French mobile operator Orange has officially launched operations in SA and is set to increase its presence in the consumer market with the goal of introducing its own network.
While Orange has confirmed rumours that it intends creating what would be SA's second mobile virtual network operator (MVNO), this is not - as widely expected - a short-term ambition, but rather a process that will be dependent on the market, regulatory framework and a successful commercial partnership. According to Orange Horizons MD S'ebastien Crozier, this process could take up to two years.
Orange Horizons is the subsidiary set up by Orange to expand its reach beyond what it calls "Orange countries", with SA being the latest venture - a development coinciding with the Africa Cup of Nations (Afcon).
"Our launch in SA was actually not planned. While we were always looking to grow a consumer brand in SA, we weren't going to do so right now. Then, when the Afcon host country changed from Libya to SA (in September 2011), we started to strategise."
SA plans
"Orange is already a known mobile operator in 33 countries and it made sense that we look to SA, as it is such a big mobile market."
Crozier says Orange will now take its brand and operations in SA "step by step" until it has gauged consumer demand and has all in place to launch a full-on MVNO. "We are not interested in being a partial MVNO, or an operator by brand only. We want to be a competitor and be able to do more. We want to create a global system and be able to offer the same services as mobile operators."
He says data is key to doing business as a mobile operator in SA. "Voice is now mature and data is the new target for operators."
However, he says, Orange is "not in a hurry" and, considering a number of negotiations in the past have fallen through, the company will have to look to other sources for partnerships and agreements that will facilitate its market penetration.
Local listed IT services company Business Connexion (BCX) was one of the companies Orange - through its business arm Orange Business Services (OBS) - was rumoured to be in talks with. Crozier confirms there were talks, but says the company has "no intention" of buying BCX.
He says past attempts to partner with other local telecom giants - such as MTN and Telkom - did not succeed, and so Orange will - for now - focus on products and services. "We are now going the product route and have launched an online store that will stock and deliver high-end products that aren't readily available in SA, such as the Kindle Fire HD."
Coming soon
Crozier says the next step, to be taken within the next few weeks, is that of telecoms/travel services. "We want to offer products that will help people when they are travelling - such as roaming products and WiFi access."
One such offering, he says, is the product of a partnership with American Express, which will help cellphone users replace a lost SIM card abroad, within 24 hours.
"In 'Orange countries' where we are an operator, we see 1.2 million people coming in to SA each year. The opposite is true as well - there are many South Africans who choose Orange countries as a travel destination. We want to help people to have better and easier telecoms access when they are in a foreign country."
After that, says Crozier, Orange will look at opening physical stores.
Leveraging assets
Crozier cites OBS, centred in Sandton and employing some 80 South Africans - as the company's primary asset in SA - and a rock upon which Orange will build and leverage to grow the consumer brand. "If we need to improve our network we will leverage OBS."
Other "assets" the company has and is planning to use to garner consumers in SA, he says, is Dailymotion - a French video-sharing Web site. Owned by Orange, Dailymotion is the world's second-largest video-sharing Web site (after YouTube).
As of November, Dailymotion was the 31st most visited Web site in the world and, according to Crozier, sees 150 million unique visitors each month.
Keeping it local
Orange already has a presence in 18 African markets and Crozier says, while SA is a new and unknown territory for the telecoms giant, it plans to learn the market and grow the brand in the country by "keeping it local".
"We are not yet well known in SA and it is an opportunity for us to make SA Orange. It is a challenge, but we will, with humility, see how it goes. As we grow we will employ South Africans. We will build this into a South African brand, and keep it local. We are South African now - you can't do things the same way you do them abroad."
He says Orange is in SA for the long haul and, while the company is largely playing the market by ear, it has a definite business case and business plan. "We cannot talk financials now, ahead of our results in February, but we do have certain targets and numbers that we will need to reach."