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Maroc Telecom to appeal MAD3.6bn fine; HOLD

    Tracy Kivunyu
    Tracy Kivunyu

    Equity Research Analyst, Telecoms

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    Tellimer Research
    3 February 2020
    Published byTellimer Research

    Morocco’s state telecoms regulator has fined Maroc Telecom MAD3.6bn (US$375mn), two years after Inwi sued the telco in March 2018 for uncompetitive practices relating to sharing of Maroc Telecom’s fixed network infrastructure. Inwi at the time sought damages of MAD5.7bn.

    While the regulator's decision is lower than the initial damages sought, the MAD3.6bn equates to 77% of Maroc Telecom’s 9M19 reported PAT. If this amount is fully expensed, this would cut our valuation by 3% to MAD153.81.

    Maroc Telecom sent out a press release stating that it 'reserves the right to use possibilities of appeal provided by the law.' Consequently, we expect a resolution to this dispute will be further delayed.

    We have a HOLD recommendation on Maroc Telecom at a target price of MAD157.89.