Orange, owned by France Telecom, has long had a footprint in the predominantly French-speaking areas of West Africa, but this year has seen the operator push into new African markets and seek to exploit its brand on the continent.
Orange entered Kenya - East Africa's largest economy - via its â‚¬301.67 million (US$390 million) acquisition of a 51% stake in Telkom Kenya in December 2007. The operator subsequently rebranded the company as Orange Kenya and launched operations last month.
Orange is targeting 1.5 million customers within a year and claims to be the first 'integrated' operator in the country by combining mobile, fixed line and Internet services. It has reportedly invested â‚¬85 million (US$110 million) in the subsidiary to date, with most of the going into the expansion of its GSM network.
Orange Kenya is using mobile market leader Safaricom's network to ensure a nationwide service while it builds its own infrastructure, but expects to cover the whole country within two years. It is the third mobile operator in Kenya (after Safaricom and Zain), while a fourth player - Econet Wireless Kenya, a specialist 3G operator - plans to launch in the country soon.
The launch of Orange Kenya was quickly followed by the announcement that Orange is to launch in neighbouring Uganda. France Telecom announced this week that it had struck a deal with local operator Hits Telecom to create a new company called Orange Uganda of which France Telecom will own 53%.
Financial details were not disclosed, though Orange said that Hits Telecom's nationwide telecoms licence will be transferred to the new company and Orange will also take over Hits Telecom's GSM network. Hits Telecom had 135,335 mobile connections in Uganda by end of second quarter of 2008, placing it a distant fifth behind MTN (2.8 million), Zain (1.8 million), Uganda Telecom (1.3 million) and Warid (250,000).
Orange also launched in Niger at the end of the second quarter and plans to cover 30 cities in the country by the end of the year. It claims it has already surpassed 100,000 connections. As in Kenya, Orange is offering mobile, fixed-line and Internet services.
The operator's aggressive expansion into new African markets reflects the continent's increasing importance to the group. Although Africa only accounts for a small portion of Orange's global connections, its African subsidiaries are already registering the strongest growth.
In the first half of 2008, Orange says its African mobile operations grew by 42.5% in terms of subscribers (compared to an average 28% increase in Orange's 'Rest of the World' division, which includes Africa) and 17% by revenue (compared to 8.3% for the division).
This focus on Africa mirrors similar moves by other large global players such as Vodafone, MTN and Zain, which have all ramped up their operations in the continent this year. Vodafone, for example, recently launched in Ghana - one of the few large markets in West Africa where Orange does not have a presence, while Zain has harmonised its brand across all its African markets as part of its One Network initiative.
Egypt's market-leader Mobinil - in which Orange is a joint shareholder with Orascom - is the operator's largest African market by connections, accounting for over half of its Africa total.
It is also one of its few African subsidiaries to have begun rolling out high speed networks; Mobinil commercially launched WCDMA on September 1 this year. The operator is expected to be rebranded as 'Orange Egypt' early next year as part of Orange's Plus loin ensemble (Together we can do more) branding campaign.
France Telecom's recent expansion in Africa is indicative of a wider 'land grab' in the continent, which has seen many of the world's largest mobile groups snap up local operators in order to expand their African footprints. The majority of the key African markets are now being contested between Orange, Vodafone, Zain and/or MTN, and all these groups have sought to harmonise their operations and brands on a pan-African basis.
Orange is arguably the most ambitious, investing heavily in building-out its new networks and focusing on fixed-line and Internet services as well as mobile. Competition is hotting up as the heavyweight players enter the game, but with mobile penetration rarely over 50%, most operators can look forward to strong connections growth for the foreseeable future.
Matt Ablott, analyst, Wireless Intelligence