Orange Reports 13.2 mil. Subscribers in Sub-Saharan Africa

Orange and its parent company, France Telecom, now have GSM subsidiaries in 16 African countries. Excluding Egypt and Réunion (which is counted as part of the French department outré mer, DOM), the operator reported a total of 13.172 million African subscribers as at 30 June 2008, equivalent to 3.926 million net new additions or a 42.5% growth over the 9.246 million the year previously (see sub-Saharan Africa: 21 February 2008: Orange/France Telecom Reach 22.3 mil. African GSM Subscribers)

Orange Mali had the highest number of net new additions in the last 12 months, 866,000 subscribers—or a growth rate of 57.7% over the previous year. This was followed by Madagascar with 775,000 net new additions (88.1%), Côte d'Ivoire with 733,000 (35%), and Senegal with 641,000 (26.6%). The three new operations launched during the year in Central Africa Republic, Guinea, and Guinea-Bissau accounted for 509,000 net new subscribers among them, of which Guinea reported 398,000.

Orange expanded into its sixteenth African market this week, through a partnership with the Ugandan operator HITS Telecom and a 53% stake in the new company created called Orange Uganda Ltd. In the last 18 months, Orange/France Telecom has therefore entered six new markets and continues to explore other opportunities.

• Guinea-Bissau: In January 2007, Sonatel—the fixed-line incumbent of Senegal, which is part of the France Telecom group—was awarded the third mobile licence in Guinea-Bissau (see Guinea-Bissau: 19 January 2007: Sonatel Wins Mobile Licence in Guinea-Bissau). By 31 December 2007, the operator had 36,000 subscribers.

• Guinea: Sonatel also acquired a mobile licence in Guinea during March 2007 and launched mobile services on 5 November under the "Orange" brand (see Guinea: 15 March 2007: Sonatel Acquires Spacetel's Mobile Licence in Guinea). By 31 December 2007, it reported 185,000 subscribers.

• Central African Republic: France Telecom acquired a mobile and internet licence in the Central African Republic in April 2007 and created a new Orange subsidiary to operate the service (see Central African Republic: 6 April 2007: France Telecom Acquires Mobile/Internet Licence). By 31 December 2007, the operator reported 34,000 subscribers.

• Niger: In November 2007, France Telecom won the tender for a "global fixed, mobile and internet" licence in Niger (see Niger: 23 November 2007: France Telecom Wins Fixed, Mobile and Internet Licence in Niger). "Niger offers good prospects for growth, with a growing population of around 13 million people and a mobile penetration rate of under 5%," said France Telecom in a company press release.

• Kenya: France Telecom won a 51% stake in fixed-line incumbent Telkom Kenya with a bid of US$390 million late in 2007 (see Kenya: 16 November 2007: France Telecom Consortium Wins 51% Stake in Telkom Kenya). Telkom Kenya was previously granted a mobile licence and in September 2008 Orange launched its GSM network, reached 30,000 subscribers in the first three weeks, and set a target of 1.5 million fixed and mobile subscribers within a year (see Kenya: 9 October 2008: Orange Reaches 30,000 Kenyan GSM Subscribers).

• Uganda: France Telecom announced on 19 October that it had entered into a partnership with HITS Telecom Uganda and will launch services under the Orange brand in the coming months (see Uganda: 20 October 2008: France Telecom Enters Uganda Market through Partnership with Hits Telecom). Under the transaction, a new company—called Orange Uganda Ltd—has been created in which France Telecom owns a 53% stake. The operator said in a company press release that the Uganda Communication Commission (UCC) has transferred HITS Telecom's licences to the new company.

Outlook and Implications

In terms of subscribers, Orange is the fifth-largest mobile operator in sub-Saharan Africa after MTN, Vodacom, Zain, and Globacom. The operator is experiencing rapid growth in the new markets it has entered with low penetration rates, which have good future growth prospects. In terms of its expansion plans, France Telecom's strategy is very simple on this point.

Explaining the rationale behind the acquisition of Telkom Kenya, the operator said in a company press release that "this transaction fits very strongly with France Telecom's strategy of targeted development in fast-growing markets….With France Telecom, Telkom Kenya will develop convergent telecommunication services, i.e. mobile, fixed and internet-based. As mobile penetration is currently lower than 30%, the Kenyan mobile market still offers a high growth potential."

The same points about low penetration and future growth prospects were also made with regard to the acquisitions in Niger and more recently Uganda, in almost identical words. "Niger offers good prospects for growth, with a growing population of around 13 million people and a mobile penetration rate of under 5%," said France Telecom in a company press release, and similarly "with a rapidly growing population of around 30 million people and a mobile penetration rate of less than 17% in March 2008, Uganda offers major prospects for growth."