What’s up with… Orange, DigitalRoute, AtlasEdge

• Africa and Middle East region props up Orange Q1
• DigitalRoute acquired by B2B software investor
• Datacentre operator AtlasEdge sets up shop in Lisbon

In today’s industry news roundup: Africa and Middle East operations are to thank for Orange’s rise in revenues in the first quarter of 2024; user data management specialist DigitalRoute has a new owner; AtlasEdge is to add new sustainable datacentres in Portugal to its growing European portfolio; and more!

According to Orange CEO Christel Heydemann (pictured above) the group has had “a very good start to the year”, which was driven by “strong momentum” across its operations in Africa and the Middle East in the first quarter of 2024 and marked by the completion of its €18.6bn merger with MásMóvil in Spain. The telco group’s chief highlighted the importance of the Iberian deal for the company, which created the leading operator in Spain in terms of customer numbers and was “a major step forward” for the telco’s development in Europe. Another focal point in the quarterly results was the performance of Orange Middle East and Africa (MEA), which booked double-digit revenue growth for the fourth consecutive quarter, up 11.1% year on year to €1.85bn. This was driven by “a robust performance in voice and double-digit increases in its four growth engines”, which include mobile data (revenues up nearly 16%), fixed broadband (up 20.6%), mobile money (revenues up by 23.5%) and B2B (revenues climbing by more than 14%). In its domestic market of France, revenues saw a slight rise of 0.8% to €4.3bn, boosted by growth in retail services. However, the telco group did not perform as well in the rest of Europe (excluding Spain) where overall revenues declined by 2% to €1.7bn due to a reduction in low-margin activities, although this was partially offset by a continued growth in retail, excluding IT and integration services. A slight decrease was also reported by Orange’s enterprise arm, Orange Business, which booked a 0.3% decrease in revenues to €1.9bn. This was mainly due to a decline in revenues from legacy fixed voice services, although these were “almost offset” by accelerated growth in IT and integration services revenues, which were up 7.5% to €937m. “Orange Business continues to execute its transformation plan with several important milestones achieved this quarter, notably the implementation of the cost-reduction plan,” noted Heydemann. Overall, Orange’s group revenues were up 2.1% year on year to €9.9bn. The company’s earnings before interest, taxes, depreciation, amortisation and adjusted loss (EBITDAaL) increased by 2.3% to €2.4bn. Orange also “maintained its leadership position” in convergence, with a total of 9.1 million convergent customers (up 1.9% in the first quarter). It had 242.6 million mobile service connections globally (up 7%), while fixed services had 39.2 million connections worldwide, of which 13.3 million were “very high-speed broadband [connections]”. And while the CEO seemed happy with the start of the year, investors did not agree, as Orange’s share price dipped by almost 4% to €10.60 on the Paris stock exchange, giving the operator a market valuation of €28.2bn. 

User data management specialist DigitalRoute is to be acquired by business-to-business software investor GRO from Swedish private equity firm Neqst for an undisclosed sum. According to GRO, it is adding the Stockholm-based vendor to its portfolio of business software companies to “accelerate the growth and innovation of DigitalRoute, as the company leverages its expertise and technology to help enterprises adopt and optimise subscription and usage-based business models across industries.” DigitalRoute’s platform helps companies to “collect, process, and monetise usage data from any source, in any format, and at any scale” and make that data useful for business functions, such as billing mediation, revenue assurance, usage-based charging and analytics. The vendor has more than 300 customers from multiple industry verticals, including telecom, IT, media and entertainment, financial services and more: US 5G newcomer Dish Network and India’s Reliance Jio are among its customers in the telecom sector. Commenting on the acquisition in a LinkedIn post, DigitalRoute CTO Demed L’Her noted: “Going through the due diligence process made me realise how much we have transformed our company over the past few years: We’ve pivoted from a telecom specialist to powering enterprises across verticals, shifted from on-premises to SaaS [software-as-a-service], and evolved from selling a single product to a portfolio of solutions. The technology changes have been massive too: Our DevOps stack is unrecognisable from four years ago. We used to push changes every three weeks; we now push features three times a day. We no longer just process data at scale: We also derive intelligence from it, with AI and machine learning.”

