Orange has entered into exclusive discussions with Ucom, an Armenian Internet service provider, on the sale of 100 per cent of its mobile subsidiary Orange Armenia.
The France-based operator said it had decided that its Armenian unit does not have the scale to carry out the required investments to enable it to offer converged fixed and mobile services to its customers. It noted that a sale to Ucom would help create "a strong Armenian player capable of offering its customers a broad range of fixed and mobile services."
As part of the Essentials2020 plan outlined earlier this year, Orange's strategy is to focus on markets where it is able to offer both fixed and market services, exiting those markets where it is not possible to do so. That strategy has also seen the company decide to sell EE--its UK joint venture with Deutsche Telekom--to BT, and to buy fixed provider Jazztel in Spain.
The Armenian business was established in 2009 after the Orange group acquired a mobile telecoms licence for the country. Orange had 630,000 customers in Armenia at the end of 2014 and employs 500 people.
Orange also said this week that it has entered into an exclusive agreement with Bharti Airtel to explore the possible acquisition by Orange of Airtel's mobile subsidiaries in Burkina Faso, Chad, Congo Brazzaville and Sierra Leone. This forms part of the company's ongoing strategy to expand its operations in the Middle East and Africa (MEA).
Indeed, earlier in July Orange CFO Ramon Fernandez said the company is targeting annual revenue growth of around 5 per cent in Africa and the Middle East by 2018 and was looking for further opportunities to expand in the region.
Orange has repeatedly emphasised that it sees Africa and the Middle East as key to its future growth, and recently outlined plans to expand further in North Africa. The company has around 100 million subscribers in the region, which accounts for around 10 per cent of group revenue.
Orange has already placed its 20 units in the MEA region under one holding company, replacing the multiple holding companies that previously existed and thereby creating a simpler and clearer management structure.
The discussions with Orange have also fuelled rumours that India-based Bharti Airtel is planning to exit Africa. However, the group has denied this is the case, telling Reuters that a sale of the units in Burkina Faso, Chad, Congo Brazzaville and Sierra Leone would enable it to "establish a sharper focus" on the remaining countries. Bharti, which first entered Africa in 2010 when it acquired Zain's mobile assets in 15 countries, is not yet profitable in Africa, Reuters noted.
- see this Orange release
- see this Reuters article
Orange aims for 5% annual revenue growth in Africa and the Middle East
Orange plans to end Israel licensing deal, expand in North Africa
Telecom Egypt's mobile strategy in doubt after leadership changes
Orange clears final regulatory hurdle to €3.4B Jazztel purchase
Orange makes 'decent' start to 2015, say analysts