Orange will create TowerCos in most European countries it is present in as part of its new strategic plan Engage 2025. The first projects will start in France and Spain next year.
Following on from Essentials2020, launched four years ago, the plan is based on four ambitions, namely reinventing Orange’s operator model; accelerating in growth areas; placing data and AI at the heart of its innovation model; and building the company of tomorrow, together. In financial terms, Orange’s objectives are:
Growth of EBITDAaL between 2% and 3% per year on average for the 2021-2023 period
Increasing organic cash flow for telecoms activities between 2020 and 2023 with a target of between €3.5 and 4 billion in 2023 (vs. over €2 billion in 2019)
A net debt/EBITDAaL ratio for telecoms activities of around 2x in the medium term.
Broadband TV News notes that key points include:
For fixed services, whether thanks to its own infrastructure or the use of third-party networks, Orange will be able to offer FTTH to more than 65 million households in Europe by 2023
In terms of content, Orange will enhance its OTT TV experience to respond to changing uses
In mobile, Orange will focus on 5G. After an initial commercial launch in Romania, 5G will begin to be rolled out in most of the European countries where the group operates in 2020
5G’s technical performance will allow the introduction of various different uses for B2C (immersive videos, cloud gaming) as well as for business customers
To derive higher value from its owned 40,000 towers of its mobile network in Europe, Orange will create TowerCos in most of its European countries. Orange will retain control of these entities in all the European countries where they are created. The first projects will start in 2020 in France and Spain.
Orange has the ambition to be the reference digital operator in Africa & the Middle East. To achieve this, the group will initially rely on the growth in mobile data driven by increased smartphone penetration and the deployment of 4G.
In financial services, Orange Bank, having attracted 500,000 customers in its two years of operation, will be launched in all European countries where the Group operates by 2025.
In order to secure its objectives, Orange will pursue operational efficiency programmes and aims to achieve, by 2023, net savings of €1 billion from within a defined perimeter of indirect costs from telecoms activities at the end of 2019 of €14 billion
Commenting on the plan, Stéphane Richard, chairman and CEO of Orange Group, said: “If I had to summarise Engage 2025, Orange’s new strategic plan, I would use two words: growth and sustainability.
“The first one is growth. We are going to grow our core business – connectivity – by adding to our competitive edge and by making the most of our network infrastructure. We are also going to foster growth beyond connectivity in Europe thanks to three elements which set us apart from our competitors, namely Africa & the Middle East, B2B IT services and financial services.
“To support this growth ambition, by 2025 Orange will have to reinvent itself and adapt to a constantly changing world. Artificial intelligence and data will be at the heart of this reinvention, both to improve customer experience and to make our networks smarter and the whole company more agile. Orange must also address the need for new skills while supporting all its employees.
“The second is sustainability. At Orange we are convinced that in the years ahead strong economic performance will not be possible without exemplary performance on social and environmental issues.
“The story of this new strategic plan is therefore a story of sustainable growth, enabled by the emergence of a reinvented Orange.
“Our financial objectives for 2023 reflect this, with increased EBITDAaL and organic cash flow from telecoms activities between 2020 and 2023.”