MAROC_TELECOM_REGISTRATION_DOCUMENT_2017

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KEY FIGURES, GROUP STRATEGY AND RISK FACTORS Risk factors

1.3 _ Risk factors This chapterbdescribes the major risks faced by the Company, given the specific nature of its business, its structure and its organization. These risks can be divided into three categories: The Company conducted a review of the risks that could have a material adverse effect on its business, financial position or results (or on its ability to achieve its objectives) and considers that there are no material risks, other than those described below. Furthermore, other risks not yet identified or currently considered insignificant by Maroc Telecom could have the same negative effect and investors could lose all or part of their investment. In addition to all the other information in this Registration Document, investors should carefully consider the risks described below before deciding to invest in the Company. Should one or more of these risks materialize, the operations, financial position, results and development of the Company could be adversely affected. Maroc Telecom is involved in legal proceedings and litigation with competitors or other parties. The outcome of these proceedings is generally uncertain and could materially affect the results and financial position of the Company. Themain disputes in whichMaroc Telecom is involved are described in Sectionb3.3. “Legal and arbitration proceedings.” MAROC TELECOM’S FUTURE REVENUES AND RESULTS ARE HIGHLY DEPENDENT ON THE ECONOMIES OF THE COUNTRIES IN WHICH IT OPERATES MarocTelecom’s core business is the provision of telecommunications services, including the provision of international telecommunications services. Consequently, the Group’s revenues and profitability depend significantly on developments in consumer telecoms spending and international call traffic. Telecom services usage trends are closely connected to changes in economic conditions in the countries concerned and, more particularly, in the disposable incomes of the population and in the economic activity of businesses. A contraction of or slower-than-anticipated growth in the economy could have a negative impact on increases in the number of users or in usage rates for Mobile, Fixed-line and Internet telephone services, which could adversely affect the growth and profitability of the Group’s business activities or might even result in a drop in revenues and results. Acts of terrorism or war, whether in Morocco or elsewhere, couldbsignificantly affect the economy in general (caused particularly by a decline in tourism). Maroc Telecom cannot anticipate the consequences of possible acts of terrorism or war. – business risks (Sectionb3.4.1); – regulatory risks (Sectionb3.4.2); – market risks (Sectionb3.4.3). 1.3.1 BUSINESS RISKS

MAROC TELECOM FACES INCREASED COMPETITION IN THE MAIN MARKETS IN WHICH IT OPERATES, WHICH COULD RESULT IN A LOSS OF MARKET SHARE AND LOWER REVENUES FOR MAROC TELECOM The business activities of the Maroc Telecom Group are subject to fierce competition, which could further intensify with the liberalization of themainmarkets inwhich the Company operates.This competition puts pressure on Maroc Telecom and its subsidiaries, which could lead to the Group introducing new reductions in rates, increasing loyalty costs and implementing promotional offers, which could lead to reduced revenues and results for the Group. To meet, or even anticipate market needs and expectations, the Group must make significant new investments, although it is not possible to ensure that the products and services thus developed and offered will not become obsolete in the short term. Note that since 2016, Maroc Telecom faces competition in voice and data services provided from the fixed-line copper network due to the operational implementation of unbundling.The competitors are able to offer multiple-play services from their unbundled access. Maroc Telecom is also be subject to an obligation to share all its passive infrastructure (including optical fiber), which risks significantly reducing the competitive advantage it could derive from its investments, especially in high-speed broadband (and FTTH in particular), if this obligation is not imposed on equitable terms and conditions. Maroc Telecom could lose its competitive advantage in terms of coverage in the Mobile market in Morocco as a result of the implementation of national roaming in PACT areas and, if the proposed amendment to lawb24-96 is adopted in its current form, in the rural areas and roads selected by the ANRT. IF THE GROUP IS UNABLE TO CONTROL ITS COSTS, ITS FINANCIAL POSITION COULD BE AFFECTED If the Group is unable to control costs, its operating margins and earnings could be adversely affected. Maroc Telecom’s constant objective is to update its cost structure, in particular its sales costs and overheads. Maroc Telecomhas adopted several voluntary termination plans and is continually taking steps to generate savings in its purchases and its network costs.

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MAROC TELECOM ____ 2017 Registration Document