Orange - Dragged Again Into A Mobile Price War

Orange (ORAN) is the largest telecommunications group in France, and one of the largest in the world, with more than 232 million customers (a year-on-year increase of 2.1% at the end of September 2013) located in roughly 32 countries. The group's 3rd quarter results were announced on October 23, 2013. These results were less bad than previous quarters, confirming the slow stabilization of the company.

On the Road to Recovery?

Orange gained 1.1 million customers during the 3rd quarter, its revenues dropped by "only" 4% year-on-year (compared to 4.3% during 2nd quarter), and the EBITDA margin remained a healthy 33.1% (only 1.1% below the margin of 3rd quarter 2012). Compared to the record 50.4% EBITDA margin reported by Verizon Wireless in April 2013, this might sound tame, but it compares favorably to the 30% reported at the end of September by giant Vodafone. Revenues of Orange increased in Spain, Africa and the Middle-East. The ARPU --- average revenues per user --- continued its drop, at -12% year-on-year in France, but this was in line with expectations. No surprise here. The group headcount was decreased by 2.8% over 9 months, which helped reduce costs. Additionally, Orange pursued its 4G deployment, with 40% of French population expected to be covered by 4G wireless service before the end of this year. In short, 3rd quarter results were far from stellar, but they confirmed the slow improvement started during the 2nd quarter. That positive trend, and the hope that Orange will benefit from an improvement in the European Union economy, conspired to raise the share price by 32% (at the close of December 18), from its trough of July 2013, as can be seen in the following chart 

source: www.seekingalpha.com

orange-dragged again into a mobile price war

Orange (ORAN) is the largest telecommunications group in France, and one of the largest in the world, with more than 232 million customers (a year-on-year increase of 2.1% at the end of September 2013) located in roughly 32 countries. The group's 3rd quarter results were announced on October 23, 2013. These results were less bad than previous quarters, confirming the slow stabilization of the company.

On the Road to Recovery?

Orange gained 1.1 million customers during the 3rd quarter, its revenues dropped by "only" 4% year-on-year (compared to 4.3% during 2nd quarter), and the EBITDA margin remained a healthy 33.1% (only 1.1% below the margin of 3rd quarter 2012). Compared to the record 50.4% EBITDA margin reported by Verizon Wireless in April 2013, this might sound tame, but it compares favorably to the 30% reported at the end of September by giant Vodafone. Revenues of Orange increased in Spain, Africa and the Middle-East. The ARPU --- average revenues per user --- continued its drop, at -12% year-on-year in France, but this was in line with expectations. No surprise here. The group headcount was decreased by 2.8% over 9 months, which helped reduce costs. Additionally, Orange pursued its 4G deployment, with 40% of French population expected to be covered by 4G wireless service before the end of this year. In short, 3rd quarter results were far from stellar, but they confirmed the slow improvement started during the 2nd quarter. That positive trend, and the hope that Orange will benefit from an improvement in the European Union economy, conspired to raise the share price by 32% (at the close of December 18), from its trough of July 2013, as can be seen in the following chart (from Google):

source:www.speekingalpha.com

India is vodafone's 2nd largest country in data traffic, 3G is 30% of data traffic

India is now Vodafone’s second largest business in terms of data traffic. This was disclosed by Vodafone Group CTO Steve Pusey during the company’s earnings conference call last week.

He added that India accounted for around 40 petabytes of the total 85 petabytes data traffic in the AMAP (Africa, Middle East and Asia Pacific Region) region in the first half year, doubling year on year (YoY).

Last week, the telco had reported a moderate increase in its data subscriptions, clocking 42.5 million data subscriptions of which 4.5 million were 3G subscriptions. The data revenues however had declined to £111 million for the quarter ended September 30, 2013, down from £123 million in the previous quarter.

Later in the call, Nick Read, Vodafone CEO (Africa, Middle East and Asia Pacific Region) said its 3G browsing revenues are up 190% for this quarter and the smartphone penetration of its customer base has increased by 40% since the start of FY14. 3G traffic now accounts for 30% of the total data traffic. ”We see a massive opportunity now in terms of ARPU uplift, and in terms of further growth coming from India for the operators that are willing to put significant investment in data networks, especially in the urban areas.”

- Vodafone plans to setup 27,000 3G sites and extend its outdoor 3G coverage to over 90% of urban areas in India. The company also plans to extend its 3G coverage to 200 new towns in the country. There are also plans to setup 14,000 2G sites and roll out 14,000 km of fibre across 40 Indian cities, which will be extended t0 100 cities later.

- Read noted the top three operators have started to increase their existing market share and currently account for 66% of the revenues for the quarter. “As the smaller players, the more vulnerable players, leave the circles, or the market completely, we are able to grab more of the minutes and more of the customers in a dual SIM environment”.

source: medianama.com

African launch for 'underwater' solar cell phone chargers

Electricity shortages in Africa have prompted US entrepreneurs to create a cheap solar powered cell phone and tablet charger that can power up devices while even being underwater.

Dubbed the ‘World Panel’ and developed by a US company of the same name, the solar charging device range is planned to be launched at the 2013 AfricaCom conference in Cape Town, South Africa being held November 12 to 14.

