Orange sees LTE as 'foundation of ICT' in Africa

Orange, which provided more updates on its LTE rollout plans for Africa this week, said LTE will be "the foundation of ICT in Africa, for individuals, business and institutional users" as fixed networks are at a very limited stage of development in the region.

In comments emailed to FierceWireless:Europe, Marc Rennard, SEVP for Africa and the Middle East at Orange, noted that broadband and very high-speed broadband are, and will continue to be, "mobile" in Africa.

However, as discussed in our latest special report on LTE in Africa, the France-based operator also highlighted the cost of devices and backhaul, as well as the difficulties of obtaining the right spectrum, as the key obstacles to LTE launches across the continent.

"The main challenge is to get hold of the necessary licence and spectrum--especially in 800 MHz band that is not usually available due to analogue TV or CDMA networks," said Rennard.

Other challenges outlined by Orange include: the very high cost of licence renewals for 2G, 3G and 4G services; the inability to deploy the company's own backhaul in some countries and obligations to go through national monopolies (e.g. in Egypt, Cameroon, Iraq); and that the fact that 4G smartphone mobile devices are not yet available at less than $100 (€93.50) (3G at $50), which it said reduces the market size to the premium segment only.

Rennard said there would be a large-scale provision of mobile 4G data services when the cost of devices comes down to below $50. Indeed, Orange is also playing its part in driving low-cost smartphone sales in the region. Earlier this month at the Mobile World Congress, the company launched Orange Klif, a new package comprising a Mozilla OS-based smartphone,voice, texts and data that is available for around $40.

As things stand, Orange has deployed commercial LTE networks in Mauritius and Botswana. As part of its new Essentials2020 five-year plan unveiled this week, the company intends to launch a further five LTE networks in Africa this year, and plans to launch 4G in the majority of its markets in Africa and the Middle East by 2018.

Yet as it rolls out 4G, Orange noted that there is still much work to be done in terms of expanding its 2G/3G services in rural areas where it can find substantial revenue growth.

"4G revenues…will take some time to develop especially with the purchasing power of the population able to buy 4G devices still relatively small and services such as VoLTE not yet ready for large-scale deployment," Rennard said, noting that the majority of Orange's revenue in the region still comes from voice services provided by 2G and 3G networks.

Looking ahead, Rennard said mobile internet usage penetration is currently around 25 per cent of the population in Africa and the Middle East and should rise to 45 per cent by 2020, thanks to mobile data networks such as 3G and 4G. "In particular, 4G will provide very high-[speed] broadband access in cities which otherwise would have required fibre optic to the home (FTTH), requiring very high investment. This is not the case as much in Europe," Rennard said.

Meanwhile Orange is in the process of placing all of its 20 units in MEA under one holding company, replacing the multiple holding companies that currently exist and thereby creating a simpler and clearer management structure. Rennard has previously said that the process should be completed by June this year, by which time the MEA unit will also publish its results as a separate region under the Orange Group.

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