Orange advances quad-play strategy with acquisition of Moldova's Sun Communications

Orange announced it is set to acquire Moldova's Sun Communications, the major cable operator in the country. The acquisition will enable Orange to move further towards its goal of becoming a pan-European quad play operator, with mobile and fixed line voice services, broadband and pay TV.

However, the in-country deal between Orange Moldova and Sun Communications comes just weeks after Orange's European head said the European Commission has effectively put the stoppers on mergers in the region's telecom sector for at least two years, after competition commissioners blocked a planned merger of Three UK with O2 UK.

Gervais Pellissier, executive director in charge of Orange's European operations and also the company's deputy CEO, said in early June that the operator has ruled out any major in-country or cross border deals for the foreseeable future, the Financial Times reported recently. However, Pellissier noted that consolidation in European markets could be back on the table in the medium term, and that future deals could be bigger than recent attempts.

Orange Moldova has signed the agreement with Sun Communications, which remains subject to the approval of competition authorities, for 100 per cent of the company's share capital.

According to Moldova's telecom regulator, ANRCETI, Sun Communications is Moldova's top pay TV operator by customer base, with over 100,000 active customers, from a population of just over four million. It offers digital and cable TV service to customers in the cities of Chisinau, Balti and Cahul under the "SunTV" brand. Sun Communications also offers internet and voice over IP services to over 38,000 customers, with up to 300Mbps speeds.

Orange is one of many mobile operators to diversify into quad-play, which has been adopted with enthusiasm across Europe. France and Spain were among the earliest markets to offer multi-service plans but quad-play offers can now be found in Portugal, the Netherlands, Italy Germany, Greece and many more markets.

However, while the shift of large mobile operators such as Orange to move into quad-play has been rife over recent years, the popularity of quad-play services in Europe has been damaging for smaller pure-play mobile operators, according to Ovum.

Those pure-play mobile operators that remain tend to be among the smaller mobile companies in their respective countries, stated Ovum; for those pure-play providers, there are few options remaining as the market remains on a convergence trend. As Ovum has noted, the option to resell fixed services is one option, but building TV services for smaller operators is often beyond their financial means.

For more:
- see this Orange press release
- see this Financial Times report (subscription required)

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