MAROC_TELECOM_REGISTRATION_DOCUMENT_2017

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KEY FIGURES, GROUP STRATEGY AND RISK FACTORS Group strategy

1.2 _ Group strategy

The prospects for growth are promising in all of the countries in which Maroc TelecomGroup operates (Morocco and countries in sub-Saharan Africa). Despite a difficult 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 telecommarkets in particular, Morocco should be distinguished from other Group entities since that market presents a different set of challenges.

MOROCCAN TELECOMS MARKET OUTLOOK AND MAROC TELECOM’S BUSINESS STRATEGY In Morocco, the Mobile market is mature, with a mobile penetration level approaching that of European countries. According to the ANRT, themobile penetration rate inMorocco was 126% in the fourth quarter of 2017, while the European average was 127% (source: Merrill Lynch Q4 2017). In 2017, the Moroccan telecom regulator maintained the regulatory framework introduced in 2016 (“the new guidelines”) and reintroduced an asymmetry in mobile call termination rates in favor of the competitors. The current regulatory framework established by the ANRT includes: – floor rates for all voice and data services, which have stabilized prices after severalbyears of significant price declines; – rate asymmetry for domestic Mobile incoming call terminations in favor of the competitors (+20%); – a special premium of 20% above the minimum rate for Mobile voice services, below which Maroc Telecom, the only operator declared to be dominant, cannot offer its rates; – an alignment of the three Mobile operators on data services with common prices to all three operators; – the liberalization since Novemberb2016 of IP telephony services, with a very marked impact on incoming international traffic to Mobile lines. In order to maintain its leadership in the Mobile market, where it remains number one with a 42.1% (Q4 2017) market share, while complying with the guidelines set by the regulator, Maroc Telecom intends to continue its major investment program in order to roll out the most extensive broadband Mobile network in the Kingdom of

Morocco, with the best quality of service for its customers enabling it to differentiate itself clearly from its rivals. Less than twobyears after its commercial launch, the Maroc Telecom 4G+ network covers 93% of the population, while its 3G network reaches 96% ofbthe population, allowing the Company to support throughout the Kingdom of Morocco the customer excitement about mobile internet, a segment that grew 78% over onebyear. In order to take full advantage of this trend, the priority is to monetize Data through the development of special predominantly data offers and bymaintaining a fair-use policy (maintainingData consumption ceilings +Data options to be added), while coupling data services with voice services in order to support the usages of its customers, who are increasingly using their voice services through Voice over IP applications. The inroads made by competitors into the ADSLmarket remain very limited despite the efforts required of Maroc Telecomby the regulator to guarantee that competitors have a fully fluid unbundling process. Despite the downward revision of wholesale unbundling prices, the positioning of the competition was maintained for broadband offers at unattractive prices, which partly explains their low impact on the market. Maroc Telecom continues to stand out with its very competitive Fixed-line, ADSL and FTTH offers and its recognized quality.Thebyear 2017 was marked by the revitalization of the FTTH segment, which underwent a major rate overhaul (FTTH general public offer starting at MADb500 perbmonth). Contributing to this is a panel of innovative added value services that Maroc Telecom continues to enhance (home automation, Cloud, M2M). Maroc Telecom faces increased competition in all Fixed-line and Mobile segments. However, the incumbent intends to bolster its leadership through differentiation on its quality of service and continuous innovation. This is reflected in the ongoing network upgrade and the deployment of ultra-high-speed technology for both fixed-line (MSAN and FTTH) andmobile (Single RAN and 4G+).

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MAROC TELECOM ____ 2017 Registration Document