A Little Noticed Article Underscores Morocco’s Regulatory Strength; A Model for the Region – Ambassador Edward M. Gabriel (ret.)

Ambassador Edward M. Gabriel (ret.)
February 14, 2020

The article entitled, Morocco’s telecoms regulator hits Maroc Telecom with $375m fine, is worth reflecting on. Maroc Telecom is the original monopoly of the Moroccan government and it is still a 22% owner. Reuters reported that the Moroccan National Telecommunications Regulatory Agency, ANRT, had imposed the fine for anti-competitive practices, an example of the maturity of regulatory oversight in Morocco and a model for the rest of the region.

ANRT was created in February 1998, and first headed by Mostafa Terrab, the current CEO of the Moroccan phosphates company, OCP Group. Its aim is to implement and sustain the conditions for fair competition in the telecommunications market while driving the growth of the sector in a transparent and competitive environment. At the time of its creation, it was a state monopoly with no other alternative for telecom service.

One of the first tasks for ANRT was to oversee competition for a second cellphone license, which would be the first competitor to Maroc Telecom. In a well-publicized, transparent process, Medi Telecom, a Spanish consortium, was awarded the license, having bid $1.1B, one of the highest bids ever made for a cell license at the time.

This resulted in several positive results as it forced Maroc Telecom to improve its quality and extend its GSM service to all corners of the country, even the deep reaches of the Sahara Desert.

Due to competition, costs to the customer were “reduced four times in less than two years and fell to less than one-half their level before the tender.”  Maroc Telecom users jumped from nearly 17,000 in 1998 to over 2.4 million by the end of 2000.  This remarkable result displayed the importance of transparency and competition. As the first such regulatory agency in the MENA region, ANRT also became an example of the importance of regulatory reforms in support of anti-corruption efforts.

One World Bank study shows a strong correlation between regulatory quality and economic growth, better governance quality and higher incomes per capita. Another World Bank report, Regulatory Governance in Developing Countries, states, “Regulation of private behavior has become a fundamental tool of government in managing more complex and diverse societies and for allowing competing interests to be balanced.” According to an OECD paper, “Good governance and regulatory management is essential to regulatory reform because they are important catalysts between reform objectives and reform results. Good governance is inherently linked to economic and social reforms.”

ANRT’s success could be a good model for other sectors in Morocco and throughout the region. Another regulatory agency in Morocco that oversees electricity policy has also proven effective in advancing electric power coverage to more than 90% of the country.

Models such as these should be considered in Lebanon, for example, as it grapples with privatization issues for telecommunications, electricity, energy, environmental protection, and air and seaports. This may enable other countries as well to learn that regulatory agency reform, if done with transparency and the proper independence reflecting what’s best for the people, can prove effective in fighting corruption.

ANRT has obviously reached its maturity by independently imposing a significant fine on the country’s former monopoly, Maroc Telecom. Other countries would be wise to look at the Moroccan experience.

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