Six months after announcing its plans to entrench itself in SA's consumer market, French telecommunications company Orange has taken its first decisive step - partnering with one of the largest local independent cellular solution providers, Nashua Mobile.
The partnership will expand the multinational's consumer activity in SA via the opening of physical retail outlets across the country.
Orange describes the move as "the next logical step", following the launch of an e-commerce store and an online portal designed specifically for the local market with the launch of Orange Horizons in mid-January.
S'ebastien Crozier, MD of Orange Horizons, revealed the move at a media briefing this morning, saying SA is the first market where a partnership of this kind will be implemented. "Orange Horizons targeted SA as a key entry market in the African space and today's announcement is an important step forward in our overall development strategy."
Initially, says Crozier, Nashua Mobile stores in Sandton (Johannesburg), Brooklyn (Pretoria) and Canal Walk (Cape Town) will incorporate Orange products and an in-store Orange-brand presence. All Orange products offered at the brick-and-mortar stores will also be available online.
Tim Walter, Nashua Mobile executive for strategy and transformation, says these three areas were chosen specifically due to them being tourism hubs. Telecommunications, he notes, is one of the biggest costs when travelling abroad.
The stores will offer Orange SIM cards from within Orange's international network, starting with France and Botswana. Crozier says the products are aimed at professionals or tourists travelling from SA to countries in which Orange is already present. Other countries will be added at a later stage. Crozier says the locally available SIMs will assist travellers in organising their communications needs ahead of their journeys.
Nashua Mobile has over 150 retail outlets across SA and CEO Mark Taylor says the stores will increasingly "roll out the Orange brand" over time.
The stores will feature "Orange corners" that will also offer services to international Orange customers coming to SA - again limited to those from France and Botswana.
Orange products
Preliminary Orange France products for South Africans will include a "Mobicarte Holiday" package - a prepaid SIM that will function on the operator's French network.
Orange says the offer, which has a validity of 14 days after activation, includes two hours of voice calls, 300 SMSes to any destination in the world and 500MB of data. "[In addition] customers will have unlimited access to the 30 000 WiFi hotspots in France."
Customers will also be able to purchase TopUp vouchers while in France.
Another of Orange's first products to hit the local market is what the operator calls "le domino" - a mobile hotspot that allows up to five devices to be connected at a time.
Botswana, says Crozier, is another important "Orange country" that the company will grow its presence in, in order to gauge customer demand for and reception of Orange's services in Nashua Mobile stores, so as to determine how to proceed in the local market.
Nashua Mobile Orange corners will also offer services to Orange customers travelling from Botswana to SA, and vice versa.
Crozier says France and Botswana are two of the most important Orange countries in terms of business interaction and travelling. As an example, 700 000 South Africans travel to Botswana per year and SA gets about 600 000 visitors from Botswana annually.
France, he says, is one of the most popular international destinations for South Africans.
There is no definite timeline for the introduction of similar products in other Orange countries but he says it will be soon. He is back in SA next month to coordinate new products and countries.
Right timing
While Orange has had a presence in SA's business sector via its business arm, Orange Business Services, since 2009, the company has been looking at expanding its reach in the local consumer market since then.
Orange's objectives also include the possibility of partnering with one of SA's networks and the launch of what would be SA's second mobile virtual network operator (MVNO), after Virgin Mobile SA.
With Orange already a known mobile operator in 33 countries, Crozier says SA - being a highly-penetrated mobile market - makes sense.
In January, he said Orange would take its local operations "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."
Crozier notes that data is key to doing business as a mobile operator in SA. "Voice is now mature and data is the new target for operators."
Orange will need to engage with the Independent Communications Authority of SA, as well as established networks, ahead of realising any conclusive plans in the MVNO space and Crozier says he is aware the process is not a quick one.
Ovum senior analyst Richard Hurst previously said, considering how the local telecoms landscape is on the consumer end - and the high saturation SA is seeing - Orange's entry into the market could "add fuel to the fire" in terms of the ongoing mobile price war. .
Arthur Goldstuck, MD of World Wide Worx, says Orange clearly sees SA as a highly-attractive telecoms market, and has quietly been building up its presence in this country.
"It was only a matter of time before they made a significant announcement. However, without obtaining a licence for providing cellular services, they can only enter that market in partnership with local players. One way or another, they end up being a reseller, and competing in the environment of MVNOs and service providers - ie, piggybacking on existing networks - rather than head-on with network operators."
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