The liner Orange is preparing to emerge from the storm

by bold-lichterman

A few weeks before the probable finalization of the agreement with Bouygues Telecom, Orange presented encouraging results for the pursuit of its strategy. The leading telecom operator has achieved a “stable” turnover for a year, at 40.2 billion euros in 2015, thus erasing the negative periods between 2011 and 2014. Better still, it triples its net profits group share to 2.6 billion over the year (compared to 925 million in 2014). Restated EBITDA reached 12.4 billion euros over the year, up 0.1% and “beyond the targets” set, says the group.

Orange is also reaping the benefits of its cost reduction policy undertaken for two years. Apart from the acquisitions made in 2015 (increase in the capital of Médi Tel, Jazztel in Spain, Ocean via Orange Business Services in particular), its net debt was down by € 851 million compared to December 31, 2014.

While the plan Essentials2020, – Following the “Conquests 2015” plan, put 15 billion euros on the table, the group also announces a drop of 118 million euros in its indirect costs. Orange controls its costs and takes the opportunity to invest its marbles in strategic investments.

Focus on fiber and Africa

In an interview with Frenchweb, Orange was showing its ambition in very high speed with an investment of “more than 3 billion euros to reach 20 million subscribers by 2022”. It already has more than a million fiber subscribers, or a third of the subscriber market. To distance itself from its competitors, Orange is positioning itself on “true very high speed” but must therefore invest massively to modernize its network.

Another course set to establish its profitability, the group is always looking more towards Africa, where most uses take place on mobile. There, the group intends to assert its positions. Other planned acquisitions include the takeover of the activities of the Indian Bharti Airtel which will position it in Burkina Faso, Liberia, and Sierra Leone. Another target country, the Democratic Republic of Congo.

FinTech to extend its conquests

On the African continent, Orange has already entered into practice with the “Orange Money” money transfer service. According to group figures, Orange Money has 16.4 million customers, an increase of 31% over one year on a comparable basis.

With “Orange Cash”, the operator wants to become essential in mobile payment. In 2014, he also selected the start-up Afrimarket in his Orange Fab. In October 2015, Orange invested in Afrostream, a VoD platform for African and African American television series and cinema. It is present in Europe but also in Senegal and Ivory Coast.

Beyond Africa, online banking is the group’s next stronghold to conquer. In early 2016, he announced that he had entered into exclusive negotiations for a majority stake in Groupama Banque. To accelerate on FinTech, Orange is even ready to invest in new crowdfunding platforms, like its investment in KissKissBankBank.

Increase the premium customer base in France

Arrived in 2009 as international director then deputy managing director in charge of France Telecom operations, Stéphane Richard is on the way to achieving the investment objectives set a year ago. He was renewed for four years until 2018 at the head of the operator, which will be the year of the first review of investments decided three years earlier.

From the acquisition of Bouygues Telecom, Orange only wishes to retain high-end customers (around 2 million), according to Le Figaro. In France, the group had a total of 24.1 million mobile plan customers as of December 31, 2015, an increase of 9.9% over one year. Another striking trend, the group recruited 1.4 million new 4G customers in the last quarter of 2015.

On the stock market, the Orange share gained slightly 0.10% in the middle of the morning.