By Simon Zekaria
LONDON--Orange SA said it is determined to pursue further growth
in Africa and the Middle East, two of the French telecommunications
company's key markets, as it looks to take advantage of the
regions' expanding populations and rising incomes.
"Our strategy is to remain or become No. 1 or No. 2" in the main
markets where Orange operates, said Marc Rennard, senior executive
vice-president for Orange in AMEA, a region that also includes the
group's limited presence in Asia.
Speaking in London, Mr. Rennard said in markets where Orange
isn't the biggest or second-biggest operator, it would be open to
acquisition opportunities, mergers or forming telecom partnerships
with other operators. He didn't elaborate.
Mr. Rennard added the "door is not closed" to the group to seek
out mobile virtual network operator partnerships in Africa--or
wireless communication services where it doesn't own the
network.
Some 106 million of the group's customers are in the AMEA
region, or 40% of the group's total, in countries such as Kenya,
Mali, Morocco and Democratic Republic of the Congo. Also, 60% of
its mobile telecom customers are in the region, which makes over 5
billion euros in revenue.
Orange, formerly known as France Telecom, has built up its
operations in Africa by offering affordable smartphones and a range
of services, including mobile banking and money transfers. Orange's
money service currently has more than 11 million customers in 14
countries in Africa and the Middle East.
Aside from Orange, much of the mobile networking in Africa is
conducted by giants such as MTN Group Ltd, Vodafone Group PLC's
Vodacom, Safaricom Ltd. and Bharti Airtel Ltd.
Mr. Rennard said major content deals for mobile telecoms with
so-called "over-the-top" providers, headlined by companies like
music-streaming service Spotify AB, wouldn't be "credible" in
Africa until smartphone penetration levels rise uniformly across
its markets. While rates of mobile telecom use are improving, some
African markets have smartphone penetration rates in the low single
digits.
Still, Luc Bretones, senior vice president of the Orange
technocenter--the group's product and design unit--said this year
is the "tipping point" for smartphone penetration in Africa.
According the group, citing data from the GSMA--an association
of mobile operators--unique subscribers in AMEA will grow by 43% by
2017.
Mr. Rennard said internet broadband opportunities in Africa
would be focused on wireless networks rather than fixed-line
telecom wires, given the cost of rollout across geographies which
can have difficult terrain, as well be remote with sparse
populations.
Earlier this year, regulators in Mali said Orange's local unit
illegally used mobile spectrum bandwidth for a fixed-line service.
Still, Mr. Rennard is upbeat. "We are very confident that we will
win this battle."
Separately, the company also launched two startup technology
accelerators in Ivory Coast and Israel.
Orange, with operations centered on European and African
markets, is spending to find and incubate innovative startups
around the world. The group's "Orange Fab" program already operates
in France, Japan, and Poland.
Launched in San Francisco in March 2013, Orange Fab was created
by Orange Silicon Valley, a development center run by the telecom
operator. Selected startups get three months of support to develop
their products and businesses.
Write to Simon Zekaria at simon.zekaria@wsj.com
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