North Africa: Morocco to get full local loop unbundling in July 2008 and pressures to unbundle grow in Tunisia

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With its more prosperous economies, North Africa has been amongst the leaders in terms of broadband subscribers on the continent. But now they are beginning to lead the way in terms of addressing local loop unbundling. In a recent decision, the Moroccan regulator ANRT has decreed that there will be partial unbundling starting this month and full unbundling in July 2008. Not surprisingly, operators elsewhere in North Africa are beginning to advocate these in their own country.

The partial unbundling allows operators access to copper pairs for DSL connections but leaves voice operations only in the hands of existing operator. Full unbundling allows external service operators access to both voice and data over the copper pair and specifically mentions alternative and local loop operators. This may be a little late as there are precious few alternative operators left beyond the SNO Meditel and Maroc Connect’s WANA but it may yet stimulate the growth of new companies.

Vivendi-owned Maroc Telecom first presented its technical and tariff offer in October 2006 and an access cost for partial unbundling was approved in January 2007, costing MDH50 (US$6.52) per line. Maroc Telecom presented its adjustments to the technical offer and its tariffs in October last year and the regulator has now lowered the partial unbundling access cost to MDH30 (US$4.50) per line. All charges are shown without taxes.

The full unbundling charge which starts in July this year has been set at MDH100 (US$13.04) by the regulator ANRT and this has been benchmarked against similar charges internationally. The European benchmarks are in euros and Morocco’s charge is 8.81 euros on this basis. These vary from 8.3 in Italy to 12.54 in the UK. Whilst benchmarking is obviously sensible, there are obviously limitations in comparing European with African, or indeed North African costs. To give some idea of these costs in relation to retail prices, Maroc Telecom’s current DSL prices vary at the low end between US$16.80 (128 kbps) and US$25.94 (512 kbps).

Reading between the lines of the decision it is clear that there are still practical issues affecting the unbundling. It says:”The ANRT insists of the importance of Maroc Telecom activating the unbundling process in the following ways” and lists all-too familiar issues like co-localisation, the setting of filters and access as well as making available information on sites where operators can co-locate.

Meanwhile in Tunisia, DSL operator Topnet projects that the number of Internet subscribers will grow to 120,000, of which 40,000 will be DSL subscribers. Its PDG

Mohamed Mehdi Khemir believes that this year will see more DSL bandwidth sold to subscribers at lower prices. But the other side of the coin in terms of attracting new subscribers is the ability to add new service offers like videoconferenceing and VoIP. But as Khemir observes:”Delivering this type of service obviously involves putting in place a regulatory framework and co-ordination between the ISPs and Tunisie Telecom.”

“Local loop unbundling would really represent an alternative way of improving the competition between service providers and would allow each to clarify their own offer. In effect, local loop unbundling requires an agreement to be put in place between the Internet service providers and Tunisie Telecom that would allow them to co-locate their equipment (in Tunisie Telecom’s exchanges) and to be able to offer freely the capacity and services (they want) to their clients. It would also allow them to offer a better level of technical support when responding to the different problems of their clients.”

In order to offer a level playing field as Internet players consolidate across Africa and face formidable new competition from the new incumbents (the mobile operators), several elements are essential: cost effective direct access to the network, timely co-location and easy access 24/7 to the co-located equipment.