Maroc
134 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT Consolidated U nancial statements at 31 December 2015, 2016 and 2017
Consolidation Company Legal form % Group interest % Capital held method Atlantique Telecom Côte d’Ivoire SA Dec, 31,17 85% 85% FC Dec, 31,16 85% 85% FC Dec, 31,15 85% 85% FC Abidjan-Plateau, Immeuble KARRAT, Avenue Botreau Roussel, 01 BP 2347 Etisalat Bénin SA Dec, 31,17 100% 100% FC Dec, 31,16 100% 100% FC Dec, 31,15 100% 100% FC Cotonou, ilot 553, quartier Zongo Ehuzu, zone résidentielle, avenue Jean Paul 2, immeuble Etisalat Atlantique Telecom Togo SA Dec, 31,17 95% 95% FC 4 Dec, 31,16 95% 95% FC Dec, 31,15 95% 95% FC Boulevard de la Paix, Route de l’Aviation, Immeuble Moov-Etisalat - Lomé - BP 14511 Atlantique Telecom Niger SA Dec, 31,17 100% 100% FC Dec, 31,16 100% 100% FC Dec, 31,15 100% 100% FC 720 Boulevard du 15 avril Zone Industrielle, BP 13 379, Niamey Atlantique Telecom Centrafrique SA Dec, 31,17 100% 100% FC Dec, 31,16 100% 100% FC Dec, 31,15 100% 100% FC Bangui, BP 2439, PK 0, Place de la République, Immeuble SOCIM, rez-de-chaussée Atlantique Telecom Gabon (a) SA Dec, 31,17 0% 0% Dec, 31,16 0% 0% Dec, 31,15 90% 90% FC Boulevard du Bord de Mer - Immeuble Rénovation BP 12470 Libreville Prestige Telecom Côte d’Ivoire SA Dec, 31,17 100% 100% FC Dec, 31,16 100% 100% FC Dec, 31,15 100% 100% FC Grand Bassam Zone Franche VITIB ex-Complexe IIAO, 01 BT 8592 Abidjan
(a) Atlantique Telecom Gabon was absorbed by Gabon Telecom with effect from 29bJuneb2016.
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NOTE 3 — GOODWILL
(in MAD million) Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2015 Mauritel 136 137 137 Onatel 1,838 1,838 1,838 Gabon Telecom 668 641 142 Sotelma 4,776 4,532 4,613 Casanet 555 Filiales Moov (a) 1,271 1,206 1,704
(a) In accordance with IFRS 3, the Ɠ nancial statements at December 31, 2015 (goodwill and trade accounts payable) have been restated for the impact of the Ɠ nal purchase price allocation for Moov subsidiaries .
From Julyb1, 2009, business combinations are recognized using the Goodwill is tested for impairment at least once a year and whenever full goodwill method. Goodwill is allocated to cash generating units there is evidence of loss of value. (CGU) identiƓ ed under IAS 36. A value test consists of comparing the carrying value of each CGU Sotelma’s goodwill and that of the new subsidiaries acquired in 2015 against its market value. This market value is estimated by discounting were measured by applying IFRS 3 revised. The deƓ nitive goodwill the future cash Ŵ ows based on 5 years business plans. For Casanet, of the Moov subsidiaries has been Ɠ nalized in the Ɠ rst half of 2016. the market value is estimated by the market multiples method, on 2017 results and 2018 projections.
Goodwill-impairment tests are based on the following assumptions:
Valuation Discount rate Perpetual growth rate CGU method in local currency in local currency Mauritel DCF (b ) 15.00% 1.50% Onatel DCF (b ) 12.00% 1.50% Gabon Telecom DCF (b ) 12.50% 1.50% Sotelma DCF (b ) 13.50% 3.00% Filiales Moov DCF (b ) [9% - 16%] 3.00% Casanet Market multiple method Average of 11.8 x 2017 EBITDA and 12.3 x 2018 EBITDA
(b) DCF: Discounted Cash Flows.
136 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT Consolidated U nancial statements at 31 December 2015, 2016 and 2017
GOODWILL VARIATION TABLE
Beginning Translation Change in scope (in MAD million) of period Impairment adjustment ReclassiU cation of consolidation End of period 2015 6,796 0 -57 0 1,701 8,440 Mauritel 137 0 137 Onatel 1,838 1,838 Gabon Telecom 142 142 Sotelma 4,674 -60 4,613 Casanet 5 5 Filiales Moov (a) 3 1,701 1,704 2016 8,440 0 -113 33 0 8,360 Mauritel 137 -1 137 Onatel 1,838 1,838 Gabon Telecom 142 -9 508 641 Sotelma 4,613 -81 4,532 4 Casanet 5 5 Filiales Moov (a) 1, 704 -22 33 -508 1, 206 2017 8,360 0 336 0 0 8,695 Mauritel 137 0 136 Onatel 1,838 1,838 Gabon Telecom 641 27 668 Sotelma 4,532 244 4,776 Casanet 5 5 Filiales Moov (a) 1,206 65 1,271
(a) In accordance with IFRSb3, the Ɠ nancial statements at 31bDecemberb2015 (goodwill and trade accounts payable) have been restated for the impact of the Ɠ nal purchase price allocation for Moov subsidiaries.
NOTE 4 — OTHER INTANGIBLE ASSETS
(in MAD million) Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2015 Software 1,674 1,411 1,603 Telecom license 4,289 4,588 4,258 Other intangible assets 1,522 1,379 1,262 NET TOTAL 7,485 7,378 7,123
The “telecom licenses” item includes the following licenses: – the global license for AT CDI; – the 2G licenses for Mauritel, Onatel, Gabon Telecom, Sotelma, – the 4G licenses for Ittisalat Al Maghrib SA, Gabon Telecom and Etisalat Benin, AT Togo and AT Niger; Etisalat Bénin. – the 3G licenses for Ittisalat Al Maghrib SA, Mauritel, Onatel, Gabon “Other intangible non-current assets” primarily includes patents, Telecom, Sotelma, Etisalat Benin, AT Togo, AT Niger and AT RCA; trademarks, and assets reŴ ecting business combinations such as customer bases identiƓ ed when measuring the goodwill of acquired – the global Mobile licenses for AT RCA and Etisalat Bénin; subsidiaries.
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2017
Change Acquisitions Disposals and Translation in scope of (in MAD million) 2016 and additions withdrawals adjustment consolidation ReclassiU cation 2017 Gross 20,009 1,405 -11 445 -274 21,574 Software 7,732 911 -11 117 -271 8,478 Telecom license 7,296 292 0 7,588 Other intangible assets 4,981 494 36 -3 5,507 Amortization and impairment -12,631 -1,332 10 -246 110 -14,089 Software -6,321 -528 10 -84 118 -6,804 Telecom license -2,708 -434 -138 -19 -3,299 Other intangible assets -3,601 -369 -25 10 -3,985 NET TOTAL 7,378 73 -1 199 -164 7,485
Intangible assets recorded an increase of MAD 1,405 million relating to new acquisitions detailed as follows: – investments in intangible networks in the amount of MAD 911 million ; – investments in patents and trademarks in the amount of MAD 326 million in Morocco.
2016
Change Acquisitions Disposals and Translation in scope of (in MAD million) 2015 and additions withdrawals adjustment consolidation ReclassiU cation 2016 Gross 18,540 2,052 0 -242 0 -340 20,009 Software 7,476 695 -86 -353 7,732 Telecom license 6,552 888 -143 7,296 Other intangible assets 4,513 468 -13 13 4,981 Amortization and impairment -11,417 -1,356 0 117 0 25 -12,631 Software -5,873 -551 62 41 -6,321 Telecom license -2,294 -446 47 -16 -2,708 Other intangible assets -3,250 -359 8 0 -3,601 NET TOTAL 7,123 696 0 -125 0 -315 7,378
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2015
Change Acquisitions Disposals and Translation in scope of (in MAD million) 2014 and additions withdrawals adjustment consolidation ReclassiU cation 2015 Gross 12,789 3,497 0 3 4,172 -1,921 18,540 Software 7,685 468 4 1,416 -2,097 7,476 Telecom license 1,556 2,545 3 2,658 -210 6,552 Other intangible assets 3,548 484 -3 98 387 4,513 Amortization and impairment -9,831 -1,247 1 4 -2,305 1,960 -11,417 Software -6,074 -563 3 -2 -986 1,750 -5,873 Telecom license -883 -327 4 -1,298 210 -2,294 Other intangible assets -2,874 -356 -1 3 -21 -1 -3,250 NET TOTAL 2,958 2,250 1 8 1,867 38 7,123
The reclassiƓ cation column concerns transfers between line items of intangible assets. 4
NOTE 5 — PROPERTY, PLANT, AND EQUIPMENT
(in MAD million) Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2015 Land 1,607 1,572 1,598 Buildings 2,876 2,859 2,897 Technical plant, machinery, and equipment 26,612 24,451 23,854 Transportation equipment 92 149 161 OfƓ ce equipment, furniture, and Ɠ ttings 712 747 723 Other property, plant, and equipment 192 204 105 NET TOTAL 32,090 29,981 29,339
The “Other property, plant, and equipment” item mainly includes advances and deposits for property, plant and equipment orders.
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2017
Change Acquisitions Disposals and Translation in scope of Assets held (in MAD million) 2016 and dotations withdrawals adjustment consolidation ReclassiU cation for sale 2017 Gross 95,532 6,851 -164 1,540 0 -432 0 103,303 Land 1,584 16 31 0 0 1,631 Buildings 8,300 297 0 53 0 0 8,650 Technical plant, machinery andbequipment 79,402 6,164 -10 1,364 0 -386 86,534 Transportation, equipment 616 36 -113 13 0 -2 549 OfƓ ce equipment furniture andbƓ ttings 5,303 200 -40 61 0 80 5,604 Other property, plant, andbequipment 327 115 0 17 0 -122 336 Depreciation and impairment -65,551 -5,595 380 -1,050 0 604 -71,213 Land -12 -13 0 -24 Buildings -5,441 -287 1 -48 0 -5,774 Technical plant, machinery, andbequipment -54,951 -4,974 291 -931 0 643 -59,922 Transportation equipment -467 -42 48 -12 0 16 -457 OfƓ ce equipment, furniture, andbƓ ttings -4,557 -265 39 -53 0 -56 -4,892 Other property, plant, andbequipment -123 -14 0 -7 -144 NET TOTAL 29,981 1,256 216 489 0 148 0 32,090
Acquisitions of property, plant and equipment (PP&E) amounting – MAD 2,647 million investments in international network to MAD 6,851 million reŴ ect investment in network infrastructure in infrastructure. 2017, as follows: In 2017, allocations to depreciation of tangible Ɠ xed assets (PP&E) – MAD 3,517 million in Morocco due for the modernization of were up 8.6%, corresponding to investments in Morocco and Mobile, Fixed-line and Internet infrastructure; internationally.
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2016
Change Assets Acquisitions Disposals and Translation in scope of held (in MAD million) 2015 and dotations withdrawals adjustment consolidation ReclassiU cation for sale 2016 Gross 90,364 5,932 -417 -887 0 193 347 95,532 Land 1,610 23 -58 -16 0 25 1,584 Buildings 8,118 214 -347 -41 8 347 8,300 Technical plant, machinery andbequipment 75,131 5,364 -1 -781 0 -312 79,402 Transportation, equipment 614 31 -10 -19 0 0 616 OfƓ ce equipment furniture andbƓ ttings 4,675 154 -1 -25 0 499 5,303 Other property, plant, andbequipment 216 146 -6 0 -28 327 Depreciation and impairment -61,025 -5,196 315 561 0 83 -289 -65,551 Land -11 -2 1 -12 4 Buildings -5,220 -249 289 28 0 -289 -5,441 Technical plant, machinery, andbequipment -51,277 -4,632 16 497 0 445 -54,951 Transportation equipment -454 -36 10 13 0 -467 OfƓ ce equipment, furniture, andbƓ ttings -3,952 -263 1 20 0 -362 -4,557 Other property, plant, andbequipment -110 -15 2 0 -123 NET TOTAL 29,339 736 -101 -326 0 275 59 29,981
2015
Change Assets Acquisitions Disposals and Translation in scope of held (in MAD million) 2014 and dotations withdrawals adjustment consolidation ReclassiU cation for sale 2015 Gross 78,177 5,338 -22 -168 7,685 -300 -346 90,364 Land 1,469 25 -5 121 0 1,610 Buildings 8,139 279 -14 58 1 -346 8,118 Technical plant, machinery andbequipment 63,869 4,748 -11 -147 6,946 -273 75,131 Transportation, equipment 508 21 -11 0 97 0 614 OfƓ ce equipment furniture andbƓ ttings 4,153 249 -2 275 0 4,675 Other property, plant, andbequipment 39 17 0 188 -28 216 Depreciation and impairment -53,043 -5,206 24 135 -3,766 542 289 -61,025 Land -9 -2 0 0 -11 Buildings -5,184 -304 13 -22 -12 289 -5,220 Technical plant, machinery, andbequipment -44,046 -4,586 11 120 -3,340 565 -51,277 Transportation equipment -341 -38 11 1 -87 0 -454 OfƓ ce equipment, furniture, and Ɠ ttings -3,450 -255 2 -227 -23 -3,952 Other property, plant, andbequipment -12 -21 2 0 -91 11 -110 NET TOTAL 25,135 132 2 -33 3,919 242 -57 29,339
The reclassiƓ cation column concerns transfers between line items of property, plant, and equipment.
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NOTE 6 — INVESTMENTS IN EQUITY AFFILIATES
No equity interest was accounted for by the equity method in 2015, 2016, or 2017.
NOTE 7 — NONCURRENT FINANCIAL ASSETS
(in MAD million) Note Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2015 Unconsolidated investments 7.1 102 156 212 Other Ɠ nancial assets 233 171 117 NET TOTAL 335 327 329
At 31bDecemberb2017, other Ɠ nancial assets mainly comprised: – loans by Mauritel amounting to MAD 34 million; – AT Togo Ɠ nancial receivables in the amount of MAD 79 million; – loans to Maroc Telecom staff amounting to MAD 16 million. – Etisalat Bénin financial receivables in the amount of MAD 58bmillion;
At 31bDecemberb2017, the maturities of other Ɠ nancial assets were as follows:
(in MAD million) Note Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2015 Due in less than 12bmonths 172 9 42 Due in 1 to 5byears 59 159 69 Due in more than 5byears 2 3 6 NET TOTAL 233 171 117
7.1 UNCONSOLIDATED INTERESTS
2017
(in MAD million) Percentage held Gross value Impairment Carrying amount Arabsat NS 12 12 Autoroute du Maroc NS 20 4 16 Thuraya NS 10 10 Fond d’amorçage Sindibad 10%550 Médi1 TV 8% 169 138 31 RASCOM 9% 47 36 11 Sonatel NS 13 13 CMTL 25%660 INMARSAT NS 12 4 8 IMT/GIE 20% 1 1 MT Fly 100% 20 20 0 Hôtels de la GARE NS 1 1 0 TOTAL 316 213 102
In 2017, the percentage of non-consolidated listed companies was nearly unchanged.
142 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT Consolidated U nancial statements at 31 December 2015, 2016 and 2017
2016
(in MAD million) Percentage held Gross value Impairment Carrying amount Arabsat NS 13 13 Autoroute du Maroc NS 20 4 16 Thuraya NS 10 10 Fond d’amorçage Sindibad 10%550 Médi1 SAT 8% 169 84 85 RASCOM 9% 44 32 12 Sonatel NS 12 12 CMTL 25%614 INMARSAT NS 12 8 3 IMT/GIE 20% 1 1 MT Fly 100% 20 20 0 Hôtels de la GARE NS 1 1 0 TOTAL 312 156 156 4
2015
(in MAD million) Percentage held Gross value Impairment Carrying amount Arabsat NS 14 14 Autoroute du Maroc NS 20 4 16 Thuraya NS 10 10 Fond d’amorçage Sindibad 10%550 Médi1bSAT 8% 169 64 105 RASCOM 6% 45 6 39 Sonatel NS 12 12 CMTL 25%614 INMARSAT NS 12 12 IMT/GIE 20% 1 1 MT Fly 100% 20 20 0 Hôtels de la GARE NS 1 1 0 TOTAL 314 102 212
NOTE 8 — CHANGE IN DEFERRED TAXES
8.1 NET POSITION
(in MAD million) Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2015 Assets 273 276 429 Liabilities 244 266 282 NET POSITION 29 10 148
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8.2 CHANGE IN DEFERRED TAXES
2017
Impact on Change Charge to proU t shareholders’ in scope of Translation (in MAD million) 2016 or loss equity consolidation ReclassiU cations adjustment 2017 Assets 276 8 2 -26 14 273 Liabilities 266 6 -1 -28 1 244 NET POSITION 10230 21329
Deferred tax assets are almost stable compared to 2016. Deferred tax liabilities declined by MAD 22 million in comparison to 2016, due to the reduction in the dividend tax.
2016
Impact on Change Charge to proU t shareholders’ in scope of Translation (in MAD million) 2015 or loss equity consolidation ReclassiU cations adjustment 2016 Assets 429 -159 6 6 -6 276 Liabilities 282 -13 -4 1 0 266 NET POSITION 148 -146 10 0 5 -6 10
2015
Impact on Change Charge to proU t shareholders’ in scope of Translation (in MAD million) 2014 or loss equity consolidation ReclassiU cations adjustment 2015 Assets 104 91 0 237 -2 0 429 Liabilities 203 -42 0 18 103 282 NET POSITION -99 133 0 219 -105 0 148
COMPONENTS OF DEFERRED TAXES
(in MAD million) Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2015 Impairment deductible in later period 55 55 56 Restatement (IFRS) of revenues -27 -38 -40 Deferred losses 62 109 234 Other -61 -116 -102 NET POSITION 29 10 148
NOTE 9 — INVENTORIES
(in MAD million) Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2015 Inventories 500 545 579 Impairment (-) -204 -221 -204 NET TOTAL 296 324 375
144 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT Consolidated U nancial statements at 31 December 2015, 2016 and 2017
Gross inventories on 31b Decemberb 2017, mainly comprised – MAD 83 million in multimedia handsets; inventories in Morocco (MAD 387 million), including: – MAD 40 million in Fixed-line handsets. – MAD 161 million in Mobile handsets; Changes in inventories are recognized in cost of purchases. – MAD 103 million in consumable materials and supplies Inventory impairment is recorded under “Amortization, depreciation (includingb MAD 80 million in SIM cards); and charges to provisions».
NOTE 10 — TRADE ACCOUNTS RECEIVABLE AND OTHER
(in MAD million) Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2015 Trade receivables and related accounts 8,527 8,929 8,851 Other receivables and accruals 2,798 3,072 2,341 NET TOTAL 11,325 12,001 11,192 4
10.1 TRADE RECEIVABLES AND RELATED ACCOUNTS
(in MAD million) Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2015 Trade receivables 14,554 14,776 14,536 Gouvernment receivables 1,611 1,507 1,682 Depreciation of trade receivables (-) -7,638 - 7,354 - 7,367 NET TOTAL 8,527 8,929 8,851
Net trade receivables fell by 4.5% versus 2016, including a MAD 118 million drop in gross receivables. Provisioning therefore increased by 2.1%.
10.2 OTHER RECEIVABLES AND ACCRUALS
(in MAD million) Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2015 Trade receivables, advances, and deposits 169 240 123 Employee receivables 82 87 89 Tax receivables 1,193 1,687 1,369 Other receivables 985 774 463 Accruals 369 283 298 NET TOTAL 2,798 3,072 2,341
The item “Tax receivables” mainly refers to VAT and corporation income tax receivables.
In 2017, net tax receivables amounted to MAD 1,193 million subsidiaries. Onbthe other hand, the decrease is also explained by (vs.b MAD 1,687 million in 2016), down 29.2%. This variation comes the compensation receivable taxes of VAT. partly from lower tax charges at the level of certain international
MAROC TELECOM ____ 2017 Registration Document 145 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT 4 Consolidated U nancial statements at 31 December 2015, 2016 and 2017
NOTE 11 — CURRENT FINANCIAL ASSETS
(in MAD million) Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2015 Term deposit > 90bdays Escrow account 119 156 126 Marketable securities NET TOTAL 119 156 126
Maroc Telecom commissioned Rothschild Martin Maurel to execute a liquidity contract on the Paris stock exchange and a share price adjustment agreement on the Casablanca stock exchange to maintain the liquidity of its stock.
NOTE 12 — CASH AND CASH EQUIVALENTS
(in MAD million) Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2015 Cash 1,923 2,338 2,784 Cash equivalents 87 100 298 CASH AND CASH EQUIVALENTS 2,010 2,438 3,082
Cash and cash equivalents fell by MAD 428 million, mainly due to Morocco.
CHANGE IN CASH AND CASH EQUIVALENTS
(in MAD million) Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2015 Net cash from operating activities 14,911 13,483 14,569 Net cash used in investing activities -8,061 -6,094 -8,828 Net cash used in Ɠ nancing activities -7,266 -7,979 -4,008 Foreign-currency translation adjustments -13 -53 91 CHANGE IN CASH AND CASH EQUIVALENTS -428 -644 1,823 Cash and cash equivalents at beginning of period 2,438 3,082 1,259 Cash and cash equivalents at end of period 2,010 2,438 3,082 CHANGE IN CASH AND CASH EQUIVALENTS -428 -644 1,823
Cash and cash equivalents fell by MAD 428 million in 2017. This drop This increase of MAD 1,334 million is mainly due to the change of reŴ ects the decline in cash Ŵ ow from investing activities in 2017; in working capital that essentially comes from Morocco. particular the acquisitions of tangible and intangible assets partially offset by the 10.6% increase in cash Ŵ ow from operating activities and improved cash Ŵ ow from Ɠ nancing activities. NET CASH USED IN INVESTING ACTIVITIES
Net cash Ŵ ow from investing activities amounted to an outŴ ow of NET CASH FROM OPERATING ACTIVITIES MADb-8,061bmillion, a cash Ŵ ow decrease of MADb1,966bmillion versus 2016. This decline was mainly due to the mismatch during In 2017, the net cash Ŵ ow from operating activities amounted to MAD the period between reimbursements to equipment suppliers and 14,911 million, an increase of MAD 1,428 million compared to 2016. new asset acquisitions, primarily of network equipment.
146 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT Consolidated U nancial statements at 31 December 2015, 2016 and 2017
NET CASH USED IN FINANCING ACTIVITIES from banks amounting to MAD 1,873 million and overdraft lines of credit amounting to MAD 718 million earmarked for funding ongoing This Ŵ ow mainly reŴ ects dividends paid to shareholders amounting to operations. MAD -6,519 million and debt service payments amounting to MAD -3,338 million. Cash inŴ ows during the period were mainly loans
NOTE 13 — DIVIDENDS
13.1 DIVIDENDS
(in MAD million) 2017 2016 2015 Dividends paid by subsidiaries to their noncontrolling interests TOTALb(A) 918 1,118 1,089 4 Dividends paid by Maroc Telecom to its shareholders – Kingdom of Morocco 1,677 1,677 1,820 – Société de Participation dans les Télécommunications (SPT) 2,963 2,963 3,215 – Other 950 949 1,031 TOTALb(B) 5,591 5,590 6,065 TOTAL DIVIDENDS PAIDb(A)+(B) 6,509 6,708 7,154
13.2 DIVIDEND PROPOSED FOR 2017 Dividends paid by subsidiaries to non-controlling shareholders fell by 17% versus 2016, which has been marked by exceptional Dividends paid by Maroc Telecom to its shareholders remained distributions. steady relative to 2016.
