Maroc Telecom’s parent company to appeal $630M fine decision

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July 11, 2024
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2 min read
Maroc Telecom's building
  • UAE-based e& Group, Morocco’s Maroc Telecom parent company, intends to appeal Casablanca’s Court of Appeal decision upholding a lower court's order for Maroc Telecom to pay 6.36 billion Morrocan dirhams ($630 million) in compensation. 
  • e& Group expressed disappointment over the Court of Appeal's ruling, highlighting its adverse impact on investments in Morocco.

The Commercial Court of Rabat originally mandated this payment in January 2024, citing allegations of unfair competition practices. 

“The group firmly believes in the validity of Maroc Telecom’s legal position and intends to pursue all available legal avenues to appeal this ruling and protect e&’s investments in Maroc Telecom,” the Group revealed. 

Jassem Mohamed Bu Ataba Alzaabi, Chairman of e& Group, highlighted the negative impact of the regulatory environment on the company's future investments. He emphasised the need for global capital to leverage technology to improve digital infrastructure, smart government services, and digital solutions for people.

The Group reaffirmed its commitment to complying with regulatory laws across all its markets. 

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However, BMCI Capital Global Research anticipates the ruling will affect the telco's 2024 profit margins and distribution plans, depending on any provisions made in late 2023 or after the closure.

Moreover, the Group has assured its shareholders that the court decision will not impact its consolidated results for the second quarter of 2024 or subsequent periods due to adequate coverage of international regulatory risks.

Notably, the fine is more than Maroc Telecom's 2023 net profit of MAD6.1 billion (US$615 million).

Hatem Dowidar, CEO of e& Group highlighted that all options regarding the group's investment are on the table as Maroc Telecom faces recurring challenges from regulatory penalties, legal rulings, and restrictions affecting its market competitiveness.

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In May 2024, Marco Telecom made headlines for reducing traders' profit margins on prepaid cards from 7% to 4.5%. The action led to outrage and a strong backlash, resulting in a Moroccan union of traders and craftsmen, affiliated with the Moroccan Labor Union (UMT), demanding a boycott of all its prepaid services until the decision is reversed.

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Currently, Marco Telecom operates in 11 African countries including Benin, Burkina Faso, Gabon, the Central African Republic, Chad, Mali, Mauritania, Niger, Côte d'Ivoire and Togo and Morrocco

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