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Meditel faces slow growth as competition increases

Mohamed Elmandjra joined Meditel as its Chief Executive in March 2008. He holds a PhD in Bioengineering from the University of Pennsylvania, a Master's Degree in Biophysics and an MBA from the University of Chicago. Elmandjra has authored numerous papers and received a number of awards.

The CEO spoke to Zawya about the company's performance and how a third operator has increased competition in the market.

I think we'll have some small growth, fundamentally. The market has been flat to slow in growing and I think we will probably follow that.

I think there are both national and international factors. The international factors - of course with the crisis, the impact on our business is essentially less visitors so less roaming and international revenues. From the national aspect - of course when there is an international crisis there is less liquidity and less cash - essentially what people have in terms of their telecoms spend has been reduced. So those are the two macroeconomic factors that I think you have to consider.

How much has the Arab Spring affected the company, if at all?

Well, I think it has affected it indirectly, as it has affected the whole of Morocco indirectly. From two perspectives: one is just essentially less exchanges in trade with countries that are going through those changes, that's number one. And number two, quite a bit of... I would say perception amalgamation of Morocco versus everything else. And so it's difficult to explain to someone, you know, in Munich, Germany, that Morocco is not Tunisia and things like that. So the country has been impacted through visitors and through direct investments.

Please give an overview of the sector.

I think the telecoms sector is really going through some very, very harsh competition. You know there's a third player that has entered with new technology. The third player has been there a while, since 2007, but then from the beginning of 2010 they switched to GSM versus CDMA technology, and so they're essentially a third entrant. They have been very aggressive, as any third entrant would, and that has put pressure on prices and it has put pressure on just how intense the competition is. So number one - a very competitive environment. Number two, I think there are still a lot of opportunities, especially in the data area, with voice becoming more mature. The market is now 105% or 110% penetrated, so voice is becoming more competitive, but I think there's still a lot of opportunity in data and b2b.

Does Meditel have any investment or expansion plans for the coming year?

Of course, yes we have. We constantly have the European investment plan, so we're not changing our investment plans based on performance or what's going on, etcetera, because these are five-year returns. We can't stop investing because we have one year of higher competition or market conditions.

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