Orange (was France Telecom) is a telecom services group providing consumer and business solutions in fixed-line, mobile and Internet services worldwide, and it has strongly established its Orange brand as a global player.
Orange has a wide portfolio of interests across Europe, Africa, the Middle East and Latin America, and those African interests include branded operations in Botswana, Cameroon, Cote d'Ivoire and Madagascar, as well as equity interests in Egypt, Jordan, Lebanon, Mauritius, Equatorial Guinea, La Reunion, Senegal and indirectly in Mali.
France Telecom had 207.52 million mobile subscribers across its global operations at the end of September 2017. In Africa and the Middle East, the group had a total of approximately 129.6 million subscribers in 21 countries, including Egypt, Cote d'Ivoire, Senegal, Cameroon, Mali, Mauritius, Madagascar, Botswana and Republic of Guinea making it the third largest mobile network operator in the AME region, with a 9% share of the subscriber market..
Table 1 provides a regional snapshot of France Telecom's mobile operations in Africa as on 31 December 2016.
Table 1: Orange - Mobile Operations in Africa 2016
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Financial and Operational Performance
Orange is likely to continue expansion in the emerging markets of Africa, where the French language holds strong historic and cultural ties. The group is on a consolidation spree, working towards uniting its operations under one umbrella brand - Orange.
Chart 1: Orange Operations in Africa - January 2018
Chart 2: Francophone Countries in Africa
Orange has around 125.35 million subscribers in MEA at the end of 1Q 2017, placing it third behind Vodafone with 196.9 million, and MTN with 236.13 million.
Chart 3: Major Groups in MEA by Mobile Subscribers 1Q 2017
Source: industry sources, Blycroft estimates c. Blycroft 2018
Orange remained in second place in the mobile market, with a market share of 32% (source: Botswana Communications Regulatory Authority), and a base of 906,000 subscribers at the end of the year (source: Orange Botswana). Wholesale mobile services are provided by Botswana Fiber Networks (BoFiNet) and a newcomer, Liquid Telecom, in collaboration with the electricity operator Botswana Power Corporation (BPC).
Orange was the first mobile operator to launch 4G services and continued to expand its 4G coverage in 2016, which stood at 30% at the end of the year. Orange covers 55% of the population with its 3G services, and most of the population with mobile services (Source: Orange Botswana). The Orange Money solution maintained its position as a leading provider of mobile payment services, with a market share of 68% (source: Botswana Communications Regulatory Authority).
The operator acquired in 2016 by Orange in Burkina Faso is the country’s second largest operator with almost 6 million mobile customers, a gain of 700,000 in 2016, and a market share of 36%.
The country has a predominantly rural population, estimated at 18.4 million. The country is characterized by a long period of political stability which has allowed average economic growth of 5.5% between 2011 and 2016.
An increasing share of its subscriber base, one-third in 2016, is a consumer of data services. Mobile financial services are also booming with more than 3.4 million users at end-2016, which represents a market share of around 95%.
The telecommunications market in Cameroon grew by 4.6 percent despite a slight decline due to stricter regulations on subscribers’ identification.
Orange Cameroon finished 2016 with a base of 5.8 million active mobile customers, a decrease of 1.2 million compared with 2015, impacted by the implementation of the new regulations on subscribers’ identification.
In 2016, trends previously observed in the market continued, such as greater competition, resulting in price pressure and a progressive substitution of voice and SMS applications by data communications and value-added services.
In response, Orange Cameroon launched a programme to expand its 3G and 4G coverage and upgrade its access network, with a view to align its network capabilities with new applications and the development of high- and very high-speed broadband.
An Orange Money Visa card was launched in December 2016.
Central African Republic:
The growth of telecommunications, the potential of which is significant as penetration rates remain low, is still affected by high inflation and infrastructure deficiencies, particularly due to the conflicts that have been ongoing since 2013.
