UAE technology company e& plans to pursue legal action after a court in Morocco upheld a decision requiring its subsidiary, Maroc Telecom, to pay more than 6.3 billion Moroccan dirhams ($645 million) to its competitor Wana Corporate for alleged anti-competitive practices.
Abu Dhabi-headquartered e&, formerly known as Etisalat Group, is a majority shareholder in Maroc Telecom (MT), with a 53 per cent stake. The Moroccan government holds a 22 per cent stake, while the remaining shares are held by institutional, retail and individual investors.
The company “firmly believes” in the validity of MT's legal position and will explore every possible legal avenue to appeal against the ruling and protect its investments, e& said in a statement on Wednesday.
“It is unfortunate that while global capital is looking to leverage the transformative power of technology to enhance digital infrastructure, smart government services, and digital solutions for people, a challenging regulatory environment negatively affects the future outlook of our investments in Morocco,” Jassem Alzaabi, e& chairman, said.
On July 3, the Court of Appeal of Casablanca rejected the appeal filed by MT, which challenged Wana Corporate’s plea.
E& said the court decision will not affect its financial results for the second quarter or the subsequent periods, due to adequate coverage of international regulatory risks.
Wana Corporate, also known as Inwi, filed an anti-trust case in 2021 accusing MT of unfairly using its market-dominant position.
In January, the court directed MT to pay 6.3 billion Moroccan dirhams in compensation to Inwi in the case.
Inwi is the third-largest telecom operator in Morocco and is controlled by a private investment fund, Al Mada.
Rabat-headquartered MT is listed on the Casablanca stock exchange and on Euronext Paris.
Besides Morocco, it is active in countries including Benin, Burkina Faso, Cote d’Ivoire, Gabon, Mali, Mauritania, Niger, Central African Republic and Togo.
At the end of the March quarter, its customer base stood at 77.1 million, marking an annual increase of a 2.7 per cent.
Hatem Dowidar, chief executive of e& Group, said all options are on the table regarding e&'s investment in MT due to the repeated setbacks caused by regulatory penalties and legal judgments that limit the telecom operator's ability to compete in the market.
Over the past few years, such decisions have cost MT more than 12 billion Moroccan dirhams ($1.2 billion) in penalties, among the highest in the telecom sector worldwide, impeding MT’s future investments, e& said.
“We affirm that driving the digital future requires constructive co-operation between service providers, regulators, and legislators to foster the desired development of communities and individuals,” Mr Dowidar said.