NOTE 14 — PROVISIONS
Provisions for contingencies and losses are analyzed as follows:
2017
(in MAD million) Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2015 Noncurrent provisions 570 470 535 Provisions for life annuities 17 18 19 Provisions for termination beneƓ ts 428 400 381 Provisions for disputes with third parties 94 28 29 Other provisions 32 23 106 Current provisions 838 1,208 834 Provisions for voluntary redundancy plan 0 386 131 Provisions for employee-related expenses 0 0 0 Provisions for disputes with third parties 834 822 365 Other provisions 4 0 338 TOTAL 1,408 1,679 1,369
MAROC TELECOM ____ 2017 Registration Document 147 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT 4 Consolidated U nancial statements at 31 December 2015, 2016 and 2017
The “Noncurrent provisions” item mainly includes provisions for The “Current provisions” item includes provisions for restructuring retirement benefits, provisions for disputes with third parties, expenses, provisions for disputes with third parties, provisions for provisions for life annuities as well as noncurrent provisions for taxes. employee-related expenses, and current provisions for taxes.
2017
Change in scope Translation (in MAD million) 2016 Charges Used of consolidation adjustment Reversals ReclassiU cation 2017 Noncurrent provisions 470 126 - 57 24 - 5 10 570 Provisions for life annuities 18 - 1 17 Provisions for termination beneƓ ts 400 43 - 45 20 10 428 Provisions for disputes with third parties 28 76 - 11 3 - 3 94 Other provisions 23 9 1 - 2 32 Current provisions 1,208 160 - 12 15 - 419 - 115 838 Provisions for voluntary redundancy plan 386 - 386 Provisions for employee-related expenses Provisions for disputes with third parties 822 156 - 12 15 - 33 - 115 834 Other provisions 4 0 4 TOTAL 1,679 286 - 69 0 39 - 424 - 104 1,408
The decrease in provisions in 2017 is mainly due to the consumption of provisions for restructuring charges in the amount of 386 million dirhams.
2016
Change in scope Translation (in MAD million) 2015 Charges Used of consolidation adjustment Reversals ReclassiU cation 2016 Noncurrent provisions 535 53 -55 0 -9 -72 18 470 Provisions for life annuities 19 -1 18 Provisions for termination beneƓ ts 381 42 -45 0 -9 -2 33 400 Provisions for disputes with third parties 29 7 -9 0 0 1 28 Other provisions 106 4 0 0 -69 -16 23 Current provisions 834 624 -155 0 -16 -37 -42 1,208 Provisions for voluntary redundancy plan 131 255 386 Provisions for employee-related expenses 0 Provisions for disputes with third parties 365 369 -135 0 -16 -37 275 822 Other provisions 338 -20 0 -317 0 TOTAL 1,369 677 -210 0 -25 -109 -24 1,679
148 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT Consolidated U nancial statements at 31 December 2015, 2016 and 2017
2015
Change in scope Translation (in MAD million) 2014 Charges Used of consolidation adjustment Reversals ReclassiU cation 2015 Noncurrent provisions 366 41 -31 166 -4 0 -2 535 Provisions for life annuities 20 -1 19 Provisions for termination beneƓ ts 337 33 -25 41 -4 0 381 Provisions for disputes with third parties 9 8 -1 15 0 0 -2 29 Other provisions - - -3 110 -1 0 0 106 Current provisions 571 244 -144 139 0 -4 27 834 Provisions for voluntary redundancy plan 134 -4 131 Provisions for employee-related expenses - 4 Provisions for disputes with third parties 328 83 -52 47 1 -4 -37 365 Other provisions 109 161 -88 92 -1 0 64 338 TOTAL 937 285 -175 305 -4 -4 24 1,369
NOTE 15 — BORROWINGS AND OTHER FINANCIAL LIABILITIES
15.1 NET CASH POSITION
(in MAD million) Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2015 Bank loans due in more than onebyear 4,200 4,666 6,039 Bank loans due in less than onebyear 2,913 2,551 2,438 Bank overdrafts 7,977 7,559 7,172 BORROWING AND OTHER FINANCIAL LIABILITIES 15,090 14,775 15,648 Cash and cash equivalents 2,010 2,438 3,082 Cash held in escrow for repayment of bank loans 38 48 11 NET CASH POSITION -13,042 -12,289 -12,555
(in MAD million) Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2015 Outstanding debt and accrued interestb(A) 15,090 14,775 15,648 Cash assetsb(B) 2,048 2,486 3,093 NET CASH POSITIONb(B)-(A) -13,042 -12,289 -12,555
The change in the Group’s Ɠ nancial liabilities is explained by: – repayment of the euro-denominated line of credit granted by Etisalat to Maroc Telecom in the amount of MAD 999 million; – increase in debt by subsidiaries with credit institutions in the amount of MAD 2,076 million; – repayment of Ɠ nancial debts and bank overdrafts by subsidiaries in the amount of MAD 2,620 million. – increase in bank overdrafts in the amount of MAD 784 million mainly in Morocco for MAD 535 million;
MAROC TELECOM ____ 2017 Registration Document 149 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT 4 Consolidated U nancial statements at 31 December 2015, 2016 and 2017
15.2. NET CASH BY MATURITY
The breakdown by maturity is based on the repayment terms and conditions of the borrowings.
2017
(in MAD million) <1 year 1Ć5 years >5 years Total Bank loans 2,913 4,200 7,113 Bank overdrafts 7,977 7,977 BORROWING AND OTHER FINANCIAL LIABILITIES 10,890 4,200 0 15,090 Cash and cash equivalents 2,010 2,010 Cash held in escrow for repayment of bank loans 38 38 NET CASH POSITION -8,842 -4,200 0 -13,042
2016
(in MAD million) <1 year 1Ć5 years >5 years Total Bank loans 2,551 4,641 25 7,217 Bank overdrafts 7,559 7,559 BORROWING AND OTHER FINANCIAL LIABILITIES 10,110 4,641 25 14,775 Cash and cash equivalents 2,438 2,438 Cash held in escrow for repayment of bank loans 48 48 NET CASH POSITION -7,623 -4,641 -25 -12,289
2015
(in MAD million) <1 year 1Ć5 years >5 years Total Bank loans 2,438 6,012 26 8,477 Bank overdrafts 7,172 7,172 BORROWING AND OTHER FINANCIAL LIABILITIES 9,610 6,012 26 15,648 Cash and cash equivalents 3,082 3,082 Cash held in escrow for repayment of bank loans 11 11 NET CASH POSITION -6,517 -6,012 -26 -12,555
150 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT Consolidated U nancial statements at 31 December 2015, 2016 and 2017
15.3 STATEMENT OF ANALYSIS
Borrowing Company (in MAD million) Currency Maturity Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2015 Maroc Telecom Loan Etisalat EUR January-19 1,882 2,881 4,021 Maroc Telecom Loan Etisalat USD November-19 1,979 1,979 1,979 Maroc Telecom Banks, overdrafts IAM MAD - 7,535 7,064 6,711 Mauritel Leasing contracts ZTE 42 site solaire USD May-17 3 11 Mauritel Leasing contracts ZTE 12 site solaire USD April-18 1 3 5 Mauritel Leasing contracts ZTE 50 site solaire USD August-19 12 20 28 Mauritel Loan QNB MRO July-19 64 105 155 Mauritel Loan ETTIJARI MRO July-19 53 78 Mauritel Mauritel overdraft MRO - 73 1 1 4 Onatel Loan AFD1110-1111 EUR October-18 2 4 6 Onatel Loan BIB 2008 FCFA - 1 Onatel Spot credit Onatel FCFA - 179 95 Onatel CREDIT SPOT BICIA B Onatel FCFA April-18 86 Onatel CREDIT SPOT SGBF Onatel FCFA April-18 43 Onatel CREDIT SPOT SGBF Onatel FCFA April-18 86 Onatel CREDIT SPOT CBAO Onatel FCFA May-18 51 Onatel Loan BICIA 2011 Telmob FCFA July-16 17 Onatel Loan SGBB 2012 (2 wMLRS) FCFA May-17 3 10 Onatel Loan SGBB 2012 (3 MLRS) FCFA November-17 10 20 Onatel Loan BIB 2013 FCFA October-18 41 62 Onatel Loan BICIA 2014 FCFA May-20 86 114 115 Onatel Loan BICIA 2016 FCFA May-22 87 82 Onatel Loan CBAO 2015 FCFA May-21 60 73 83 Onatel Loan SGBB 2015 FCFA May-21 60 73 85 Onatel Banks, overdrafts Onatel FCFA December-19 3 16 3 Onatel Loan BICIA B 2014 FCFA May-20 34 Gabon Télécom Loan AFD EUR -222 Gabon Télécom Loan UGB FCFA December-20 367 Gabon Télécom Loan UGB FCFA December-20 166 194 Sotelma Loan DGDP/CFD OP FCFA April-20111 Sotelma Loan AFD OE/CML 1026 01 S FCFA April-18258 Sotelma Loan AFD OY/CML 1065 03 X EUR October-16 3 Sotelma Loan DGDP/NKF FCFA - 10 10 10 Sotelma Loan BIM 47 Milliards FCFA 575 Sotelma Loan BIM 58 Milliards FCFA April-19 871 Sotelma Loan BIM 10 Milliards FCFA October-19 173 Sotelma Loan BIM 52 Milliards FCFA September-16 648 Sotelma Banks, overdrafts Sotelma FCFA - 7 307 24 Casanet Banks, Ɠ nancial debt Casanet MAD - 0 0 Moov CDI Loan SIB EUR August-18 182 392 631 Moov CDI Banque Atlantique Côte d’Ivoire FCFA 2018 150
MAROC TELECOM ____ 2017 Registration Document 151 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT 4 Consolidated U nancial statements at 31 December 2015, 2016 and 2017
Borrowing Company (in MAD million) Currency Maturity Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2015 Moov CDI Banques, découvert Moov CDI FCFA - 237 Moov Bénin Loan BABE FCFA - 63 96 136 Moov Bénin Loan CAA pour construction câble ACE FCFA 23 21 Moov Togo Loan ECOBANK FCFA November-17 39 76 Moov Togo BANQUE ATLANTIQUE TOGO FCFA December-21 187 Moov Togo BANQUE ATLANTIQUE TOGO FCFA December-21 97 Moov Togo ECOBANK TOGO 2 FCFA 26 Moov Togo Banks, overdrafts Togo FCFA - 101 22 10 Moov Niger Loan ECOBANK AT Niger FCFA March-18 111 201 59 Moov Niger Loan ERICSSON USD December-16 25 Moov Niger Loan Moov CDI FCFA - 5 Moov Niger Banks, overdrafts Niger FCFA - 68 144 148 Moov Niger Mauritel overdraft FCFA 104 Moov Niger Ecobank overdraft FCFA 35 Moov Niger CBAO overdraft FCFA 15 Moov Niger Loan CBAO 1 FCFA October-17 13 Moov Niger Loan CBAO 2 FCFA November-17 24 Moov Niger Loan CBAO 3 FCFA September-20 42 Moov Niger CMT BAN FCFA December-17 85 Moov RCA Loan Ecobank FCFA - 53 3 Moov RCA BANQUE POPULAIRE MAROCO FCFA September-22 49 Moov RCA Loan DPA ERICSSON USD January-20255 Moov RCA Banks, overdrafts RCA FCFA - 4 4 37 Prestige Loan Banque Atlantique FCFA - 0 Prestige Caution (FDFP, Laborex, Reuter, GESTOCI) FCFA - 0 Moov Gabon Bank UBA FCFA - 60 TOTAL BORROWING AND OTHER FINANCIAL 15,090 14,775 15,648
NOTE 16 — TRADE ACCOUNTS PAYABLE
(in MAD million) Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2015 Trade payables and related accounts 16,265 15,247 13,732 Accruals 2,370 2,107 2,223 Other payables 6,992 7,272 6,872 TOTAL 25,627 24,626 22,827
Trade payables and related accounts include amounts due for the In 2017, operating debt rose by MAD 1,001 million, of which MAD acquisition of Ɠ xed assets and trade receivables – advances and 1,018 million reflects an increase in trade payables and related deposits on orders in progress. accounts, versus 2016. “Other operating debts” mainly reflects tax owed (excluding corporation tax) in the amount of MAD 4,432 million.
152 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT Consolidated U nancial statements at 31 December 2015, 2016 and 2017
NOTE 17 — REVENUES
(in MAD million) 2017 2016 2015 Morocco 20,481 21,244 21,033 International 15,733 15,326 14,010 Elimination of transactions between the parent company andbsubsidiaries -1,250 -1,318 -910 TOTAL CONSOLIDATED REVENUES 34,963 35,252 34,134
As of December-end 2017 Maroc Telecom Group’s consolidated of the deregulation of IP telephony since Novemberb2016 and the revenues amounted to MAD 34,963 million, down slightly by 0.8% decline in call termination rates. Revenues from outgoing services (-0.9% at constant exchange rates). The 2.4% increase in subsidiaries’ were up 3.7% thanks mainly to the growth in the customer base and revenues at constant exchange rates offset the impact in Morocco increased Data usage. 4 NOTE 18 — COST OF SALES
(in MAD million) 2017 2016 2015 Cost of handsets 659 793 835 Domestic and international interconnection charges 4,090 4,290 4,213 Other cost of sales 1,188 1,140 998 TOTAL 5,937 6,223 6,046
The “Other cost of sales” item mainly comprises purchases of energy Purchases consumed decreased from MAD 6,223 million in 2016 (fuel and electricity), the cost of purchasing phone cards, and other to MAD 5,937 million in 2017, following lower termination rates for consumables. international call.
NOTE 19 — PAYROLL COSTS
(in MAD million) 2017 2016 2015 Wages 2,654 2,796 2,761 Payroll taxes 484 463 483 Wages and taxes 3,138 3,260 3,245 Payroll costs 3,138 3,260 3,245 Average headcount (in number of employees) 11,022 12,162 12,556
This item includes the payroll costs for the Ɠ scal year (wages, payroll In 2017, personnel expenses declined by MAD 122 million due to the taxes, training costs) but excludes employee severance plan costs, Ɠ nalization of the voluntary redundancy plan in Morocco. which were recognized as other operating expenses.
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NOTE 20 — TAXES, DUTIES, AND FEES
(in MAD million) 2017 2016 2015 Taxes and duties 873 1,096 803 Fees 1,964 1,876 1,573 TOTAL 2,838 2,971 2,377
Royalties include amounts owed to telecom regulatory agencies in In 2017, total taxes, duties and fees fell by 4.5% versus 2016. Tax Morocco and internationally. expense fell by MAD 223 million, mainly due to tax changes favoring Sub-Saharan subsidiaries.
NOTE 21 — OTHER OPERATING INCOME AND EXPENSES
(in MAD million) 2017 2016 2015 Communication 822 809 815 Commissions 1,845 1,745 1,628 Other including: 3,517 2,931 2,879 Rental expenses 852 936 823 Maintenance, repair, and property-service charges 1,020 962 1,023 Fees 763 706 491 Postage and banking service 149 145 140 Voluntary redundancy plan 620 4 Other 113 183 398 TOTAL 6,183 5,485 5,323
In 2017, other operating income and expenses increased by MAD – signiƓ cant increase in voluntary redundancy plan expense; 698 million. – slight decline in rental expenses and other operating expenses. The changes mainly reŴ ect: The “Other” item primarily includes foreign exchange gains and – increase in commissions, reflecting the revenue growth of losses on operations, transfers of operating expenses, and gains or subsidiaries; losses on disposals of Ɠ xed assets.
NOTE 22 — DEPRECIATION, IMPAIRMENT AND PROVISIONS
The following table sets out changes in this item for the Ɠ scalbyears ended 31bDecemberb2015, 2016, and 2017:
(in MAD million) 2017 2016 2015 Depreciation and impairment of Ɠ xed assets 6,610 6,489 6,403 Net provisions and impairment 54 355 400 TOTAL 6,557 6,845 6,804
Net allocations to depreciation, impairment and provisions amounted to MAD 6,557 million at December end 2017, versus MAD 6,845 million at December end 2016. This change mainly reŴ ects the reversal of provisions for the voluntary redundancy plan.
154 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT Consolidated U nancial statements at 31 December 2015, 2016 and 2017
DEPRECIATION AND IMPAIRMENT OF FIXED ASSETS
The following table sets out the depreciation and impairment of Maroc Telecom Group’s Ɠ xed assets for the Ɠ scal years ended 31bDecemberb2015, 2016, and 2017:
(in MAD million) 2017 2016 2015 Other intangible assets 1,300 1,309 1,199 Building and civil engineering 286 249 304 Technical plant and pylons 4,690 4,616 4,586 Other property, plant, and equipment 334 315 314 TOTAL 6,610 6,489 6,403
N ET CHARGES TO PROVISIONS AND IMPAIRMENT
The following table sets out the net charges to provisions and impairment of Maroc Telecom Group for the Ɠ scal years ended 31bDecemberb2015, 2016, and 2017: 4
(in MAD million) 2017 2016 2015 Impairment of trade receivables 178 78 170 Impairment of inventories -22 18 -5 Impairment of other receivables 22 4 58 Provisions -232 256 177 NET CHARGES AND REVERSALS -54 355 400
NOTE 23 — INCOME FROM EQUITY AFFILIATES
No equity interest was accounted for by the equity method in 2015, 2016, or 2017.
NOTE 24 — NET FINANCIAL INCOME OR EXPENSE
24.1 BORROWING COSTS
(in MAD million) 2017 2016 2015 Income from cash and cash equivalents 6 10 14 Interest expense on loans -497 -333 -454 NET BORROWING COSTS -491 -322 -439
Net borrowing costs include interest expense on loans less income Interest expense on borrowings increased by 49%. This variation is from cash and cash equivalents (investment income). due not only to the increase in the Group’s debt volume, but also to the rise in interest rates.
MAROC TELECOM ____ 2017 Registration Document 155 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT 4 Consolidated U nancial statements at 31 December 2015, 2016 and 2017
24.2 OTHER FINANCIAL INCOME AND EXPENSE
(in MAD million) 2017 2016 2015 Foreign-exchange gains and losses 5 5 -46 Other Ɠ nancial income (+) 84 83 34 Other Ɠ nancial expenses (-) -89 -211 -113 OTHER FINANCIAL INCOME AND EXPENSES -1 -124 -126
“Other Ɠ nancial expenses” decreased by 122 million dirhams. In 2015 “Other Ɠ nancial income” takes into account revenues from non- and 2016, the Group paid registration fees related to the acquisition consolidated investments and the proceeds from their disposal. of the new MOOV subsidiaries, hence this variation.
NOTE 25 — TAX EXPENSE
Like all Moroccan corporations (sociétés anonymes), Maroc Telecom Deferred tax reŴ ects temporary differences between the carrying is subject to income tax. value of assets and liabilities and their tax-base value. “Income tax expense” includes current and deferred taxes.
The following table shows Maroc Telecom Group’s payable and deferred taxes for the years ended 31bDecemberb2015, 2016, and 2017:
(in MAD million) 2017 2016 2015 Income tax expense 3,199 3,221 3,373 Deferred tax -2 146 -133 Provisions for tax 11 -20 -88 Current tax 3,208 3,347 3,152 Consolidated effective tax rateb(a) 33% 34% 32%
(a) Tax expense/pretax earnings.
(in MAD million) 2017 2016 2015 Net earnings 6,579 6,628 6,577 Income tax expense 3,197 3,367 3,240 Provision for tax 11 -20 -88 Pretax earnings 9,787 9,975 9,729 Moroccan statutory tax rate 31% 31% 30% Theoretical income tax expense 3,034 3,092 2,919 Impact of changes in tax rate -91 -80 -65 Other differencesb(b) 265 334 298 Effective income tax expense 3,208 3,347 3,152
(b) Other net differences mainly include withholding tax of MADb235b million of Maroc Telecom.
A provision for tax was recognized for the subsidiary Sotelma in the In 2017, following the outcome of the tax audit covering Ɠ scal years amount of MAD 11 million. 2011, 2012, 2013 and 2014, the Sotelma subsidiary paid a sum of MAD 19 million.
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The deferred tax rates of the Group are as follows:
Entity The deT ered tax rate Maroc Telecom 31.0% Mauritel 25.0% Onatel 27.5% Gabon Telecom 30.0% Sotelma 30.0% Atlantique Telecom Côte d’Ivoire 30.0% Etisalat Benin 30.0% Atlantique Telecom Togo 28.0% Atlantique Telecom Niger 30.0% Atlantique Telecom Centrafrique 30.0% 4 NOTE 26 — NONCONTROLLING INTERESTS
(in MAD million) 2017 2016 2015 Total noncontrolling interests 873 1,031 982
Noncontrolling interests represent the claims of shareholders other In 2017, non-controlling interests fell by 15% because of lower than Maroc Telecom to the earnings of Mauritel, Onatel, Gabon earnings in some of the subsidiaries. Telecom, Sotelma, AT CDI, and AT Togo.
