Orange detailed a new strategic plan covering the period to 2025, seeking to generate more value from its core assets to offset growing financial challenges at a time Christel Heydemann (pictured, left) branded a crossroads for the industry.

Heydemann presented the Lead the Future strategic plan during an event incorporating the release of Orange’s Q4 2022 earnings and its Capital Markets day. The CEO said the plan reflects the quality of the operator’s infrastructure and solid finances, giving it a unique place in the sector.

Arguably, Heydemann’s early time in charge has been a success, with Orange stating it hit all its 2022 financial targets, but the CEO noted the company does “not underestimate the difficulties within the sector and our environment” and, in turn, the need “to transform our company to increase agility”.

Lead the future
The strategic plan has four pillars involving generating revenue, capitalising on the current business, transformation and growth.

Orange plans to boost service quality by deploying AI and targeted the launch of a next-generation satellite service in France later this year in conjunction with Eutelsat.

In Spain, it pinned hopes on a proposed combination with Masmovil and tie-up in Belgium with VOO to give the financial capacity and scale necessary to compete, and more broadly it intends to build new services and applications including on-demand enterprise networks.

The second pillar involves continued investment in fixed and mobile networks, targeting strategic partnerships in RAN sharing and establishing joint entities to share financial costs and secure investment.

In mobile, Orange plans to increase the value generated from passive infrastructure operated by its tower company Totem, which it said had “all the strengths needed to be a key player in European consolidation”.

Orange also plans fixed and mobile network modernisation, decommissioning its domestic copper network along with 2G and 3G networks across Europe by 2030.

It will also seek growth in enterprise, with a focus on cloud and collaborative software to tap into “new realities of a market where boundaries between networks and digital services are disappearing”.

As part of this shift, it is rebranding Orange Business Services unit to Orange Business. It also aims to become a leader in cybersecurity, targeting revenue of €1.3 billion by 2025.

Finally, it aims to continue to grow its position in Africa and the Middle East, setting an annual revenue growth target of 7 per cent between 2022 and 2025, along with a significant increase in profitability.

Heydemann added it planned to “offset 70 per cent of the inflation impact on our costs through price increases in 2023” in Europe, including France.

Q4 numbers
Revenue increased 1.3 per cent year-on-year to €11.4 billion, driven by retail services which rose 2.5 per cent.

In France, the figure was flat at €4.7 billion, while its Europe division was up 2.1 per cent to €2.9 billion, driven by its convergence play, B2B and roaming.

Africa and the Middle East increased 5.7 per cent to €1.8 billion, fuelled by mobile data and fixed broadband.

Enterprise was flat at €2.1 billion and Totem revenue increased 25 per cent to €188 million.

Mobile customers rose 5.9 per cent to 241.9 million and it closed 2022 with 11.6 million converged users.

Full year net income grew from €778 million to €2.6 billion, with revenue flat at €43.5 billion.