Inside Orange’s SA expansion plans

The company plans to increase its brand recognition among South Africans ahead of launching a full mobile virtual network operator. By Duncan McLeod.

Orange, the mobile arm of France Telecom, is entering South Africa’s cellular communications industry with the intention of launching a fully fledged virtual mobile network operator (MVNO) with one of the country’s network providers.

However, the launch of the MVNO is not imminent — it’s unlikely it will happen this year — as Orange first wants to lobby the Independent Communications Authority of South Africa to formulate regulations that it believes will better govern relationships between network operators and MVNOs.

If Orange goes ahead, it will be South Africa’s second MVNO after Virgin Mobile, though the French company says its plans involve becoming a “full MVNO”, rather than a simple brand licensee. Virgin Mobile uses Cell C’s network.

Orange’s entry into South Africa is one of the early moves by a new unit of the company’s, Orange Horizons, which has been set up to expand into new markets around the world.

Orange Horizons MD Sébastien Crozier, who is in South Africa this week to launch Orange’s consumer brands here — it’s Orange Business Services arm already has a presence — tells TechCentral that the plan is to expand beyond the 35 countries worldwide where it offers telecommunications services to retail consumers.

Orange already has a strong presence in 18 markets in Africa, including Egypt, Morocco, Côte d’Ivoire, Senegal and Cameroon, and has long been rumoured to be interested in expanding its operations in South Africa. Crozier confirms that Orange has spoken to all the major players here.

Orange Business Services, which has an office in Sandton with a staff complement of about 80 people, was also said to have attempted unsuccessfully to buy JSE-listed IT services group Business Connexion. It’s not clear why the talks failed.

Crozier says Orange has timed its expansion into South Africa’s consumer market to coincide with the 2013 Africa Cup of Nations football championship, which it sponsors. South Africa is hosting the event.

Its entry into the country will, however, take place on a piecemeal basis. This week, the company launched two websites, one an e-commerce website at store.orange.com/za offering access to handsets, tablets and other gadgets at what Crozier says are highly competitive prices. He says the company is able to offer lower prices because of its global buying power and intends offering products not readily available in South Africa, such as the Amazon Kindle Fire HD.

The second website, at orange.com/za, offers localised content, including video from Dailymotion, which Crozier says is the second largest online video service worldwide after Google’s YouTube and serves more than 150m unique visitors a month. Orange holds 49% of Dailymotion. Other content will include music and sports information as well as information for South African and international travellers.

These services will build the Orange brand ahead of the launch of a South African MVNO, Crozier says.

However, he says it’s unclear when Orange will launch as an MVNO — piggybacking off the network of either Cell C, Vodacom, MTN or 8ta — but says the company is in the country with a “long-term strategy” and understands the complexities of relationships between network operators and MVNOs. “Orange hosts MVNOs, so we know how to do it.”

Before it launches anything, though, Crozier says Orange wants to build its brand and understand the South African market. “We need to understand what consumers need and what they expect from us. We don’t want to disappoint them.”

In addition, new regulations are needed to ensure there are no “technical difficulties” in launching an MVNO in South Africa. He says Orange has no interest in simply being a brand licensee and wants to “own a part of the network” in order to offer a “full MVNO”.

“We want to create real new services for customers,” he says. “This is the reason we want regulations that will allow us to do that. We should be able to offer what we want, to improve or create new experiences for end customers.”

Crozier says, too, that Orange is not averse to acquiring a local network operator if the opportunity presents itself. “We have tried that several times in South Africa already.”  — (c) 2013 NewsCentral Media

• See also: Orange denies eXpansys closure link