Orange unveiled a five-year strategy to cut costs and refocus the business on perceived growth areas, including the creation of a European tower company and a potential IPO of its Middle East and Africa (MEA) unit.

At an investor event, CEO Stephane Richard said the Engage2025 strategy represented the “most significant transformational change the company has undertaken in recent years”. He noted its previous Essentials2020 programme had been a success, but was now “reaching the end of the road”.

The company believes it will cut telecom-related costs by €1 billion by 2023, though the figure does not count fees related to activities deemed to be high growth, including B2B and MEA operations.

Richard said the plan was designed to deliver sustainable growth with aggressive targets to “beat industry targets on carbon emissions by ten years” and increase digital inclusion.

“Strong economic performance is impossible without environmental leadership,” Richard added, noting companies ignoring trends including climate change “cease to be relevant”.

Orange plans to separate tower assets in the bulk of its European operators into national units before creating a company to house them. The move was expected and taps a trend among several large European operator groups.

Richard noted the company would also attempt to cut costs by striking further RAN sharing partnerships. He clarified the company did not plan to dispose of tower assets, though announced it recently sold 1,500 non-strategic sites in Spain to Cellnex for €260 million.

Target areas
Orange identified B2B, financial services and its MEA units as key growth areas for the business in the years to 2025.

In the B2B and consumer sectors, it wants to place services based on data and AI at the heart of its operation, seeking to increase efficiency and modernise customer experience.

The operator committed to spend more than €1.5 billion retraining staff in new technology areas, including 20,000 employees who will be schooled in virtualisation, AI, cloud computing, code and cybersecurity.

Orange plans to focus on 5G services in Europe and 4G across its MEA footprint.

It launched its first European 5G network in Romania last month, with Richard noting the technology would “pave the way to new services” using network slicing.

In its MEA segment, Richard said it would continue to pursue fast growth areas including content, health, energy and new financial services including the launch of Orange Bank Africa.

The company was also “prepared” for potential opportunities for its regional operation, including the possibility of an IPO.

Within its European banking operation, having launched in Spain last month the company reiterated its target of rolling the service out across its operations.