VoIP Ban in Morocco and its economic impact on the country

VoIP Ban in Morocco and its economic impact on the country

It all started on the first week of January 2016, when Internet users all over the country found issues making mobile calls on a regional and international level through free applications such as Skype, Viber, Tango, Facebook Messenger and WhatsApp using their 3G, 4G internet connection.

Few days later the Moroccan telecommunications regulation agency, the ANRT, made an official statement confirming that the most widely used VoIP services will be blocked from now on by the Three Moroccan Telecom service providers.

This decision was approved by Maroc Telecom, Meditel (Orange) and Inwi who have mutually agreed to block all Voip calls made through 3G and 4G and to expand these restrictions to calls made through Wifi connection.

Needless to say that the ban received a  significant  negative reaction from Moroccans and expatriates who have been using these internet call services for personal or professional purposes.

Before  you pros and con anything. Let us step back and understand what the VoIP is, who are the key telecom regulators in Morocco and what could be the effect of these limitations on a macroeconomic level.

VoIP, what does it stands for:

VoIP stands for Voice over Internet Protocol, or in common terms phone service transmitted over a digital network. This technology is commonly used for voice, video and data conferencing and quickly became popular because of the lower cost (compared to traditional phone calls) and convenience thanks to its functionality.

VoIP global services market:

VoIP services are cost effective and allow both corporate and individual customers to operate calls while avoiding costs incurred using traditional phones calls.

Consequently, VoIP services market has grown effectively during the past years, according to a market report published by Transparency Market Research^[1], the global VoIP services market was valued at USD 70.9 billion in 2013 and is expected to reach USD 136.76 billion by 2020, growing at a CAGR of 9.7% from 2014 to 2020.

Mobile applications popularity is increasing and many apps such as Viber, WhatsApp and Skype monthly active users reach over 200 million (i.e. Viber had 250 million active users as of April 2015^[2]). These applications use a “Freemium” model, meaning that the basic services of the apps like calls and texting applications are free but the customer need to pay for extra features (i.e. Viber use premium stickers).

This trend has led to a decline of prices for basic voice and data services and had a huge impact on generated revenues for the Global Telecom industry. Indeed, according to a research published by Ovum in 2014, the telecommunications industry will lose a combined USD 386 billion between 2012 and 2018^[3].

Concerning consumers, the use of VoIP will grow at an annual rate of 20 percent between 2012 and 2018 to reach 1.7 trillion minutes^[4].  This global demand will be sustained thanks to internet penetration, development of wireless devices and continuous prevalence of social media.

While some companies have been trying to deal with the increasing growth of VoIP apps worldwide by adjusting to their customer needs and building new innovative approaches (i.e. Swisscom has launched new mobile tariffs with unlimited national voice, SMS…). Many companies have attributed the loss of revenues generated by their companies to the increasing use of VoIP apps which led many countries to block these services.

VoIP market regulation:

Countries have adopted various regulatory approaches to face the increasing growth of VoIP, they can be classified into countries were^[5]:

What is the regulatory framework in Morocco?

In 2004, the Moroccan Telecommunications Regulatory Agency (ANRT) has published a regulatory article (ANRT/ N° 04-04) to frame the general use of VoIP in the country, asserting that: “A license is required for the provision of any VoIP service. Therefore, only the licensed Public Telecom Operators (PTO) can provide VoIP services^[6]. “

The VoIP was since subjected to its own set of regulations in the country, however this law was not effective until January 7^th 2016, when the National Agency published an official statement announcing that all telecom services need licenses whether they are Voice over Internet Protocol (VoIP) or others.

The ANRT stated that: “In addition to the losses for the telecoms national market, the free internet voice calls do not respond to the required legal gateway, therefore their suspension (VoIP) came in conformity with the operators’ obligations that were underlined in their licenses.”^[7]

Furthermore, another regulatory article (ANRT/ N° 83/24-96) related to telecommunications states that : “It is forbidden to use a telecommunication network without a license…This could be punishable by the law with a sentence reaching 1 month to 2 years in prison and a fine of 10,000 to 200,000 MAD”^[8].

While VoIP has not yet been made illegal in the country, it is clear that ANRT regulation will try to maintain limitations concerning mobile apps use. The main reasons highlighted remains the non-conformity to the regulatory framework and absence of license permits of mobile apps such as Viber, WhatsApp and Skype.

Macro-economic impact:

The real impact of the VoIP ban cannot be measured yet, however we can still assume that the Moroccan economy could be directly affected by this decision on many levels.

Through its strategy Emergence^[9], Morocco has launched various economic and industrial programs aiming to develop 6 key sectors (Offshoring, Automobile, Textile, Food Industry, Electronic and Aeronautic).

The Offshoring sector, with a potential of around 100,000 jobs in 2015 and a sectorial turnover estimated more than 20 billion dirham’s is dedicated to the promotion of the country as an attractive destination for outsourcing services  and customer Services (Including call centers, many of which are depending on VoIP services).

The ban of VoIP apps could impact the operating costs of companies in the sector and decreasing the competitive advantage of the country it terms of telecom prices.

While this decision can still be considered as legal, it might represent a step backward for the development of the country.

Mounia, Senior Analyst at Infomineo. Know more about Mounia

^[1] VoIP Services Market (Individual Consumers, Corporate Consumers, Mobile VoIP and Others) – Global Industry Analysis, Size, Share, Growth, Trends and Forecast, 2014 – 2020 : http://www.transparencymarketresearch.com/voip-services-market.html

^[2] Number of monthly active Viber users in millions :  http://www.statista.com/statistics/316423/viber-messenger-monthly-active-users/

^[3] Telecom companies count USD 386 billion in lost revenue to Skype, WhatsApp, others : http://fortune.com/2014/06/23/telecom-companies-count-386-billion-in-lost-revenue-to-skype-whatsapp-others/

^[4] Telecom companies count USD 386 billion in lost revenue to Skype, WhatsApp, others : http://fortune.com/2014/06/23/telecom-companies-count-386-billion-in-lost-revenue-to-skype-whatsapp-others/

^[5] Regulatory issues : https://www.itu.int/osg/spu/ni/voice/papers/FoV-VoIP-Biggs-Draft.pdf

* PSTN : Public switched telephone network

^[6] Regulatory issues : https://www.itu.int/osg/spu/ni/voice/papers/FoV-VoIP-Biggs-Draft.pdf

* PSTN : Public switched telephone network

^[7] ANRT official press release :  https://www.anrt.ma/sites/default/files/CP-Telephonie-IP-fr.pdf

^[8] ANRT regulation : https://www.anrt.ma/sites/default/files/documentation/1997-1-97-162-24-96-loi-telecom-ver-consolidee-fr.pdf

^[9] Strategy Emergence : http://www.emergence.gov.ma/En/MMM/Offshoring/Pages/Presentation.aspx