By MTN, Global dip; Orange soars
By Nsikan Ikpe
Analysts and industry watchers are asking if the troubles currently facing the African telecoms sector are not bigger than we know it today. This is coming after the South African mobile phone operator MTN Group flagged a half-year loss today, blaming a hefty fine in Nigeria and continuing poor performance in its home market.
But the market is not impressed with many querying whether the firm which has had the better part of the last year has really done much to fix its myriad of problems of which the Nigerian and South African challenges are only symptomatic they say.
But the South African domino’s problems are not isolated as up-north, Egypt’s Global Telecom though posting a Q2 net profit of $26.5million has also seen its fortunes equally dipping.
Global Telecom, the Egypt-based group formerly known as Orascom Telecom, made a net profit of $26.5 million in the second quarter, but this is down from $27.4 million in the same period a year earlier, a point that the firm also confirmed on Thursday.
Overal, Global Telecom posted a total revenue tally of $693 million compared with $736 million in the same period last year.
In the midst of this scenario however, one other network is pushing on all fours and striving to seriously increase its market share and presence on the continent is Orange S.A.
The France-originating firm which is currently driving a fresh digital transformation wave in Africa with new innovations in smart metering, solar power, NFC and reinforced customer experience insists that Africa remains a key growth contributor in its business objectives going forward.
Underscoring this expansion is a deeper commitment to go beyond telecoms for telecoms sake, but to use the platform as a carrier of value and service to meet the needs of different sectors and components of the population. Thus rather than being seen as a basic communication channel, it is positioning as a composite service vehicle.
Speaking at its 4th annual strategy and activity update for press and analysts in London on 28 July, Ramon Fernandez, Deputy CEO and Chief Finance and Strategy Officer, Bruno Mettling, CEO of Orange Middle East and Africa, and Jean-Marc Vignolles, Chief Operating Officer for Orange MEA, outlined their vision and priorities, identifying a number of new sectors and activities in which Orange can play a key role in delivering digital transformation to the region.
Mettling commented: “The Middle East and Africa remains a key growth contributor for Orange. Today, we are present in 21 countries in the zone, with more than one in 10 Africans being Orange customers. We are investing for the long term and plan to continue playing a major role in the digital transformation of the region, from providing infrastructure and access to communications services through to developing new models that will help the region grow.”
Of the subsidiaries, a flagship one is Orange Money which the Group says is part of its ambition to strategically diversify around mobile financial services. With more than 19 million clients (+36% year on year), Orange Money is a proven success and, for the first time, Orange Money has exceeded one billion euros of transactions in June 2016. It has recorded around 50% growth in revenue in the first half 2016 compared to first half 2015.
A second foray has to do with mobile technologies. In February 2016, Orange partnered with Google to launch the Orange Rise 31, an affordable new Android-based smartphone bundled with data, available in 10 countries in the MEA.
The new Orange Rise 51 features the latest Android N version from Google, and is a 4G smartphone bundled with Orange applications and popular Google services such as YouTube and Google Search. Already plans are underway to ensure that the Orange Rise 51 will be launched first in Ivory Coast for the back to school period.
A third application, the Orange Travel Pass is a new Orange customer value proposition for travellers within the MEA region and to some European destinations. Bundled roaming is new to Africa and the Middle East, and Orange Travel Pass is designed to give customers control of their budget abroad through voice, SMS and data bundles. The offer was just launched in four countries and enables Orange customers to roam across the Orange MEA footprint* and France, with a gradual roll out to 10 countries by the end of summer, and the rest by year end.
And there is a fourty, the Orange Rural Electrification Programme, which is being promoted as about the first domestic solar-energy trial for consumers to generate electricity in rural Africa
With 90% of the rural population living in sub Saharan Africa excluded from access to electricity, Orange says that it is launching its Rural Electrification Programme to provide an affordable solution – either to individual customers or collectives – to help populations generate electricity where no traditional electricity grids are available.
Scheduled to be piloted first in the Ivory Coast, Senegal and Cameroon from November 2016, Orange through the scheme, will be providing solar kits or micro-grids to rural communities to harness the power of the sun and generate electricity. The pilot is due to run for six months and the equipment will be wholly subsidised by Orange. And for good measure, customers will also be able to pay for the service using Orange Money.
Another related move is that in September 2016, Orange will launch Tunisia’s first smart metering pilot in partnership with STEG (The Tunisian Company of Electricity and Gas). The pilot is due to run for six months with 100 smart meters installed in residential premises in Tunisia with up to an envisaged four million smart meters when the solution is rolled out commercially across the country. Orange is offering its ‘smart metering as a service’ by building a smart metering infrastructure that connects and manages – in a secure and reliable manner – millions of smart meters to help utility companies reduce the cost of reading meters and the risk of fraud or billing errors.
