DIN-CUBE-RED-w2 Profiled in Dynamic Intelligence Network (DIN)

France Telecom May launch MVNOs in Italy & Africa

logo_20orange-FTNWSource Bloomberg

France Telecom SA (FTE), trying to reverse falling sales while avoiding boosting expenses or debt, plans to expand into new countries this year without major acquisitions or building costly networks.

In an unusual strategic move for a phone carrier, the former French monopoly is adding well-placed shops and online stores for its Orange wireless brand to add sales in new markets like Italy and South Africa while keeping a lid on costs, strategy chief Elie Girard said in an interview in Barcelona.

At home, France Telecom is coping with falling prices amid competition from discounters. Photographer: Balint Porneczi/Bloomberg
“There are many countries in which people know our Orange brand very well, but we’re not selling them anything,” Girard said. “We can get extra sales and, in some cases, test the field before we decide to go in for an acquisition or to deploy as a full-blown carrier.”

Years of declining sales, profit and share price combined with a debt pile topping 30 billion euros ($39 billion) are forcing France Telecom to look at new ways of finding growth. The company is targeting regions such as Africa as competition from smaller, cheaper rivals weighs on sales in its shrinking home economy.

France Telecom, which last year cut its dividend and said it will shy away from acquisitions to save cash, is part of the bidding process for TeliaSonera AB (TLSN)’s Yoigo in Spain, and is also studying Mauritanian carrier Mattel, Girard said. It is also scouting opportunities in Libya, through network-management contracts, as well as in Togo, Burkina Faso and Benin, he said.

Girard said Paris-based France Telecom has no plans involving Vivendi SA (VIV)’s Maroc Telecom SA (IAM), which the French conglomerate has been shopping around.

South Africa
France Telecom’s revamped expansion plans, dubbed “Orange Horizons,” started a month ago in South Africa, where it sponsored the Africa Cup of Nations soccer tournament.

In that market, the company sells phones and accessories online. Its local websites also promote services such as music and video streaming by French startups Deezer Inc. and Dailymotion SA, a YouTube rival partly owned by France Telecom.

Online sales have also started in Italy. In both cases, France Telecom works with a distributor to limit its investments, and collects a
“small margin,” Girard said.

“The strategy is compatible with our financial policy,” Girard said. “It allows us to keep our international development rolling, with softer models.”

‘Incomplete Vision’
At home, France Telecom is coping with falling prices amid competition from discounters. Its stock was the worst performer on France’s CAC 40 index last year and has lost 12 percent this year. It rose 1.4 percent to 7.36 euros at 1:10 p.m. in Paris.

The company reported a 79 percent drop in 2012 profit, hurt by impairment costs in Poland, Egypt and Romania, and said 2013 would be a tough year in its markets.

“We used to think of our company as having business in 35 countries, but that’s an incomplete vision,” Girard said. “We looked at travel and migratory routes. Our footprint is potentially much bigger.”

Starting news websites in Latin America or shops in airports in the United Arab Emirates or New York are all options as part of the “Horizons” plan, Girard said. The company could also rent network capacity from another carrier to start mobile services as a so-called virtual operator, he said.

The new strategy is also a way to get around tough regulation for foreign companies in some countries.

Closer to home, doing business in Algeria would make sense, Girard said. The company’s brand already has visibility in the market because
French television, and thus France Telecom’s advertisements, are popular.

“There are some countries we’ve been trying to get into for years through the classic routes,” Girard said. “We’ll try this approach too.”

source link via France Telecom Online Push Takes Orange to Italy, Africa

To contact the reporter on this story: Marie Mawad in Barcelona at mmawad1@bloomberg.net
To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

Image Credit(s): (c) All trademarks mentioned in this release are the property of their respective owners

Please take our Survey to help improve the site.5f7232aa8d37115b23583a025e20ef22
BROKEN Link, inaccurate Information, please contact us, and we will check it, and Fix It!
For those of you looking wanting to be included in our site; please use the following Contact Form. If you are an International Roaming MVNO Provider, and want to be included in our upcoming listings, and expose, then please complete the following form.

Copyright policy: All content on this site are the copyright of MVNO Dynamics, unless cited or stated. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of information on the Internet. So our reproduction policy is as follows: You may quote up to 400 words of any of our posts, and articles on the condition that you attribute the credit to MVNO Dynamics and either link to the original article or to www.mvnodynamics.com. All other use is prohibited. MVNO Dynamics will not be liable for any errors or omissions in this information. This site does not mean to harm, or encourage to harm any companies or person(s). Please Refer to our Legal Disclaimer for further information.