French telco giant Orange may enter South African market

According to Reuters, the French telecommunications giant Orange, wants to enter large, lucrative markets in Africa. The main options they are considering are Nigeria and South Africa. They already have a presence in Africa, but mostly in smaller francophone markets.

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The CEO of Orange, Stephane Richard, was quoted in a French newspaper saying “it could make sense to be in economies such as Nigeria and South Africa. If one considers there are things to do, the time frame I am considering is rather a few months than a few years.”

There were also murmurings that the company could be interested in buying the MTN Group, as they have a strong foothold in the African market. Allegations of paying terrorist groups over the last six months may have curtailed those ideas.

We have seen Orange in small doses in South Africa in the past. They launched an e-commerce site in the country back in 2013 and tried to sell cheaper, less well-known brands. They also launched a Wi-Fi business delivering access to various communities and also provided business services with its Orange Business Services division. This is the first time we’ve heard that they want to enter the country as a fully-fledged telecommunications operator.

In total, Orange has operations in 18 markets in the Middle East and Africa, which they bundled together in a single subsidiary business to the French parent company. They want to spin off this business in order to offer in initial public offering for this business – they chose BNP Paribas and Morgan Stanley to play advisory role in this process.

Smaller telecommunication companies have found it very difficult to compete with Vodacom and MTN over the decades. There have been many attempts, but few have succeeded. With the funding of the massive Orange behind a possible business in South Africa, though, they could offer some real competition in the market.