Ovum cautious on Orange emerging markets scheme
Ovum analysts say Orange must find an economical way to construct networks in emerging markets if it is to hit its goal of doubling revenues from such regions by 2015.
Eden Zoller, principal analyst at the research firm, applauded Orange’s plan to share networks to keep a lid on rollout costs in emerging territories – revealed by Marc Rennard, Orange’s executive vice president for Africa, Middle East and Asia, during a roundtable discussion at the Mobile World Congress. However, Zoller notes the biggest challenge is in the pricing of non-SMS data services.
“Rennard did not have any easy answers, but said part of the answer lies in new business models for mobile broadband,” Zoller states, noting that consumers in emerging markets are typically “price sensitive,” and that Rennard “had reservations about how far mobile advertising can help.”
Zoller also reveals that Orange will abandon emerging markets if it cannot achieve a top-two position. While the timescale of that goal is uncertain, it seems fair to assume 2015 as a key marker, given that is the date originally set in Orange chief Stephane Richards’ Conquests 2015 business plan.
While network sharing is one option open to Orange, Rennard also revealed it will seek partnerships covering joint procurement of handsets as a means of capping operating costs.