Connecting Africa is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 3099067.


Orange Keeps MEA Sales Growth Target at 5% as Focus Shifts

Article Image
Orange is confident it can maintain sales growth of 5% across its footprint of operations in the Middle East and Africa (MEA) even as its mainstream consumer voice business goes into decline.

The French telecom group, which runs networks in 19 Middle Eastern and African (MEA) countries, is shifting its focus to data, mobile money and business-to-business markets in a region that has been its engine of growth for much of the past decade.

Senior executives at a press briefing in London this morning said the MEA business had delivered average annual sales growth of 4.3% over the past ten years thanks to soaring take-up of basic and more advanced telecom services in that period.

Engine of Growth
Orange CFO Ramon Fernandez expects to maintain historical growth rates in Africa.
Orange CFO Ramon Fernandez expects to maintain historical growth rates in Africa.

Serving about 120 million mobile and 1 million fixed customers, Orange made €5.2 billion ($5.9 billion) in MEA revenues last year -- a 5% increase on the 2017 figure -- and generated €1.7 billion ($1.9 billion) in earnings (before interest, tax, depreciation and amortization).

It has managed that performance despite the upheavals that have occurred in several markets, including the recent Egyptian currency devaluation and "Arab Spring" uprising of 2011.

Alioune Ndiaye, the CEO of the MEA business, said high levels of growth across the footprint of countries had allowed it to cope with episodes of turmoil in specific markets. "Even if there is a crisis in one or two countries, we can still manage substantial growth," he said.

But data shared with analysts and reporters at today's event shows the revenue mix is now changing radically, with the percentage of revenues that come from voice services dropping to just 50% in the last three months of 2018, from 64% in the first quarter of 2016.

Orange's push into mobile data and mobile money has allowed it to pick up the slack, with 31% of sales now coming from those services. Ndiaye said it was "remarkable" that Orange had been able to deliver such a strong performance with such a "deep transformation" of its business model.

The operator reckons it can maintain sales growth at historical levels partly because usage of data services is forecast to keep rising as low-cost devices become more widely available.

After launching a $20 handset called Sanza earlier this year, Orange is now predicting that smartphone penetration across the region will hit 65% by 2025. Penetration currently stands at 50% in the Middle East and north Africa and 30% in central and west Africa, it says.

Already available in Burkina Faso, Cameroon, Cote d'Ivoire and Mali, the Sanza "smart feature phone" is set to be launched in other Orange countries in the next few months and comes with an operating system -- KaiOS -- that will be unfamiliar to smartphone customers in Western economies.

Based on the Linux open source platform, KaiOS is the brainchild of a Californian startup called KaiOS Technologies, in which Orange today announced it would invest through a "Series B" funding round. "These investments are in line with the strategy of providing customers with access to affordable devices and a crucial step in our ambition of democratizing access to the Internet in Africa," Ndiaye told reporters.

Orange has not disclosed the sum it is investing in KaiOS Technologies, which has so far raised a total of $79 million from investors, according to Crunchbase.

Want to know more about 5G? Check out our dedicated 5G content channel here on
Light Reading.

The operator is also targeting a huge increase in the take-up of its mobile money services, which allow customers to pay bills, purchase goods and transfer money through basic text-messaging functionality. Around 30% of its customers now use those services, but Orange is eyeing an adoption rate of 70%. "That is the benchmark today if you look at M-Pesa in Kenya," said Ndiaye, referring to the popular mobile money service developed by Kenyan telco Safaricom.

As in Europe, Orange is trying to expand its portfolio of mobile money services in Africa. It has requested a banking license from regulatory authorities in west Africa, says Ramon Fernandez, Orange's chief financial officer, with the aim of launching credit and savings services for its customers. "As soon as that is granted, we'll launch a fully fledged bank in Africa," he says.

Outside telecom and finance, Orange is hopeful that its technology platforms will support service launches in additional markets, including the energy sector. In several countries, it has already made investments in solar-based energy systems, with customers paying for services through the Orange money platform.

