1

THE TELECOMMUNICATIONSSECTOR EVOLUTION

AT 31stMARCH2012

1- Highlightsat 31stMarch 2012

Evolution of Tariffs (ARPM1 ),average usage2of fixed and mobile telephonyand the average monthly Internet bill per customer3

Mobile :

• The downward trend in mobile prices as measured by average revenue per minute (ARPM "Average Revenue Per Minute") continues. Indeed, the ARPM has dropped from 0.83 DHFoT/min at the end of March 2011 to 0.65 DHFoT/minat the end of March 2011 making a 22% drop.

• The average outgoing use per mobile customer has risen between March 2011 and March 2012 from 50 to 64 minutes/customer/month making a growth in the use of 28%.

Fixe :

• The downward trend in fixed prices as measured by average revenue

per minute also continues. Indeed, the ARPM has dropped from 0.97DHFoT/minat the end of March 2011 to 0.86 DHHT/minat the end of March 2012 making a decrease of 11%.

• The average outgoing usage per fixed customer decreased by 7% between March 31, 2011 and March 31, 2012 from 128 minutes per month to 115 minutes per month.

Internet :

• The downward trend in prices measured by the average monthly bill for Internet customer is confirmed. Indeed, it has dropped from 83DHFoT/month/customer at the end of March 2011 to 55DHFoT/month/customer in March 31, 2012 making a decline of 34%.

• For 3G Internet, this bill has dropped from 62DHFoT/month/customerat the end of March 2011 to 38DHFoT/month/customerin March 31,

1ARPM: Average revenue per minute of communication is obtained by dividing the turnover free of Tax of the outgoing voice communications by the outgoing traffic in minutes. 2The average use is calculated by dividing outgoing traffic in minutes by average subscriber per month in the reporting period. 3The average monthly bill per customer is calculated by dividing turnover free of Tax by average Internet subscribers and the period in months.

2

2012marking a 40% drop. As for ADSL, it decreased from 132DHFoT/month/customerat the end of March 2011 to 127DHFoT/month/customerin March 31, 2012 making a 4% decline.

MOBILE TELEPHONY

• The number of mobile subscribers reached 36 238 612 at the end of March 2012 and continues its upward trend by recording anannually increase of 8.58%anddecreases by 0.86% aver the first quarter of 2012. Thepenetration rate of mobile telephony reached 112.59%at the end of March 2012 against 113.57% at end of December 2011.

• The number of mobile postpaid subscribers recorded a quarterly

growth rate of 6.27%at the end of March 2012 against a decrease of 1.18% in the number of prepaid subscribers. The annual growth rate of postpaid subscribers is about 24.45% against 7.92% for prepaid subscribers.

• Outgoing mobile traffic has decreased quarterly by 0.53% and increased annually by 36.39%.

• SMS traffic has decreased quarterly by 23% and increased annually by 35.34%.

FIXED TELEPHONY

• The overall fixed line subscribers reached 3 534 567 at the end of March 2012 by making a slight decrease of 0.88%fromDecember 2011 and of 2.98% from March 2011. The penetration rate of fixed telephony is10.98% at the end of the first quarter of 2012.

• The outgoing fixed traffic during thefirst quarter recorded a decrease of 7.55% from December 2011 and of 12.38% from March 2011.

3

INTERNET

• At the end of March 2012, the Internet accounts reached 3 400 899and recorded a quarterly growth rate of 6.88%and annually of 56.51%.The penetration rate of Internet is 10,57% at the end of the first quarter of 2012

• The 3G Internet subscribers (83.28% of the Internet accounts) had aquarterly growth rate of 9.33% and annually of 71.08%.

• The ADSL subscribers with at least 2 Mbits/s speed represent around99% of the accounts at the end of March 2012.

• The 3G Internet accounts combining voice with Data

reached1 265.771 and recorded a quarterly growth rate of 16% and annually of 211.03%.

• The 3G Internet “Data only” reached 1 566 384 and recorded a quarterly growth rate of 4.48% and annually of 25.46%.

4

2- Quarterly analysis of the market evolution

Mobile telephony market4

At the end of the first quarter of 2012, the number of mobile subscribers reached 36 238 612, with a slight quarterly decrease of 0.86%. From March 2011, this number increases by 8.58%. The penetration rate reached 112.59%at the end of March 2012 against 113.57% in December 2011.