Orange is the most recent entrant to a market with four operators. Orange has more than 400,000 active mobile subscribers, the majority pre-paid. After being the first operator to launch the 3G network in 2013, Orange has provided the four main cities with mobile data services. Orange is the only operator to provide mobile payment services since it launched its Orange Money in 2016.
2016 saw the consolidation of economic gains and the pursuit of the private sector reforms of the National Development Plan covering 2016-2020, for a total cost of XOF 30,000 billion (USD 55.4 billion).
Although during Q1 2016 two operators (Koz and GreenN) withdrew from the market, between 2015 and late September 2016, the mobile market grew from 25.4 to 27.5 million SIM cards, an increase of 8.3%. At the same time, the penetration rate increased significantly to 113.2%, notably following the expansion in the number of consumers with multiple SIM cards and the number of abundance offers, as well as falling communication prices and handset costs.
2016 was marked by a stronger competition, both in voice offers and mobile data offers. Within this context, Orange Cote d'Ivoire successfully improved its market share, which stood at 45.2% at the end of 2016 (compared with 42.5% at the end of 2015), therefore consolidating its ledership, with MTN in second place. It claims that this performance results from an active acquisition strategy, but also from the segmentation and differentiation of offers, including those developed around mobile data services.
The level of competition in the market should remain high in 2017 following the grant of the fourth global licence to Libyan Post Telecommunication and Information Technology, as a substitute for the four smaller operators.
The number of fixed lines of Orange represents a low percentage of the total number of customers, due to strong competition from the growth of mobile. There was strong growth in the mobile broadband market, with the arrival of 3G.
In addition, Orange had some 69,000 ADSL Internet customers at the end of 2016, an increase of 41%, thanks to the launch of a new ADSL range and the promotion that was led for Parents’ Day.
Since the operational merger of Orange Cote d'Ivoire and Cote d’Ivoire Telecom in 2010, Orange has had the leading network of retail stores in the country’s telecom sector, with a total of 137, including 37 that were directly owned and 100 franchises at end 2016. Indirect distribution is managed through a network of 14 exclusive partners comprising close to 80,000 retailers.
Democratic Republic of the Congo:
The IMF in October 2016 recorded a population of 84.1 million, putting the country fourth in Africa in terms of population. The Telecommunications and Postal Services Regulatory Authority of Congo in its 3Q 2016 report calculated the mobile penetration rate at only 36%; much lower level than that of most neighbouring countries.
In 2016, the country’s overall economic environment was marked by difficulties, notably following the depreciation of the Congolese franc compared with the American dollar (two currencies used in the Democratic Republic of the Congo) and the expected institutional changes, notably the delay in the presidential elections that were initially due in November 2016.
In a context of weak mobile penetration representing a huge potential for growth, Orange, which already held a 2G and 3G national license, strengthened its position in 2016 by acquiring the operator Oasis in April 2016, which was operating under the Tigo brand. Through this acquisition, Orange managed to further develop its market position by reaching second place in terms of mobile market share, with 30.8%, or 1.6 point behind the leader, and by becoming a leader in the mobile Internet segment, with a market share of 41.6%, far ahead of its competitor Airtel at 32.7%.
The number of Orange mobile customers, which stood at 5.3 million at the end of 2015, reached 7.3 million at the end of 2016, or an increase of 38%, mainly due to the purchase of Oasis. On a comparable basis, the customer base is in fact down 27% considering the negative impact of the depreciation of the Congolese franc and the law on subscriber registration, which significantly slowed down acquisitions, particularly during the first half of 2016. In this context, Orange DRC's revenues contracted by 10% during 2016.
Mobinil changed name to Orange in March 2016.