NOTE 27 — EARNINGS PER SHARE
27.1 EARNINGS PER SHARE
2017 2016 2015
(in MAD million) Basic Diluted Basic Diluted Basic Diluted Net earnings, Group share 5,706 5,706 5,598 5,598 5,595 5,595 Adjusted net earnings, Group share 5,706 5,706 5,598 5,598 5,595 5,595 Number of shares (in million) 879 879 879 879 879 879 Earnings per share (in MAD) 6.49 6.49 6.37 6.37 6.36 6.36
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27.2 CHANGE IN THE NUMBER OF SHARES
(in MAD million) 2017 2016 2015 Weighted average number of shares outstanding for the period 879,095,340 879,095,340 879,095,340 Adjusted weighted average number of shares outstanding forbthe period 879,095,340 879,095,340 879,095,340 Potential dilutive effect of Ɠ nancial instruments outstanding Number of shares including potential dilutive effect 879,095,340 879,095,340 879,095,340
NOTE 28 — SEGMENT DATA
28.1 STATEMENT OF FINANCIAL POSITION: ITEMS BY GEOGRAPHICAL AREA
2017
Total Maroc (in MAD million) Morocco International Eliminations Telecom Group Noncurrent assets 37,129 24,360 -12,610 48,879 Current assets 7,963 8,135 -2,295 13,803 TOTAL ASSETS 45,092 32,495 -14,905 62,682 Shareholders’equity 17,666 11,065 -8,981 19,750 Noncurrent liabilities 2,963 5,680 -3,629 5,014 Current liabilities 24,462 15,750 -2,295 37,918 TOTAL SHAREHOLDERS’EQUITY AND LIABILITIES 45,092 32,495 -14,905 62,682 Acquisitions of PP&E and intangible assets 4,612 3,643 8,256
2016
Total Maroc (in MAD million) Morocco International Eliminations Telecom Group Noncurrent assets 36,172 22,446 -12,296 46,322 Current assets 8,413 8,526 -1,966 14,974 TOTAL ASSETS 44,585 30,972 -14,261 61,296 Shareholders’equity 17,600 10,679 -8,981 19,298 Noncurrent liabilities 4,051 4,666 -3,315 5,402 Current liabilities 22,934 15,628 -1,966 36,596 TOTAL SHAREHOLDERS’EQUITY AND LIABILITIES 44,585 30,972 -14,261 61,296 Acquisitions of PP&E and intangible assets 3,906 4,077 7,983
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2015
Total Maroc (in MAD million) Morocco International Eliminations Telecom Group Noncurrent assets 36,549 21,594 -12,483 45,660 Current assets 7,475 8,508 -1,094 14,889 TOTAL ASSETS 44,024 30,101 -13,576 60,549 Shareholders’equity 16,950 11,491 -8,617 19,825 Noncurrent liabilities 5,185 5,536 -3,866 6,855 Current liabilities 21,889 13,074 -1,094 33,869 TOTAL SHAREHOLDERS’EQUITY AND LIABILITIES 44,024 30,101 -13,576 60,549 Acquisitions of PP&E and intangible assets 4,793 4,043 8,835
28.2 SEGMENT EARNINGS BY GEOGRAPHICAL AREA 4 2017
Total Maroc (in MAD million) Morocco International Eliminations Telecom Group Revenues 20,481 15,733 -1,250 34,963 Earnings from operations 6,760 3,550 0 10,310 Net depreciation and impairment 3,826 2,784 6,610 Voluntary redundancy plan 579 41 620
2016
Total Maroc (in MAD million) Morocco International Eliminations Telecom Group Revenues 21,244 15,326 -1,318 35,252 Earnings from operations 6,901 3,568 10,468 Net depreciation and impairment 3,846 2,643 6,489 Voluntary redundancy plan 0
2015
Total Maroc (in MAD million) Morocco International Eliminations Telecom Group Revenues 21,033 14,010 -910 34,134 Earnings from operations 7,383 2,956 10,339 Net depreciation and impairment 3,761 2,643 6,403 Voluntary redundancy plan 4 4
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NOTE 29 — RESTRUCTURING PROVISIONS
Total Maroc (in MAD million) Morocco International Telecom Group BALANCE AT JAN. 01, 2015 134 0 134 Change in scope and adjustment of allocation of acquisition price Allocated Used -4 -4 Reversed BALANCE AT DEC. 31, 2015 131 0 131 Change in scope and adjustment of allocation of acquisition price Allocated 255 255 Used Reversed BALANCE AT DEC. 31, 2016 386 0 386 Change in scope and adjustment of allocation of acquisition price Allocated Used Reversed -386 -386 BALANCE AT DEC. 31, 2017 0 0 0
Provisions for restructuring were used after the Ɠ nalization of the voluntary redundancy plan in Morocco.
NOTE 30 — RELATED-PARTY TRANSACTIONS
30.1 COMPENSATION OF CORPORATE OFFICERS, SENIOR MANAGERS, AND DIRECTORS IN 2015, 2016, AND 2017
(in MAD million) 2017 2016 2015 Short-term beneƓ tsb(a) 84 55 48 Termination beneƓ tsb(b) 105 65 55
(a) Wages and salaries, compensation, incentives and bonuses paid, social security contributions, paid leave and nonmonetary beneƓ ts recognized. (b) Severance pay.
30.2 EQUITY AFFILIATES 30.3 OTHER RELATED PARTIES
In 2015, 2016 and 2017 no company is consolidated by the equity Maroc Telecom conducted transactions in 2017 mainly with Emirates method. Telecommunications Corporation, Atlantique Telecom and Etisalat Intl Rep. Of Benin, Etihad Etisalat Company (Mobily), EDCH, Etisalat International Nigeria Limited (EIN) and Excelcommindo (Excel) as part of the strategic cooperation with the Etisalat Group. These different transactions are summarized as follows:
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2017
Atlantique Etisalat Intl (in MAD million ) Etisalat Telecom, S. A Rep. of Benin Mobily EDCH EIN Excelcommindo Revenues 139 66 166010 Expenses 46333120 Receivables 47 20 112010 Payables 3,881 1030822
2016
(in MAD million) Etisalat Mobily Revenues 163 7 Expenses 21 5 Receivables 24 6 Payables 4,863 3 4
2015
(in MAD million) Etisalat Mobily Revenues 202 6 Expenses 26 17 Receivables 41 1 Payables 6,003 11
NOTE 31 — CONTRACTUAL COMMITMENTS AND CONTINGENT ASSETS AND LIABILITIES
31.1 CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS RECORDED IN THE BALANCE SHEET
Less than (in MAD million) Total 12 months 1Ć5 years >5 years Long-term debt 15,090 10,890 4,200 0 Capital lease obligations 7 7 0 Operating leases 105 30 76 0 Irrevocable purchase commitments Other long-term commitments TOTAL 15,203 10,919 4,283 0
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31.2 OTHER COMMITMENTS GIVEN In 2016 AND RECEIVED AS PART OF An investment commitment of MAD 6,918 million, distributed as THE CURRENT ACTIVITY follows: – MAD 6,235 million for ITISSALAT AL MAGHRIB SA; – Commitments given MAD 256 million for Onatel; – MAD 187 million for AT Niger; Commitments given comprise the following: – MAD 93 million for Gabon Telecom; In 2017 – MAD 62 million for Etisalat Benin; An investment commitment of MAD 4,719 million, distributed as – MAD 60 million for Sotelma; follows: – MAD 23 million for Mauritel; – MAD 3,642 million for Maroc Telecom; – MAD 2 million for AT RCA. – MAD 336 million for AT Niger; Commitments through guarantees and endorsements issued to – MAD 234 million for Onatel; banks for MAD 1,297 million, which break down as follows: – MAD 209 million for Gabon Telecom; – MAD 519 million for ITISSALAT AL MAGHRIB SA; – MAD 149 million for Etisalat Benin; – MAD 285 million for AT Niger; – MAD 120 million for Sotelma; – MAD 147 million for Etisalat Benin; – MAD 29 million for Mauritel; – MAD 120 million for AT Togo; – MAD 1 million for AT RCA. – MAD 82 million for Onatel; Commitments through guarantees and endorsements issued to – MAD 81 million for Sotelma; banks for MAD 1,532 million, which break down as follows: – MAD 59 million for AT RCA; – MAD 569 million for AT Niger; – MAD 3 million for Gabon Telecom; – MAD 314 million for Sotelma; – MAD 1 million for Mauritel. – MAD 265 million for ITISSALAT AL MAGHRIB SA; Operating and Ɠ nance lease commitments totaling MAD 65 million. – MAD 160 million for AT Benin; Commitments for a long-term satellite lease in the amount of MAD – MAD 105 million for AT Togo; 45 million. – MAD 66 million for Onatel; Other commitments for MAD 455 million, including: – MAD 52 million for AT Central African Republic; – MAD 214 million for Atlantique Telecom Côte d’Ivoire in respect – MAD 1 million for Mauritel. of the network maintenance contract with Ericsson; Simple lease commitments and Ɠ nancing for a total of 113 million – MAD 107 million for AT Niger in respect of the network dirhams. maintenance contract with Ericsson; Commitments for a long-term satellite lease in the amount of MAD – MAD 49 million for Etisalat Benin in respect of the network 44 million. maintenance contract with Ericsson; – Other commitments for MAD 219 million, including: MAD 17 million for AT Togo in respect of the network maintenance contract with Ericsson; – MAD 145 million for Atlantique Telecom Côte d’Ivoire in respect – MAD 13 million for Mauritel OPEX commitments; of the network maintenance contract with Ericsson; – MAD 9 million for Onatel OPEX commitments; – MAD 23 million for AT Niger in respect of the network maintenance contract with Ericsson; – MAD 2 million for AT RCA OPEX commitments. – MAD 20 million for Mauritel OPEX commitments; Other commitments (ITISSALAT AL MAGHRIB SA): – MAD 15 million for AT Togo in respect of the network maintenance – reversal of Guarantees issued by Etisalat on the Ɠ nancing of the contract with Ericsson; Atlantique subsidiaries (EURb4.15 million at 12/31/2016, i.e., MAD – MAD 10 million for Onatel OPEX commitments; 44 million); – – MAD 3 million for Gabon Telecom OPEX commitments; swap agreement: Commitment to the forward sale of EUR 120 million against USD 138 million under the swap agreement. – MAD 2 million for AT RCA OPEX commitments. In 2015 Other Commitments (ITISSALAT AL MAGHRIB SA): An investment commitment of MAD 3,574 million, which breaks – takeover of the guarantees given by Etisalat on the Ɠ nancing of down as follows: the Atlantic subsidiaries (0.19 million euros at 31/12/2017, or MAD 2.1 million); – MAD 2,556 million for ITISSALAT AL MAGHRIB SA; – commitment to forward sell €154 million against US$176 million – MAD 288 million for Onatel; under the forward buy and sell agreement. – MAD 168 million for Sotelma;
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– MAD 158 million for Gabon Telecom; Other commitments received (ITISSALAT AL MAGHRIB SA): – MAD 154 million for AT Niger; – Forward purchase commitment of $ 176 million versus € 154 – MAD 94 million for Mauritel; million under the Forward Purchase and Sale. – MAD 91 million for AT RCA; – Agreement Commitment by the Moroccan government to social welfare. – MAD 65 million for Etisalat Benin. – Investment agreement: Commitments through guarantees and endorsements issued to banks for MAD 700 million, which break down as follows: — Exemption of the customs duties on the imports relating to the investments. – MAD 263 million for ITISSALAT AL MAGHRIB SA; In 2016 – MAD 155 million for Sotelma; Guarantees received for MAD 1,233 million at 31bDecemberb2016 – MAD 107 million for Etisalat Benin; versus MAD 1,295 million to 31bDecemberb2015, distributed as – MAD 95 million for AT Togo; follows: – MAD 44 million for Onatel; – MAD 754 million for ITISSALAT AL MAGHRIB SA, for endorsements – MAD 27 million for Mauritel; and bonds; – MAD 8 million for Gabon Telecom; – MAD 153 million for Etisalat Benin, deposits received; – MAD 1 million for AT Niger. – MAD 84 million for Mauritel, deposits received; Operating and Ɠ nance lease commitments totaling MADb75 million. – MAD 69 million for AT Cote d’Ivoire, deposits received; Commitments for a long-term satellite lease in the amount of MADb48 – MAD 50 million for Onatel, guarantees received; 4 million. – MAD 37 million for AT RCA guarantees received; Various commitments for MADb490 million, including: – MAD 32 million for Gabon Telecom, guarantees received; – MAD 129 million for Etisalat Benin in respect of the network – MAD 29 million for AT Niger, deposits received; maintenance contract with Ericsson; – MAD 15 million for Sotelma, deposits received; – MAD 88 million for Mauritel OPEX commitments; – MAD 11 million for AT Togo, deposits received. – MADb72 million for AT Niger in respect of the network maintenance Other commitments received (Maroc Telecom): contract with Ericsson; – – swap agreement: Commitment to the forward purchase of USD MADb64 million for Atlantique Telecom Côte d’Ivoire in respect of 138 million against EUR 120 million under the currency hedging the network maintenance contract with Ericsson; agreement; – MAD 19 million for AT Togo in respect of the network maintenance – commitment by the Moroccan government to social welfare; contract with Ericsson; – investment agreement: – MAD 10 million for Onatel OPEX commitments. — exemption of the customs duties on the imports relating to Other commitments (ITISSALAT AL MAGHRIB SA): thebinvestments. – reversal of Guarantees issued by Etisalat on the Ɠ nancing of opcos 2015 (EURb9.82 million at 12/31/2015, i.e., MAD 106 million); – Guarantees received for 1,295 million dirhams at 31bDecemberb2015 SWAP agreement: Commitment to the forward sale of EUR 120 versus 1,187 million dirhams to 31bDecemberb2014, as follows: million against USD 138 million under the SWAP agreement. – MADb916 million for ITISSALAT AL MAGHRIB SA, for guarantees; Commitments received – MADb100 million for Mauritel, guarantees received; – MADb23 million for Onatel, guarantees received; Commitments received comprise the following: – MADb46 million for Sotelma, guarantees received; In 2017 – MADb72 million for AT Côte d’Ivoire, guarantees received; Guarantees received for MAD 1,289 million at 31bDecemberb2017 – MADb104 million for Etisalat Benin, guarantees received; versus MAD 1,233 million to 31bDecemberb2016, distributed as – follows: MADb11 million for AT Togo, guarantees received; – MADb24 million for AT Niger, guarantees received. – MAD 679 million for ITISSALAT AL MAGHRIB SA, for endorsements and bonds; Other commitments received (Maroc Telecom): – MAD 242 million for AT Niger, guarantees received; – SWAP Agreement: Commitment to the forward purchase of USD – MAD 89 million for Mauritel, deposits received; 138 million against EUR 120 million under the currency hedging agreement; – MAD 86 million for Etisalat Benin, deposits received; – commitment by the Moroccan government to social welfare; – MAD 61 million for AT Cote d’Ivoire, deposits received; – investment Agreement: – MAD 58 million for Sotelma, guarantees received; — exemption of the customs duties on the imports relating to the – MAD 40 million for Onatel, deposits received; investments. – MAD 34 million for Gabon Telecom, guarantees received.
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NOTE 32 — RISK MANAGEMENT
The Group is exposed to different risks of market related to its activity. CURRENCY RISK
Maroc Telecom Group is exposed to exchange rate Ŵ uctuations to the CREDIT RISK extent that inŴ ows and outŴ ows are in different currencies. Maroc Telecom receives inŴ ows in foreign currencies in the form of Maroc Telecom minimizes its credit risk by committing solely to credit international operator’s revenues, and makes expenditures in foreign transactions with merchant banks or Ɠ nancial institutions that have currencies in the form of payments to international suppliers (notably, a high credit rating and by splitting its transactions among selected as capital expenditure and when buying terminals) and payments for institutions. interconnections with foreign operators. These outŴ ows are mainly denominated in euros. Maroc Telecom’s receivables show no major concentration of credit risk, as their dilution ratio is high. In Morocco, at 31bDecemberb2017, euro-denominated outŴ ows in foreign currencies accounted for 78% of total outŴ ows in foreign currencies total outŴ ows MAD 3,754 million. In 2017, these outŴ ows in foreign currencies were less than inŴ ows in foreign currencies amounting to MAD 3,886 million. Internationally, at 31bDecemberb2017, dollar-denominated outŴ ows in foreign currencies accounted for 47% of total outŴ ows in foreign currencies, totaling MAD 2,478 million. In 2017, these outŴ ows in foreign currencies were more than inflows in foreign currencies amounting to MAD 766 million.
In addition, Maroc Telecom Group held debt of MAD 15,090 million at 31bDecemberb2017 vs. MAD 14,775 million at 31bDecemberb2016. The bulk of this debt is denominated in Euro and MAD:
(in MAD million) 2017 2016 2015 Euro 2,067 3,277 6,641 Moroccan dirham 7,535 7,064 6,711 Other (mainly CFA Franc) 5,488 4,434 2,295 CURRENT DEBT 15,090 14,775 15,648
Maroc Telecom Group cannot fully offset its inŴ ows against outŴ ows However, based on the Group’s 2017 Ɠ nancial statements, a 1% or vice-versa as Moroccan regulations allow only 80% of its telecoms devaluation of the dirham against the euro would have the following receipts in foreign currencies to be kept in a foreign-currency limited impacts: account, the remaining 20% having to be settled in dirhams. Maroc – revenues =b+bMAD 153 million; Telecom Group results may therefore be sensitive to Ŵ uctuations in exchange rates, particularly in terms of dirham, US dollars or euros. – earnings from operations =b+bMAD 40 million; – In 2017, the euro slipped by 5.09% against the dirham (from net earnings, Group share =b+bMAD 15 million. 10.6450 dirhams per euro on 31bDecemberb2016 to 11.1870 on At Maroc Telecom, assets in foreign currencies consist mainly of 31bDecemberb2017). Over the same period, the US dollar rose by receivables from its subsidiaries and foreign operators. Liabilities in 7.59%, from 10.0960 dirhams per dollar in 2016 to 9.3295 in 2017. foreign currencies consist mainly of debts to the parent company, suppliers and operators. Internationally, assets in foreign currencies The subsidiaries whose accounting currency is the CFA franc and consist mainly of receivables from foreign operators. The Group’s the Mauritanian subsidiary whose currency is the ouguiya increase currency liabilities are made up primarily of payables to foreign the Group’s exposure to currency risk, particularly as regards to suppliers and operators. Ŵ uctuations in the exchange rate of the euro and the ouguiya against the dirham.
Total foreign (in MAD million) EUR/FFCFA USD MRO currencies MAD Final balance Total assets 32,381 634 1,713 27 27,927 62,682 Total shareholders’equity and liabilities -18,763 -4,405 -1,172 -15 -38,328 -62,682 NET POSITION 13,618 -3,771 542 12 -10,401 0
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The Group has a currency hedging arrangement in the form of a The following table shows the Company’s net foreign-currency forward swap (euro/dollar) on US dollar-denominated borrowing. positions in euros and US dollars, and the aggregate of other currencies, at 31bDecemberb2017:
Other currencies (in million) EUR (c) USD (c) (against the euro (a)) (b) Assets 530 43 2 Liabilities -274 -334 -8 Net position 257 -292 -6 Commitmentsb(d ) -151 173 AGGREGATE NET POSITION 106 -119 -6
(a) based on 1 euro =b11.1870 dirhams, the Bank-Al Maghrib average rate at Dec.31, 2017. (b ) Other currencies are mainly the Japanese yen (YEN), Swiss franc (CHF) and Swedish krona (SEK). (c ) The foreign-currency position in euros and in dollars is calculated by applying, to receivables and debts expressed in Special Drawing Rights (SDR) of foreign operators at 31bDecemberb2016, the proportion per currency of inŴ ows in 2016. (d ) For the balance of commitments owed on contracts in progress, the breakdown by currency corresponds to the actual remaining part of the contracts signed. 4 LIQUIDITY RISK INTEREST-RISK RISK
Maroc Telecom estimates that the cash flows generated by its Maroc Telecom Group’s debt is mainly at a Ɠ xed rate of interest. operating activities, its holdings of cash and cash equivalents, and As the variable-rate component of its debt is relatively small, funds available via lines of credit, will be sufficient to cover the Maroc Telecom Group is not signiƓ cantly exposed to favorable or disbursements and capital expenditures necessary for its operations, unfavorable Ŵ uctuations in interest rates. for servicing its debt, for dividend payments, and for external growth operations in progress on 31bDecemberb2017.
NOTE 33 — EVENTS AFTER THE END OF THE REPORTING PERIOD
33.1 HIGHLIGHTS
None.
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4.4 _ Statutory financial statements
LIST OF CONTENTS TO THE NOTES TO THE FINANCIAL STATEMENTS
Pursuant to regulation (EC) no.b1606/2002 of the European Parliament of 19bJulyb2002, Maroc Telecom Group’s consolidated Ɠ nancial statements have been prepared in accordance with International Financial Reporting Standards (IAS/IFRS), as endorsed by the European Union.
STATUTORY AUDITORS’ GENERAL REPORT YEARS ENDED DECEMBER 31, 2017 167 ASSETS 168 SHAREHOLDERS’EQUITY AND LIABILITIES 169 STATEMENT OF COMPREHENSIVE INCOME ʂEXCLUSIVE OF VATʃ 170 STATEMENT OF OPERATING DATA 171 STATEMENT OF CASH FLOWS 172 A1 MAIN VALUATION METHODS USED BY THE COMPANY 173 A2 EXCEPTIONS 175 A3 CHANGES IN METHOD 175 B1 CAPITALIZED COSTS 175 B2 NON FINANCIAL ASSETS 176 B2 BIS B3 GAINS AND LOSSES FROM DISPOSALS AND RETIREMENT OF FIXED-LINED ASSETS 177 B4 EQUITY INVESTMENTS 178 B5 PROVISIONS 179 B6 RECEIVABLES 180 B7 LIABILITIES 180 B8 GUARANTEES GIVEN OR RECEIVED 181 B9 FINANCIAL COMMITMENTS GIVEN OR RECEIVED, EXCLUDING LEASING TRANSACTIONS 182 B10 FINANCE-LEASE ASSETS 183 B11 ANALYSIS OF STATEMENT OF COMPREHENSIVE INCOME ʂITEMSʃ 184 B12 RECONCILIATION OF NET INCOME TO TAXABLE INCOME 186 B13 DETERMINATION OF ORDINARY INCOME AFTER TAX 187 B14 ANALYSIS OF VAT 187 C1 SHAREHOLDER STRUCTURE 188 C2 APPROPRIATION OF YEAR-END INCOME 189 C3 INCOME AND OTHER SIGNIFICANT ITEMS OVER THE PAST THEE YEARS 189 C4 TRANSACTIONS IN FOREIGN CURRENCIES DURING THE YEAR 190 C5 DATE OF FINANCIAL STATEMENTS AND SUBSEQUENT EVENTS 190
166 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT Statutory U nancial statements
STATUTORY AUDITORS’ GENERAL REPORT YEARS ENDED DECEMBER 31, 2017
To shareholders of Itissalat Al Maghrib “IAM” SA involves implementing procedures in order to gather information about the amounts and disclosures in the Ɠ nancial statements. Avenue Annakhil, Hay Riad The procedures selected depend on the auditors’judgment, Rabat, Maroc including the assessment of risk that the Ɠ nancial statements could In accordance with the terms of our appointment by the General contain material misstatements. In assessing such risk, the auditors Meeting, we have audited the accompanying Ɠ nancial statements take into consideration the entity’s current internal controls relating of Itissalat Al-Maghrib (IAM) SA, including the statement of Ɠ nancial to the preparation and presentation of the Ɠ nancial statements, in position, the statement of comprehensive income, the statement order to deƓ ne audit procedures that Ɠ t the circumstances, but not of operating data, the statement of cash Ŵ ows, and the additional for the purpose of stating an opinion on the effectiveness of the disclosures, concerning theb year ended 31b Decemberb 2017. internal control. An audit also involves evaluating the appropriateness These Ɠ nancial statements show shareholders’equity and reserves of the accounting policies used, the soundness of the accounting of MADb15,363,637 thousand and net profit of MADb5,699,461 estimates made by management, and the overall presentation of thousand. the Ɠ nancial statements. We believe that the information gathered is sufƓ cient and appropriate MANAGEMENT’S RESPONSIBILITY to provide a basis for our audit opinion. 4
Management is responsible for preparing these Ɠ nancial statements to give a true and fair view of the Company, in accordance with OPINION ON THE FINANCIAL STATEMENTS the accounting standards generally accepted in Morocco. This In our opinion, the financial statements referred to in the responsibility includes planning, implementing, and monitoring first paragraph above give a true and fair view of ITISSALAT internal controls relating to the preparation and presentation ALMAGHRIB (IAM) SAs assets, liabilities, and Ɠ nancial position at of financial statements that are free of material misstatement, 31bDecemberb2017, and of its operations for thebyear then ended, and selecting accounting estimates that are appropriate to the in accordance with the accounting principles generally accepted circumstances. in Morocco.
