France Telecom-Orange (FT) would consider launching an MVNO in South Africa if its new locally-based unit Orange Horizons proves successful as part of expansion plans in new markets.
The French incumbent launched Orange Horizons, which aims to seek out…
France Telecom-Orange (FT) would consider launching an MVNO in South Africa if its new locally-based unit Orange Horizons proves successful as part of expansion plans in new markets.
The French incumbent launched Orange Horizons, which aims to seek out new business opportunities in countries in which the group is not present as a mass-market telecoms operator, in mid-January.
The unit’s first two projects – an e-commerce website for telecoms-related products and a news portal – are based in South Africa and intended to strengthen the brand in the nation. If they are successful, FT has said it would look at setting up an MVNO there, although this may not happen within the next couple of years.
An FT spokesperson today noted that Orange Horizons is more likely to first launch MVNOs in countries nearer to those where it already has a presence, such as parts of West Africa.
FT is still striving to expand its presence in Africa and the Middle East, the spokesperson said, adding that this is expected to be driven mostly by organic growth and integrating companies in which the group already has a stake. However, he noted that there is scope for acquisitions.
Orange Horizon’s South African projects, the launches of which were timed to coincide with the Orange African Cup of Nations 2013, have prompted speculation among analysts and media that FT may look at acquiring operators in the nation. France Telecom-Orange has declined to comment on such speculation.
Pyramid Research analyst Jessica Gendall commented in a recent report that FT appears to be “testing the waters” in the highly-competitive South African mobile market “and perhaps getting a feel for the market before unleashing some bigger plans”.
Gendall noted that such plans would most likely consist of launching an MVNO in the country – in which MTN, Vodacom and Cell C are dominant players – or acquiring an existing operator.
TelecomFinance understands that the second option is far less likely to eventuate.
While Gendall noted that making an acquisition would be a riskier move as it would require greater investment, she said it would “fall within the operator’s core competencies”. She named potential targets as Cell C, Telkom’s mobile unit 8-ta and fixed-line operator Neotel.
“Each of these possible acquisitions would clearly require different levels of engagement and different strategies, with Cell C being closest to France Telecom’s core business and comfort zone,” she said.
Orange Horizons has also launched a branded e-commerce project in Italy.
Announcing Orange Horizon’s launch last month, FT said it plans to establish business ventures in several African and European countries in 2013 and will also look at opportunities in South America that “leverage existing content-related assets”.
