Major African Mobile Markets: Future Growth Prospects 2006-2011  

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Back Key Company - France Telecom Company Overview Business Strategy Financial and Operational Performance Recent Developments Future Outlook Figure 1: Revenue of the 'Rest of the World' Segment (2002-2004) Figure 2: Mobile Subscribers (January 2003 - June 2005) Figure 3: Mobile Subscribers in Africa - by Geography (June 2005) Figure 4: France Telecom - Ownership Structure (November 2005) Table 1: France Telecom - Mobile Operations in Africa Company Overview France Telecom is a telecom services group providing consumer and business solutions in fixed-line, mobile and Internet services worldwide. The majority of the worldwide mobile operations of France Telecom are conducted under the Orange brand. Orange has a wide portfolio of interests across Europe, Africa, the Middle East and Latin America, and those African interests include branded operations in Botswana, Cameroon, Cote d'Ivoire and Madagascar, as well as equity interests in Egypt, Jordan, Lebanon, Mauritius, Equatorial Guinea, La Reunion, Senegal and indirectly in Mali. France Telecom had 72.54 million mobile subscribers across its worldwide operations at the end of June 2005. In Africa, the group had a total of approximately 9.39 million subscribers in 10 countries, namely Egypt, Ivory Coast, Senegal, Cameroon, Mali, Mauritius, Madagascar, La Reunion, Botswana and Republic of Guinea making it the fourth largest mobile network operator in the region. Table 1 provides a regional snapshot of France Telecom's mobile operations in Africa as on 30th June 2005. Table 1: France Telecom - Mobile Operations in Africa Source: Company Reports Business Strategy France Telecom aims to reorganise its worldwide telecom operations. It has adopted a restructuring programme for its business lines and much of its expansion strategy has been driven by this programme. The group plans to consolidate all its mobile operations under the Orange brand. Specifically, France Telecom highlights the following strategies: Focus on establishing itself as an integrated telecom service provider France Telecom has focussed on establishing itself as an integrated telecom service provider. With this objective, it has adopted a three-year restructuring programme - New Experience in Telecom services (NExT) in France and countries in Rest of the World (RoW) segment. As a part of this programme, it has restructured its business lines under three customer usage segments; residential services, personal communications services (mobile services) and business services. Moreover, it has integrated its mobile (Orange) and Internet (Wanadoo) business segments. Some of the strategic objectives of the group with respect to the NExT programme are: - Introduce new products and services with simplified solutions under the Orange banner - Re-brand the existing solutions - Look for investment opportunities in potentially good markets and expand their operations either by acquiring or entering into an alliance with the local operators - Divest cable network operations The group aims to consolidate all of its mobile operations under the Orange brand. The recent purchase of a stake in Auna, which controls the Spanish mobile operator Retrovision Movil, through Orange is a step forward in this regard. Focus on reducing expenditure and debts · France Telecom also aims to reduce its expenditure and level of corporate debt. For this, it has sold off its stakes in some of its mobile operations, such as selling Orange Denmark, MobilCom in Germany, BITCO in Thailand and BPL Mobile Communications Ltd. in India. Financial and Operational Performance Revenue The combined revenue of all operations of France Telecom worldwide was USD 64 billion for the financial year ending December 2004, an increase of 1.1 percent over the revenue reported in 2003. Orange, which constitutes the majority of the mobile operations of the group, reported revenue of USD 24.5 billion in 2004 as compared to USD 20.3 billion in 2003. The RoW segment of Orange, which comprises the majority of the African operations of Orange, reported revenue of USD 6.3 billion in 2004 as compared to USD 4.9 billion in 2003. The revenue from the company's operations in Ivory Coast, Cameroon, Madagascar, Dominican and Botswana increased by 57.9 percent and reached USD 793 million in 2004. The revenue in Egypt grew by 35.2 percent and had reached USD 534.9 million. Figure 1 shows the revenue of Orange from 2002 to 2004 for the RoW segment. Figure 1: Revenue of the 'Rest of the World' Segment (2002-2004) Source: Company Reports Capital Expenditure The CAPEX of Orange in the RoW segment was USD 969 million for the financial year 2004, an increase of 8.5 percent over the previous year. Operating KPIs The gross number of mobile subscribers of France Telecom worldwide was 68.02 million at the end of financial year 2004 (31 Dec 04). Out of this, the number of subscribers of the group in Africa was 7.73 million, an increase of 35.1 percent over the previous year. The total number of subscribers of France Telecom in Africa was approximately 9.39 million as on 30th June 2005. Figure 2 shows the total mobile subscribers of the group in Africa from 2003 to June-end 2005. Figure 3 depicts the break-up, by geography, of the total mobile subscribers in Africa, as on 30th June 2005. Figure 2: Mobile Subscribers (January 2003 - June 2005) Source: Company Reports Figure 3: Mobile Subscribers in Africa - by Geography (June 2005) Source: Company Reports The ARPU on a yearly basis for operations in Egypt decreased by 13.9 percent and was USD 208 at the end of 2004. (More granular details about ARPU and Churn rate in operations in Africa are not reported by the group) Ownership Structure Changes in French Law in 2003 decreased the stake of the French government in the group to 50 percent. Later, with the sale of 10.85 percent of France Telecom capital by the government in September 2004, the stake was further reduced to 42.25 percent. As of 7th November 2005, the French government dropped their stake further to 32.5 percent. Figure 4 shows the ownership structure of France Telecom as on 7th November 2005. Figure 4: France Telecom - Ownership Structure (November 2005) Source: Company Reports Top of page Recent Developments The following are some recent developments for France Telecom: Network, Service and Brand Expansion In August 2005, as a part of brand development, MobiNil, the group's mobile operator in Egypt, sponsored the largest travel fair in the region, during which it offered roaming services to all. Before that in March 2005, it had sponsored a campaign for breast cancer research and in January 2005, MobiNil became the first operator to introduce SMS solutions for people with hearing and speech disability, by introducing SMS ALO services. · CellPlus, the group's operating subsidiary in Mauritius, launched GPRS technology in December 2004. Since then, it has been offering various value-added solutions, such as SMS Web. Top of page Future Outlook France Telecom will likely continue expansion in the emerging markets of Africa, where the French language holds strong historic and cultural ties. The operator has also decided to bid for a 35 percent stake in Tunisie Télécom. The group is on a consolidation spree, trying to reunite its operations under one umbrella brand - Orange. As a result, it is possible that the group might consolidate its mobile operations in Egypt, Madagascar, Mauritius, Republic of Guinea and Senegal under the Orange brand. Top of page Copyright © 1998-2009 Africa & Middle East Telecom Week