The company’s chief executive officer John Anderson says World Panel has specifically designed the solar products to target African feature phone, smartphone and tablet users with a plan to launch the chargers to market in early 2014.

Two portable solar chargers are expected to be unveiled at AfricaCom: the World Panel 500 and World Panel 1000. The WP-500 solar charger can charge up to six or more phones per day, while the WP-1000 has a capacity for 10 or more devices per day, says World Panel.

Using 'direct-from-the-sun' technology to charge a mobile device, a World Panel video illustrates how the device can draw more power than even a wall socket connected to the electricity grid. The video even shows how the World Panel charger, while underwater, can continue charging mobile devices.

The bid to launch the World Panel products in Africa comes at a time when the continent is becoming increasingly dependent on mobile phones, while also largely lacking access to sufficient electricity supplies required to charge these devices.

Africa is the second largest mobile phone market in the world with over 700 million network subscriptions, says the GSMA.

But according to the World Bank, only 24% of the population of sub-Saharan Africa has access to electricity while 25 countries on the continent are facing an electricity crisis, evidenced by chronic rolling blackouts.

As a result, small cellphone charging station businesses have sprung up across Africa that specialise in charging multiple devices.

Also, solar chargers for mobile devices are already sold in countries such as South Africa and Ghana, with prices ranging between R250 to thousands of rands.

But World Panel has told ITWeb Africa that its solar chargers are planned to be ‘affordable’ for Africans.

“Telecom providers will price our units in an attractive range for their subscribers since a charging solution will ultimately boost their average revenue per user (ARPU) if phone batteries are dead less frequently,” Cheryl Gordon, co-founder and marketing director at World Panel, told ITWeb Africa.

source: www.itwebafrica.com

investment opportunities in sub saharan African telecoms

 After a wave of regulatory penalties, including fines and a ban on promotions, Nigeria's mobile operators have announced plans to expand and upgrade their networks to cope with strong subscriptions growth and increasing data usage.

Business Monitor expects this trend to continue over the medium term as the market is forecast to add around 45mn new subscribers in the five years to 2017.

Meanwhile, consolidation and, subsequently, transition to LTE technology appears to be a growing trend among tier two telecoms service providers in Nigeria. Business Monitor sees this as a positive development as, through consolidation, tier-two operators are able to gain scale for bigger network deployments while the transition to LTE should enable them to compete better with 3G HSPA+ offerings from the GSM operators.

Kenya's mobile operators will prioritise high value services over aggressive network expansion into underserved areas to improve their profit margins. This view is supported by the first ever quarterly contraction in the country's mobile market during Q113 following the deactivation of unregistered lines, a development that underscores sluggish new subscriber acquisition.

Business Monitor expect Orange's tower deal with Eaton to open the market for tower sharing services, which should benefit from operators' need to improve cost efficiencies.

Intense competition in South Africa's mobile market due to increasing market saturation and cuts to the mobile termination rate (MTR) is taking its toll on mobile ARPUs, with available data showing a sharp decline in ARPUs in H113.

As there is no end in sight to the ongoing price competition in the basic voice segment, Business Monitor expect mobile network operators to increase their focus on non-voice services, including mobile data and corporate solutions, in order to sustain revenue growth.

The continued delay in the implementation of local loop unbundling (LLU) in the fixed-line sector poses a downside risk to investment and growth fixed voice and data services.

source: www.ciol.com

south Africans spend more on mobile

South Africans spend more on their mobile bill than the global average, new research from the GSMA shows.

According to the “Sub-Saharan Africa Mobile Economy 2013” report by the GSMA, South Africa’s Average revenue per subscriber (ARPU) is recorded at $25.4 (R264) – above the global average of $25 (R260) and a Sub-Saharan Africa average of $13.6 (R141).

It follows a study commissioned by Informa Telecoms & Media in July 2013, which found that smartphone users in South Africa spend on average US$31 (R321) per month on their mobile phone bills.

ARPU levels vary significantly across the SSA region – largely driven by differing GDP per capita and income levels – but remain in line with the developing market average, the GSMA said.

The only exception is South Africa which, of the larger markets, has ARPUs above the global average level – reflecting mainly high average income levels in the country.

source : businesstech.co

Algeria will have 3G service from dec 2013

This country report and accompanying data annex provide a comprehensive overview of Algeria's telecoms market, including KPIs and data on subscribers, penetration, revenue and ARPU. The Report analyses the strategies of major players in the country's fixed and mobile telecoms markets, and includes market share data and operators' infrastructure status. It also includes an analysis of the market outlook, focusing on the following trends and emerging opportunities.

- The launch of 3G in December 2013 will stimulate the mobile broadband market but threaten the fixed market.

- OTA continues to dominate the mobile market, despite operational difficulties.

- The Algerian government is determined to take a controlling stake in OTA.

Data coverage

This country report data annexes provide a range of key metrics for each country's telecoms market. Figures are supplied for each year since 2007. The data annex for Algeria was last updated on 26 September 2013.

source: 4-traders.com