05 November 1999

MOROCCO has recently hit the headlines with its record-breaking $1,100 million GSM deal. The contract for the country's first private mobile licence was won in July by the international Medi Telecom consortium led by Spain's Telefonica, with Portugal Telecom and the local BMCE Bank and Afriquia Group.

Medi Telecom faces competition from state-owned Itissalat al-Maghrib (IAM) which has embarked on a strategy intended to increase its share of the mobiles market in the run-up to its partial privatisation. In an aggressive marketing campaign, the company has issued cheaper pre-paid phone cards, reduced connection and subscription charges and embarked on a series of tariff cuts. As a result, the number of its GSM subscribers has almost doubled to 230,000 in the past 10 months. The sale of IAM is the jewel in the country's privatisation plan and is expected to account for the lion's share of the anticipated MD 3,500 million ($360 million) in privatisation receipts targeted for the 1999/2000 budget.

Two international consortia have been selected to provide the Privatisation Ministry simultaneously with advice on the value of IAM, as well as recommendations on the size and method of the sale. The first tranche of the sale - a 20 per cent minimum of IAM's capital - is expected to be made to a strategic investor in the first quarter of 2000, and analysts believe a second tranche will be floated on the market - local, international or both - later next year.

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