France’s Orange Group, one of the largest telecom companies in Africa, has reportedly set its sights on a possible expansion into Africa’s most populous country, Nigeria.
This is according to a statement issued by the Nigerian Communications Commission (NCC), where it is detailed that Orange sent a six-person team from its Middle East and Africa division led by non-executive Victoria Adefala to scout the Nigerian market for expansion opportunities.
NCC CEO Umar Danbatta
Orange would be entering a highly competitive telecom market in Nigeria, with four other operators already vying for power, with MTN Nigeria holding the largest market share, followed by Globacom, Airtel, and finally 9Mobile.
“We are here to ensure steady investment for the long term. We also want to support the vision of the [NCC] in driving broadband penetration for a robust digital economy and leverage on local content development initiatives,” said Adefala in the statement, seen by Developing Telecoms.
Orange is Africa’s second-largest telecom company behind MTN Group in terms of revenues and sheer user base size. The company has over 140-million connections across the 17 African markets it is present, as well as a single Middle East presence in Jordan.
Nigeria is conspicuously missing from its portfolio of countries. Adefala highlighted that Orange considers the country a “missing piece”, noting its potential.
“The large market potentials buoyed by the huge population, impressive Gross Domestic Product (GDP) figure, proximity to our operations in the neighbouring African countries, as well as the appreciable friendly operating environment are great motivators for our expansion plan into the Nigerian telecom market,” she noted.
NCC CEO Umar Danbatta reportedly assured Orange’s scout team that the company had the “full support” of the Federal Government to enter the market. This support would be “showcased” in several government initiatives, Danbatta said.
Orange told Developing Telecoms that, while no specific project is on the table just yet, the telecom group would continue to study any opportunity that could create value for the Group and for the Nigerian market.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
Competition is getting hotter for fintech startups across West Africa as Orange, a major player in telecommunications in Africa and the Middle East, and NSIA, leader in bancassurance, have announced the launch of Orange Bank Africa’s commercial activities across West Africa, with the pilot project starting in Abidjan, Côte d’Ivoire. Orange Bank Africa, headed by Jean-Louis Menann-Kouamé, aims to offer customers a simple credit and savings offer that is accessible at any time from their mobile.
Stéphane Richard, Chairman and CEO of Orange
“New technologies are needed to strengthen financial inclusion and support economic development, as mobile money has proven in recent years. Banking activity is new for Orange in Africa. It is fully consistent with our strategy as a multi-service operator and our desire to drive the continent’s digital transformation. Thanks to our association with NSIA, another African market leader, we facilitate access to banking services to as many people as possible, through simple and essential services, for the benefit of all our customers,” Stéphane Richard, Chairman and CEO of Orange said.
Here Is What You Need To Know
The latest move by Orange in mobile financial services in Africa aims to offer solutions accessible to as many people as possible regardless of their income level or where they live. Thus, the objective of Orange Bank Africa is to become the benchmark player in financial inclusion in West Africa.
Orange Bank Africa hopes to meet the needs of a large part of the population, often excluded from the traditional banking world, by allowing them to borrow or save small amounts essential for their daily lives.
As soon as it is launched, Orange Bank Africa will offer, through the Orange Money channel, a savings and micro-credit offer allowing customers to borrow from 5,000 FCFA ($8.7) instantly from your mobile.
Orange Bank Africa aims to expand into Senegal, Mali and Burkina Faso. At the heart of financial transactions for several years, Orange Money and digital services have seen their importance reinforced and their adoption accelerated in times of health crisis.
“I am very happy that the partnership concluded between Orange and NSIA has given birth to Orange Bank Africa. For 25 years, the NSIA Group has been developing banking and insurance solutions adapted to the needs of African populations with the aim of making them accessible to as many people as possible. We know that banking digitization is a sine qua non for the financial inclusion of our populations. We are therefore proud to have been able to combine our expertise and human capital with those of Orange for the creation of the 100% digital bank Orange Bank Africa,” Jean Kacou Diagou, President of the NSIA group said.