AUDITORS’RESPONSIBILITY SPECIFIC CONTROLS AND INFORMATION Our responsibility is to render an opinion on these financial We have also performed the speciƓ c veriƓ cations required by law. statements on the basis of our audit. We have conducted our audit In particular, we ensured that the information contained in the in accordance with the audit standards applicable in Morocco. These Management Board’s report to the Shareholders was consistent with standards require us to comply with a Code of Ethics and to plan and the Company’s Ɠ nancial statements. perform the audit in order to obtain reasonable assurance that the Ɠ nancial statements are free from material misstatement. An audit
Februaryb16, 2018 The Statutory Auditors Deloitte Audit Abdelaziz Almechatt Sakina Bensouda-korachi Abdelaziz Almechatt Partner Partner
MAROC TELECOM ____ 2017 Registration Document 167 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT 4 Statutory U nancial statements
ASSETS
Net Amortization (in MAD thousand) Gross and provisions 2017 2016 2015 CAPITALIZED COSTS (A) 0 0000 Start-up costs 0 0000 Deferred costs 0 0000 Bond redemption premiums 0 0000 INTANGIBLE ASSETS (B) 11,990,431 9,518,046 2,472,385 2,501,845 2,851,000 Research and development costs 0 0000 Patents, trademarks, and similar rights 11,489,661 9,453,742 2,035,919 2,171,240 2,408,475 Goodwill 70,717 64,304 6,414 10,722 13,761 Other intangible assets 430,052 0 430,052 319,882 428,764 PROPERTY, PLANT, AND EQUIPMENT (C) 67,390,536 48,022,551 19,367,986 18,629,831 18,226,274 Land 954,671 0 954,671 953,601 950,351 Buildings 7,296,310 4,594,425 2,701,885 2,684,928 2,711,854 Technical plant, machinery, and equipment 51,323,298 39,052,890 12,270,408 12,130,825 11,577,716 Vehicles 46,578 38,033 8,545 73,420 79,387 OfƓ ce equipment, furniture, and Ɠ ttings 4,612,920 4,091,062 521,858 581,644 663,008 Other property, plant, and equipment 11,048 0 11,048 11,048 11,048 Work in progress 3,145,711 246,141 2,899,570 2,194,365 2,232,910 FINANCIAL ASSETS (D) 12,553,701 167,149 12,386,552 12,382,829 12,983,705 Long-term loans 3,074,386 0 3,074,386 2,996,776 3,926,026 Other Ɠ nancial receivables 3,382 0 3,382 3,382 3,558 Equity investments 9,475,932 167,149 9,308,784 9,382,670 9,054,121 Other investments and securities UNREALISED FOREIGN EXCHANGE LOSSES (E) 53,895 0 53,895 52,964 37,789 Decrease in long-term receivables 52 0 52 52,964 37,789 Increase in long-term debt 53,843 0 53,843 0 0 TOTAL I (A+B+C+D+E) 91,988,563 57,707,745 34,280,818 33,567,470 34,098,769 INVENTORIES (F) 363,692 160,841 202,852 217,755 202,121 Merchandise 231,769 111,005 120,764 145,367 155,306 Raw materials and supplies 131,923 49,836 82,088 72,388 46,815 Work in progress 0 0000 Intermediary and residual goods 0 0000 Finished goods 0 0000 CURRENT RECEIVABLES (G) 14,844,341 7,513,074 7,331,267 6,983,083 6,129,446 Trade payables, advances and deposits 13,564 0 13,564 25,576 41,545 Accounts receivable and related accounts 13,197,065 7,352,058 5,845,006 5,502,874 5,222,536 Employees 3,793 0 3,793 2,906 2,651 Tax receivable 595,320 0 595,320 459,520 595,865 Shareholders’current accounts 0 0000 Other receivables 799,640 161,015 638,625 923,384 217,958 Accruals 234,959 0 234,959 68,824 48,891 MARKETABLE SECURITIES (H) 128,759 0 128,759 126,633 123,659 UNREALIZED FOREIGN EXCHANGE LOSSES (I) 61,708 0 61,708 114,726 93,844 (current items) TOTAL II (F+G+H+I) 15,398,501 7,673,914 7,724,586 7,442,198 6,549,070 CASH AND CASH EQUIVALENTS 497,991 0 497,991 973,998 957,102 Checks 0 0 0 4,123 10,500 Bank deposits 495,067 0 495,067 966,649 943,495 Petty cash 2,924 0 2,924 3,226 3,108 TOTAL III 497,991 0 497,991 973,998 957,102 GRAND TOTAL I+II+III 107,885,055 65,381,659 42,503,396 41,983,665 41,604,941
168 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT Statutory U nancial statements
SHAREHOLDERS’EQUITY AND LIABILITIES
Net
(in MAD thousand) 2017 2016 2015 SHAREHOLDERS’EQUITY (A) 15, 363, 637 15, 254, 928 14, 653, 526 Share capitalb(a) 5, 274, 572 5, 274, 572 5, 274, 572 Less: capital subscribed and not paid-in 0 0 0 Paid-in capital 000 Additional paid-in capital 0 0 0 Revaluation difference 000 Statutory reserve 879, 095 879, 095 879, 095 Other reserves 3, 510, 509 2, 909, 976 2, 561, 953 Retained earningsb(b) 000 Unallocated incomeb(b) 0004 Net income of thebyearb(b) 5, 699, 461 6, 191, 285 5, 937, 906 QUASI-EQUITY (B) 000 Investment subsidies 000 Regulated provisions 000 DEBENTURE BONDS (C) 3, 867, 811 4, 866, 688 6, 007, 025 Debenture bonds 000 Other long-term debt 3, 867, 811 4, 866, 688 6, 007, 025 PROVISIONS (D) 70, 477 70, 658 56, 604 Provisions for contingencies 53, 895 52, 964 37, 789 Provisions for losses 16, 582 17, 694 18, 814 UNREALIZED FOREIGN EXCHANGE GAINS (E) 36, 248 60, 174 32, 730 Increase in long-term receivables 36, 248 0 0 Decrease in long-term debt 0 60, 174 32, 730 TOTAL I (A+B+C+D+E) 19, 338, 173 20, 252, 447 20, 749, 885 CURRENT LIABILITIES (F) 14, 508, 512 13, 244, 286 13, 254, 067 Accounts payable and related accounts 8, 428, 399 7, 772, 383 7, 954, 035 Trade receivables, advances and down payments 115, 726 96, 756 28, 964 Payroll costs 1, 117, 965 1, 012, 981 816, 065 Social security contributions 116, 790 97, 086 96, 177 Tax payable 2, 567, 667 2, 534, 463 2, 603, 442 Shareholders’current accounts 1 1 1 Other payables 783, 018 432, 468 435, 593 Accruals 1, 378, 946 1, 298, 148 1, 319, 790 OTHER PROVISIONS FOR CONTINGENCIES AND LOSSES (G) 1, 185, 365 1, 436, 913 897, 696 UNREALIZED FOREIGN EXCHANGE GAINS (CURRENT ITEMS) (H) 70, 061 53,949 47, 440 TOTAL II (F+G+H) 15, 763, 938 14, 735, 149 14, 199, 204 BANK OVERDRAFTS 7, 401, 285 6, 996, 069 6, 655, 852 Discounted bills 000 Treasury loans 000 Bank loans and overdrafts 7, 401, 285 6, 996, 069 6, 655, 852 TOTAL III 7, 401, 285 6, 996, 069 6, 655, 852 GRAND TOTAL I+II+III 42, 503, 396 41, 983, 665 41, 604, 941
(1) Personal capital debtor (-). (2) BeneƓ ciary (+), deƓ cit (-).
MAROC TELECOM ____ 2017 Registration Document 169 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT 4 Statutory U nancial statements
STATEMENT OF COMPREHENSIVE INCOME ʂEXCLUSIVE OF VATʃ
(in MAD thousand) 2017 2016 2015 I- Operating income 20,324,642 21,065,643 20,993,021 Sales of goods 382,127 378,063 311,568 Sales of manufactured goods and services rendered 19,518,264 19,680,420 19,931,371 Operating revenues 19,900,391 20,058,482 20,242,939 Change in inventories 000 Company-constructed assets 0 0 16 Operating subsidies 000 Other operating income 31,436 629,850 364,140 Operating write-backs: expense transfers 392,815 377,310 385,926 TOTAL I 20,324,642 21,065,643 20,993,021 II- Operating expenses 13,648,763 14,071,410 13,609,828 Cost of goods sold 629,207 688,723 745,083 Raw materials and supplies 3,503,463 3,681,985 3,385,126 Other external expenses 2,777,274 2,740,708 2,713,291 Taxes (except corporate income tax) 222,417 185,290 285,954 Payroll, costs 2,190,425 2,339,746 2,304,415 Other operating expenses 2,540 2,540 2,326 Operating allowances for amortization 3,644,867 3,639,680 3,496,628 Operating allowances for provisions 678,570 792,737 677,005 TOTAL II 13,648,763 14,071,410 13,609,828 III- Operating income i-ii 6,675,879 6,994,233 7,383,194 IV- Financial income 1,532,300 1,772,812 1,164,757 Income from equity investments and other Ɠ nancial investments 932,680 1,179,331 845,255 Foreign exchange gains 150,096 97,340 98,530 Interest and other Ɠ nancial income 281,834 364,508 159,101 Financial writeb– backs: expense transfers 167,691 131,633 61,871 TOTAL IV 1,532,300 1,772,812 1,164,757 V- Financial expenses 526,028 491,986 480,527 Interest and loans 253,230 209,721 219,183 Foreign exchange losses 103,347 94,477 129,532 Other Ɠ nancial expenses 95 98 179 Financial allowances 169,356 187,691 131,633 TOTAL V 526,028 491,986 480,527 VI- Financial income iv - v 1,006,272 1,280,826 684,230 VII- Ordinary income iii +bvi 7,682,151 8,275,059 8,067,424 VIII- Extraordinary income 924,968 1,083,408 299,514 Proceeds from disposal of Ɠ xed assets 42,771 634,826 3,753 Subsidies received 000 Write-backs of investment subsidies 0 0 0 Other extraordinary income 245,287 245,754 120,074 Extraordinary write-backs: expense transfers 636,911 202,827 175,688 TOTAL VIII 924,968 1,083,408 299,514 IX- Extraordinary expenses 942,084 1,104,808 388,168 Net book value of disposed assets 66,687 415,948 1,266 Subsidies granted 000 Other extraordinary expenses 587,866 161,591 125,266 Regulated provisions 000 Extraordinary allowances for depreciation and provisions 287,531 527,269 261,636 TOTAL IX 942,084 1,104,808 388,168 X- Extraordinary income viii - ix -17,116 -21,400 -88,654 XI- Income before tax vii +bx 7,665,035 8,253,658 7,978,770 XII- Corporate income tax 1,965,575 2,062,373 2,040,864 XIII- Net income xi - xii 5,699,461 6,191,285 5,937,906 XIV- TOTAL INCOME (I+IV+VIII) 22,781,911 23,921,863 22,457,292 XV- TOTAL EXPENSES (II+V+IX+XII) 17,082,450 17,730,578 16,519,386 XVI- NET INCOME (TOTAL INCOME – TOTAL EXPENSES) 5,699,461 6,191,285 5,937,906
170 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT Statutory U nancial statements
STATEMENT OF OPERATING DATA
Operating Statement (in MAD thousand) 2017 2016 2015 1 Sales of goods 382,127 378,063 311,568 2 - Cost of goods sold 629,207 688,723 745,083 I = GROSS MARGIN ON SALES -247,080 -310,660 -433,515 II + PRODUCTION FOR THEbYEAR: (3+4+5) 19,518,264 19,680,420 19,931,387 3 Sales of manufactured goods and services rendered 19,518,264 19,680,420 19,931,371 4 Change in inventories 0 0 0 5 Self-constructed assets 0 0 16 III - COST OF CURRENT YEAR PRODUCTION 6,280,737 6,422,693 6,098,417 6 Raw materials and supplies 3,503,463 3,681,985 3,385,126 7 Other external expenses 2,777,274 2,740,708 2,713,291 IV = ADDED VALUE (I+II-III) 12,990,446 12,947,066 13,399,455 4 8 + Operating subsidies 0 0 0 9 - Taxes 222,417 185,290 285,954 10 - Payroll costs 2,190,425 2,339,746 2,304,415 V = GROSS OPERATING SURPLUS 10,577,605 10,422,030 10,809,086 = Net loss from operations 0 0 0 11 + Other operating income 31,436 629,850 364,140 12 - Other operating expenses 2,540 2,540 2,326 13 + Operating write-backs, expense transfers 392,815 377,310 385,926 14 - Operating allowances 4,323,437 4,432,418 4,173,633 VI = OPERATING INCOME (+bOR -) 6,675,879 6,994,233 7,383,194 VII +/- FINANCIAL INCOME 1,006,272 1,280,826 684,230 VIII = ORDINARY INCOME (+bOR -) 7,682,151 8,275,059 8,067,424 IX +/- EXTRAORDINARY INCOME -17,116 -21,400 -88,654 15 - Corporate income tax 1,965,575 2,062,373 2,040,864 X = NET INCOME (+bOR -) 5,699,461 6,191,285 5,937,906
Operating Cash Flow (in MAD thousand) 2017 2016 2015 1 Net income +ProƓ t 5,699,461 6,191,285 5,937,906 - Loss 000 2 + Operating allowancesb(a) 3,644,867 3,639,680 3,496,628 3 + Financial allowancesb(a) 107,647 72,964 37,789 4 + Extraordinary allowancesb(a) 287,531 272,269 261,636 5 - Operating write-backsb(b) 1,112 1,121 1,117 6 - Financial write-backsb(b) 52,964 37,789 0 7 - Extraordinary write-backsb(b) (c) 251,018 202,827 128,354 8 - Proceeds on disposal of Fixed-lined assets 42,771 634,826 3,753 9 + Net book value of disposed assets 66,687 415,948 1,266 I CASH EARNINGS 9,458,328 9,715,583 9,602,001 10 - Dividend payments 5,590,752 5,589,883 6,065,275 II NET CASH EARNINGS 3,867,577 4,125,700 3,536,727
(a) Excluding allowances related to current assets and liabilities and cash. (b) Excluding write-backs relating to current assets and liabilities and cash. (c) Including write-backs of investments subsidies.
MAROC TELECOM ____ 2017 Registration Document 171 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT 4 Statutory U nancial statements
STATEMENT OF CASH FLOWS
SELECTED BALANCE-SHEET DATA
Changes (AĆB) Masses 2017 2016 Uses Sources (in MAD thousand) (A) (B) (C) (D) 1 Equity and long-term liabilities 19,338,173 20,252,447 914,274 2 Less long-term assets 34,280,818 33,567,470 713,348 3 Working capital (1-2) (A) -14,942,645 -13,315,022 1,627,623 4 Current assets 7,724,586 7,442,198 282,389 5 Less current liabilities 15,763,938 14,735,149 1, 028, 789 6 Working capital requirement (4-5) (B) -8,039,351 -7,292,951 746, 400 7 Net cash (A-B) -6,903,294 -6,022,071 881, 222
USES AND SOURCES
2017 2016 2015
(in MAD thousand) Uses Sources Uses Sources Uses Sources I - LONG-TERM FINANCING SOURCES Net Cash earnings (A) 3,867,577 4,125,700 3,536, 727 Cash earnings 9,458,328 9,715,583 9, 602, 001 Dividends 5,590,752 5,589,883 6, 065, 275 Disposals and reductions of Fixed-lined assets (B) 590,137 990,516 282, 388 Reduction of intangible assets 23 464 0 Reduction of property, plant, and equipment 44,695 1,430 1, 887 Disposal of property, plant, and equipment 42,771 74 3, 753 Disposal of Ɠ nancial assets 0 634,752 0 Write-backs of long-term receivables 502,648 353,796 276, 748 Increase in shareholders’equity and quasi equity (C) 0 0 0 Increase in equity, capital contribution 0 0 0 Investment subsidies 00 0 Increase in long-term debt (D) 0 0 6, 032, 881 (net of refund premiums) TOTAL (I) LONG-TERM RESOURCES (A+B+C+D) 4,457,714 5,116,216 9, 851, 996 II - LONG-TERM USES FOR THE YEAR Additionsb& increase in Fixed-lined assets (E) 4,972,443 3,969,460 11, 071, 498 Acquisitions of intangible assets 658,550 497,181 1, 520, 649 Acquisitions of property, plant, and equipment 3,822,795 3,268,237 3, 145, 266 Acquisitions of Ɠ nancial assets 0 110,976 2, 199, 297 Increase in long-term receivables 491,098 93,067 4, 206, 286 Increase in property, plant, and equipment 0 0 0 Reimbursement of equity (F) 0 0 0 Reimbursement of long-term debt (G) 1,112,894 1,112,894 0 Capitalized costs (H) 0 0 0 TOTAL (II) STABLE USES (E+F+G+H) 6,085,337 5,082,354 11, 071, 498 III - CHANGE IN WORKING CAPITAL REQUIREMENT 0 746,400 357,183 0 0 222, 161 IV - CHANGE IN CASH AND CASH EQUIVALENTS 0 881,222 0 323, 321 0 997, 342 GRAND TOTAL 6,085,337 6,085,337 5,439,537 5, 439, 537 11, 071, 498 11, 071, 498
172 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT Statutory U nancial statements
A1 — MAIN VALUATION METHODS USED BY THE COMPANY
ACCOUNTING POLICIES FINANCIAL ASSETS
The Company’s financial statements have been prepared in Investment securities are recorded at their purchase price. An accordance with generally accepted accounting practices and, in impairment charge is recorded for the difference if this value is particular, with the principles related to historical costs, separation of higher than the carrying value. The carrying value is determined accounting periods, prudence, and consistent accounting methods on the basis of the Group’s proportionate share of equity as from onebyear to the next, and no netting. represented by the securities. This Ɠ gure may be adjusted to reŴ ect the companies’growth and earnings outlooks. Other Ɠ nancial assets, which include receivables, loans, and deposits, INTANGIBLE ASSETS AND PROPERTY, PLANT, are recognized on the basis of their nominal value. Provisions may ANDEQUIPMENT be recorded to reŴ ect collection risk.
The assets transferred by the Moroccan government on Februaryb26, 1998, to establish Itissalat Al Maghrib (MarocTelecom), were recorded INVOTORIES as a net amount in the opening, which was approved by: – Postal Services and Information Technology Act no.b24–96; Inventories comprise: 4 – joint order no.b341–98 of the Ministry of Telecommunications and – Mobile handsets and accessories intended for sale to customers the Ministry of Finance, Commerce, and Industry, approving the upon line activation; inventory of assets transferred to Itissalat Al-Maghrib Itissalat Al- – technical support required for network rollout and maintenance Maghrib. other than cable and spare parts. Assets acquired thereafter are recorded at their acquisition or Inventories of Mobile handsets and accessories are accounted for production cost, which for networks essentially comprises design using the weighted average cost method; a provision is recorded to and planning costs, construction costs, site development costs, account for obsolescence risk and for unsold inventory. network-rollout costs, customs duties, and internal costs related to Technical-equipment inventories are measured at cost (including network development. Financial expenses corresponding to interest customs duties and other costs) and are depreciated on the basis of on capital borrowed to Ɠ nance property, plant, and equipment are their value in use or obsolescence. not expensed as production costs during the production period. Expenses of maintenance and network maintenance are expensed for thebyear. Capital assets are amortized evenly according to their nature (intangibleb– tangible) and according to their destination ACCOUNTS RECEIVABLE (transmission, network equipment,…). Accounts receivable are recorded at nominal value. The depreciation and amortization are calculated using the straight- line method over the estimated useful life lives of the assets, as Trade receivables: impairment provisions are recorded to cover follows: collection risk, which is estimated on the basis of the age of the receivable. – intangible assets: Government receivables: Provisions are recorded to cover the risk of Licenses from 4 to 25 years — the Moroccan government not recognizing these receivables. These – property, plant, and equipment: provisions are evaluated statistically. — constructions and buildings 20byears Other receivables: where appropriate, other provisions are recorded — civil engineering 15byears on the basis of estimated collection risk. — network equipment:
— transmission (Mobile) 10byears
— switching 8byears ACCRUALS (ASSETS)
— transmission (Fixed-line) 10byears This line item includes mainly prepaid expenses. – other property, plant, and equipment:
— furniture and Ɠ ttings 10byears — computer equipment 5byears CASH AND INVESTMENT SECURITIES — ofƓ ce equipment 10byears
— transportation equipment 5byears Cash and investment securities comprise highly liquid assets and An additional provision is recorded for technical obsolescence, short-term investments measured at historical cost. reduction in estimated useful life, or asset impairment. Assets not yet in service are recorded as work-in-progress.
MAROC TELECOM ____ 2017 Registration Document 173 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT 4 Statutory U nancial statements
PROVISIONS FOR CONTINGENCIES under deferred revenue as a liability on the statement, before AND LOSSES being transferred to revenues for the period. For prepaid services, revenues are recognized at the time of consumption. They also These include long-term and other provisions for contingencies and include income from sales of advertising in paper and electronic losses: telephone directories; this revenue is recognized when the advertisements are published. – long-term provisions for contingencies and losses correspondto They also include the proceeds from the sale of advertising inserts in provisions for translation differences and life annuities; the printed and electronic directories which are taken into account – other provisions for contingencies and losses comprise provisions in the result when they are published. for restructuring, loyalty programs, and disputes and legal risks – known at period end. These provisions are measured on the basis Sales of merchandise concern revenues from handset sales, which of the advancement of procedures underway and estimated risks are recognized either at the time of delivery or upon line activation. at period end; – Customer acquisition and loyalty costs include discounts on – no provision for postretirement beneƓ ts has been recorded in the Mobile handsets and promotional offers of free airtime granted to Ɠ nancial statements, because pension expenses are covered by new customers. Discounts on Mobile handsets are deducted from statutory pension plans established for employees in Morocco. revenues on the date of delivery to the customer or distributor. Discounts granted to distributors as remuneration for services are recognized mainly under revenues, at the time of delivery. ACCRUALS ʂLIABILITIESʃ
This item contains deferred revenue concerning mainly prepaid OTHER INCOME subscriptions and unusedbminutes sold. Other income from operations includes: – expense reclassiƓ cations (mainly telecommunication costs speciƓ c RECEIVABLES AND PAYABLES IN FOREIGN to IAM, recognized under “Other external expenses”); – reversal of operating provisions (inventories and provisions for CURRENCIES contingencies and losses).
