Since joining Orange as deputy CEO and group CFO in September last year, Ramon Fernandez has been busy crunching the numbers. He’s targeting growth in Africa and the Middle East (MEA) in a big way, and earlier this month set some pretty ambitious targets for the group.
Orange is now banking on increasing revenue by approximately 5 per cent every year through to 2018 in these regions. It is also aiming to increase operating profit faster than sales growth.
Fernandez used his vast financial experience, including a long stint at the French treasury, to also take a leading role in forming a separate holding unit for the company’s operations in MEA, which he hopes will attract suitable investors and strategic partners to help grow the segment.
Speaking to Mobile World Live, Fernandez, one of the company’s four deputy CEOs, directly under CEO Stephane Richard, spoke about his ambitions for further growth in both regions, his wider experience of Africa and his love of tennis.
MWL: Could you explain Orange’s management structure? Where do you fit in, and why does the company have four deputy CEOs?
Fernandez: There is of course only one CEO, Stephane Richard, and there are four deputy CEOs which sit under him and all have different roles. I am in charge of finance and strategy. There is the secretariat generale, who looks after human resources and mobile banking. We have also have a deputy CEO in charge of Europe, and a delegate.
Overall, there are 12 people working in the executive committee and we don’t place too much emphasis on titles. Since Africa and the Middle East is important, I work closely on these issues as they are very much part of the group challenges.
MWL: For a long time now, Orange has committed to Africa and the Middle East, rather than other growing regions like Asia and Latin America. As a relatively new member of the team, would you have advised this strategy in the past?
Fernandez: To be honest, I’m very comfortable with it. Today, we have been reinforcing our position in Africa, and in my past life, I worked closely on a lot of issues to do with Africa as part of the French treasury.
I’ve dedicated almost 10 years in the ministry of finance to international affairs, and Africa played a huge part. I’ve also travelled to Africa extensively and met stakeholders of different origins, which I enjoyed. I’ve always been convinced, despite difficulties in the region, that Africa has great energy, projects and a future which we can jointly build upon.
MWL: How can Orange achieve and deliver such ambitious growth targets?
Fernandez: Our targets are ambitious but we believe they’re also very achievable Looking at both regions, we are absolutely convinced that this is where we will see growth in the future. There is strong GDP growth and the population is also expected to exceed one billion very soon. There’s a lot of business to be done in Africa, particularly in telecoms, which will be led by a boom in subscribers, increases in mobile data and mobile banking.
With increasing consolidation, we will also see a slow-down in tariff increases. We are already present in 19 countries and we have extensive experience, networks, services and a money platform. In terms of footprint, our intention is to reinforce our position and capture this growth – we have resources dedicated and we can create value with our operating model.
Of course, we don’t expect the same growth across all countries in Africa. Senegal will of course have less, but in the DRC we could have close to 60 per cent growth. The situation is different from country to country but we are very confident about our prospects.
MWL: With regards to the separate holding company you have set up for the regions, Orange has been very much active in Africa and the Middle East for many years. Why have you done this now?
Fernandez: Well, you have to start at some point and its’s an acknowledgment that these regions are very important for the group. It was time to give it more visibility, transparency and the opportunity to grow. We are now open to partnering with strategic and financial partners, which could eventually lead to listing within the group. These are all steps as part of our wider strategy.
MWL: Stephane Richard recently announced a focus on Egypt and Morocco. How does this announcement tie-in with that?
Fernandez: These two operations are moving ahead, and this is separate from the holding company. Both operations are now taking different steps and we are open to investors in Egypt with Mobinil, while increasing our role in Meditel (Morocco).
MWL: How is Orange Money developing? Do you believe it can have as big an impact on the market as M-Paisa in Kenya?
Fernandez: We believe Orange Money is like a corridor between France and advanced economies in Africa, where we allow the transfer of funds at extremely low costs.
In my previous life I worked on ways to reduce the level of fees people would have to pay to transfer something like €100 from Paris to Dakar for example, and what we could achieve was limited. This tool, Orange Money, will be a game changer and it will be one of our main sources to fuel increase in revenue. It reached around €50 million in revenues for Orange last year, and we plan to augment this to reach revenues of €200 million by 2018.
MWL: Do you believe more international competitors will emerge in the regions, in the same way Airtel did a few year ago?
Fernandez: With over 200 operators competing in Africa, both local and international players, the MEA telecoms landscape is going to keep changing. That’s for sure.
MWL: Away from the numbers and the office, what else occupies your time?
Fernandez: I’m very much a family man. I have a wife, three children, one dog and two cats and as you can imagine they keep me very busy. I also love to watch and play tennis. I was very impressed by Stan Wawrinka at Roland-Garross. Djokovic is also a great champion who plays fantastic tennis, and I miss John McEnroe!