France Telecom-Orange: A French giant’s Pan African footprint. Source:Orange.com
Orange is one of the main telecommunications operators in the world, with a turnover of 42 billion euros in 2019 and 145,000 employees as of March 31, 2020, including 85,000 in France. The Group served 253 million customers as of March 31, 2020, including 208 million mobile customers, 21 million fixed broadband customers. The Group is present in 26 countries. Orange is also one of the world leaders in telecommunications services to multinational companies under the Orange Business Services brand. In December 2019, the Group presented its new strategic plan “Engage 2025” which, guided by social and environmental exemplarity, aims to reinvent its profession of operator. While accelerating in areas and areas with growth potential and by placing data and AI at the heart of its innovation model, the Group intends to be an attractive and responsible employer, adapted to emerging businesses.Orange is listed on Euronext Paris (symbol ORA) and on the New York Stock Exchange (symbol ORAN). For more information (on the web and on your mobile): www.orange.com,www.orange-business.com or to follow us on Twitter: @ presseorange.Orange and any other Orange product or service mentioned in this press release are trademarks owned by Orange or Orange Brand Services Limited.
About NSIA
The NSIA Group is a financial services group that integrates banking and insurance products and services. The NSIA Group is made up of 3 banks, 3 bank branches, 21 insurance companies, 1 management and inter-mediation company (SGI), 1 UCITS management company, 1 real estate company, 1 reinsurance brokerage company, and 1 Foundation. It has nearly 3,000 employees.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions. He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance. He is also an award-winning writer.
One would have thought that two of Africa’s biggest telecoms markets, Nigeria and South Africa had reached saturation levels, with no room for new whosesale investors peeping in. But that may not be the case after all, as French telecoms giant Orange still believes that there are still portions of the big pies that can be shared profitably with existing competitors. This sums up the decision by the company with a huge presence across francophone African countries to venture into the two big markets according to a statement credited to its CEO, Stephane Richard, who said the company would make its move into Nigeria and South Africa in coming months.
Chief Executive Officer, Stephane Richard
Speaking on the plan, Mr. Richard said that “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’m considering is rather a few months than a few years,” he said. Earlier in the year, Orange opened a regional headquarters for Africa and Middle East in Casablanca Morocco, signaling its interest to increase its presence in the region, particularly Africa. The telco has seen growth in its operation in the Middle East and it’s working to do the same in Africa, targeting the largest economies in the continent.
Orange has operations in 18 countries in the Middle East and Africa that have proved to be the fastest growing market in its grip. Revenues in the region have a record of 6.2% in the first quarter of 2020. Orange has recorded an average annual growth of 6% in the Middle East and Africa (MEA) region since 2015. For these reasons, the telco decided to give the region more autonomy to foster the growth.
Orange has continued to deploy the 4G technology in the MEA, reaching 26.5 million customers, 50.6% more than a year ago. However, its interest in South Africa and Nigeria poses concern on whether it could usurp the reign of existing telcos in the countries. MTN leads with the highest subscribers’ base in Nigeria and South Africa, while the others have over time amassed enormous numbers of subscribers. The number of GSM subscribers in Nigeria as of March 2020 stood at 188,989,051, according to data published by the Nigeria Communication Commission. Given a population of 203 million, Orange will find it difficult to disrupt the status quo as most Nigerians are already attached to existing telecom companies.
But Orange knows this, and has come with a plan. At the inauguration of the headquarters in Casablanca, Richard said the potential the telecom operator sees in the African telecom industry goes beyond voice calls and internet data. He said that mobile money is an example of digital transformation that needs to be developed in the African continent. “Orange is one of the rare international groups to have made the strategic choice, 20 years ago, to seek to develop in Africa and the Middle East. We have also always been convinced of the immense potential of this continent. In many ways, it can be seen as a model for digital transformation; mobile money is a great example of this.
“One of the key success factors behind new services is to develop them in Africa so that they are adapted to specific local requirements and so meet the needs of our customers. That is why we decided to organize the management of our business in Africa and the Middle East from within the region directly from the African continent,” he said. Orange has been investing $1.1 billion in the MEA yearly as part of its Engage 2025 plan. The Engage 2025 plan involves a multi-services strategy aimed at diversifying their operation to represent 20% of the business at the end of 2025. The company hopes to derive $1 billion in revenue while it works to develop its energy and e-health services.
However, financial services have become paramount in its strategy to penetrate more African markets. The telco is planning to introduce Orange Credit in every country of the MEA region where it is operational, and it hopes to use its banking system to facilitate Orange Money payment services. While the telecom industry appears to be all taken in Nigeria, the fintech industry is still open and offers amazing opportunities to operators who wish to offer financial services. MTN Nigeria happens to be the only telco in the country that has pushed itself to the limelight with its MoMo financial services. Airtel, Glo and 9mobile are struggling to find their footing, which leaves the sector ripe and open for Orange.Moreover, the number of unbanked and financially underserved people in Nigeria and the rest of the continent is economically viable for companies that want to pitch their trade in the fintech industry.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