Receivables in foreign currencies are translated into the presentation currency using the exchange rate on the transaction date. At period end, receivables and payables in foreign currencies are translated OTHER EXTERNAL EXPENSES into the presentation currency using the exchange rate on the closing date; unrealized gains or losses are recorded on the statement under In addition to rental expenses, maintenance costs, advertising “Accruals (assets)” or “Accruals (liabilities).” Unrealized losses are expenses, and general expenses, other external expenses include: accrued in full. – ANRT regulatory fees for radio-frequency assignment, in In accordance with the principles of clarity and prudence, no accordance with actb24–96 and Order 310-98 of Februaryb25, 1998; exceptions shall be made between unrealized gains and unrealized – expenses related to the universal service obligation, in accordance losses, unless otherwise speciƓ ed in the CGNC. To this end, the with actb24–96 and Orderb2.00.1333 of Octoberb9, 2000 (IAM translation differences on the USDb200bmillion loan granted by contract speciƓ cations); Golden Falcon to IAM to finance investments in the new IAM – costs related to research, training, and telecommunications Subsidiaries were offset against the loans granted to the subsidiaries. standardization, in accordance with actb24–96 and Orderb2.00.1333 of Octoberb9, 2000 (IAM contract speciƓ cations). REVENUES FINANCIAL INSTRUMENTS Revenues are recorded on the basis of consumption by subscribers and customers at the end of the period, net of subsidies and Except the operation of purchase of foreign currency (dollar against commissions. euro) set up in late 2015 to cover the loan of USDb200bmillion – Sales of goods and services correspond to income from outgoing granted by Golden Falcon to IAM for investment Ɠ nancing of the and incoming communications and are recognized at the time new subsidiaries, the Company does not use any Ɠ nancial instrument, they occur (telephone communications and line-activation costs). including any currency hedge. Subscriptions are billed in advance eachbmonth and recognized
174 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT Statutory U nancial statements
A2 — EXCEPTIONS
FROM 01/01/2017 TO 12/31/2017
JustiU cation of ET ect of exemptions on assets, Exemptions exemptions U nancial position, and results I- Exemptions from basicbaccounting principles None None II- Exemptions from valuation methods None None III- Exemptions from rules for preparing and presenting summary Ɠ nancial statements None None
A3 — CHANGES IN METHOD 4
FROM 01/01/2017 TO 12/31/2017
JustiU cation of ET ect of exemptions on assets, Type of commitment exemptions U nancial position, and results Changes affecting valuation methods None Changes affecting presentation guidelines None
B1 — CAPITALIZED COSTS
FROM 01/01/2017 TO 12/31/2017
Main account Description Amount 2110 Incorporation fees None 2116 Development costs None 2118 Other preliminary expenses None 2120 Costs allocated over several Ɠ scalbyears None TOTAL NONE
MAROC TELECOM ____ 2017 Registration Document 175 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT 4 Statutory U nancial statements
B2 — NON FINANCIAL ASSETS
FROM 01/01/2017 TO 12/31/2017 ʂIN MAD THOUSANDʃ
Increase Decrease Gross Balance Self Gross carried Constructe Balance Description forward Acquisition assets Transfers Disposals Retirement Transfers at yearĆend Capitalized costs 00000000 Start-up costs 00000000 Deferred costs 00000000 Bond redemption premiums 00000000 Intangible assets 11,504,118 658,550 0 376,143 0 23 548,357 11,990,431 Research and development costs 00000000 Patents, trademarks, and similar rights 11,113,518 0 0 376,143 0 0 0 11,489,661 Goodwill 70,71700000070,717 Other intangible assets 319,882 658,550 0 0 0 23 548,357 430,052 Property, plant, and equipment 63,542,003 3,822,795 0 3,269,051 106,759 39,716 3,096,837 67,390,536 Land 953,601 1,070 0 0 0 0 0 954,671 Buildings 7,043,762 0 0 252,630 82 0 0 7,296,310 Technical plant, machinery, and equipment 48,439,885 0 0 2,884,538 1,125 0 0 51,323,298 Vehicles 143,108 0 0 7,876 104,405 0 0 46,578 OfƓ ce equipment 4,505,216 0 0 124,007 1,147 15,156 0 4,612,920 Other property, plant, and equipment 11,04800000011,048 Work in progress 2,445,383 3,821,725 0 0 0 24,560 3,096,837 3,145,711
176 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT Statutory U nancial statements
B2 BIS — DEPRECIATION SCHEDULE
FROM 01/01/2017 TO 12/31/2017 ʂIN MAD THOUSANDʃ
Accumulated depreciation Allowances Amortization of Amount Description opening of period for period (a) disposed assets at year Ćend Capitalized costs 0000 Start-up costs 0000 Deferred costs 0000 Bond redemption premiums 0000 Intangible assets 9,002,272 515,773 0 9,518,046 Research and development costs 0000 Patents, trademarks, and similar rights 8,942,278 511,464 0 9,453,742 Goodwill 59,995 4,309 0 64,304 4 Other intangible assets 0000 Property, plant and equipment 44,661,154 3,170,484 55,228 47,776,410 Land 0000 Buildings 4,358,834 235,673 82 4,594,425 Technical plant, machinery, and equipment 36,309,060 2,744,530 700 39,052,890 Vehicles 69,687 7,435 39,089 38,033 OfƓ ce equipment 3,923,572 182,847 15,357 4,091,062 Other property, plant, and equipment 0000 Work in progress 0000
(a) Including extraordinary allowances: – Asset retirement - – Corrective action to remedy delays to entry into service 41bMMAD TOTAL OF EXTRAORDINARY ALLOWANCES 41bMMAD
B3 — GAINS AND LOSSES FROM DISPOSALS AND RETIREMENT OF FIXED-LINED ASSETS
FROM 01/01/2017 TO 12/31/2017 ʂIN MAD THOUSANDʃ
Disposal Proceeds or retirement Principal Accumulated Net from disposal date amount Gross amount depreciation book value of assets Gains Losses 01/01/2017 2341 497 497 0 49 49 0 05/01/2017 2331 95 0 95 116 20 0 23/03/2017 2331 944 615 329 409 81 0 24/03/2017 2341 0 0 0 41 41 0 20/09/2017 2321 82 82 0 39 39 0 27/09/2017 2331 85 85 0880 31/12/2017 2341 103,909 38,592 65,317 41,162 0 24,155 31/12/2017 2355 16,303 15,357 946 946 0 0 TOTAL 121,915 55,228 66,687 42,771 238 24,155
MAROC TELECOM ____ 2017 Registration Document 177 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT 4 Statutory U nancial statements
B4 — EQUITY INVESTMENTS
FROM 01/01/2017 TO 12/31/2017 ʂIN MAD THOUSANDʃ
Derived from latest selected U nancial Income data of issuer recorded in Overall statement of Operating Share % of acquisition Net book comprehensive sector capital interest price value Closing date Net equity Net income income
1234 5 67 8 9 Arabsat Operation and marketing of telecommunication systems 1,277,366 0.61 6,454 6,454 31/12/2017 0 0 2,699 ADM Building and operation ofbMoroccan road network 15,715,629 0.13 20,000 16,000 31/12/2017 0 0 0 Thuraya Regional satellite operator 5,312,845 0.16 9,872 9,872 31/12/2017 0 0 0 Casanet Internet service provider 14,414 100 18,174 18,174 31/12/2017 53,637 4,109 0 CMC Financial holding compagny 344,617 80 399,469 399,469 31/03/2017 338,387 147,585 118,431 Fonds Amorcage Sindibad Seed capital fund 43,000 10 4,479 0 31/12/2017 0 0 0 Médi1 sat Media (Satellite television) 199,246 8 169,540 31,170 31/12/2017 0 0 0 Onatel Telecommunications 585,631 51 2,459,380 2,459,380 31/12/2017 1,179,733 471,109 174,235 Gabon Telecom Telecommunications 927,276 51 696,641 696,641 31/12/2017 1,437,176 327,077 58,695 Sotelma Telecommunications 151,437 51 3,143,911 3,143,911 31/12/2017 600,771 396,923 387,742 MT FLYbSA Operating aicraft forbpassenger and/ or freight transport 2,096 100 20,300 0 31/12/2017 0 0 0 Etisalat BéninbSA Telecommunications 166 100 433,020 433,020 31/12/2017 -270,508 16,881 0 Atlantique Télécom Côtebd’Ivoire Telecommunications 332,339 85 919,634 919,634 31/12/2017 662,937 162,424 89,833 Atlantique Telecom Togo Telecommunications 132,936 95 621,697 621,697 31/12/2017 323,404 155,550 101,045 Atlantique Telecom Niger Telecommunications 18,439 100 358,797 358,797 31/12/2017 -90,582 -27,976 0 Atlantique Telecom Centrafrique Telecommunications 33,317 100 171,474 171,474 31/12/2017 -96,322 -39,563 0 Prestige Telecom Côtebd’Ivoire Telecommunications 15,062 100 23,090 23,090 31/12/2017 -21,411 -34,811 0 TOTAL 9,475,932 9,308,784 4,117,222 1,579,308 932,680
178 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT Statutory U nancial statements
B5 — PROVISIONS
FROM 01/01/2017 TO 12/31/2017 ʂIN MAD THOUSANDʃ
Allowances WriteĆbacks
Opening Closing Description balance Operating U nancial Extraordinary (a) Operating U nancial Extraordinary (b) balance 1- Provisions forbdepreciation of Fixed-lined assets 364,414 0 53,752 246,141 0 0 251,018 413, 289 2-Regulated provisions 0 0 0 0 0 0 0 0 3- Provisions for contingences and losses 70,658 0 53,895 0 1,112 52,964 0 70, 477 SUB-TOTAL (A) 435,072 0 107,647 246,141 1,112 52,964 251,018 483, 766 4-Provisions 4 forbdepreciation of current assets (excluding cash andbcash equivalent) 7,490,936 370,746 0 0 187,768 0 0 7, 673, 914 5- Other provisions forbcontingencies 1,436,913 307,824 61,708 0 120,461 114,726 385,893 1, 185, 365 6- Provisions forbdepreciation of cash and cash equivalents 0 0 0 0 0 0 0 0 SUB-TOTAL (B) 8,927,849 678,570 61,708 0 308,230 114,726 385,893 8, 859, 279 TOTAL (A+B) 9,362,921 678,570 169,356 246,141 309,341 167,691 636,911 9, 343, 045
(a) Including: (b) Including: Depreciation of inventories class 2 73bMMAD Spare parts 75bMMAD Delays to entry into Delays to entry into service of work progress 173bMMAD service of work progress 176bMMAD TOTAL 246bMMAD 251bMMAD
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B6 — RECEIVABLES
FROM 01/01/2017 TO 12/31/2017 ʂIN MAD THOUSANDʃ
Breakdown by maturity Other breakdown Amounts due from Expired Amount government Amounts due More than Less than but not in foreign and public from related Amounts Receivables Total one year one year recovered currency bodies parties in notes Fixed-lined assets 3,077,769 1,305,035 1,585,968 186,765 3,042,393 0 3, 058, 167 - Long-term loans 3,074,386 1,301,653 1,585,968 186,765 3,041,833 0 3, 058, 167 - Other Ɠ nancial receivables 3,382 3,382 0 0 56000 - Current assets 14,844,341 0 3,212,588 11,631,753 2,610,586 1,483,237 1, 979, 937 - Trade payables, advances, and deposits 13,564 0 13,564 0 4,990 0 0 - Accounts receivable and related accounts 13,197,065 0 2,069,933 11,127,132 1,861,744 706,592 1, 221, 998 - Employees 3,793 0 3,793 0 0 0 0 - Tax receivables 595,320 0 595,320 0 0 595,320 0 - Shareholders’current accounts 0 0000 0 0 - Other receivables 799,640 0 295,020 504,621 582,614 175,826 596, 992 - Accruals 234,959 0 234,959 0 161,238 5,500 160, 947 -
B7 — LIABILITIES
FROM 01/01/2017 TO 12/31/2017 ʂIN MAD THOUSANDʃ
Breakdown by maturity Other breakdown Amounts due from Expired Amount government Amounts due More than Less than but not in foreign and public from related Amounts Liabilities Total one year one year recovered currency bodies parties in notes Long-term debt 3,867,811 2,722,143 1,145,668 0 3,861,495 0 3,860,937 0 Debenture bonds 0 0000 000 Other long-term debt 3,867,811 2,722,143 1,145,668 0 3,861,495 0 3,860,937 0 Current liabilities 14,508,512 110,782 13,959,427 438,302 2,900,853 3,587,266 253,231 0 Accounts payable and related accounts 8,428,399 110,782 7,900,428 417,189 2,862,750 141,277 246,851 0 Trade receivables, advances, andbdeposits 115,726 0 94,613 21,112 36,272 0 4,549 0 Employees 1,117,965 0 1,117,965 0 0 0 0 0 Social-security authorities 116,790 0 116,790 0 0 116,790 0 0 Tax payable 2,567,667 0 2,567,667 0 0 2,567,667 0 0 Shareholders’current accounts 1 0010 0 0 0 Other payables 783,018 0 783,018 0 1,831 761,532 1,831 0 Accruals 1,378,946 0 1,378,946 0 0 0 0 0
180 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT Statutory U nancial statements
B8 — GUARANTEES GIVEN OR RECEIVED
FROM 01/01/2017 TO 12/31/2017 ʂIN MAD THOUSANDʃ
Amount Net book value of the covered by Date and place guarantee given at Third parties guarantee Description (a) of registration Purpose (b) (c) balanceĆsheet date
Guarantees given Guarantees received arebfrom Guarantees received employees Long-term loans 16,220 (b) 16,220
(a) Collateral: 1- Mortgage: 2-Pledge: 3-Warrant: 4-Others: 5-To be speciƓ ed. (b) Specify whether the security is given for the beneƓ t of companies or third parties (data security). (AfƓ liated companies, partners, staff). (c) Specify whether the collateral received by the Company from persons other than the debtor (collateral received). 4
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B9 — FINANCIAL COMMITMENTS GIVEN OR RECEIVED, EXCLUDING LEASING TRANSACTIONS
FINANCIAL YEAR BEGINNING ON 01/01/2017 AND ENDING ON 12/31/2017 ʂIN MAD THOUSANDʃ
Amounts U nancial Amounts previous Commitments given year U nancial year Investments initiated but not yet completed: – investment agreement 1,753,693 6,235,037 – of which investments initiated 3,642,404 2,013,525 3,642,404 6,235,037 Guarantees via endorsement and signature from banks: – documentary credits – endorsements and guarantees 265,235 263,994 265,235 263,994 Rental commitmentb(a) 57,012 17,796 57,012 17,796 Guarantees issued by Etisalat regarding the Ɠ nancing of the operating companies: Replacement of the Etisalat Group companies by IAM in relation to the guarantees issued by those companies, as part of the day-to-day operations of the acquired companies. (€0.19 million at Decemberb31, 2017, and €4.5 million at Decemberb31, 2016) 2,096 44,310 2,096 44,310 AT Niger bank guarantee – Commitment linked to the bank guarantee (€23,909,452), and commitment to pay the balance on Ɠ rst demand in the event that the amount on the IAM account is insufƓ cient (LC dated 09/23/2016) 268,288 255,281 268,288 255,281 Other Guarantees – VeriƓ cation that the subsidiary is ensuring compliance with its commitments with the usual diligence Subsidiaries Concerned (AT CAR, AT CI, AT Niger, Etisalat Benin, and AT Togo) – Commitment to perform an accordion transaction via a capital increase and absorption of the losses carried forward. (Commitment fulƓ lled in 2017) Subsidiaries Concerned: AT CAR – Prior authorization commitment from the bank in the event of full or partial disposal. Subsidiaries Concerned: AT CAR and Etisalat Benin – Commitment to inform the bank beforehand in the event of full or partial disposal. Subsidiaries Concerned: AT IC and AT Niger – Ensure that the subsidiary maintains a satisfactory economic and Ɠ nancial position, which enables it to meet its commitments to its lenders. Subsidiaries Concerned: AT IC, AT Togo, and Etisalat Benin Swap agreement – Commitment involving the forward sale (on 11/20/2019) of €154 million in exchange for US$176 million as part of the swap agreements signed with ATW. Investment agreement – Commitment to create 150 direct and stable jobs within a period of 36 months. – Jobs created in 2016: 75 jobs; the commitment was completely fulƓ lled in 2017. TOTAL 4,235,035 6,816,418
(a) The terms of the site lease agreements range between 2 and 15 years, with tacit renewal. The amount indicated corresponds to one month’s notice in the event of termination. The terms of the transport equipment leases range between 4 and 5 years; the commitment corresponds to the compensation to be paid to the lease companies in the event of early termination of the agreement.
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Amounts U nancial Amounts previous Commitments given year U nancial year Endorsements and guarantees 678,547 753,822 Other commitments received Swap agreement – Commitment involving the forward purchase (on 11/20/2019) of US$176 million in exchange for €154 million as part of the swap agreements signed with ATW. – Commitment to social welfare given by the Moroccan Government Investment agreement – Exemption from customs duties on the imports relating to investments TOTAL 678,547 753,822
B10 — FINANCE-LEASE ASSETS 4
FROM 01/01/2017 TO 12/31/2017 ʂIN MAD THOUSANDʃ
Estimated Remaining value royalties to pay at the date Accumulated Date Contract of the Theoritical fees of Accumulated Less More Residual of the length contract amortization previous royalties than than purchase Section U rst term in months value period years amount one year one year price Observations
1 2 3 4 5 6 7 8 9 10 11 None None
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B11 — ANALYSIS OF STATEMENT OF COMPREHENSIVE INCOME ʂITEMSʃ
FROM 01/01/2017 TO 12/31/2017 ʂIN MAD THOUSANDʃ
Item Current year 2017 Previous year OPERATING INCOME 711 Sales of goods 382,127 378,063 Sales of goods in Morocco 382,127 378,063 Sales of goods abroad 00 Other sales of goods TOTAL 382,127 378,063 712 Sales of manufactured goods and services rendered 19,518,264 19,680,420 Sales of manufactured goods in Morocco Sales of manufactured goods abroad Sales of service rendered in Morocco 16,408,402 15,866,477 Sales of service rendered abroad 3,109,862 3,813,942 Royalties for patents, trademarks, rights, etc Other sales of manufactured goods and services rendered 0 0 TOTAL 19,518,264 19,680,420 713 Change in inventories 00 Change in manufactured goods inventory 0 0 Change in services inventory 00 Change in product inventory WIP 00 TOTAL 00 714/718 Other operating income 31,436 629,850 Directories’fees received 00 Other operating income 31,436 629,850 TOTAL 31,436 629,850 719 Operating write-backs: expense transfers 392,815 377,310 Write-backs 0 Write-backs 309,341 280,319 Expense transfers 83,474 96,991 TOTAL 392,815 377,310 Financial income 0 738 Interest and other Ɠ nancial income 281,834 364,508 Interest and similar income 277,503 359,329 Income from receivables of controlled entities 0 0 Net proceeds from disposal of marketable securities 2,215 3,072 Other interest and Ɠ nancial income 2,116 2,107 TOTAL 281,834 364,508
184 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT Statutory U nancial statements
FROM 01/01/2017 TO 12/31/2017 ʂIN MAD THOUSANDʃ
Item Current year 2017 Previous year OPERATING EXPENSES 611 Cost of goods sold 629,207 688,723 Cost of goods 585,675 697,296 Change in inventory (+/-) 43,532 - 8,573 TOTAL 629,207 688,723 612 Raw material and supplies 3,503,463 3,681,985 Raw materials 00 Change in raw material inventory 00 Supplies and packaging 143,790 158,101 Change in supplies and packaging inventory -1,701 - 25,446 Cost of consumable materials and supplies 609,554 592,677 Cost of research, surveys, studies, and services 2,751,821 2,956,653 TOTAL 3,503,463 3,681,985 4 613/614 Other external expenses 2,777,274 2,740,708 Rent and rental expenses 297,371 281,362 Finance lease installments 00 Maintenance and repairs 554,876 534,625 Insurance premiums 14,257 14,357 Payments of external staff 244,677 238,268 Payments for intermediaries and fees 209,823 196,622 Fees for patents, trademarks, rights,betc. 663,241 661,118 Transportation 40,443 36,149 Travel and entertainment expenses 71,177 72,242 Other external expenses 681,409 705,966 TOTAL 2,777,274 2,740,708 617 Payroll costs 2,190,425 2,339,746 Payroll 1,861,138 2,013,373 Social security 329,287 326,373 Other payroll costs 00 TOTAL 2,190,425 2,339,746 618 Other operating expenses 2,540 2,540 Directors’fees 2,540 2,540 Losses on uncollectible receivables 0 0 Other Ɠ nancial expenses 00 TOTAL 2,540 2,540 FINANCIAL EXPENSES 638 Other Ɠ nancial expenses 95 98 Net losses on disposal of marketable securities 95 98 Other Ɠ nancial expenses 00 TOTAL 95 98 EXTRAORDINARY EXPENSES 658 Other extraordinary expenses 587,866 161,591 Contract cancellation payments and forfeiture of deposits 0 342 Back tax payments (other than income tax) 0 0 Tax penalties and Ɠ nes 800 548 Uncollectible receivables 0 5,224 Other extraordinary expenses 587,066 155,477 TOTAL 587,866 161,591
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B12 — RECONCILIATION OF NET INCOME TO TAXABLE INCOME
AT 12/31/2017 ʂIN MAD THOUSANDʃ
DETERMINATION OF INCOME
Amount Amount I- NET INCOME Net proƓ t 5,699,461 Net loss II- TAX ADD-BACKS 2,291,346 1. Ordinary 2,075,001 Income tax 2017 1,965,575 Amortization in excess of MADb300,000 701 POP Paris expenses (IAM branch) 1,415 Unrealized foreign exchange gains 2017 106,309 Gifts exceeding MADb100 per unit 1 Donations in cash or kind 1,000 Provisions 0 2. Extraordinary 216,345 Amortization 41,390 Provisions 172,952 Tax penalties and Ɠ nes 800 Contribution for the support of social solidarity 0 Other provisions for contingencies and losses 1,202 III- TAX DEDUCTIONS 1,226,009 1. Ordinary 1,046,803 Unrealized foreign exchange gains 2016 114,123 POP Paris income (IAM branch) 0 Revenues from equity investments 932,680 2. Extraordinary 179,207 Allowance on net capital gains from disposal 0 Provisionsb& amortization 179,207 Reversal of provisions for impairment of investments 0 TOTAL 2,291,346 1,226,009 IV- GROSS TAXABLE INCOME Gross proƓ t 6,764,797 Gross taxable loss V- LOSS CARRIED FORWARD 0 VI- TAXABLE INCOME Net taxable proƓ t 6,764,797 Net taxable loss Reducing the corporate tax rate to 17.50% for the export turnover 131,512 Corporate tax 1,965,575
186 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT Statutory U nancial statements
B13 — DETERMINATION OF ORDINARY INCOME AFTER TAX
FROM 01/01/2017 TO 12/31/2017 ʂIN MAD THOUSANDʃ
I - DETERMINATION OF INCOME
Amount Ordinary income from statement of comprehensive income (+) 7,682,151 Add-backs on ordinary operations 109,426 Deduction of ordinary operations 1,046,803 Ordinary income theoretically taxable (=) 6,744,775 Theoretical tax on ordinary income (-) 2,090,880 Exemption of EXPORT revenues -131,123 Ordinary income after tax (=) 5,722,394
II - INDICATION OF THE TAX STATUS AND ADVANTAGES GRANTED BY INVESTMENT CODES OR BY SPECIFIC LEGAL PROVISIONS 4
IAM beneƓ ts from a reduced rate of corporate income tax (17.50% instead of 31%).
