Monday, May 27, 2019
Home Tech Orange continues to grow, driven by fiber

Orange continues to grow, driven by fiber

Orange's strategy in recent years is simple: invest heavily in fixed and mobile networks to differentiate. The idea is that consumers will choose quality, even if they pay a little more in an ultra-competitive market.

And this choice pays. For the third year in a row, Orange saw a 2018 increase in revenue, up 1.3% to € 41.3 billion, as well as adjusted EBITDA, up 2.6% to 13 billion euros.

Africa contributes heavily

In all the geographies where the group is present, Orange's revenues are progressing. The two most important countries for Orange, France (44% of revenues) and Spain (13% of revenues) posted growth of 0.9% and 2.3% respectively in 2018.

The Africa & Middle East region (13% of revenues) also performed well, driven by the rise in mobile data consumption and financial services on smartphones. Africa thus contributes nearly a third to the increase in the group's income.

The success of fiber

Orange's success is closely linked to its advance in fiber optics. By the end of 2018, the operator could offer very high-speed Internet connections to 32.5 million customers, including 13.8 million in Spain and 11.8 million in France. Customers who subscribe pay more and are more loyal – if only because the technical problems on the lines, which scare subscribers, are much lower than the historical copper network.

In France, the operator ended the year with 2.6 million fiber customers, far ahead of its competitors. More than one in two subscribers to fiber optics in France is an Orange customer. The advance is comfortable, and allows the group to be relatively spared by the war of promotions raging in telecom tricolor.

Of course, this strategy has a huge cost. Group investments (Capex) reached a record 7.4 billion euros this year. Half of them concern France, where fiber roll-out accelerates and doubles as an investment in 4G coverage as part of the New Deal government agreement signed a year ago to reduce mobile white areas. Stéphane Richard promised investors that the Capex would be slightly lower in 2019.

Sébastien Dumoulin

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