AtlasEdge, the European datacentre operator formed as a joint venture by Liberty Global and DigitalBridge in 2021, has pitched its flag in Portugal for the first time with the acquisition of two sites in the Lisbon metropolitan area and has pledged to invest more than €500m in the country in the “coming years”. The sites are in Carnaxide, just west of the city centre, and not far from Carcavelos (located at the mouth of the river Tagus) where multiple subsea cables land. The new datacentres to be constructed on the sites are due to come online in the next three years and will be built according to the company’s AgileEdge approach to building and running efficient and sustainable facilities. “Once fully operational, both sites will run on renewable power and will be able to recover and reuse 100% of waste heat,” as well as having zero water wastage, according to the company. “Our entry into the Portuguese market provides us with a key foothold in one of Europe’s emerging tech hubs and a market where demand for capacity is rapidly outstripping supply,” noted AtlasEdge CEO Giuliano Di Vitantonio. “Strategic investments like this are only made possible by leveraging our combined expertise and valued customer relationships, and that is precisely what we have done since we launched AtlasEdge. The progress we have made to date has been remarkable, and our push into the Lisbon market represents a continuation of our bold and agile approach,” he added. AtlasEdge’s European footprint now spans 20 metropolitan areas – including Amsterdam, Barcelona, Berlin, Brussels, Copenhagen, Dusseldorf, Hamburg, London, Leeds, Leverkusen, Madrid, Manchester, Milan, Paris, Stuttgart, Vienna and Zurich – across 13 countries. Read more.

Canadian telco Rogers Communications is reaping the benefits of its merger with Shaw Communications, having achieved “industry-leading growth” in the first three months of the year. The operator, which last year combined its operations with its domestic rival, reported a 28% year-on-year increase in total revenues to 4.9bn Canadian dollars (CAN) (US$3.58bn) in the period. The merger has helped Rogers see a 94% increase in cable service revenue, as well as a 9% rise in wireless service revenue due to “the cumulative impact of growth in our mobile phone subscriber base and revenue from Shaw Mobile subscribers”. The company’s adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) climbed 34% to CAN $2.2bn (US$1.6bn). “We continued to deliver industry-leading growth in the first quarter, our ninth straight quarter of growth and momentum,” noted Tony Staffieri, president and CEO of Rogers. Read more.

TikTok’s owner, Chinese digital giant ByteDance Technologies, is facing a tricky couple of years after the US Senate voted to pass a bill that will either force a sale or result in a ban of the short-form video app. If US President Joe Biden signs the bill and it is made law, which he has previously said he would do due to national security concerns, ByteDance will have a year to sell up or face being ousted from US app stores. This would be a hammer blow to the business: TikTok is currently used by 170 million Americans, accounting for about 17% of its total global user base (the app is not available in China and has already been banned in India), so a ban would be very unpopular with younger demographics in the US and is unlikely to be well received by ByteDance’s multiple major US investors. ByteDance has always said it would fight any such legal move by the US government, so what’s the likely outcome? According to experienced tech sector analyst Richard Windsor, the future’s not bright for ByteDance – he believes the Chinese government will block any move to sell TikTok, especially to a US company, and that ByteDance’s legal appeals will fail. You can read his analysis of the situation in his latest Radio Free Mobile blog. To add to ByteDance’s problems, TikTok is also currently in the European Commission’s firing line, as the BBC reported this week. 

No matter how many people don’t want to use the term 6G, it’s going to be a permanent fixture in the telecom industry and be used endlessly by marketing teams eager to be first to market with something (anything!). And now we even have an official 6G logo, courtesy of standards group 3GPP – you can check it out here. 

- The staff, TelecomTV