MOBILE ACCOUNTS

MOBILE TELEPHONY (in thousands) Mar-11 Dec-11 Mar-12

Mobile accounts 33 375 36 554 36 239

Quarterly growth5 1 393 404 - 315

QuarterlyGrowth (%)6 4.36% 1.12% - 0.86%

Penetration rate7 104.78% 113.57% 112.59%

Through the analysis of the evolution of the number of mobile subscribers for the first quarter of 2012, we notice that the number of subscribers of IAM reached 17194 (in thousands) against 17 126 (in thousands) at the end of December 2011 While the number of mobile subscribers of Medi Telecom reached 11 235(in thousands) (12 035thousands subscribers in December 2011) and for Wana Corporate this number reached 7 810(in thousands) against 7 393 (in thousands) subscribers in December 2011, carrying out a quarterly growth of 0.4% for IAM and of 5.64% for Wana Corporate and a quarterly decrease of 6.65% for Medi Telecom. In terms of market share, the incumbent operator holds 47.45% of the mobile subscribers market followed by Medi Telecom with 31% and Wana corporate with 21.55%.

4This figure includes mobile subscribers to mobile telephony using the 2G and 3G networks. 5The growth at the quarter N equals to the difference between the market size of N and N-1. 6% of growth at the quarter N equals to the difference between the market size of N and N-1 divided by the market size of N-1. 7 The penetration rate for mobile telephony is calculated on base of the population projections published by the Statistics Department/HCP and the General census of population 2004. Starting from March of the year N, the reference population for calculating this rate results from Statistics Department/HCP projections of the year N-1.

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Outgoing Mobile Voice Traffic8 At the end of the first quarter of 2012, outgoing Mobile traffic achieved 6 456.49 million minutes which correspond to a slight decrease of 0.53% compared to the last quarter of 2011.Over a year, this traffic increases by 36.39%.

Outgoing Mobile Voice Traffic (in millions min)

1st Quarter 11

4th Quarter 11

1st Quarter 12

Outgoing Mobile Traffic 4 733.94 6 491.05 6 456.49

Quarterly growth 433.19 215.9 - 34.56

Quarterly growth (%) 10.07% 3.44% - 0.53%

Outgoing SMS Traffic9 The number of SMS sent in the first quarter of 2012 is about 1 232.13 million units making a quarterly drop of 23%.Over a year, this traffic increases by 35.34%.

Mobile Outgoing SMS Traffic (in millions)

1st Quarter 11

4th Quarter 11

1st Quarter 12

Outgoing SMS Traffic 910.37 1 599.86 1 232,13

Quarterly growth - 190.60 106.16 - 367.73

Quarterly growth - 17.31% 7.11% - 22.99%

8The outgoing voice traffic is the sum of minutes used by customers of the three operators of mobile telephony in a quarter. 9The outgoing SMS traffic is the sum of SMS sent by customers of the three operators of mobile telephony in a quarter.

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Residential accounts 3 097 732 3 054 626 3 032 186

Quarterly growth - 103 018 53 817 - 22 440

Quarterly growth % - 3.22% 1.79% - 0.73%

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FIXED TELEPHONY Mar-11 Dec-11 Mar-12

Professional accounts 406 344 416 364 421 446

Quarterly growth 3 316 3 454 5 082

Quarterly growth % 0.82% 0.84% 1.22%

Outgoing Fixed Voice Traffic11 During the first quarter of 2012, subscribers of fixed telephony and those of fixed telephony with restricted mobility have made1 221.41 million minutes which corresponds to a decrease of 7.55% over a quarter and of 12.38% over a year.

Outgoing Fixed Voice Traffic (in million min)

1st Quarter 11

4th Quarter 11

1st Quarter 12

Outgoing Voice Traffic 1 394 1 321,18 1 221,41

Quarterly growth - 105.25 1.44 - 99.77

Quarterly growth % - 7.02% 0.11% - 7.55%

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13

3- Analysis of the trend in prices (ARPM) at the end of the third quarter of 2011 and the average Fixed and Mobile outgoing use per customer and the average Internet monthly bill per customer

MOBILE MARKET Mobile ARPMEvolution

31st Mar 2011 31st Mar 2012 Evolution

Average revenue per minute (ARPM) of mobile telephone call (in DH Free of Tax /minute)

Mobile prepaidARPM Mobile postpaid ARPM

0.83

0.92 0.68

0.65

0.74 0.50

- 22%

- 20% - 26%

The downward trend in mobile prices as measured by average revenue per minute (ARPM "Average Revenue Per Minute") continues. Indeed, the ARPM has dropped from 0.83DHFoT/min at the end of March 2011 to 0.65DHFoT/minat the end of March 2011 making a 22% drop.