B14 — ANALYSIS OF VAT
FROM 01/01/2017 TO 12/31/2017 ʂIN MAD THOUSANDʃ
Opening Closing balance Operations VAT returns balance
Description 1 2 3 (1+2Ć3) (A) INVOICED VAT 2,267,386 3,467,028 3,411,444 2,322,970 (B) RECOVERABLE VAT 444,556 1,903,741 1,864,740 483,558 – On expenses 269,881 954,733 958,163 266,451 – On assets 174,675 949,009 906,577 217,107 C/VAT PAYABLE (VAT CREDIT) 1,822,829 1,563,286 1,546,704 1,839,412 VAT = (A-B)
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C1 — SHAREHOLDER STRUCTURE
FROM 01/01/2017 TO 12/31/2017 ʂIN MAD THOUSANDʃ
Stocks held (in thousand) Nominal value Capital amount Surname, U rst name, business of each stock name of main shareholders (a) Adress Previous year Current year or share Soubscribed Called Full paid
1 234 5678 1/ Royaume du Maroc 263,729 263,729 0.006 1,582,371 1,582,371 1,582,371 2/ Société de Participation dansb les Télécommunications 465,940 465,940 0.006 2,795,643 2,795,643 2,795,643 3/ M. Mohamed Boussaid 0.010 0.010 0.006 0.060 0.060 0.060 4/ M. Mohamed Hassad 0.010 0.010 0.006 0.060 0.060 0.060 5/ M. Alami Mohamed 2.900 2.900 0.006 17.400 17.400 17.400 6/ M. Eissa Mohamed Al Suwaidi 0.001 0.001 0.006 0.006 0.006 0.006 7/ M. Mohamed Hadi Al Hussaini 0.001 0.001 0.006 0.006 0.006 0.006 8/ M. Ahmed Abdulkarim Julfar 0.001 0.001 0.006 0.006 0.006 0.006 9/ M. Daniel Ritz 0.001 0.001 0.006 0.006 0.006 0.006 10/ M. Mohammed Saif AlbSuwaidi 0.001 0.001 0.006 0.006 0.006 0.006 11/ M. Serkan Okandan 0.001 0.001 0.006 0.006 0.006 0.006 12/ M. Jean-Francois Dubos 0.010 0.010 0.006 0.060 0.060 0.060 13/ M. Regis Turrini 0.010 0.010 0.006 0.060 0.060 0.060 14/ M. Jacques Espinasse 0.010 0.010 0.006 0.060 0.060 0.060 15/ M. Franck Esser 0.010 0.010 0.006 0.060 0.060 0.060 16/ M. Jean-René Fourtou 0.010 0.010 0.006 0.060 0.060 0.060 17/ M. Jacques Chareyre 0.100 0.100 0.006 0.600 0.600 0.600 18/ M. Talbi Abdelaziz 0.010 0.010 0.006 0.060 0.060 0.060 19/ M. Saleh Abdooli 0.000 0.001 0.006 0.006 0.006 0.006 20/ M. Abderrahmane Semmar 0.000 0.001 0.006 0.006 0.006 0.006 21/ M. Hatem Dowidar 0.000 0.001 0.006 0.006 0.006 0.006 22/ Various shareholders 149,423 149,423 0.006 896,539 896,539 896,539
(a) 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 principal shareholders.
188 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT Statutory U nancial statements
C2 — APPROPRIATION OF YEAR-END INCOME
FROM 01/01/2016 TO 12/31/2016 ʂIN MAD THOUSANDʃ
Amount Amount A. Source of income (Decision of 04/25/2017 ) B. Income appropriation Legal reserves 0 Retained earnings at 12/31/2016 0 Other reserves 600,534 Net income to be allocated 0 Directors’share in proƓ ts 0 Net income for the period 6,191,285 Dividends 5,590,752 Withholding from reserves 0 Other allocations 0 Other reserves 0 Retained earnings 0 TOTAL A 6,191,285 TOTAL B 6,191,285 4
C3 — INCOME AND OTHER SIGNIFICANT ITEMS OVER THE PAST THEE YEARS
FROM 01/01/2017 TO 12/31/2017 ʂIN MAD THOUSANDʃ
Description 2017 2016 2015 Net equity of the Company Shareholders’equity and quasi-equity less capitalized costs 15,363,637 15,254,928 14,653,526 Operations and income from period Revenues excluding tax 19,900,391 20,058,482 20,242,939 Income before tax 7,665,035 8,253,658 7,978,770 Corporate income tax 1,965,575 2,062,373 2,040,864 Dividends 5,590,752 5,589,883 6,065,275 Unappropriated income (placed in reserves or to be allocated) 600,534 348,023 483 Earnings per share Earnings per share for period (in MAD) 6.48 7.04 6.75 Dividends per share (in MAD) 6.36 6.36 6.90
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C4 — TRANSACTIONS IN FOREIGN CURRENCIES DURING THE YEAR
FROM 01/01/2017 TO 12/31/2017 ʂIN MAD THOUSANDʃ
Entry exchange value Outgoing exchange value Description (in MAD) (in MAD) Permanent Ɠ nancing - Gross assets 3,096,927 Receipts from sale of Fixed-lined assets 1,586,007 Repayment of long-term debt - Dividends paid Income 2,298,211 Expenses 648,530 Total inŴ ows 3,884,219 Total outŴ ows 3,745,457 Foreign currency balance 138,762 TOTAL 3,884,219 3,884,219
C5 — DATE OF FINANCIAL STATEMENTS AND SUBSEQUENT EVENTS
I. DATES Date of statement of Ɠ nancial positionb(a ): 12/31/2017 Date of preparation of the Ɠ nancial statementsb(b ): 01/29/2018 Date of rectifying declaration:
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 (a ) Justification in the event of a change in the balance-sheet date. (b ) Justification in the event of noncompliance with the regulatory requirement to prepare financial statements within three months of the balance-sheet date.
190 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 FINANCIAL REPORT Statutory U nancial statements
STATUTORY AUDITORS’ SPECIAL REPORT ON THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR JANUARY 1 TO DECEMBER 31, 2017
This is a free translation into English of our special audit report signed — Atlantique Telecom Côte d’Ivoire (AT CIV). and issued in French and is provided solely for the convenience of — Atlantique Telecom Togo (AT TOGO). English speaking users. This report should be read in conjunction and construed solely in accordance with Moroccan law and Moroccan — Atlantique Telecom Gabon (ATG). professional auditing standards. — Atlantique Telecom Niger (AT Niger). Financial Year from January 1st, 2017 to December 31st, 2017 — Atlantique Telecom Centrafrique (AT RCA). — Prestige Telecom Côte d’Ivoire (Prestige CIV). – Services provided: The agreement concerns the payment by Dear Shareholders, Itissalat Al Maghrib (IAM) of total amount of 474bmillion euros As statutory auditors of the company, we hereby submit our report (equivalent to 5.16bbillion dirhams) for the acquisition of the above- on related-party agreements, in accordance with Articles 95 to 97 mentioned subsidiaries (Shares and debts). The payment was not of 17-95 Act, as amended and completed by Acts 20-05 and 78-12. yet realized at Decemberb31, 2014. Moreover, in accordance with the acquisition agreement, in 2015 IAM received a loan Our responsibility is to present the main characteristics and of 200bmillion USD at zero interest rate from Etisalat, which at modalities of the agreements which we have been informed of by 2015, 2016 and 2017 has been reallocated to newly acquired the Chairman of the Supervisory Board or that we discovered during 4 subsidiaries (AT CIV, AT Niger, AT RCA) for 176 million USD. our engagement, without giving an opinion on their usefulness and appropriateness, or looking for the existence of other agreements. – Amounts paid: It is your responsibility, under the law above, to decide on their — In 2017, Itissalat Al Maghrib (IAM) paid a total amount of approval. 1.1bbillion dirhams to Etisalat Benin International and Atlantique We have performed the procedures that we considered necessary Telecom SA under the acquisition agreement. The remaining under the standards of the profession in Morocco. These procedures amount due by IAM amounts to 1.8bbillion dirhams by the end are designed to verify the consistency of the information provided to of 2017. us with the documentation from which they originate. — Itissalat Al Maghrib (IAM) has also granted loans to its subsidiaries after the completion of the “Alysse Operation”. The movements of these loans in 2017 are detailed as below: 1. RELATED-PARTY AGREEMENTS Atlantique Côte d’ivoire:
CONCLUDED IN 2017 — Loan granted earlier to 2017: 62.5b million euros as of Decemberb31st, 2017 (equivalent to 673bmillion dirhams). None IAM booked a revenue related to interests and penalties for respectively 3.95bmillion euros and 0.015bmillion euros in 2017 (equivalent to 43.16 and 0.16bmillion dirhams). st 2. RELATED-PARTY AGREEMENTS — Loan granted in 2017: 38.1bmillion euros as of Decemberb31 , CONCLUDED IN PREVIOUS YEARS 2017 (equivalent to 409.5bmillion dirhams). IAM booked a revenue related to interests and penalties for respectively THAT REMAINED EFFECTIVE IN 2017 1.9bmillion euros and 0.008bmillion euros in 2017 (equivalent to 20.76 and 0.09bmillion dirhams) 2.1. Agreement related to the acquisition — Amount paid: No amount was collected by IAM for the Ɠ nancial of Etisalat subsidiaries year 2017. Atlantique Niger: – Parties concerned: st — Loan: 29,3 million euros as of December 31 , 2017 (equivalent — Etisalat is the major shareholder of IAM. to 314 million dirhams). IAM booked a revenue related to — M. Eissa Mohammad AL SUWAIDI is vice-president of the interests and penalties for respectively 1.5 million euros and Supervisory Board of IAM. 0.05 million euros in 2017 (equivalent to 16.39 and 0.55 million — Mohammad Hadi AL HUSSAINI is member of the Supervisory dirhams). Board of IAM. — Amount paid: No amount was collected by IAM for the Ɠ nancial — Hatem DOWIDAR is member of the Supervisory Board of IAM. year 2017.
— Saleh ABDOOLI is member of the Supervisory Board of IAM. Atlantique RCA: st — Serkan OKANDAN is member of the Supervisory Board of IAM. — Loan: At December 31 , 2017,the total current account advances granted to this subsidiary amount to 9.15 million euros – Agreement form: Written agreement. (equivalent to 99.8bmillion dirhams). IAM booked a revenue – Nature and purpose of the agreement: Acquisition of participation related to interests and penalties for respectively 0.51bmillion securities. euros and 0.01bmillion euros in 2017 (equivalent to 5.57 and – Main terms: In May 2014, Itissalat Al Maghrib (IAM) concluded an 0.11bmillion dirhams). agreement with Etisalat subsidiaries (Etisalat International Benin — Amount paid: an amount of Ɠ ve thousands euros (equivalent Ltd and Atlantique Telecom SA) on the acquisition of subsidiaries to 55bthousands dirhams) was collected by IAM for the Ɠ nancial presented below: yearb2017. — EtisalatBénin SA (ETB).
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2.2. Agreements resulting from the – Main terms: Itissalat Al Maghrib (IAM) substituted to ATH and GFI acquisition of new subsidiaries – LLC in all their rights and obligations resulting from the above- «Alysse Operation» mentioned agreements signed between ATH and Etisalat Bénin on one hand and GFI LLC and Etisalat Bénin on the other hand. All Following the acquisition of the new subsidiaries “Alysse Operation” amounts due by Etisalat Bénin under these agreements shall be and since January 26, 2015, Itissalat Al Maghrib (IAM) substituted paid to IAM. In accordance with these agreements, Etisalat Bénin to Atlantique Telecom SA (ATH) and Golden Falcon Investments is still engaged to IAM at the same level as previously to ATH and LLC (GFI LLC) in all their rights and obligations resulting from the to GFI LLC. agreements signed between ATH, GFI LLC and the subsidiaries – Services provided: acquired by IAM. These Agreements are as follows, by subsidiary: — Technical assistance services: the revenues booked by Itissalat 2.2.1. AGREEMENTS SIGNED WITH ATLANTIQUE TELECOM Al Maghrib for 2017 amount (after withholding taxes) to CÔTE D’IVOIRE (AT CI) 80.2bmillion dirhams (calculated on the basis of 5% of the restated net revenue). – Parties concerned: — Brand licenses: the revenues booked by IAM for 2017 — Itissalat Al Maghrib is the major shareholder of Atlantique represented 14.4bmillion dirhams (calculated on the basis of Telecom Côte d’Ivoire. 0.9% of the restated net revenue). – Agreement form: Written agreements. — Loan: Loan balance: 122.6bmillion euros as of the end of 2017 – Nature and purpose of the agreement: As of Januaryb26, 2015, (equivalent to 1,336bmillion dirhams). Itissalat Al Maghrib (IAM) IAM substituted to Atlantique Telecom SA (ATH) in all their rights booked Ɠ nancial revenue of 12.6bmillion euros (equivalent to and obligations resulting from the following agreements: 137.66bmillion dirhams).
— Technical assistance agreement between AT CI and ATH on – Amounts received: Itissalat Al Maghrib (IAM) received a total Julyb4th, 2006. payment of 25.2bmillions euros (equivalent to 274.7bmillion th dirhams) during 2017. — Brand license agreement between AT CI and ATH on Juneb12 , 2006. 2.2.3. AGREEMENTS SIGNED WITH ATLANTIQUE TELECOM th — Share loan agreement between AT CI and ATH on Februaryb17 , TOGO (AT TOGO) 2012, with an initial amount of 125bmillion euros. – Parties concerned: – Main terms: Itissalat Al Maghrib (IAM) substituted to ATH in all its Itissalat Al Maghrib is the major shareholder of Atlantique rights and obligations resulting from the agreements listed above — Telecom Togo. signed between ATH and AT CI. All amounts due by AT CI under these agreements shall be paid to IAM. In accordance with these – Agreement form: Written agreements. agreements, ATbCI is still engaged to IAM at the same level as – Nature and purpose of the agreement: As of Januaryb26, 2015, previously by ATH. IAM substituted to Atlantique Telecom SA (ATH) in all its rights and – Services provided: obligations resulting from the following agreements:
— Technical assistance services: the revenues booked by Itissalat — Technical assistance agreement between AT Togo and ATH on Al Maghrib for 2017 amount to (after withholding taxes) Julyb17th, 2008. 138bmillion dirhams (calculated on the basis of 5% of the — Brand license agreement between AT Togo and ATH on restated net sales revenue). Decemberb1st, 2006. st — Brand licenses: the revenues booked by IAM for 2017 amounts — Share loan agreement between AT Togo and ATH on Augustb1 , to 24.8bmillion dirhams (calculated on the basis of 0.9% of the 2013, with an initial amount of 5.79 million euros. restated net sales revenue). st — Share loan agreement between AT Togo and ATH on Augustb1 , — Shareholder loan: Itissalat AlbMaghrib received in 2017, as loan 2013, with an initial amount of 24 million euros. reimbursement, an amount of 4.1bmillion euros (equivalent – Main terms: IAM substituted to ATH in all its rights and obligations to 44.7bmillion dirhams) and also interests and penalties for resulting from the agreements listed above signed between ATH respectively 5.1bmillion euros and 0.2bmillion euros (equivalent and AT Togo. All amounts due by AT Togo under these agreements to 56.1 and 2.2bmillion dirhams). shall be paid to IAM. In accordance with these agreements, AT – Amounts received: the company repaid the entire loan following Togo is still engaged to IAM at the same level as previously to ATH. the acquisition of the Moov subsidiaries, an amount of 9.4bmillion – Services provided: euros (equivalent to 102bmillion dirhams). — Technical assistance services: the revenues booked by Itissalat Al 2.2.2. AGREEMENTS SIGNED WITH ETISALAT BÉNIN (ETB) Maghrib for 2017 represented a net amount (after withholding taxes) of 48.6 million dirhams (calculated on the basis of 5% of – Parties concerned: the restated net revenue). — Itissalat Al Maghrib is the major shareholder of Etisalat Bénin. — Brand licenses: the revenues booked by IAM for 2016 – Agreement form: Written agreements. represented 8.7bmillion dirhams (calculated on the basis of 0.9% – Nature and purpose of the agreement: As of Januaryb26, 2015, of the restated sales revenue). st IAM substituted to Atlantique Telecom SA (ATH) and Golden — Shareholder loans: Loan balance as of Decemberb31 2017: Falcon Investments LLC (GFI LLC) in all their rights and obligations 11.3bmillion euros (equivalent to 122.8bmillion dirhams). During resulting from the following agreements: 2017, Maroc Telecom booked total Ɠ nancial revenue related — Technical assistance agreement between Etisalat Bénin and ATH to interests and penalties for respectively 0.6 million euros and on Novemberb3rd, 2011. 0.5bmillion euros (equivalent to 6.56 and 5.46bmillion dirhams)
— Brand license agreement between Etisalat Bénin and ATH on – Amounts received: As part of the management fees agreement, Januaryb1st, 2014. Itissalat AlbMaghrib (IAM) received a payment of 48.5bmillion st dirhams during 2017. — Loan agreement between Etisalat Bénin and GFI LLC on Mayb1 , 2013.
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2.2.4. AGREEMENTS SIGNED WITH ATLANTIQUE TELECOM — Brand licenses: the revenues booked by IAM for 2017 amounts NIGER (AT NIGER) to 0.4 million dirhams (calculated on the basis of 0.9% of the – Parties concerned: restated sales revenue). – — Itissalat Al Maghrib is the major shareholder of Atlantique Amounts received: Telecom Niger. — As part of the management fees agreement, Itissalat AlbMaghrib – Agreement form: Written agreements. (IAM) received a pay ment of 86bthousands dirhams duringb2017. – Nature and purpose of the agreement: As of Januaryb26th, 2015, IAM substituted to Atlantique Telecom SA (ATH) in all their rights 2.3. Technical services agreement and obligations resulting from the following agreements: with Etisalat — Technical assistance agreement between AT Niger and ATH on – Parties concerned: Decemberb29th, 2004. — Etisalat is the major shareholder of IAM. Brand license agreement between AT Niger and ATH on — M. Eissa Mohammad AL SUWAIDI is vice-president of IAM Januaryb1st, 2008. — Supervisory Board. Share loan agreement between AT Niger and ATH on Augustb1st, — M. Mohammad Hadi AL HUSSAINI is member of IAM Supervisory 2013, with an initial amount of 1.7bmillion euros. — Board. Financing agreement between AT Niger and ATH on — M. Hatem DOWIDAR is member of IAM Supervisory Board. Novemberb25th, 2008. — — M. Saleh ABDOOLI is member of IAM Supervisory Board. — Loan agreements signed between AT Niger and ATH in January 2015. — M. Serkan OKANDAN is member of IAM Supervisory Board. 4 th – — Treasury signed between AT Niger and ATH on Decemberb3 , Agreement form: Written agreement. 2003. – Nature and purpose of the agreement: Supply of technical – Main terms: IAM substituted to ATH in all its rights and obligations assistance. resulting from the agreements listed above signed between – Main terms: In May 2014, the Company concluded a service ATH and AT Niger. All amounts due by AT Niger under these agreement with the Emirates Telecommunications Corporation agreements shall be paid to IAM. In accordance with these (Etisalat), under which,Etisalat will provide, either directly or agreements, AT Niger is still engaged to IAM at the same level through its subsidiaries, technical support work. These services as previously to ATH. are carried out mostly by expatriate employees. – Services provided: – Services provided: Itissalat Al Maghrib accounted in 2017 within — Technical assistance services: the revenues booked by Itissalat its expenses 3.3bmillion dirhams regarding this agreement. Al Maghrib for 2017 amount to (after withholding taxes) – Amounts paid: During 2017, Itissalat Al Maghrib paid a total 28.7bmillion dirhams (calculated on the basis of 5% of the amount of 4bmillion dirhams regarding this agreement. There is restated net revenue). no amount still due to Etissalat by the end of 2017.
— Brand licenses: the revenues booked by IAM for 2016 amount to 5.2bmillion dirhams (calculated on the basis of 0.9% of the 2.4. Fédération Royale Marocaine restated net revenue). d’Athlétisme «FRMA» – Amount paid: No amount was collected by IAM for the Ɠ nancial – Parties concerned: M. Abdeslam AHIZOUNE, Chairman of the IAM yearb2017. Management Board. 2.2.5. AGREEMENTS SIGNED WITH ATLANTIQUE TELECOM – Agreement form: Written agreement. CENTRAFRIQUE (AT RCA) – Nature and purpose of the agreement: Sponsorship agreement. – Parties concerned: Itissalat Al Maghrib is the major shareholder – Main terms: The sponsoring agreement between IAM and FRMA of Atlantique Telecom Centrafrique. was initially conclude in July 2012 for an amount of 6bmillion – Agreement form: Written agreements. dirhams per annum and for a period of 3b years. Then, this agreement was renewed on July 2014 for 3byears for an amount – Nature and purpose of the agreement: As of Januaryb26th, 2015, of 4bmillion dirhams. IAM substituted to Atlantique Telecom SA (ATH) in all their rights and obligations resulting from the following agreements: The Supervisory Board on Decembreb08, 2017 authorized the renewal of this agreement for one year foran amount of 3bmillion Technical assistance agreement between AT RCA and ATH on — dirhams, plus the costs related to travel and missions of the President Julyb4th, 2006. of the FRMA. st — Brand license agreement between AT RCA and ATH on Julyb1 , – 2011. Products or services delivered or provided: The amount expensed by IAM related to this agreement for 2017 amounted to 3.8 bmillion — Shareholder loan agreement between AT RCA and ATH on dirhams. August 1st, 2013, with an initial amount of 2.6bmillion euros. – Amounts paid: IAM paid to the FRMA a total amount of 1.8bmillion — Loan agreements signed between AT RCA and ATH in January dirhams in 2017. 2015. – Main terms: IAM substituted to ATH in all its rights and obligations 2.5. Agreement with Sotelma resulting from the agreements listed above signed between ATH and AT RCA. All amounts due by AT RCA under these agreements – Parties concerned: shall be paid to IAM. In accordance with these agreements, AT — Itissalat Al Maghrib is the major shareholder of Sotelma. RCA is still engaged to IAM at the same level as previously to ATH. — M. Larbi GUEDIRA is member of IAM and Sotelma Management – Services provided: Boards. — Technical assistance services: the revenues booked by Itissalat – Agreement form: Written agreement. Al Maghrib for 2017 amounts (after withholding taxes) to – Nature and purpose of the agreement: ProvidingServices and 1.9bmillion dirhams (calculated on the basis of 5% of the restated technical assistance. revenue).
