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France Telecom in Africa.
France Telecom targets rural Africa

Financial Times
November 9, 2010

France Telecom is aiming to become the “champion of rural Africa” with a range of low-cost products and services aimed at doubling its sales in the area by 2015.

The French operator is counting on rapid expansion in fast-growing African and Middle Eastern markets to offset a gradual decline in its traditional fixed-line business and lower profits from mobile operations in France.

“Orange wants to be the champion of rural Africa,” said Marc Rennard, executive director for the region.

The company has developed a range of services designed for rural, low-income users with limited access to electricity and banking systems, and wants to extend them across the continent. For example, its E-Recharge service allows pay-as-you-go mobile users to exchange credits by sending a text, which means they do not need to go to a shop. It accounts for 80 per cent of sales in Côte d’Ivoire. African users can also benefit from price discounts of up to 99 per cent off-peak. In Cameroon, 200,000 clients use the discount service.

In a continent still blighted by high rates of illiteracy, users can send 20-second voice recordings instead of texts for the same price. Orange is rolling out solar-powered base stations for mobile networks in areas without electricity and customers can also use the base stations to recharge their phones.

In Senegal, 14,000 villages have been equipped with solar-powered mobile units.

The French group is betting on a fast take-up of mobile internet and has invested in underwater cables to improve data connections between Africa and the rest of the world.

Stéphane Richard, chief executive, said this year that up to two-thirds of the additional revenues he is targeting from the Middle East and Africa by 2015 would come from acquisitions. In September, France Telecom bought a 40 per cent stake in Meditel, Morocco’s second largest operator, for €640m.

Finding other sizeable take-over opportunities at a good price is a challenge, especially after Bharti’s takeover of Zain’s African mobile assets.

“The principal focus is the development of our own networks where there is huge growth potential,” said Jean-Paul Cottet, marketing director.

France Telecom has 55m users and operations in 22 countries in Africa and the Middle East. It says a relatively high average gross domestic product growth, a young population and low mobile penetration make the region a safe bet for rapid organic growth.
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