MAROC_TELECOM_REGISTRATION_DOCUMENT_2017

KEY FIGURES, GROUP STRATEGY AND RISK FACTORS

Group strategy

INTERNATIONAL OUTLOOK AND STRATEGY OF MAROC TELECOM’S SUB-SAHARAN SUBSIDIARIES Thebyear 2017 was marked by economic stable economic growth in sub-Saharan Africa in connection with the crisis in the commodities market and the unstable political climate. All of the Group’s subsidiaries saw significant growth in their mobile penetration (on average 90% in 2017 vs. 86% in 2016), thus demonstrating the dynamism of those Mobile markets despite the strict customer identification requirement that applies to all operators. The increase in competitive pressure (new entrant inMali) should also result in lower prices in those markets and a democratization of uses of mobile data and other features. The historic subsidiaries continue to enjoy a privileged status as convergent historical operators (fixed/mobile), but their growth model will have to be reviewed in the comingbyears. In subsidiaries experiencing growth in mature markets (Gabon Telecom and Mauritel), changes have begun to encourage the use of mobile data over voice. Their efforts must therefore focus on maintaining their leading position through continuous expansion of network coverage and improvement of their QoS while developing innovative added value products (Mobile money, FTTH, Managed Corporate Services, etc.). The historic subsidiaries operating in growingmarkets (Sotelma and Onatel) increasingly face challenges from their competitors in the Mobile market, but they remain very well placed to benefit from the rise of mobile data, which is considered a driver for growth in those markets. As such, the forthcoming installation of a submarine cable

at Group level will enable them to democratize Data Mobile usage since they will benefit from international bandwidth capacity at a very competitive price. As for the subsidiaries acquired in 2015, Maroc Telecom continues to support them closely, sharing with the local teams the experience and expertise of Maroc Telecom in Morocco and Africa. The marketing and sales efforts of all the subsidiaries bore fruit with an increased share of the Mobile market for each of the subsidiaries. The significant network investments implemented in 2016 and 2017 also contributed to these encouraging results thanks to the extension of networks and the continuous improvement in the quality of service. Significant efforts to streamline costs also improved the margins of all these subsidiaries, even if they are suffering from tax and royalty pressures in a fiscal and regulatory environment that does not offer levers favorable to challenger operators.These subsidiaries must also meet the challenge of mobile data development. Significant network investments are planned for the period from 2018 to 2020. These investments should allow the subsidiaries to expand their coverage, improve their service quality and keep pace with growing customer demand for mobile data and all the innovative products developed because of it (M-payment, Cloud, M2M). The challenge for these operators is to continue to gainmarket share and become benchmark operators in terms of service quality and innovation while ensuring the monetization of mobile data so that it becomes a growth booster in these markets. The progressive improvement in the performances of the new subsidiaries and the consolidation of the assets of the historical subsidiaries should increase their contribution to the growth of the Group’s sales and profits.

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MAROC TELECOM ____ 2017 Registration Document