With the rollout of more advanced networks, the enterprise sector could represent the biggest opportunity in the years ahead. That market contributes about 12% of regional revenues today, said executives, and Orange is now looking at opportunities in cybersecurity and the cloud.

However, some analysts are skeptical about the enterprise opportunity for Orange, noting that data center services in Africa are largely about colocation, and that most "racks" are in South Africa.

Asked what cloud services Orange would offer, Ndiaye said the company had already built three data centers in Cameroon, Cote d'Ivoire and Senegal and would look to capitalize on data protection moves. "African political leaders are introducing policies that will not authorize the telcos or anyone else to have data outside the country," he said. "All banks in eight countries of west Africa have been asked to locate data inside one of the eight countries -- there will be demand for that."

Fernandez played down concern about a fall in average revenues per user (ARPU) in Africa and said Orange had been able to buck that trend. "In the business-to-consumer market it is interesting to see that quarter on quarter ARPU is increasing and we've been able to monetize data and compensate for a decrease in voice and decline in termination rates," he said.

Executives hailed the performance in several markets where Orange made acquisitions in 2016 and declined to rule out further M&A activity. "Footprint extension is not a priority," said Fernandez. "That does not mean we exclude any footprint extension if it will be value-accretive."

— Iain Morris, International Editor, Light Reading

Innovation hub


Moya super app takes aim at SA fintech market

Super app Moya's fintech platform, MoyaPay, aims to be South Africa's most widely used mobile money payments platform.


Hot startup of the month: Kenya's Shamba Pride

This month's hot startup, Shamba Pride, wants to revolutionize the rural agricultural trade ecosystem in Kenya by transforming agro-dealers into franchised 'DigiShops.'

More Innovation hub

Guest Perspectives


Omdia View: April 2022

By Omdia Analysts

This month's Omdia View highlights indicate a shift to digital transformation and operational consolidation to maximize return on investments.


Omdia View: March 2022

By Omdia Analysts

This month's Omdia summary of the biggest stories in the Middle East and Africa focuses on SA's spectrum auction and new submarine cables landing in Kenya and Togo.

More Guest Perspectives

Partner perspectives

All Partner Perspectives

Flash poll

All polls

Latest video

More videos

Archived webinars

Boosting Customer Experience in the Digital Age

From the first interaction to the last payment: convert leads into clients, drive loyalty and grow your bottom line.

The digital age has ushered in a new era of customer engagement. Consumer demands and expectations are higher than ever – where an affordable but seamless online experience is now the norm.

At a time when competition for your customers is fierce, ensuring a client journey that is tailored to their needs has never been more important. The ability to build these bespoke offerings starts with understanding, and that understanding is built on data.

This webinar will explore how gathering insight is key to growing and retaining a strong customer base; we’ll unpack how CRM platforms, mobile payment, lead capture, and online marketing are key factors in building a successful 21st Century digital business.

  • Customer Experience – understanding consumer expectations of today
  • What easy steps can you take to provide a complete, immersive digital customer experience?
  • How to leverage modern digital tools to build customer loyalty

More Webinars

Sponsored video

More videos

AfricaCom perspectives


Digital inclusion as a catalyst for economic empowerment: Mastercard's Imelda Ngunzu

Mastercard's Imelda Ngunzu talks to Connecting Africa about how digital payment solutions and mobile money are transforming the lives of small business owners, women and marginalized groups in East Africa.


Accelerating women in STEM: In conversation with GirlCode's Tinyiko Simbine

GirlCode co-founder and CFO Tinyiko Simbine talks about why it's important to help girls and young women excel in science, technology, engineering and mathematics (STEM) fields.


How Poa Internet is unlocking meaningful connectivity in East Africa

Poa Internet's CEO Andy Halsall shares his views on what it takes to develop last-mile connectivity and get Africans online in a meaningful way.

More AfricaCom perspectives

Like us on Facebook

Newsletter Sign Up

Sign Up