0.83

0.65

0.92

0.740.68

0.50

00,10,20,30,40,50,60,70,80,91

31st Mar 2011 31st Mar 2012

ARP

M (in DH Free of Tax/m

inute) 

Evolution of Mobile ARPM

Mobile (ARPM)  (in DH Free of Tax/minute)

Mobile prepaid ARPM 

Mobile postpaid ARPM 

14

Evolution of average monthly outgoing use by mobile telephone customer14

31st Mar 2011 31st Mar 2012 Evolution

Average monthly outgoing use by mobile telephone customer (in minute/month/customer)

Mobile prepaid use Mobile postpaid use

50

33 492

64

42 553

28%

27% 12%

The average outgoing use per mobile customer has risen between March 2011 and March 2012 from 50 to 64 minutes/customer/month making a growth in the use of 28%. For prepaid usage, it has increased by 27% moving from 33 minutes/month to 42minutes per month while the postpaid use has increased by 12% from 492 minutes/month to 553 minutes per month.

14The average monthly outgoing use by mobile telephone customer is obtained by dividing the outgoing mobile telephone voice traffic in minutes by the average number of subscribers to mobile telephony and the period in months.

50 64

33 42

492553

0

100

200

300

400

500

600

31st Mar 2011 31st Mar 2012(minute/mon

th) p

er customer 

Evolution of average monthly outgoing use by mobile telephone customer 

Average monthly outgoing use by mobile telephone customer (min)

Mobile prepaid use

Mobile postpaid use

15

FIXED MARKET

FixedARPM Evolution

31st Mar 2011 31st Mar 2012 Evolution

Average revenue per minute (ARPM) of fixed telephone callin DH Free of Tax /minute

0.97 0.86 - 11%

The downward trend in fixed prices as measured by average revenue per minute also continues. Indeed, the ARPM has dropped from 0.97 DHFoT/min at the end of March 2011 to 0.86 DHHT/min at the end of March 2012 making a decrease of 11%.

0.97

0.86

0

0,2

0,4

0,6

0,8

1

1,2

31st Mar 2011 31st Mar 2012

ARP

M (in DH Free of Tax/m

inute) 

Evolution of fixed ARPM 

16

Evolution of average monthly outgoing use by fixed telephone customer15

31st Mar 2011 31st Mar 2012 Evolution

Average monthly outgoing use by fixed telephone customer (in minute/month/customer)

128 115 - 10%

The average outgoing usage per fixed customer decreased by 7% between March 31, 2011 and March 31, 2012 from 128 minutes per month to 115 minutes per month.

15The average monthly outgoing use by fixed telephone customer is obtained by dividing the outgoing fixed telephone voice traffic in minutes by the average number of subscribers to fixed telephony and the period in months.

128

115

0

20

40

60

80

100

120

140

31st Mar 2011 31st Mar 2012

(minute/mon

th) p

er customer 

Evolution of average monthly outgoing use by fixed telephone customer

17

INTERNET MARKET Evolution of the Internet average monthly bill per customer16

31st Mar 2011 31st Mar 2012 Evolution

Internet average monthly bill per customer (in DH Free of Tax/month/customer)

ADSL 3G Access

 83   

132 62  

 55   

127 38  

 ‐34% 

  

‐ 4% ‐39% 

 

The downward trend in prices measured by the average monthly bill for Internet customer is confirmed. Indeed, it has dropped from 83 DHFoT/month/customer at the end of March 2011 to 55 DHFoT/month/customer in March 31, 2012 making a decline of 34%. For 3G Internet, this bill has dropped from 62 DHFoT/month/customerat the end of March 2011 to 38 DHFoT/month/customer in March 31, 2012 marking a 40% drop. As for ADSL, it decreased from 132 DHFoT/month/customerat the end of March 2011 to 127 DHFoT/month/customer in March 31, 2012 making a 4% decline.

16The average monthly bill per customer is calculated by dividing turnover free of tax by average Internet subscribers and the period in months.

83

55

132127

62

38

0

20

40

60

80

100

120

140

31st Mar 2011 31st Mar 2012

( DH FoT

/mon

th) p

er customer

Evolution of the average monthly Internet bill per customer

Global (ADSL+ 3G)

ADSL

3G (DATA Only + DATA&voix)