The Colour of Innovation is Orange

How Orange is winning in West and Central Africa

Managing one's business dealings across a massive geographical area like Africa from a single, regional head office is no mean feat. It takes solid insight into each country's cultural nuances, a good understanding of how mature that country's market forces are and someone heavily focused on the legislative landscape. But, as different as some of the countries on the African continent are (think South Africa and Nigeria), certain constants exist. A case in point, says Claire Paponneau, Director of West and Central African Operations at Orange, is the booming demand for mobile communications and the strong appetite for data services, which make product development a far more predictable process for large, multinational operators. "That said," she continues, "each country has different economic and regulatory environments. "Our aim in all of the African markets we do business in is to get the coverage that is expected by the population and the government, while at the same time remaining profitable." It's a goal that sounds far easier to attain than what it is in reality. All about local relevance Orange's presence in Africa is not exactly something that's recent. And Paponneau says that her company hasn't seen Africa as a territory to conquer, like so many of its peers. "Orange has been active in a number of countries on the African continent since the eighties and nineties. And in every case, it's been a distinct opportunity that's lured us there as opposed to a need to conquer the continent," she explains. Paponneau says Orange's past policy preferred a 'greenfields' environment where it could shape and mould the goto- market strategy and infrastructure before taking any steps into the market. Today, however, some of Orange's most successful ventures have been into markets where they've taken over or merged with existing players. "There's also a misconception around Orange being more successful and comfortable with operations in Frenchspeaking countries, because of the company's clearly French roots," she adds. "The reality is that we have successful operations regardless of the language spoken within the markets we operate. This is because we go to great lengths to understand the market and are committed to the long-term." Strong evidence of this is provided by its investments in entities such as its Africa technology centre, which staffed by a research and product development team from the Ivory Coast and a manager from Senegal. "This centre has worked on and developed a multitude of services and solutions that have been successful on the African continent," Paponneau says. A great example of such a service is Facebook for mobile, which Orange developed and launched in multiple African countries six months ago. "In six short months, the service has already garnered one million customers and is continuing that growth. It's important for us that these services weren't exported from other parts of the world. "They were designed in Africa with local relevance in mind," she says. says that although Orange has a name that's synonymous with mobile telephony throughout the world, it has a convergence strategy at heart that sees it committed to driving new services on the voice and data fronts. Paponneau says Orange is driving voice, data and new services such as mobile banking for the African markets

The growth of broadband

Still speaking to the topic of local relevance, Paponneausays that although Orange has a name that's synonymous with mobile telephony throughout the world, it has a convergence strategy at heart that sees it committed to driving new services on the voice and data fronts. Paponneau says Orange is driving voice, data and new services such as mobile banking for the African markets it operates in. "We see broadband as a key lever for growth in the next years," she adds, "and that's the reason we launch a 3G network wherever possible." "And where we can't have a 3G service, for whatever reason, we do our best to roll out a WiMAX service to ensure that the high-value business segment is addressed with speedy, reliable communications infrastructure." Less visible but nonetheless critical, Paponneau believes, is Orange's involvement with the submarine cables providing backhaul to Africa; and the numerous terrestrial cable projects focused on assisting countries without direct access to the submarine cables to still be provided with cheap international capacity. "We feel it's key for us to assist in developing this connectivity – terrestrial or submarine – since broadband is a key driver and enabler for our customers," she says.

Competitive landscape

Despite its commitment to providing locally relevant services, driving broadband penetration and the fact that it's the top operator in a number of the countries it operates in (Senegal, Mali, Ivory Coast and Madagascar, to name a few), Paponneau says that Africa is a competitive region. "It's difficult to say which countries have the most competitive landscape, since there are some factors that make markets with two to three players competitive and other factors that make markets with upwards of five players difficult to operate in," she says. "If I had to choose, however, I'd say that markets saturated with upwards of five players aren't a good landscape for competition, since there's just insufficient room for all of the players to be profitable while at the same time developing a quality of service that's of a high standard. "The risk is always there that a price war will develop and as we've seen in markets such as Kenya, where a price war happens there are lower costs but also a lower quality of service." "In the beginning," she says, "there's benefit for the consumer and it might seem as if the price war is a good thing. All it does is drive down innovation, which is counter intuitive to what an operator should be doing in any market." On the topic of a 'price floor', which has been suggested for the Kenyan market, Paponneau says it's an interesting suggestion, but not one she feels is achievable. "The price should be linked to the cost and when costs reduce, reductions in price should follow," she says. "It's a good suggestion and we're ready to contribute, but it's something that needs to be carefully worked through. "We already have interconnect costs that have been decided and defined by a regulatory body. If the retail market is also decided upon by a regulator, we will find ourselves in a situation that's not very stable for very long," she says. Paponneau says it's sad when you're part of a market where you can't build value. "For me it's not about where competition exists, but rather where we're stronger for the existence of competition. "Those markets, in my opinion, are the ones where we're able to and encouraged to differentiate on services innovation – like bringing new devices to market before our peers, and launching innovative broadband offerings and services that enrich our customers' lives," she says.

The customer is king

An area that's considered innovative to some and just plain smart business practice to others is the act ofoutsourcing certain elements of the business to effect reductions in operating expenditure. For Orange, Paponneau says this takes on the form of infrastructure sharing, site sharing and outsourcing non-core activities, as this can reduce costs while leaving quality of service unaffected. "We won't do more than that, however," she says, "as we want to remain masters of the customer relationship and quality of service. "Instead we've embarked on a project to outsource internally, forming a single entity that is dedicated to developing and managing all of the value added services platforms across our African operations. "This gives us the dual benefits of being able to reduce the costs of developing and managing value added services platforms in-country, while still being able to provide a guaranteed quality of service and local relevance," she says.

Innovation the way forward

While Paponneau admits that it's difficult to talk about what Orange has in the pipeline when it comes to upcoming services and differentiation, she says it's clear that innovative services are the best way to add value to customers' lives. "We will continue looking at services that are heavily linked to content, such as the 'football fan club' we've launched in more than 10 countries to date." Paponneau says that the service provides users with access to a number of news articles related to African and European football (since a large number of professional African players play the majority of their football in Europe), information on upcoming games, as well as a chat feature for community members. So far, Paponneau says, the service has been very successful and it provides a good blueprint for other contentdriven services. "Orange feels that even though technical innovation is important, innovation that centres on services customers can derive real value from is just as important," she says. And as such, it won't be surprising to see the company centring on services that reside above cost-effective, solid data services – as opposed to focusing on the data services themselves, as so many other telcos do today.