MAROC_TELECOM_REGISTRATION_DOCUMENT_2017

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DESCRIPTION OF THE GROUP, BUSINESS ACTIVITIES, LEGAL AND ARBITRATION PROCEEDINGS Business activities

3.2.2 SUBSIDIARIES

3.2.2.1 CONSOLIDATED DATA

Population (a) (000)

Customers (b) (000)

Revenue (b) (MAD millions)

111,427

33,376

15,733

BREAKDOWN BY POPULATION (a)

BREAKDOWN BY CUSTOMER (b)

3 % Mauritania/ Mauritel 17 % Burkina Faso/ Onatel 2 % Gabon/ Gabon Telecom 17 % Mali/ Sotelma

6 % Mauritania/ Mauritel 21 % Burkina Faso/ Onatel 5 % Gabon/ Gabon Telecom 21 % Mali/ Sotelma

47 % Moov

61 % Moov

3.2.2.2 MAURITEL

the CMC Group acquired 0.527% of MauritelbSA from SOCIPAM, a non-commercial company created by employees of the Mauritanian subsidiaries. On completion of this transaction, CMC held 51.527% of MauritelbSA. Under Lawb2007-049 of Septemberb3,2007,which in Septemberb2007 repealed Articleb73 of the Telecommunications Lawb(Lawb99-019), MauritelbSA was forced to spin off all its competitive businesses, namely itsMobile business.OnNovemberb27,2007,the Extraordinary Shareholders’ Meetings of Mauritelb SA and Mauritel Mobiles subsequently ratified plans tomerge the two companies. MauritelbSA has since become a global operator able to take advantage of synergies between all its Fixed-line, Mobile, and Internet businesses. Maroc Telecom’s representatives sit on the Board of Directors of MauritelbSA. Maroc Telecom has no Executive Directors within the Company. The consolidation methods for the CMC/Mauritel sub- group are summarized in Notesb1, 2 and 28 to the consolidated financial statements. In addition, Chapterb2.3.4 “Related-party transactions” illustrates the type of financial flows between Maroc Telecom and the Mauritel sub-group. Fixed-line telephony, data and internet Mauritel provides Fixed-line telephony services (voice and data) as well as ADSL and FTTH internet access to residential customers, companies and the public sector. At the end of 2017, Mauritania had 153,000 fixed telephone lines (source: Dataxis) with a penetration rate of 3.9%. Mauritel holds a 61% market share. In addition to Mauritel, Mattel and Chinguitel have had fixed-line licenses since 2009 that allow them to operate in this market. Nevertheless, to date, the former has developed neither networks nor Fixed-line offers, while Chinguitel provides Fixed-line services through its CDMA network. As a result, Mauritel remains the sole wireline operator in Mauritania.

Macroeconomic indicators

2017

2016

2015

Population (000)

3,881 4,474

3,794 4,336

3,706 4,308

GDP per capita (in USD)

GDP growth

+3.8% +1.7% +0.9% +2.1% +1.5% +0.5%

Inflation

Source: IMF, Octoberb2017. Mauritelb SA is the incumbent operator in Mauritania. It was formed in 1999 following the break-up of Office des Postes et Télécommunications , the national postal and telecommunications operator. In 2000, MauritelbSA created its wholly owned subsidiary Mauritel Mobiles, which has since obtained its second GSM Mobile telephony network license. OnAprilb12, 2001, following an international call for tenders issued by the Mauritanian government, Maroc Telecom acquired a 54% stake in MauritelbSA. In Januaryb2002, Maroc Telecom created Compagnie Mauritanienne de Communication (CMC), to which it transferred the shares it held in MauritelbSA. On Juneb6, 2002, Maroc Telecom sold 20% of CMC to Mauritanian investors. In fiscalbyear 2003, CMC sold 3% of MauritelbSA to its employees for MADb17bmillion, in accordance with the commitments made during its privatization in 2001. Once the Moroccan government gave up its veto over Mauritel SA on Julyb1, 2004, Maroc Telecom gained exclusive control of its subsidiary which became a fully consolidated Group entity. In 2006,

(a) Forecasts at end-Decemberb2017 (source: IMF, Octoberb2017). (b) Data at end-Decemberb2017 (source: Maroc Telecom).

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MAROC TELECOM ____ 2017 Registration Document