Equally, starting first in Mali, Guinea and the Ivory Coast this month, the firm will be introducing NFC coins to provide an easy, quick and secure way to get change from any merchant. NFC Coins is a contactless solution to top up any Orange customer with airtime without disclosing the phone number, and solves the issue of a lack of change and coins in Africa. Once an Orange customer sticks an NFC tag on their mobile, the merchant returns change to them in the form of airtime credit instantaneously.
Equally, having seen that lengthy processes for customer authentication or service activation are a barrier for Orange sales agents in acquiring new customers or activating new accounts or services, Orange has developed NOMAD, a new and simple portal, accessible via USSD or through an Android app on a smartphone, tablet or web interface, which provides a fast and reliable service for Orange sales agents to authenticate and activate new accounts or services. Through this mode, Orange sales forces can perform transactions ranging from prepaid identification (a legal requirement set by local authorities), prepaid acquisition (for voice or data services), Orange Money subscriptions and SIM Swap services, amongst others, while customers are in shops or at Orange kiosks. With over 700,000 active retailers and kiosks across the MEA region, this new solution enables Orange to digitise its entire distribution channel. NOMAD is already rolled out in 14 countries in the MEA region today.
Another application, #303# is an app store based on USSD technology through which service providers can deliver mobile services to any type of phone. Orange end customers can access it to find all kinds of content on all topics provided by partners. Cameroon and Egypt will launch its portal in August 2016, with the same #303# unique code to roll out to the rest of the countries in Orange’s MEA footprint.
USSD allows any publisher to address Orange’s customer base regardless of the type of device. At launch, 20 publishers have joined the portal.
Expandedly, the firm is one of several French firms that is making a strong push in the composite African market today, The Difference checks have uncovered.
While in the past, the practice was for French firms to largely play within the politically sheltered Francophone belt, with a few others, randomly crossing over the fence, today, the reality of globalisation and the shutting down of borders has made it easier for firms to drive greater global ambitions irrespective of their points of origination.
Orange’s latest acquisition of a 100 per cent stake from Bharti Airtel’s Sierra Leone operations is therefore being viewed by industry watchers as not being an isolated event, The Difference has learnt.
This is because it comes to join earlier commencement of operations in several other African countries in the world’s fastest growing telecommunications market that the African continent is.
Before Sierra Leone, Orange had made a decisive push into Burkina Faso when it completed the acquisition of mobile operator Airtel in Burkina Faso. At that point, Airtel was already the second largest mobile operator in Burkina Faso, with close to 4.6 million customers
And like was the case in the Sierra Leone instance, the new acquisition was done together with another of its subsidiaries, this time, Orange Côte d’Ivoire.
Even more significant perhaps for Orange;s ‘diversified telecoms purposes is the fact that in the mobile financial services market, Airtel was also the uncontested leader in Burkina Faso and was already interoperable with Orange Money in neighbouring countries, thereby allowing international transfers to be made. Airtel was also positioned as the country’s leading Internet provider thanks to its extensive 3.75G network, which had been rolled out in over 100 towns. This has therefore led to analysts’ conclusions that in its Burkina Faso acquisition, Orange was indeed getting ‘good measure for money spent!’
With 18 million inhabitants and a relatively high mobile penetration rate for the region (80% of the population), the thinking is that the firm’s investments in the coming years will enable customers in Burkina Faso to take advantage of the Orange group’s expertise and momentum in terms of innovation and development of the digital ecosystem, thus responding to a strong expectation from customers in Burkina Faso.
Also notable is the fact that this acquisition in one of the countries with the strongest growth rates in the Economic Community of West African States (5.8% annual growth of GDP) strengthens Orange’s presence in Africa by confirming is proactive strategy in the African market.
Mettling says: “We are pleased to announce that the acquisition of the mobile operator Airtel in Burkina Faso has been finalised. This new acquisition will further strengthen the Group’s positions on the African continent.”
At the last count, almost two dozen African countries had been integrated into the fast-growing Orange platform.
These include Botswana, Cameroon, the Central African Republic, Democratic Republic of the Congo and Egypt.
Others are Guinea , Guinea-Bissau, Cote d’Ivoire, Burkina Faso, Sierra Leone, Madagascar, Mali, Niger, Tunisia and Uganda
Besides these, the company also has stakes in other African country networks such as Mauritius Telecom (40%) and Telkom Kenya (70%)
Indeed, pundits say that, going forward, the real icing on the cake for Orange from where it is now as per its African business suite would be the group’s frontal penetration of the two leading markets in the continent, namely Nigeria and South Africa.
Founded in 1988 and with headquarters in Paris, France, the firm which has Stéphane Richard as Chairman and CEO earned a cumulative revenue of €40.236 billion in 2015, of which it posted a profit of €2.652 billion.
Underscoring its deep immersion in the French national order, the government of France has a 13.4% stake in its operations even as the firm employed a total of 157,000 staff worldwide at the close of its 2015 business year.
Formerly France Télécom S.A., the multinational telecommunications corporation which has 263 million customers worldwide is a component of the Euro Stoxx 50 stock market index.
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