MAROC_TELECOM_REGISTRATION_DOCUMENT_2017

KEY FIGURES, GROUP STRATEGY AND RISK FACTORS

Risk factors

MAROC TELECOM DEPENDS ON THE RELIABILITY OF ITS INFORMATION SYSTEMS. FAILURE OR DAMAGE AFFECTING SOME OR ALL OF ITS SYSTEMS COULD RESULT IN A LOSS OF CUSTOMERS AND A DROP IN REVENUES Maroc Telecom is paid for its services only insofar as it has reliable information systems, including collection and billing systems, and succeeds in protecting and ensuring the operating continuity of its IT systems. Maroc Telecom has established a security policy for its information systems that allows it to deal with ordinary disruptions in computer operations (unauthorized access, power cuts, theft, hardware crashes, etc.) and to secure uninterrupted service. Maroc Telecom currently has a Business Recovery and Continuity Plan for its critical information systemsb– i.e., those that have a direct impact on its revenues, such as systems for collecting data on taxes, sales and billing information for its three product lines: Fixed-line, Mobile and Internet. The plan also covers administrative systems for calculating inter-operator settlements, inMorocco and internationally, and for purchasing and financial management. An accident entailing the total or partial destruction of these systems (natural disasters, fire or acts of vandalism) would automatically activate a backup information system. Since the critical data systems are synchronized in real time by means of replication between production and emergency platforms, the risk of losing data and being unable to bill customers and recover outstandings from them is now marginal. Since inception, the plan has been, and is, tested and evaluated annually by simulating a situation where the information systems are totally unavailable. For some subsidiaries, the risk of information-systems failure concerns the lack of a Business Recovery and Continuity Plan (BRCP) in the event of a major incident impacting the only data processing center currently available. However, data backup/recovery is carried out regularly to minimize this potential impact. Although difficult to quantify, the impact of such an event could result in customer dissatisfaction and lower revenues. DISRUPTIONS TO TECHNICAL NETWORKS COULD RESULT IN A LOSS OF CUSTOMERS AND LOWER REVENUES The Maroc Telecom Group can only provide services to the extent that it is able to protect its telecommunications networks from damage caused by disruptions, power failures, computer viruses, natural disasters, theft and unauthorized access. Any disruption of the system, accident or breach of security measures that would cause interruptions in the Group’s operations might affect its ability to provide services to its customers and adversely affect revenues and results fromoperations. Such disruptions may also result in harm to the image and reputation of the Company and/or its subsidiaries, which, in particular, could lead to a loss of customers. In addition, the Groupmay have to incur additional costs to repair the losses or harm caused by these disruptions.

MAROC TELECOM’S INDIRECT DISTRIBUTION NETWORK IS A STRENGTH THAT COULD BE WEAKENED IF MAROC TELECOM WERE UNABLE TO MAINTAIN IT Maroc Telecom has an extensive distribution network consisting of a direct network of branches and an indirect network consisting of phone stores, resellers and partners, and an independent network (see Sectionb3.2.1.5 “Distribution, advertising”). If Maroc Telecom were unable to maintain its close relationships, or to renew its distribution agreements, with its indirect network participants, or if its indirect distribution network were jeopardized for other reasons, including the action of competitors, or if themanagers of telestores failed to comply with the exclusivity agreements with Maroc Telecom and distributed products competing with those of Maroc Telecom, the distribution network could be weakened and the activity and results of the Company could be significantly affected. CONTINUED AND RAPID CHANGES IN TECHNOLOGY COULD INTENSIFY COMPETITION OR REQUIRE MAROC TELECOM TO MAKE SIGNIFICANT ADDITIONAL INVESTMENTS Many services offered by Maroc Telecom and its subsidiaries make extensive use of technology. The development of new technologies could render some of the Company’s services uncompetitive. To respond to changes in the telecoms sector and to the expectations of demanding customers in terms of price and quality, the Group must adapt its networks and its technologies and develop new products and services at a reasonable cost, or it may not be able to compete with its competitors. Moreover, it cannot be excluded that the new technologies in which the Company may choose, or be forced, to invest will affect its ability to achieve its strategic objectives. As a result, Maroc Telecom may then lose customers, fail to attract new customers, or be obliged to incur significant costs to maintain its customer base, which might have a negative effect on its business activities, its operating revenues and its results. ALTERNATIVE MEANS OF COMMUNICATION COULD LEAD TO A DECREASE IN THE UTILITY, OR EVEN THE OBSOLESCENCE, OF THE MOBILE AND THE FIXED-LINE NETWORK, WHICH COULD RESULT IN THE LOSS OF COMPETITIVE ADVANTAGE AND SIGNIFICANTLY REDUCE THE COMPANY’S REVENUES The Company has already been faced with the phenomenon of the shift from fixed-line to mobile, compounded by the use of alternative technologies: In addition, traffic bypass solutions using GSM gateways compete with Fixed-line voice services to Corporate customers.

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MAROC TELECOM ____ 2017 Registration Document