January 2000

Morocco Update Memo

The following report outlines new developments in the past three months and the state of on-going developments.

The principle points to be developed in this report concern the legal constraints which are holding back the national offices who are potential alternative telecommunication network suppliers, and the strategies offered to the entities whose defined mission permits them to set up telecommunication activities.

In fact, these organizations were created specifically for a public service mission. Consequently, their statutes must be analyzed in order to determine if they are authorized to do the following:

• Lease unused fibers
• Sell fixed capacity
• Supply telecommunication services
• Enter into an association with a telecommunication operator

Public establishments have a mission that does not permit them to exercise any of the above activities. However, the concessionary companies have a broader mission, thus allowing them to be involved in several activities.

For example, article 2 of the decree (dahir) #1-63-225 of the 5^th of August 1963, which was responsible for the creation of the ONCF (National Office of Railways), limits the activities of this office to only those related to the railway.

Even the ONE (National Office of Electricity) is not authorized to exercise functions that are unrelated to electrical energy.

The concessionary companies have a more flexible mission:

• The company METRAGAZ can carry out, within the framework of its principle activity, any commercial, industrial or financial operation that favors its development.
• The Moroccan motorways company is also allowed to manage and use its own property and real estate and can offer diverse services that, if need be, can be sub-contracted to a third party.

We can, therefore, consider the concessionary companies to be in possession of "active" alternative infrastructures. However, because of the limited nature of their defined missions, the public offices can only use their infrastructures for their needs so long as their statutes do not allow for a diversification of functions.

Those in possession of alternative infrastructures will be able to use three different approaches once they are authorized to use their networks:

• They can become telecommunication operators.
• They can lease their networks to another telecommunication operator.
• They can negotiate an access right with the telecommunication operator.

The choice depends on legal, technical, economic and even political factors.

Trends :

Certain public officials believe that it is now necessary to rewrite the texts, especially the statutes of certain establishments who possess major telecommunication networks. In addition, specific regulations for supplying alternative infrastructures must be studied according to the recommendations given by the Devotech office concerning the technical and legal conditions of alternative infrastructure supply in Morocco.