The parent firm of Maroc Telecom, e& Group, which is based in the United Arab Emirates, is to appeal the Casablanca Court of Appeal’s ruling that upheld a lower court’s ruling for Maroc Telecom to provide compensation of 6.36 billion Morrocan dirhams ($630 million) to its rival Wana Corporate, popularly referred to as Inwi, for purportedly unscrupulous business activities.
e& Group highlighted the adverse effects of the Court of Appeal’s decision on investments in Morocco while expressing dissatisfaction.
In January 2024, the Commercial Court of Rabat initially ordered this amount, citing charges of unfair competition.
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Group to explore all legal avenues
“The group intends to pursue all available legal avenues to appeal this ruling and protect e&’s investments in Maroc Telecom, as they firmly believe that the company’s legal position is valid,” the Group disclosed.
The Chairman of e& Group, Jassem Mohamed Bu Ataba Alzaabi, emphasised the detrimental effects of the current regulatory landscape on the organisation’s upcoming initiatives. He stressed the necessity of using technology to develop digital infrastructure, intelligent government services, and digital solutions for individuals by leveraging global capital.
The Group reiterated its dedication to following all applicable regulations in each of its markets.
Verdict will impact profit margins
However, depending on any allowances made in late 2023 or after the shutdown, BMCI Capital Global Research believes the verdict will impact the telco’s 2024 profit margins and distribution plans.
Furthermore, because it has sufficient insurance against foreign regulatory risks, the Group has guaranteed its shareholders that the court ruling will not affect its consolidated earnings for the second quarter of 2024 or any following periods.
Notably, the penalties exceed the MAD6.1 billion (US$615 million) net profit for Maroc Telecom in 2023.
The CEO of e& Group, Hatem Dowidar, emphasised that all possibilities about the group’s investment are open to consideration because Maroc Telecom is frequently confronted with obstacles in the form of judicial decisions, regulatory penalties, and market-competitive limitations.
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Marco Telecom cut the profit margins of dealers
Marco Telecom gained notoriety in May 2024 when it cut dealers’ profit margins on prepaid cards from 7% to 4.5%. A Moroccan union of traders and craftsmen connected to the Moroccan Labour Union (UMT) demanded a boycott of its prepaid services until the decision was overturned due to the action’s outcry and fierce backlash.
At the moment, Benin, Burkina Faso, Gabon, the Central African Republic, Chad, Mali, Mauritania, Niger, Côte d’Ivoire, Togo, and Morocco are among the 11 African nations where Marco Telecom is present.