Convergence is the name of the game for Orange Europe

Convergence is the name of the game for Orange Europe

06 October 2021 | Natalie Bannerman

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Orange Europe sets its sight on network convergence as its key strategic priority across the continent.

During the company's European press and analyst day, Mari-Noëlle Jégo-Laveissière, deputy CEO, Orange Europe, set the tone for the group, which is for it to become the best sustainable convergent telco in Europe.

In his video address Ramon Fernandez, said stated that the company is currently in its development and transformation phase … "which will increase our organic cash flow from 3.5 to 4 billion euros by 2023".

The five pillars of this growth according to Jégo-Laveissière, is Digital, Diversity, Customer, Efficiency and Green, underscored by its group-level Engage 2025 strategy.

Specifically, in the case of digital this means that the group aims to deliver greater convergence & multiservice offerings for its customers, increasing its B2B activities, an area that Jégo-Laveissière sees as having huge potential for growth, and of course accelerating the group's digitalisation activities.

As for Diversity, a focus on the promoting of diversity, particularly women in tech, an area close to Jégo-Laveissière's heart is top of the list as well as adapting to new ways of working across the various businesses.

"Orange goes green" is the term for the group sustainability object and will see the group aim reach carbon neutrality by 2040, as well as higher engagement in energy optimisation & circular economy across the businesses.

Efficiency will see the implementation of data and AI at the core of its business with heart of its business for greater efficiency and delivery of personalised interactions, as well as a migration to the Cloud.

While for the Customer, the group will develop new infrastructure and operating models, and accelerate its 5G rollout across its respective markets. 

Supporting these objectives, the completion of the TowerCo in Spain – Totem, as well as the FibreCo in Poland, co-owned with APG, have continued at pace, despite the disruptions of the pandemic.

"It is very clear that convergence more than ever is the cornerstone of our strategy. We are number one leader in conversions in Europe today with more than 5.4 million customers across both mobile and fixed broadband. Convergence is the nebulous to all answer customer needs and these needs are growing following the Covid-19 crisis," said Jégo-Laveissière.

In addition, 5G is set to create new use cases for the group, especially in B2B, such as Smart City, Automotive, IoT etc., "these will allow us to monetise 5G in the B2B sector", she said, before handing off to her colleagues for more colour on the respective businesses that she described as "local intimacy with European scale".

Orange Poland

Julien Ducarroz, CEO, Orange Poland echoed many of Jégo-Laveissière's sentiments by presenting the Polish business' .Grow strategy.

Poland is a strong and fast-growing economy with GDP growth of 11% in 2021, with ARPU and broadband penetration across the country still below that of the rest of Europe. However, its residents have a growing disposable income (up 20% from 2017) and fixed broadband coverage at roughly 69%.

Looking ahead Ducarroz says that Orange Poland will expand the reach of its fibre connectivity to 7-8 million homes by 2024, supported by the aforementioned FibreCo.

As well as the implementation of a convergent value strategy focused on the household and that the company is on track to deliver a cash dividend of PLN 0.25 ($0.063) to be paid in 2022 from 2021 profits.

One of the more interesting takeaways from Ducarroz's spotlight on Poland was the news that Orange Poland is the leader in cloud, CRM, IT and apps integration, "with more than 1 billion in revenue coming from this segment". As for the corporate enterprise, "50% of our revenue is coming from the ICT space to date", he said.

Orange Spain

In his own words Jean-François Fallacher, CEO, Orange Spain, described the Spanish telco market as " one of the most competitive in Europe". Aside from the growing convergent offerings of its players, Fallacher says that they count roughly six major players, more than 20 brands and hundreds of MVNO's all competing for the same customers.

Interestingly he says that only three are invested massively in the Spanish market with the rest of the players positioning themselves in the local segment, a segment that by his own admission is nowadays "taking the lion's share" of the market.

During the Q&A and portion of the event, Fallacher elaborated saying that the Spanish market has long suffered from a number of price rises "which consumers were upset about" and have led to a distrust that the bigger players will do the same again. All of this has been compounded by the Covid-19 crisis, which has left many Spanish households suffering financially and looking for the cheaper deal. Unsurprisingly, this makes the market ripe for consolidation, the question becomes when?

This aside, Orange Spain has been hard at work reshuffling its organisation to align with its business goals, as well as simplification of its in-country brands, bringing the number down from 5 to 3.

"Orange for the top of the market and premium customers. Jazztel for the middle market and Simyo for the low-cost customers," said Fallacher.

Again, a greater slice of the B2B market is also on the books with Fallacher sharing that Orange Spain only holds a .8% market share.

With both organic and inorganic growth on as part of the group's roadmap, Jégo-Laveissière ended in saying that any potential M&A activity for Orange Europe would be in-county as opposed to any new markets. Though no specific locations were shared, it's clear that growth is par for the course.