Europe, MENA and enterprise adds colour to modest Orange Q3

Orange has highlighted “solid” commercial performance in France, continued strong growth in Africa and the Middle East, and increased revenues from the Europe and enterprise segments as the key drivers of a steady if not spectacular third quarter.

In the third quarter of the year, which ended on 30 September 2019, Orange Group revenues totalled €10.58bn, inching up 0.8% year-on-year on a comparable basis. For the nine-month period, Orange’s revenues stood at €31.15bn, up 4% compared with Q3 2018.

The increase was attributed to the continuation of 7.6% growth in Africa and the Middle East, a 1.4% increase in Europe – supported by convergence – and an enterprise segment which produced a fourth consecutive quarter of growth, rising 1.8%.

These areas offset disappointments in France and Spain, where in the former there was a slight erosion of 0.4% and a more pronounced decline of 2.5% in the latter, due to a general market move towards the middle and low segments.

Group EBITDAaL rose 0.2% on a comparable basis over the quarter, and 0.6% over nine months to €3.62bn and €9.57bn respectively. The EBITDAaL margin on telecoms activities improved by 0.1 percentage points over the nine months.

The eCAPEX grew 4.0% on a comparable basis over the first nine months of the year, reflecting the acceleration in fiber-to-the-home deployment in France, which now has 14.6 million connectable lines: an increase of 34% year on year. In line with Orange’s objectives, eCapex for 2019 will be slightly lower compared with 2018, excluding the impact of the network sharing agreement in Spain.

In the third quarter, France posted 90,000 net mobile contract additions and 65,000 in fixed broadband. Convergence remains a strong route to customer acquisition: 83.5% of new convergent customers are either new fixed or new mobile customers.

The ongoing development of the telco’s fibre business was demonstrated by the 178,000 net additions, a record for a third quarter. Orange reached more than seven million fibre customers in Europe in the quarter: an increase of 25% compared with a year ago.

Commenting on the third quarter results, Stéphane Richard, chairman and CEO of Orange, claimed the results showed that the company had confirmed its growth momentum. “These results further attest to the relevance of our very high-speed broadband network strategy,” he said.

“In fixed, the strong commercial momentum achieved in fibre, supported by our investments, is clear. This can be seen in France in particular, where we achieved 178,000 net additions, a record figure for a third quarter. The launch of the Livebox 5 at the beginning of October should also maintain this momentum.”

Going forward, the company pointed to a number of areas of potential growth. It noted the 5G tests that it had carried out in Europe, which Richard said had given the firm confidence in plans for an imminent launch in Romania and other European countries throughout 2020.

The company also announced that its wholesale arm had signed a contract with Rakuten Mobile, Japan’s newest mobile network operator, providing a range of LTE roaming services to enable international connectivity for its mobile subscribers.