By Harry Baldock for Total Telecom
Orange already has a significant footprint in Africa and the Middle East, operating in 18 countries in those regions, but they could their sights set on a nice round 20 with the possible addition of Nigeria and South Africa to their portfolio.
Speaking to French newspaper Les Echos, Orange CEO Stephane Richard said that the potential growth of these markets was considerable and warranted their investment. Much of the company’s current revenue from the MEA region comes from the success of Orange Money, with the fintech expected increase further as a key asset for the operator.
“It could make sense to be in economies such as Nigeria and South Africa. If one considers there are things to do, the time frame I am considering is rather a few months than a few years,” he said.
Orange had originally left the South African market, where it was offering retail and mobile repair services only, back in 2016, but now seems excited to enter the market more completely. Limited spectrum availability has been a deterrent to foreign operators, but it seems that Orange is unperturbed.
In a similar vein, rumours have been circulating that the French giant is interested in buying a stake in South African operator MTN, but no further information has been forthcoming. The two operators have worked together recently on the mobile payment company Mowali, as well as being partners in the consortium to build the upcoming 2Africa subsea cable, set to circumvent the continent.
Orange has also had its eyes set on Nigeria for some time. When Etisalat Nigeria was struggling financially in 2017, Orange was reportedly in negotiations to pick up a 65% stake in the company. However, Etisalat ultimately withdrew from the market, taking Orange’s ambitions with it.
Further expansion in a time when the economy has been rattled by the coronavirus is a bold and exciting strategy for Orange. The news comes during a time of transformation for the company’s senior executive team; some highlights include the appointment of Jean-François Fallacher, current CEO of Orange Polska, to the role of CEO of Orange Spain, while CEO of Orange Belgium, Michael Trabbia has been promoted to chief technology and information officer as well as the executive board.
South Africa is considering giving telecoms companies increased spectrum (or airwave capacity), as millions of people switch to home working, testing networks and driving up data traffic, the communications minister said on Wednesday.
President Cyril Ramaphosa announced a 21-day national lockdown from midnight on Thursday in an address on Monday, saying Africa’s most advanced economy needed to escalate its response to the spread of the coronavirus, which has infected 709 people in the country.
The telecoms industry, which is regulated by the Independent Communications Authority of South Africa (ICASA), has experienced a spike in network data traffic in recent days after thousands of schools and universities were forced to shut down.
Telkom told Reuters that it is seeing increases of 15% to 30% in data consumption across mobile and fixed connectivity, while MTN Group said it was too early to quantify the surge in data traffic.
MTN, Telkom and Vodacom are already providing free access to health sites and e-school platforms to support home learning and teaching, while MTN has waived fees on mobile money transactions in certain markets.
While South African telecoms operators say their networks have been able to cope so far, there are fears of congestion as more people work from home.
“One envisages a situation where there will be too much traffic on the network,” Minister of Communications Stella Ndabeni-Abrahams told journalists, adding that ICASA is considering providing temporary additional spectrum.
The minister said that telecoms companies will be required to return the spectrum once the situation normalises.
“ICASA is currently engaging with sector licensees on possible ways of (providing) radio frequency spectrum relief for the duration of the declared state of disaster,” ICASA spokesman Paseka Maleka confirmed in an email.
“This is mainly to ease congestion, ensure good quality of broadband services and to enable licensees to lower cost of access to consumers (particularly in relation to education, emergency and other social services).”
Vodacom told Reuters that it will be engaging ICASA to “gain access to spectrum on a temporary basis.”
“Vodacom has also taken a decision to significantly ramp up investment spend in the short term to help manage network congestion,” group spokesman Byron Kennedy said in an email.