The National Telecom Regulatory Authority continued to impose restrictions on the sales of lines for security reasons, which led, for the first time in 2015, to a decrease in the number of mobile phone subscribers in Egypt. In 2016, mobile operators undertook measures to overcome and mitigate the impact of these restrictions, which resulted in a resumption of economic growth in the mobile market. The mobile telephony market in Egypt essentially comprises prepaid customers. Increasingly, operators are expanding their offers to the lower end of the market, reducing connection fees, offering cheap telephones and allowing customers to recharge small amounts. This strategy aims to attract middle-class and rural customers, and resulted in a decrease in the average revenue per user (ARPU).
At the end of 2016, the number of mobile subscribers reached 97.8 million, an increase of 4% year-on-year, or a penetration rate of 107% of the population. The number of ADSL subscribers reached 4.4 million, an increase of 17% year-on-year.
Orange’s mobile customer base stood at 33.9 million at the end of 2016, with an increase of 2.4% compared with 2015. About 80% of mobile customers are positioned on prepaid offers. However, the proportion of prepaid customers decreased in 2016 due to the success of capped usage contracts. In euros, the annual revenues stood at 1.13 billion in 2016, a decrease of 15.3%.
Orange has been indicating its desire to exit this market for some time. The exit fee negotiated in 2011 by Orange with state-owned incumbent Getesa saw the operator resort to arbitration to resolve the matter. In July 2014 the CCI (Chamber of Commerce and Industry) in Paris - to which the matter had been referred for arbitration - found for Orange, and directed the government to pay the operator some EUR 132 million (USD 164.3 million) plus interest.
Orange holds a 40 percent of the operator, the government holding the remaining 60 percent. Orange sought to exercise the right to exit, as negotiated in 2011, when the government took over the operation of the company. Orange had particularly wanted to sell its shares at a negotiated price if a new operator entered the market.
In January 2012 Guinea Ecuatorial Comunicaciones Sociedad Anonima started operations, so further diversifying the market that already had Getesa and Hits Telecom. However, despite provision for such a development, it was reported that Orange's exit has been effectively blocked by the government.
Telegeography notes that the mobile market in Guinea-Bissau, mainly focused on voice applications, continues to grow with a penetration rate of approximately 76.5%.
As the most recent entrant in a market shared by two operators, at the end of 2016, Orange confirmed its leading position in the mobile market in terms of volume and value.
Orange Bissau had close to 600,000 active mobile customers at the end of 2016 (+7.3% compared with 2015), or a market share of 52%. Orange Bissau was the first operator to launch the 4G network in the Africa region at the end of 2015. Through the introduction of this new technology, Orange Bissau’s base had reached more than 58,000 mobile data subscribers at the end of December 2016, compared with 27,000 in December 2015. Orange Bissau is the leader on the Internet market.
Orange Guinea, the fourth company to join the telecommunications market in 2007, has maintained its leadership since 2013, closing 2016 with a market share of 57.6%, or more than 6 billion subscribers.
Voice traffic still dominates mobile usage, but mobile Internet, valueadded services and mobile payments are growing.
As a result, the Orange Money service had a total of more than 509,000 active customers at the end of 2016. At the end of 2016, Orange was the only operator in Guinea-Conakry to cover all of the sub-prefecture capitals both in 2G and 3G.
Orange has a non-controlling equity interest in Iraq. At end-2016, Iraq had a population of 38.1 million inhabitants (source: GSMA, March 2017). In the third quarter of 2016, the mobile services market totaled 32.3 million users, which resulted in a penetration rate of 84.6% (source: GSMA, March 2017).
Jordan has three large mobile operators. Orange remained in second place in the mobile market, with a 32.4% market share.
The mobile market grew from 13.8 million SIM cards at the end of 2015 to 16.7 million in 2016. The mobile market increase was driven by competition, with abundance offers for data taking over from prepaid voice offers, together with the regular growth in broadband mobile services.
Orange had a total base of 4.4 million customers at the end of 2016, including 3.8 million mobile customers. The mobile customer base increase is mainly due to the mobile data services growth following the replacement of fixed Internet with mobile broadband and the strong competition in fiber. Orange continued to roll out a full range of Internet services based on ADSL and fiber technologies and on the implementation of abundance offers to better meet customers’ expectations.