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– Main terms: In 2009, Sotelma and IAM concluded an agreement — Development. under which IAM provides technical assistance and services. These — Marketing. services are carried out mostly by expatriate employees. — Finance. – Products or services delivered or provided: In 2017, IAM provided Sotelma with technical assistance services. — Purchasing. On Decemberb31, 2017, the amount booked in revenues by IAM — Quality. amounts to MAD 17.3bmillion (excluding VAT). — Human resources. The balance of the receivable hold by IAM at Decemberb31, 2017 on — Information systems. Sotelma totalized MAD 6million dirhams. — Interconnection and Regulatory commitments of GT. – Amounts received: IAM received18.2bmillion dirhams in 2017. — International trafƓ c and roaming. — Taxation, legal and governance.
2.6. Agreement with ONATEL — Network technologies and operations.
– Parties concerned: — Wholesale services, Roaming and trafƓ c routing services. — IAM is the major shareholder of Onatel. Under all of these services’ provisions, IAM recorded in its accounts: – Contract form: Written agreement. – Service commitment agreement: – Nature and purpose of the agreement: Supply of services and During 2017, the revenues booked by Itissalat Al Maghrib (IAM) technical assistance. represented a total amount (excluding VAT) of 14.2bmillion dirhams. – Main terms: In September 2007, Onatel and IAM concluded an The receivable balance hold by Itissalat Al Maghrib (IAM) as of agreement under which IAM provides technical assistance and December, 31st, 2017 amounts to 24.3bmillion dirhams. services. These services are carried out mostly by expatriate employees. – Management fees: – Products or services delivered or provided: During Ɠ scal year – Technical assistance services: During 2017, the revenues booked 2017, IAM provided services to Onatel in the following areas: by Itissalat Al Maghrib (IAM) represented a total amount (excluding VAT) of 96.9bmillion dirhams. These revenues rate for the Ɠ scal Strategy and development. — years 2013, 2014 and 2015 is 2.5%, while the rate of the Ɠ scal — Organization. years 2016 and 2017 is 5%. — Networks. – Supply of services: Itissalat Al Maghrib (IAM) booked within its — Marketing. revenues a fee for the supply of services provided to its subsidiary amounting to (excluding VAT) 17.4bmillion dirhams. — Finance. The receivable balance hold by Itissalat Al Maghrib (IAM) as of — Purchasing. Decemberb31st, 2017 amounts to 328bmillion dirhams. — Human resources. – Amounts received: In 2017, IAM received a total amount of Information systems. — 30.7bmillion dirhams. Regulatory matters. — – Loan: The remaining balance related to the acquisition of Moov At Decemberb 31, 2017, revenues booked by IAM amount to subsidiaries amount to 1bmillion euros as at Decemberb31st, 2017 9.2bmillion dirhams (excluding VAT). (equivalent of 10.8bmillion dirhams). IAM booked a revenue related At Decemberb31, 2017, the Onatel receivable on IAM’s books to interests and penalties for respectively 0.3bmillion euros and totalized 2 million dirhams. 0.6bmillion euros in 2017 (equivalent to 3.28 and 6.56bmillion dirhams). – Amounts received: IAM received MAD 8.8 million dirhams in 2017. – Amount paid: Itissalat Al Maghrib received in 2017, as loan reimbursement, an amount of 16.8bmillion euros (equivalent to 2.7. Agreement with Gabon Telecom 183 million dirhams), 1.8 bmillion euros as interest and 2.1b million – Parties concerned: euros as penalties (equivalent to 19.7 and 22.8b million dirhams)
— Itissalat Al Maghrib (IAM) is the major shareholder of Gabon Telecom (GT). 2.8. Agreement with Mauritel
— M. Brahim BOUDAOUD is the common member of the – Parties concerned:
Management Board of IAM and Gabon Telecom. — IAM is the major shareholder of Mauritel – Form of the agreement: Written agreement. — Mr. Hassan RACHAD is the common member of IAM and – Nature and purpose of the agreement: Service commitment Mauritel Management Boards. agreement. – Agreement form: Written agreement. – nd Main terms: On Novemberb22 , 2016, Gabon Telecom (which – Nature and purpose of the agreement: Services and technical absorbed the subsidiary Atlantique Telecom Gabon on Juneb29, assistance. 2016 with effect from January, 1st, 2016) and Itissalat Al Maghrib – Main terms: In 2001, Mauritel and IAM concluded an agreement (IAM) concluded an agreement under which IAM provides under which IAM provides technical assistance and equipments. technical assistance and services, with retroactive effect starting from January, 1st, 2013. – Products or services delivered or provided: IAM provides Mauritel with telecommunication equipments and technical assistance. These services are carried out mostly by expatriate employees or by resort to a third party, after Gabon Telecom agreement. Under this agreement, the amount of revenues invoiced by IAM amounts to11.6bmillion dirhams (excl. tax) in 2017. – Products or services delivered or provided: In 2017, Itissalat Al Maghrib (IAM) provided services to Gabon Telecom(GT) in the At December 31, 2017, the Mauritel receivable on IAM’s books stood following areas: at 4.9 million dirhams
— Strategy and Organization. – Amounts received: IAM received 12.2bmillion dirhams in 2017.
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2.9. Agreement with Casanet for currentĆ – Main terms: Since 2003, Itissalat Al Maghrib has concluded several account advance/ shareholder loan service agreements with its subsidiary Casanet. – Products or services delivered or provided: The main services – Parties concerned: provided by Casanet to IAM are: — IAM is the major shareholder of Casanet. — Maintenance of IAM’s Menara Internet portal. — Mr. Hassan RACHAD is member of IAM and Casanet Installation of a solution for transport of IAM services to the Management Boards. — Ethernet base access network. – Agreement form: Written agreement. — Remake of the IAM Intranet backbone network. – Nature and purpose of the agreement: Advance by IAM to Extension of the Marnis backup access test solution. Casanet on non-interest-bearing account. — Implementation of marketing campaign management solution. – Main terms: At its meeting held on Decemberb4, 2007, the — Supervisory Board authorized IAM to underwrite all necessary — Providing CPW routers, technical assistance and training. capital expenditures through the provision of non-interest-bearing — Providing and management of information service by SMS for current-account advances for 6.1bmillion dirhams. IAM clients.
Several current-account advances have been granted to Casanet — Acquisition of various types of equipment. between 2008 and 2012. — Transmission of SMS for IAM. At December 31, 2017, the current-account balance totalized — Providing of digital acquisition of the Marnis network. 6.1bmillion dirhams. — Acquisition of licenses for the content management solution – Products or services delivered or provided: Advance on non- for hosting offers. 4 interest-bearing current account. — Etc. – Amounts received or paid: None. At Decemberb31, 2017, the expense booked by IAM under these agreements amounts to 64.2bmillion dirhams (excluding taxes and 2.10. Service agreement with Casanet including penalties for late payment for 15bthousand dirhams tax – Parties concerned: included).
— IAM is the major shareholder of Casanet. Payables totalized 67bmillion dirhams at Decemberb31, 2017.
— Mr. Hassan RACHAD is member of IAM and Casanet – Amounts paid: IAM paid 71 million dirhams in 2017. Management Boards. – Shareholder loan: The balance on the loan granted to Casanet: – Agreement form: Written agreement. 10.2bmillion dirhams. – Nature and purpose of the agreement: Maintaining services, web – Amounts received: No amount was collected by IAM for the hosting, technical assistance, and equipment. Ɠ nancial year 2017.
Casablanca, Februaryb16th 2018 The Statutory auditors DELOITTE AUDIT ABDELAZIZ ALMECHATT Sakina BENSOUDA-KORACHI Abdelaziz AL MECHATT Partner Partner
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5.1 RECENT DEVELOPMENTS 198 Ordinary Shareholders’ Meeting of April 24, 2018 198 Legal proceeding 198 Wana Dispute 198
5.2 MARKET OUTLOOK 198
5.3 OBJECTIVES 199 Report of the statutory auditors on proƓt forecasts 200
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5.1 _ Recent developments
ORDINARY SHAREHOLDERS’ MEETING OF LEGAL PROCEEDING APRIL 24, 2018 The company received a summons from the Commercial Court of Itissalat Al-Maghrib, a Moroccan public limited company with Rabat on March 20, 2018 concerning a complaint Ɠ led by Wana Management and Supervisory Boards and share capital of Corporate . The Ɠ rst hearing before the Commercial Court of Rabat MADb5,274,572,040, whose headquarters are in Rabat, Avenue will take place on April 2nd. The company will take all measures to Annakhil, Hay Riad, and which is registered under number 48 947 in defend its rights. the Rabat Trade and Companies Register, hereby invites shareholders to its headquarters on Aprilb24, 2018 at 3bpm for an Ordinary General Shareholders’ Meeting convened to deliberate on the following WANA DISPUTE agenda: On June 9, 2017, ANRT sent Maroc Telecom a referral from Wana 1. Approval of the reports and summary annual Ɠ nancial statements for anticompetitive practices regarding the implementation of for the Ɠ scalbyear ended Decemberb31, 2017. unbundling. On March 23, 2018, Maroc Telecom received the reply 2. Approval of the consolidated Ɠ nancial statements forbthebƓ scalbyear to its initial response sent on August 7, 2017. The period allowed for ended Decemberb31, 2017. responding to this reply is one month. 3. Approval of the related-party agreements reviewed inbthe Statutory auditors’ special report. 4. Allocation of 2017 earningsb– Dividend. 5. Ratification of the appointment of Abdelouafi Laftit to the Supervisory Board. 6. Repeal of the current share buyback program and authority to be granted to the Management Board to again trade in the Company’s shares and the establishment of a liquidity contract on the Casablanca stock market. 7. Powers to complete legal formalities.
5.2 _ Market outlook
The comments relating to market outlook contain forward-looking Sectionb3.4, the Company warns investors that actual results could statements and information relating to Company expectations. differ materially from expectations. Forward-looking statements involve risks and uncertainties inherent The telecommunications market in Morocco offers significant to forecasts and are based solely on assessments undertaken as potential for growth because of the following favorable economic of the date on which such statements are made. Because of the and social factors, and the generalized use of information and significant number of factors involved, including those listed in communication technologies.
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Morocco should beneƓ t particularly from: Thanks to the accelerated deployment of its networks (3G et 4G+ for mobile, ADSL and optical Ɠ ber for Fixed-line), Maroc Telecom plans – a favorable economic environment in 2018: GDP is expected to to take advantage of the popularity of the internet and support the grow 3.2% and the budget deƓ cit to be reduced to 3.5% of GDP increase in usages that will continue in the comingbyears. (source: Ministry of Finance); the International Monetary Fund estimates growth of about 3.1%; Changes in internet usages will create signiƓ cant pressures on current – a population that is growing at an annual rate of 1.25% and which is infrastructure capacities. As a result, these new needs will require increasingly urban: 60.3% of the population lives in urban centers investments. Given the magnitude of the investments required, the (source: latest census of the High Commission for Planning, 2014); trend toward new mobile technologies must include monetization – of data services, the primary vector for maintaining positive growth an industrial acceleration plan and investment in renewable in the sector. energies; The new regulatory framework established by the regulator in 2016 – the increasing presence of major Moroccan groups in Africa; ended the MINDLESS price cuts made by mobile operators and the – a major long-term program to combat poverty and social exclusion destruction of value, which ultimately led to the birth of a new market (National Initiative for Human Development, or INDH, launched model centered on innovation-based competition, adapted offers in 2005). and the quality of the networks and services. Since Marchb2017, the These are all factors that herald more intensive usage of new Moroccan regulator has also reinstated an asymmetry of 20% on information technologies. Access to Internet services will continued Mobile termination rates in favor of the competitors. to be carried by the mobile networks, but also by Ɠ ber optic Ɠ xed- Following the integration of the new Moov subsidiaries, the Group’s line infrastructures, the only technologies capable of absorbing the revenue from the International segment was close to 45% at end- constantly growing volumes of data exchanged. 2017. The plans for upgrades, support and massive investment in The internet (Ɠ xed-line and mobile) customer base in Morocco was subsidiaries will continue and reduce the operator’s exposure to its up 30%byear-on-year with an internet penetration rate of 63.67%. domestic market. The growth potential of this market still exists, supported by the In sub-Saharan Africa, where Maroc Telecom’s principal subsidiaries penetration of the smartphones that are revolutionizing usages. operate, the telecommunications market offers very high growth Changes in use also include the increasing use of Voice over IP potential because of: applications, i.e., technologies that enable the free routing of voice – continued rapid growth, estimated at 5.7% in 2018 compared to 5 communications over the internet, which have been deregulated in 5.5% in 2017 (source: International Monetary Fund); Morocco since Novemberb2016. Even though it encourages Data use, – this alternative means of communication replaces traditional Voice the sharp increase in public and private investment; and communications and has a marked impact on incoming international – a penetration rate projected to increase significantly in the trafƓ c in particular. comingbyears.
5.3 _ Objectives
Section 5.3 contains information regarding The Group objectives for risk factors could have an impact on the Company’s operations and its Ɠ scalbyear 2017. The Company warns potential investors that these ability to achieve its targets (see also Sectionb5.2 “Market Outlook”). forward-looking statements are dependent on circumstances and On the basis of recent business trends in Morocco and internationally, events that are expected to occur in the future. These statements do The Group outlook for 2018, on a like-for-like basis, is as follows: not reŴ ect historical data and should not be interpreted as guarantees – unchanged revenues; that the facts and data mentioned will occur or that the targets will be achieved. Because of their uncertain nature, these targets may – unchanged EBITDA; not be achieved, and the assumptions on which they are based may – CAPEX of around 23% of revenue (excluding frequencies and be found to be erroneous. Investors are encouraged to take into licenses). consideration the risks described in Sectionb3.4. The aforementioned
MAROC TELECOM ____ 2017 Registration Document 199 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 RECENT DEVELOPMENTS AND GROWTH OUTLOOK 5 Objectives
REPORT OF THE STATUTORY AUDITORS ON PROFIT FORECASTS
To the Chairman of the Board of Directors, We also gathered all the relevant information and explanations that we deemed necessary to obtain reasonable assurance that the proƓ t In our capacity as Statutory auditors and in accordance with European forecast has been properly compiled on the basis stated. Regulation (EC) 809/2004, we have prepared this report on Itissalat Al-Maghrib (IAM) S.A and its subsidiaries’s proƓ t forecasts (Maroc It should be noted that, given the uncertain nature of forecasts, the Telecom Group), which may be found in part 5, Section 5.3, of this actual Ɠ gures are likely to be signiƓ cantly different from those forecast 2017 Registration Document. and that we do not express a conclusion on the achievability of these Ɠ gures. These forecasts and underlying signiƓ cant assumptions were made under the responsibility of the Management Board of Maroc Telecom We conclude that: Group, in accordance with the provisions of European Regulation – this proƓ t forecast has been properly compiled on the basis stated; (EC) 809/2004 and the relevant ESMA (CESR) recommendations on proƓ t forecasts. – the accounting methods applied in the preparation of the proƓ t forecast are consistent with the accounting principles adopted by Our responsibility, in accordance with the terms of annex I, item 13.2, Maroc Telecom Group. of European Regulation (EC) 809/2004, is to state our conclusions on the appropriateness of the preparation of such forecasts. This report is issued for the sole purpose of filing the 2017 Registration Document with the AMF. As appropriate, this report may We have performed our procedures which we considered necessary, be used for any public offering, in France or any other European in accordance with the professional Moroccan standards, applicable Union country, for which a prospectus containing this Registration to the review of the Ɠ nancial forecasts. Our work consisted in an Document has been registered with the AMF. It may not be used in assessment of the preparation process for the proƓ t forecast, as any other purpose. well as the procedures implemented to ensure that the accounting methods applied are consistent with those used for the preparation of the historical Ɠ nancial information of Maroc Telecom Group.
Casablanca, March 30 , 2018 The Statutory auditors Deloitte Audit Abdelaziz Almechatt Sakina Bensouda-Korachi Abdelaziz Almechatt Partner Partner
200 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 RECENT DEVELOPMENTS AND GROWTH OUTLOOK
5
MAROC TELECOM ____ 2017 Registration Document 201 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 202 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 6 NOTES
CROSS-REFERENCE TABLE 204
FINANCIAL INFORMATION REPORTED IN 2017 207
STATUTORY AUDITORS’ FEES 207
ORDINARY SHAREHOLDERS’ MEETING OF APRIL 24, 2018 208
GLOSSARY 210
MAROC TELECOM ____ 2017 Registration Document 203 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 NOTES 6 Cross-reference table
_ CrossĆreference table
Page number of the Registration Headings of Annex 1 to European Regulation 809/2004 Document 1. RESPONSIBLE PERSONS 24 2. STATUTORY AUDITORS 25 3. SELECTED FINANCIAL INFORMATION – KEY FIGURES 12-13/106-107 4. RISK FACTORS 16-17 5. INFORMATION ABOUT THE ISSUER 5.1. History and development of the Company 4-5 5.2. Investments 5 6. BUSINESS OVERVIEW 6.1. Main activities 71-78/90-102/111-113 6.2. Main markets 71-78/90-102 6.3. Material events that have affected information in 6.1. and 6.2. 16-17 6.4. Dependency on patents or licenses; industrial, commercial or Ɠ nancial agreements andbnew 60-69 manufacturing processes 6.5. Basis for statements made with regard to competitive position 70-71/72/75/90-102 7. ORGANIZATIONAL STRUCTURE 7.1. Description of the Group 62 7.2. Main subsidiaries 90-102 8. PROPERTY, PLANT AND EQUIPMENT 8.1. Existing or planned Ɠ xed assets 68-69 8.2. Environmental issues that may affect the utilization of property, plant and equipment 65-66 9. REVIEW OF FINANCIAL POSITION AND EARNINGS 9.1. Financial position 106-190 9.2. Operating income 170-171 10. CASH AND CAPITAL RESOURCES 10.1. Information on capital resources (short and long term) 124-125 10.2. Cash Ŵ ows 124-125 10.3. Information on borrowing terms and Ɠ nancing structure 124-125 10.4. Information on restrictions on the use of capital resources NA 10.5. Information on the expected sources of funds required to fulƓ ll commitments referred NA to in 5.2.3 and 8.1 11. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES 69-70 12. INFORMATION ON TRENDS 194 13. PROFIT FORECASTS AND ESTIMATES 196 14. BOARD OF DIRECTORS, MANAGEMENT BOARD, SUPERVISORY BOARD AND SENIOR MANAGEMENT 14.1. Board of Directors, Management Board, Supervisory Board 44-52 14.2. ConŴ icts of interest with regard to the Board of Directors, Management Board andbSupervisory Board 57-58 15. COMPENSATION AND OTHER PAYMENT 15.1. Compensation and beneƓ ts in kind 57-58 15.2. Pension, retirement and other beneƓ ts 57-58 16. OPERATION OF THE BOARD OF DIRECTORS AND THE MANAGEMENT BOARD 16.1. Date of expiration of current term 44-52 16.2. Service agreements among members of the Board of Directors, Management Board and Supervisory Board 57-58 16.3. Audit Committee and other committees 54-56 16.4. Compliance disclosure with regard to corporate governance prevailing in the country of origin NA
204 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 NOTES Cross-reference table
Page number of the Registration Headings of Annex 1 to European Regulation 809/2004 Document 16.5. Report of the Chairman of the Supervisory Board on internal controls NA 16.6. Report of the Statutory auditors on the Chairman’s report NA 17. EMPLOYEES 17.1 Human resources and employee performance indicators 63-65 17.2. Management shareholdings and stock options NA 17.3. Employee proƓ t-sharing agreements and shareholdings 36 18. MAJOR SHAREHOLDERS 18.1. Breakdown of share capital and voting rights 36 18.2. Categories of voting rights NA 18.3. Control of the issuer 25 18.4. Arrangements known to the issuer that may entail a change 36-37 of control at a later date 19. RELATED-PARTY TRANSACTIONS 57-58 20. FINANCIAL INFORMATION ON THE ISSUER’S ASSETS, FINANCIAL POSITION AND EARNINGS 20.1. Past Ɠ nancial information 110-119 20.2. Pro-forma Ɠ nancial information 110-119 20.3. Financial statements 122-123 20.4. Audit of Ɠ nancial information 121/167/167/196 20.5. Date of latest Ɠ nancial information 203 20.6. Interim and other Ɠ nancial information NA 20.7. Dividend policy 42 6 20.8. Legal and arbitration proceedings 103 20.9. Material change in Ɠ nancial or trading position 194 21. ADDITIONAL INFORMATION 21.1. Share capital 34-35/188 21.2. Deed of incorporation and articles of association 26-27 22. KEY AGREEMENTS NA 23. INFORMATION FROM THIRD PARTIES, STATEMENTS FROM EXPERTS AND EXPRESSIONS NA OFbINTEREST 24. DOCUMENTS AVAILABLE TO THE GENERAL PUBLIC 25 25. INFORMATION ON SHAREHOLDINGS 90-102
Registration Document NA: not applicable
MAROC TELECOM ____ 2017 Registration Document 205 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 NOTES 6 Cross-reference table
In compliance with Articleb28 of European Commission Regulation – the consolidated financial statements for the fiscalbyear ended (EC) 809/2004 of Aprilb 29, 2004, the following information is Decemberb31, 2009, the relevant Statutory auditors’ report and incorporated by reference in this Registration Document: the Group financial report presented on pages 179, 180 and 142 of Registration Document no.bD.10-0321 filed with the AMF on – the consolidated financial statements for the fiscalbyear ended Aprilb26, 2010; Decemberb31, 2016, and the relevant Statutory auditors’ report and the Group financial report presented on pages 152 and 154 – the consolidated financial statements for the fiscalbyear ended of the Registration Document no.bD.17-0386 filed with the AMF Decemberb31, 2008, the relevant Statutory auditors’ report and on Aprilb14, 2017; the Group financial report presented on pages 185, 186 and 146 of Registration Document no.bD.09-0289 filed with the AMF on – the consolidated financial statements for the fiscalbyear ended Aprilb24, 2009; Decemberb31, 2015, and the relevant Statutory auditors’ report and the Group financial report presented on pages 172 and 178 – the consolidated financial statements for the fiscalbyear ended of the Registration Document no.bD.16-0336 filed with the AMF Decemberb31, 2007, the relevant Statutory auditors’ report and on Aprilb14, 2016; the Group financial report presented on pages 186, 187 and 146 of Registration Document no.bD.08-0323 filed with the AMF on – the consolidated financial statements for the fiscalbyear ended Aprilb28, 2008; Wednesday, Decemberb31, 2014, and the relevant Statutory auditors’ report and the Group financial report presented on pages – the consolidated financial statements for the fiscalbyear ended 172 and 178 of the Registration Document no.bD.15-029687 filed Decemberb31, 2006, the relevant Statutory auditors’ report and with the AMF on Aprilb2, 2014; the Group financial report presented on pages 135, 175 and 106 of Registration Document no.bR 07-0058 filed with the AMF on – the consolidated financial statements for the fiscalbyear ended Mayb9, 2007; Decemberb31, 2013, and the relevant Statutory auditors’ report and the Group financial report presented on pages 154 and 157 – the consolidated financial statements for the fiscalbyear ended of the Registration Document no.bD.14-029687 filed with the AMF Decemberb31, 2005, the relevant Statutory auditors’ report and on Aprilb2, 2014; the Group financial report presented on pages 124, 167 and 98 of Registration Document no.bR 06-031 filed with the AMF on Aprilb11, – the consolidated financial statements for the fiscalbyear ended 2006; Monday, Decemberb31, 2012, and the relevant Statutory auditors’ report and the Group financial report presented on pages 158 and – the consolidated financial statements for the fiscalbyear ended 159 of the Registration Document no.bD.13-029687 filed with the Decemberb31, 2004, the relevant Statutory auditors’ report and AMF on Aprilb2, 2014; the Group financial report presented on pages 157, 131 and 100 of Registration Document no.bR 05-038 filed with the AMF on Aprilb8, – the consolidated financial statements for the fiscalbyear ended 2005; Decemberb31, 2011, the relevant Statutory auditors’ report and the Group financial report presented on pages 197, 198 and 179 – the consolidated financial statements for the fiscalbyear ended of Registration Document no.bD.12-0385 filed with the AMF on Decemberb31, 2003, the relevant Statutory auditors’ report and Aprilb23, 2012; the Group financial report presented on pages 160, 122 and 208 of Registration Document no.bI 04-198 filed with the AMF on – the consolidated financial statements for the fiscalbyear ended Novemberb08, 2004. Decemberb31, 2010, the relevant Statutory auditors’ report and the Group financial report presented on pages 206, 207 and 172 The chapters of Registration Document no.b R 05-038 and of of Registration Document no. D.11-0284 filed with the AMF on Prospectus no.bI 04-198 that are not referred to above are either Aprilb12, 2011; irrelevant to the investor or addressed elsewhere in this Registration Document.
