Orange is building the foundations for its continued growth in the Middle East and Africa (MEA), and also hopes to be able to exploit future opportunities for consolidation in the region.
The France-based operator is in the process of placing all of its 20 units in MEA under one holding company, replacing the multiple holding companies that currently exist and thereby creating a simpler and clearer management structure.
According to Marc Rennard, EVP for Africa, the Middle East and Asia, the process should be completed by June this year, by which time the MEA unit will also publish its results as a separate region under the Orange Group.
Although Rennard said the process is an internal measure and will have no impact on customers and partners, he noted that it would make it easier for Orange to bring in new shareholders or enter into mergers in the region.
Rennard pointed out that Africa, for example, has around 800 million mobile subscribers but 200 operators; in China, one operator – China Mobile – accounts for about that many customers. “There is room for consolidation in Africa,” he said, adding that Orange’s focus is on building up its position in its existing markets.
The company also recently strengthened its position in Egypt by increasing its stake in Mobinil to 99 per cent from around 94 per cent for a total cost of €209.6 million. Rennard said Mobinil should take on the Orange brand this year, and also expects the long-delayed converged licences to be launched in Egypt this year. That will enable the market’s three mobile operators to offer fixed and mobile services, while also allowing Telecom Egypt to launch an MVNO.
However, Rennard is not convinced that the market can support four players, even if one of them is an MVNO.
As well as its organisational changes, Orange has also developed a strong smartphone sales strategy in MEA – although it’s clear that Rennard was not initially keen on that approach because he did not believe that Orange was in the business of selling devices.
“I’ve changed my view,” Rennard said candidly. One reason for this change of heart was that 3G smartphone prices declined to around $50. Orange started selling the Alcatel OneTouch Pixi smartphone, and in 2014 sold 860,000 devices across its MEA footprint.
Encouraged by this, Rennard supported the launch of Orange Klif, the Mozilla OS-based smartphone launched at Mobile Congress this week that also includes a bundle of voice, texts and data for around $40.
The smartphone will be launched in different MEA markets in the coming weeks, and Rennard said he is already seeing positive signals from local managers.
While he believes that Orange has proved its smartphone sales strategy is a good one, it remains to be seen if the Orange Klif strategy will also be a success.