Liberia has 4.6 million inhabitants, with a mobile penetration rate of 70% at the end of 2016. In April 2016, Orange Cote d'Ivoire, a subsidiary of Orange Group, acquired the operator Cellcom, which was the leading mobile operator in the market, with more than 1.5 million mobile customers, before MTN, which launched a second brand called Novafone. Despite the strong market competition and a fragile economic environment, Cellcom’s revenues grew by 3.8% in 2016. Cellcom’s success lies in new attractive offers launched in 2016. 2016 was also marked by the launch of d’Orange Money in April and that of 4G / LTE, which helped it gain the lead in data communications.
2016 was marked by the improvement of the country’s political situation and the disbursement of international aid, including the grant of 9.7 billion dollars in funds to support the economic recovery. The mobile penetration rate was 23.4% of the population (source: GSMA), an increase of 1.3 points compared with 2015.
Orange has a global license (2G, 3G and 4G). Orange strengthened its lead in the 3G and 3G+ very highspeed broadband mobile Internet market, notably for businesses, by capitalizing on the quality of international connectivity provided by the LION cable. Orange's network covers 68% of mobile data customers.
The Orange Money service increased its active customer base by more than 23.4% compared with 2015, which generated about EUR 555.7 million (USD 673.2 million) in transactions.
In 2016 the market continued to see a decline in the mobile penetration rate, which stood at 102% at the end of 2016, or a reduction of 17 points compared with 2015. This trend results from the implementation of new SIM regisration rules for subscribers, which came into force at the end of 2015.
Orange, as the second company to enter the mobile market, maintained its leading position with a market share of 59.3%. The other operators in this market are the incumbent operator Sotelma, owned by Maroc Telecom, and the Planor-Monaco Telecom International consortium operating through the Malian operating company Alpha Telecommunication Mali SA (Atel-SA).
At the end of 2016, Orange Mali’s network covered about 95% of the population and 46% of the country and had a base of 11.3 million active mobile subscribers, of which more than 99% were prepaid customers. Their uses mainly cover voice, mobile Internet and mobile payment services. Launched in June 2010, Orange Money service had 3.5 million customers at the end of 2016 (compared with 3.4 million at the end of 2015). The broadband Internet customer base, which included close to 191,000 subscribers at the end of 2016, grew by more than 15% compared with 2015.
Mauritius is another market where Orange has a non-Controlling equity interest. Mauritius Telecom – Orange is the leading fixed-line (ahead of DCL) and mobile (ahead of Emtel and MTML) telco in Mauritius.
It offers a comprehensive range of fixed and mobile data and voice services, as well as convergence packages (voice, IP and TV) though its MyT service. It was the first operator to launch the 4G network and the Orange Money mobile payment service in 2012, Orange launched its fiber optic network (FTTH) with a flow rate of 10 to 100 Mbits / s in 2013.
Connectivity is provided by the Sat 3 / WASC / SAFE, LION / LION2, Eassy, and GIE fiber optic submarine cables. Mauritius Telecom – Orange also has its investments in Orange Madagascar, CSL Madagascar, and its stake in TVL, the incumbent operator in Vanuatu.
In 4Q 2016 regulator ANRT noted a significant drop of 15% in average prices for mobile services, which led to a 12% increase in average usage per customer.
For the first time in several quarters, the new rules for the approval of offers by regulatory authorities helped increase prices during 3Q 2016. The Internet market’s dynamics continued in 2016, with an increase of the penetration rate from 43% at end-2015 to 50% at end-2016, mainly resulting from mobile Internet growth, which accounted for 93% of Internet access and with an increase of 18.6% in users in 2016.