206 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 NOTES Statutory auditors’ fees
_ Financial information reported in 2017
The following table lists Ɠ nancial information published or made public by Maroc Telecom over the past twelvebmonths (frombMarchb22, 2017 to Marchb21, 2018), pursuant to ArticlebL.b451-1-1 of the Monetary and Financial Code, and Articleb221-1-1 of the AMF General Regulations:
Date Document Aprilb14, 2017 Press release, publication of 2016 Registration Document Aprilb24, 2017 Press release, Q1 2017 results Julyb5, 2017 Semi-annual report; liquidity contract (Paris); share-price-stabilization contract (Casablanca) Julyb24, 2017 Press release, results for Ɠ rst half 2017 Octoberb23, 2017 Press release, results for Ɠ rst ninebmonths of 2017 Januaryb3, 2018 Semi-annual report; liquidity contract (Paris); share-price-stabilization contract (Casablanca) Februaryb19, 2018 Press release, annual results for 2017
All press releases may be viewed or downloaded at: – the AMF website: www.amf.fr; – the Maroc Telecom website under “Regulatory Information”: www.Maroc Telecom.ma/Information-reglementee.aspx.
_ Statutory auditors’ fees 6 FISCAL YEAR 2017
In accordance with the provisions of Articleb221.1.2 of the AMF General Regulations, the table below shows the amount of the fees paid by the Maroc Telecom Group to each of its Statutory auditors for Ɠ scalbyear 2017.
Maroc Telecom Group
Abdelaziz (in MAD excl. tax) Deloitte Audit Almechatt Other 2017 Total Statutory auditors’ fees 20,268,216 3,828,927 2,589,021 26,686,164 Other audit engagements 2,869,895 - 306,605 3,176,500 TOTAL 23,138,111 3,828,927 2,895,626 29,862,664
All press releases may be viewed or downloaded at: – the AMF website: www.amf.fr; – the Maroc Telecom website under “Regulatory Information”: www.Maroc Telecom.ma/Information-reglementee.aspx.
MAROC TELECOM ____ 2017 Registration Document 207 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 NOTES 6 Ordinary Shareholders’ Meeting of April 24, 2018
_ Ordinary Shareholders’ Meeting of April 24, 2018
FIRST RESOLUTION Meeting hereby approves all operations and agreements reviewed in said report. Approval of the reports and summary annual Unancial statements for the Uscal year ended FOURTH RESOLUTION December 31, 2017 Having satisƓ ed the quorum and majority requirements pertaining to Appropriation of 2017 earnings ć Dividend Ordinary Shareholders’ Meetings, the Shareholders’ Meeting, after hearing: Having satisƓ ed the quorum and majority requirements pertaining to Ordinary Shareholders’ Meetings, the Shareholders’ Meeting – the management report of the Management Board and the hereby resolves to allocate as follows the earnings for the Ɠ scalbyear observations of the Supervisory Board on said report; ended Decemberb31, 2017, which amount to MADb5,699,460,547.06, – and the general report of the Statutory auditors on the Ɠ nancial namely: statements for the Ɠ scalbyear ended Decemberb31, 2017; hereby approves the summary Ɠ nancial statements for said Ɠ scalbyear Distributable earnings (in MAD) MADbb5,699,460,547.06 and the operations accounted for therein or summarized in said Optional reserve (in MAD) MAD 2,922,743.86 reports. Total amount of dividend (in MAD)b(a) MAD 5,696,537,803.20 Consequently, the Shareholders’ Meeting resolves to give final discharge to the members of the Supervisory and Management (a) This amount is adjusted to reŴ ect the number of treasury shares held on Boards for the performance of their duties in Ɠ scalbyear 2017. the dividend payment date. The Shareholders’ Meeting therefore resolves to set the dividend at MADb6.48 for each share of those comprising the share capital and SECOND RESOLUTION held on the record date. The dividend will be paid out on or after Juneb5, 2018. Approval of the consolidated Unancial Ordinary dividends were paid in the past three Ɠ scalbyears as follows: statements for the Uscal year ended December 31, 2017 Fiscal years 2014 2015 2016 Having satisƓ ed the quorum and majority requirements pertaining to Dividend/share (in MAD) 6.90 6.36 6.36 Ordinary Shareholders’ Meetings, the Shareholders’ Meeting hereby approves as necessary the consolidated Ɠ nancial statements, as Total distribution (in MADbmillion) 6,065 5,589 5,590 presented, for the Ɠ scalbyear ended Decemberb31, 2017. FIFTH RESOLUTION THIRD RESOLUTION RatiUcation of the coĆoptation Approval of the relatedĆparty agreements of AbdelouaU LaYit reviewed in the Statutory auditors’ special The General Meeting, deliberating under the conditions of quorum report and majority required for Ordinary General Meetings, ratiƓ es the Having satisƓ ed the quorum and majority requirements pertaining to appointment of AbdelouaƓ Laftit as a member of the Supervisory Ordinary Shareholders’ Meetings and having heard the special report Board for the remaining term of ofƓ ce of the outgoing member, i.e., of the Statutory auditors on the related-party agreements covered by until the end of the General Meeting called to approve the Ɠ nancial Articleb95 of Lawb17-95 relating to corporations, which was amended statements for thebyear ended Decemberb31, 2018. and supplemented by Lawb20-05 and Lawb78-12, the Shareholders’
208 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 NOTES Ordinary Shareholders’ Meeting of April 24, 2018
SIXTH RESOLUTION (Februaryb24, 2003) determining the forms and conditions under which corporations can buy back their own shares on the stock exchange in view of regulating the share price; Revocation of the current stock buyback – and, of the AMMC (Moroccan securities authority) circular. program and authority to be given to the And having heard the report of the Management Board on the share Management Board to trade in the Company’s buyback program undertaken by Itissalat Al-Maghrib with a view shares and establish a liquidity contract towards regulating share price, has reviewed all items in the notice on the Casablanca Stock Exchange approved by the AMMC. The Shareholders’ Meeting, ruling under the quorum and majority The Ordinary Shareholders’ Meeting expressly authorizes the conditions required for Ordinary Shareholders’ Meetings, upon establishment of a new program by Itissalat Al-Maghrib to buy back reading the Management Board’s report, revoked, with effect from its own shares on the stock exchange, in Morocco or abroad, as May 10, 2018, the stock buyback program in view of regulating the proposed by the Management Board. share price as authorized by the Ordinary Shareholders’ Meeting of Incidentally, and subject to compliance with the current legal and Aprilb25, 2017, and due to expire on Novemberb8, 2018. regulatory provisions, the Shareholders’ Meeting expressly authorizes The Ordinary Shareholders’ Meeting, abiding by the terms and establishing a liquidity contract on the Casablanca stock exchange, conditions of: backing this buyback program. – Articlesb279 and 281 of Lawb17-95 of Augustb30, 1996, pertaining The number of shares speciƓ ed by this liquidity contract can under to Moroccan corporations (sociétés anonymes), as amended and no circumstance exceed the lower of the following two limits: supplemented by Laws 20-05 and 78-12; – 300,000 shares, or 20% of the total number of shares indicated in – decreebno.b2-10-44 of 17 Rajab 1431 (Juneb30, 2010), amending the buyback program; and supplementing Decreebno.b2-02-556 of 22 Dou-al Hijja 1423 – the maximum limit allowed by the laws cited above.
The characteristics of the new buyback program are as follows:
Stock concerned Shares of Itissalat AlĆMaghrib Maximum number of shares to be held within the scope of the share buyback 0.17% of the capital program, including shares covered by the liquidity agreement i.e., 1,500,000 shares Maximum expenditure allowable for implementation of buyback program MADb283,500,000 6 Authorized period 18bmonths Program calendar From Mayb10, 2018 to Novemberb8, 2019 Share price (excluding commissions): – Minimum sale price MADb96 per share (or equivalent in euros) – Maximum sale price MADb189 per share (or equivalent in euros) Financing method With free cash Ŵ ow
The Shareholders’ Meeting hereby grants all powers unreservedly to SEVENTH RESOLUTION the Chairman of the Management Board, or to any other member of the Management Board, to proceed with the revocation of the share buyback program authorized at the Ordinary Shareholders’ Meeting Powers to perform legal formalities of Aprilb25, 2017, and to implement, within the limits set out above, Having satisƓ ed the quorum and majority requirements pertaining to in Morocco and abroad, the new share buyback program and the Ordinary Shareholders’ Meetings, the Shareholders’ Meeting hereby liquidity contract related thereto, at the dates and under the terms gives the bearer an original, copy or extract of thebminutes of this and conditions that said Board deems Ɠ t. meeting, in order to perform all formalities required by law.
MAROC TELECOM ____ 2017 Registration Document 209 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 NOTES 6 Glossary
_ Glossary
4G. 4G is the 4th generation of standards for Mobile telephony. CGSUT (Comité de Gestion du Service Universel des Succeeding the 2G and 3G, it allows for “very-high-speed mobile Télécommunications). Telecommunications Universal Service broadband,” in other words data transmissions with theoretical Management Board. speeds of more than 100 broadbandbMb/s, i.e., higher than 1bGbps. Churn rate. Indicator calculated by dividing the number of contracts 3RP (Shared Radio Network). A radio network in which the terminated over a given period by the average customer base over transmission methods are shared between the users of several the same period, expressedbyearly. Thebmonthly average customer companies or bodies for internal communications. This sharing is base corresponds to a givenbmonth’s mean number of customers marked by the fact that these methods are allocated to users solely taken at the beginning and at the end of thatbmonth. for the duration of each communication. CTI (Centre de Transit International). International Transit Center: a ADSL (Asymmetrical Data Subscriber Line). Technology enabling switch that carries international calls to foreign operators’ networks. users to receive high-bandwidth services and make phone calls Divisions. Indicates Maroc Telecom’s Mobile or Fixed-Line and simultaneously through their existing phone lines. The transmission Internet divisions. capacity going from the network to the consumer is greater than that from the consumer to the network, and therefore asymmetric. Dropped-call rate. Quality indicator measuring, for the existing Mobile customer base, the number of dropped communications in AMRTP. The Malian regulatory authority for telecommunications and comparison to the set of communications established on the network. postal services. DSLAM (Digital Subscriber Line Access). ADSL equipment located ANRT. The Moroccan national telecommunications regulatory at a telephone exchange. It is an electronic assembly holding agency. several cards that are equivalent to the client Ɠ lter and modem. The ARCEP. Regulatory authority for electronic communications and Ɠ lter separates incoming phone and data signals, and the modem postal services. translates back the ATM cells (small packets transported over ATM connections). ARE. The Mauritanian telecommunications regulator. EDGE (Enhanced Data Rates for GSM Evolution) is a Mobile ARPU. Revenues generated (prepaid and postpaid) for a given telephony standard that builds on GPRS, which is a GSM extension period, excluding roaming-in revenues (incoming and outgoing with backward compatibility. calls, revenues from value-added services), divided by the average number of customers (prepaid and postpaid) over the same period, Fidelio. Fidelio was the Ɠ rstbpoints-based loyalty program introduced on abmonthly basis. The average customer base is the average of in Morocco. It is reserved to postpaid customers and was launched all averagebmonthly customer bases (prepaid and postpaid) for on Juneb1, 2002. This program allowsbpoints to be collected on the the period. Thebmonthly average customer base corresponds to a basis of expenditure and provides advantages in the form of free or givenbmonth’s mean number of customers (prepaid and postpaid) discounted handsets and free calls and SMS messages. taken at the beginning and at the end of thatbmonth. Frame Relay. Technology used to send high-bandwidth data over ATM (Asynchronous Transfer Mode). Network technology that long distances, enabling the transmission of large amounts of data, accommodates the simultaneous transmission of data, voice and the handling of Ŵ uctuations in data Ŵ ows, and voice transmission. video. It is based on asynchronous transmission of short packets of GMPCS (Global Mobile Personal Communications by Satellite). Ɠ xed length. Personal communications system providing cross-border, regional Average churn rate. Indicator calculated by dividing the number of or worldwide coverage via a network of satellites accessible by small, contracts terminated (customers with prepaid and postpaid plans) easily transportable handsets. over a given period by the total average customer base (prepaid GPRS (General Packet Radio Service). Packet switching system that and postpaid) for the same period, expressedbyearly. The average increases data rates over GSM networks. customer base is the average of all averagebmonthly customer bases (prepaid and postpaid) for the period. Thebmonthly average customer GSM (Global Systems for Mobile Communications). European base corresponds to a givenbmonth’s mean number of customers digital radio transmission standard for Mobile telephony, known (prepaid and postpaid) taken at the beginning and at the end of as 2G (second generation), developed by ETSI (European thatbmonth. Telecommunications Standards Institute) and adopted in 1987. It is the most widely used standard in the world. Used since 1992, this BTS (Base Transceiver Station). Element of the mobile radio network, technology uses two frequency bands, 900 and 1,800 MHz, and can consisting of an antenna system and radio transmitters/receivers transmit voice just as well as data. (TRX). It provides GSM network coverage in a speciƓ c geographical segment. IN platforms (Intelligent Network). Platform allowing value-added services to be made available (prepaid card, prepaid line, kiosk, Call completion rate. Quality indicator measuring, at peak time on the capped rate plan,betc.). network, the number of calls successfully completed by the existing Mobile customer base (for the BSS radio portion), compared to all Interconnection. Reciprocal service offered by the operators of two calls transmitted over the network. different telecommunications networks, enabling all subscribers within the two groups to communicate freely with one another. CAMEL (Customised Applications for Mobile Networks Enhanced Logic). A technology that enables users to call their home country without needing an area code. The technology works for voice calls as well as short messages (SMS).
210 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 NOTES Glossary
Inter-segment revenues. Inter-segment revenues are mainly PABX (Private Automatic Branch eXchange). Equipment able to generated from interconnection services relating to trafƓ c between establish temporary connections between inbound and outbound the Ɠ xed-line and mobile networks and the provision to the Mobile lines in order to route communications. segment of leased lines by the Fixed-line segment. Since Julyb1, 2004, PCM (Pulse Code Modulation). Transmission of the spoken word inter-segment revenues also include revenues from the provision of through the sampling and digital coding of the signal. The PCM interconnection services with Mauritel. circuit is the heart of the 2bMb/s telephone network. IP (Internet Protocol). Telecommunications protocol used on Postpaid (services). Formula whereby services are paid for after being networks to carry internet trafƓ c and based on the transmission of used (free services may also be included in this formula). data packets. Power CP. New, more powerful processor, based on Siemens ISDN (Integrated Services Digital Network). Entirely digital telecom technology, for MSC mobile switches. network enabling the simultaneous transmission of voice and data (fax, internet,betc.). PPT. Smart Network service allowing the marketing of capped-rate plans, not with a line number (CLI) but with any virtual phone number. ISP (Internet Service Provider). A company or an organization offering internet access to retail, business or corporate users. Prepaid (services). Formula whereby services are paid for before being used (free services may also be included in this formula). Kbits/s (Kilobits per second). Unit of measurement for the speed at which data can be transmitted along a line. PSTN (Public Switched Telephone Network). This is the classic 2-line network. This system is switched in the sense that the connection is Leased line. Any part of a network (or an access line to that network) temporarily established with the person called, as opposed to cable, that is supplied as a dedicated channel with all of its capacity where the connection is permanent. available exclusively to the user and on which there are no controls or signaling. Radio paging. Transmission of numeric or alphanumeric messages to a mobile handset or group of mobile handsets. LO BOX (GSM gateway). Equipment, compatible with the GSM standard, that has been designed to act as an interface between the Radio-relay system. Technique used to transmit a signal (voice, data GSM network and equipment that is normally meant to be connected or video) by radio wave. These links consist of relays that are installed to the Ɠ xed-line public telecommunications network, e.g., private on pylons or at highbpoints which are used to ensure that the signal switching systems (PABX) or ordinary telephones. is routed from the source to the destination. Maroc Telecom Group. The Maroc Telecom entity comprising all fully Roaming. Function enabling customers abroad to make and receive consolidated companies. calls via an operator other than the one to which they subscribe. MENA (The Middle East and North Africa). Region comprising the SDH (Synchronous Digital Hierarchy). Digital method of optimizing following countries: Algeria, Bahrain, Egypt, Gaza and the West Bank, transmissions over Ɠ ber optic and radio systems. Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Signal failure rate. General term, applicable to various services, 6 Qatar, Saudi Arabia, Syria, Tunisia, Turkey, UAE and Yemen. expressing the number of lines or services declared to have failed MMS (Multimedia Messaging Service). Multimedia version of SMS during the period, compared to the set of lines or services for the enabling real multimedia Ɠ les (video, audio, high-resolution images) same period. to be attached to text messages. Signaling Transfer Point (STP) system. Signaling transfer point for S7 MSAN (Multi-Service Access Node). New telecommunications signaling systems. The STP allows signaling messages to be routed technology that shortens last miles, thereby increasing speeds, and transferred by means of the SS7 protocol. integrating ADSL and voice and allowing for services such as SIM (Subscriber Identity Module) card. Without a SIM card, calls videotelephony and three-way calling. cannot be made from a mobile phone. In particular, the SIM card MSC (Mobile Switching Center). A central switching point for Mobile stores the user’s personal proƓ le and a PIN code protecting access service that controls the routing of calls. to the card. Multiplexer. Telecom network equipment that enables the insertion Single RAN. Solution for network operators that lowers energy or extraction of data packages. consumption, transmission costs, maintenance, and the amount of ground infrastructure needed with respect to traditional BTS Network Intelligent Call Center (Centre d’Appels Intelligent Réseaub– solutions. CAIR). Call Center Offer launched by Maroc Telecom, intended for companies whose customer relations management constitutes a true SMS (Short Message Service). Written message, limited to 160 strategic variable. CAIR’s objective is to enable effective management characters, exchanged between mobile telephones. of the customer relationship without signiƓ cant investment from the SMSC (Short Message Service Center) Servers. Service allowing the customer. This is because the technical functionalities of the call sending and receiving of written messages containing a maximum center are managed within the Maroc Telecom network. of 160 characters. Messages can be sent via an operator, via the NMT (Nordic Mobile Telephone) standard. Mobile network launched internet or directly using the keyboard on a mobile phone. If the by Maroc Telecom and based on analog technology operating in the recipient’s phone is turned off, the messages are still saved at the 450 MHz frequency band. operator’s message center. The length of time these messages are stored for varies depending on the operator. Nonetheless, in order NSS System (Network Sub-System). All elements/equipment, in for messages to be received, the maximum storage capacity of the particular switchgear, required to make up a GSM network. handset must not have been reached. Optical local loop. Fiber optic-cable-based access network used to connect broadband customers.
MAROC TELECOM ____ 2017 Registration Document 211 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 NOTES 6 Glossary
SMW3 (SEA-ME-WE3/Southeast Asiab– Middle Eastb– Western Unbundling. An incumbent operator, owner of the local loop, has an Europe). Fiber optic submarine cable linking four continents. obligation to provide pairs of copper wires to third-party operators, in exchange for compensation. Such third-party operators install their SRS (Self-Routing Switch). A switch is a set of controls that allow a own transmission equipment in order to connect their networks to temporary link or connect to be established between an incoming path their customers’ premises. Partial unbundling allows a third-party and an outgoing path corresponding to subscriber lines or circuits. operator to take over the internet connection while the incumbent SS7 Network (Signaling Systemb7). American name for the CCITTb7 operator still provides telephony subscription and services. Full network signaling protocol. unbundling allows a third-party operator to connect the entire SSNC (Signaling System Network Control). A new component customer line to its own network, and thus to offer both telephony developed by Siemens that controls signaling trafƓ c for MSCs (mobile and broadband services. switching centers) in such a way as to increase handling capacity. USF. Universal Service Fund. Success rate. Quality indicator measuring the number of SMS successfully sent by the existing Mobile customer base, as compared to all SMS transmitted on the network.
212 MAROC TELECOM ____ 2017 Registration Document WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244 MAROC TELECOM Itissalat Al Maghrib Moroccan corporation (Société anonyme) with a share capital of MAD 5,274,572,040 RC 48 947 Headquarters Avenue Annakhil, Hay Riad Rabat, Morocco www.iam.ma WorldReginfo - 4e3f6317-7984-4435-8b2c-cd58e13b8244