Convergence strategy to drive more Euro M&A at Orange: Deputy CEO

• Orange wants more fixed line assets across Europe
• Needs broadband connectivity to shore up ‘convergence’ strategy, says Deputy CEO
• On lookout for further M&A opportunities – Belgium looks a likely hot-bed of action

LONDON – Orange in Europe strategy briefing – Having just closed the acquisition of a controlling stake in fixed line operator Telekom Romania Communications to shore up its ‘convergence’ efforts in that particular market, Orange is now seeking other fixed line assets to acquire in Europe that help fulfil its multi-service plans, noted the operator’s Deputy CEO Mari-Noëlle Jégo-Laveissière during a strategy briefing today. 

Jégo-Laveissière, who has responsibility for the operator’s European operations outside of France, had been stressing the importance of having fibre access network assets to be a convergent operator, one that has control of the fixed and wireless assets and is able to offer high-quality mobile and fixed broadband services and thus be able to offer additional services, such as streaming video, across those connections. Having customers subscribe to a bundle of services across all of its European territories is Orange’s key strategic focus, as it believes this will help it to attract and retain profitable customers, and in the markets where it can currently offer such bundles, “fibre is really making the difference,” noted Jégo-Laveissière, who added (on more than one occasion) that having fibre rather than copper fixed access connections will also help the operator meet its sustainability goals.

But there’s more work to be done to give Orange, which historically has been more of a mobile service provider in European markets outside of France, the fixed access assets it needs to fulfil this strategy. Jégo-Laveissière noted that one way to do this was to team up with investment partners, as Orange has done in Poland where it has formed a FibreCo joint venture with pension fund management giant APG, but added that “inorganic moves in fixed across Europe” would also be considered.

So where might this further M&A action take place? The most obvious key European market where Orange doesn’t currently own any extensive fixed broadband network assets is Belgium: Earlier this year is began some FTTH pilots in the capital Brussels, but has also been linked to the potential acquisition of Belgian cable operator Voo, though it has competition from national cable operator Telenet (part of Liberty Global) as well as a number of private equity firms, according to local media reports.  

Jégo-Laveissière declined to comment specifically on Belgium, noting only (with a smile) that “convergence is key to our strategy,” and that any fixed line M&A activity was likely to be in markets where Orange is already active (Belgium, Luxembourg, Moldova, Poland, Romania, Slovakia, Spain) but that if the right opportunity came up in a new market the company would consider such as opportunity. 

And don’t rule out Orange’s involvement in other M&A moves too. “There are too many operators in Europe, so there will be consolidation – the question is when,” stated Orange Spain CEO Jean-François Fallacher. 

- Ray Le Maistre, Editorial Director, TelecomTV