Orange is present in the Moroccan market through a subsidiary that, after having operated under the Meditel brand, has been marketing its services under the Orange brand since December 2016. Orange Morocco, which had a base of 13.9 million mobile subscribers at the end of December 2016, saw, in 2016, its mobile market share rise to 32.8%, up by 0.9 percentage points. , Orange Morocco is ranked second in the market, behind Morocco Telecom and before Wana Telecom, whose mobile market shares at end-2016 were 44% and 23% respectively. In addition, the number of Orange Morocco mobile Internet subscribers stood at 3.8 million at the end of December 2016, which represents a market share of 23.8%.
The most market entrant, Orange Niger is now the second-largest operator, with a mobile market share of 29.5%.
Recently Niger Telecom, formed by an alliance of Sonitel and Sahelcom at the end of 2016, has entered the market. At the end of 2016, Orange Niger’s base comprised 1.6 million active mobile customers with a coverage of 82% of the population. As the first operator to have launched the 3G network, from 2011, Orange Niger is also leading the broadband mobile Internet market.
With a population of 15.4 million, Senegal is West Africa’s third-largest economy. The mobile market reached 15.2 million SIM cards in 2016, a slight growth of 1.5%, up 227,000 than in 2015, despite the implementation of compliance measures for subscribers bases, resulting in the termination of customers who did not fulfill the registration criteria as defined by the regulator. At the same time, the mobile penetration rate decreased from 100.0% in 2015 to 98.7% at the end of 2016.
The regulated mobile call termination rates dropped again in 2016 along with the reintroduction of asymmetry (from XOF 12 to XOF 9 per minute for Orange and from XOF 12 to XOF 11 for competitors).
Sonatel, an entity through which Orange operated in the country, secured in 2016 the renewal of its concession to operate its networks in Senegal for 17 years, and acquired spectrum to operate the 4G network.
The number of Orange mobile customers almost entirely comprises prepaid options. After a growth of 3.9% in 2015, Orange’s subscribers base decreased by 6.1% in 2016 following the implementation of compliance measures for subscribers bases, resulting in the termination of more than customers who did not fulfill the new identification criteria.
Despite the decrease in the mobile subscribers base and the reduced average price for voice services following the increase in the level of free abundance offers, the ARPU remained fully stable compared with 2015 in view of, on the one hand, an enhanced monetization of mobile data applications and value-added services, and, on the other hand, the development of Orange Money. This relative stability for the ARPU is all the more notable in that it is part of contracting mobile call termination revenues impacted by the asymmetrical decrease of mobile interconnection rates.
Orange Money had nearly 1.1 million active customers at the end of 2016, or 14% of the mobile customer base, and saw significant growth in the volume of transactions (+73%) compared with 2015.
Sierra Leone has a population of 6.4 million, many located live in rural areas. The subsidiary was acquired by Orange in July 2016. It has 1.5 million customers. As population’s mobile coverage and mobile penetration rates are low, the country therefore has a strong growth potential. In an environment where the percentage of people with bank accounts is low, almost one out of two customers is involved in Orange Money’s activities. International communications was liberalized in April 2016.
At the end of 2016, Orange Tunisia had 4.3 million mobile customers (an increase of 316,000 customers compared with 2015), or a mobile market share of 26%, according to the Nationale des Telecommunications (INT), an increase of 3 points compared with the end of 2015. In addition, the company confirmed its leading position in the mobile Internet segment, with a market share of 40.1%.
Orange Tunisia is the third largest fixed and mobile operator in Tunisia which, since it joined the mobile market in 2010, has established a strong position in the 3G segment. Orange Tunisia’s strategy, focused on developing data services, continued in 2016 through the launch of 4G.
Orange Tunisia’s growth strategy is based on an innovative and diverse commercial offer, particularly in the pre-paid mobile and mobile Internet segments. This dynamic was strengthened in 2016 through the launch of number portability, which allowed Orange Tunisia to acquire 27,000 new mobile numbers, or 58.5% of the total number of ports. 2016 saw the rollout of 4G and the continuation of the plan for extending and densifying the network.