Orange takes a tentative step into South Africa, hints at MVNO

Orange could follow the unveiling of a content portal and a retail site in South Africa with the launch of a fully-fledged mobile virtual network operator (MVNO) within the next few years.
Written by Lance Harris, Contributor

After several attempts to break into South Africa's telecoms market through partnerships, Orange has moved into the country's retail telecoms market through its new Orange Horizons subsidiary.

The mobile operator has launched two websites in South Africa under the Orange Horizons banner: a retail website that will sell telecoms devices and accessories, and a news portal that will provide content tailored for a South African audience.

Orange's new South Africa store. (Credit: Orange)

This marks Orange's first foray into the South African retail telecoms market, although the operator already has a presence in the country through its enterprise unit, Orange Business Services. Orange's goal is to build brand awareness in South Africa ahead of the possible launch of an MVNO. The company is also pitching for an MVNO licence in Togo.

These initiatives form part of Orange's plan to reach 300 million customers worldwide and 7 billion euros in revenues in emerging markets by 2015, with a particular focus on the African and the Middle Eastern region. Orange is active in around 20 countries in the region, mostly in North and French-speaking Africa.

Orange Horizons MD Sébastien Crozier said that Orange has tried to enter the South African market through partnerships and acquisitions a number of times over the past few years. It has now decided to enter the country through Orange Horizons to build a better understanding of the market.

Though Orange is targeting a number of other countries with Orange Horizons--Italy is next to be launched--Orange decided to start in South Africa because it is a "very interesting market," and because the hosting of the Orange-sponsored Africa Cup of Nations in South Africa offered a high-profile launch platform, said Crozier.

Orange is counting on its global buying power to offer handsets, accessories, and electronic equipment to South African consumers at a lower cost than local competitors, and to source products that are not readily available in the country.

The online presence may in time be extended to physical stores that will also provide assistance to Orange customers visiting from abroad. Through its retail presence, Orange may provide multi-country travel products-- data offers using Wi-Fi or VoIP--aimed in particular at professionals or tourists coming from countries in which Orange is already present.

Orange's hesitancy in launching a full-fledged MVNO in South Africa is understandable. After launching a MVNO with great fanfare in 2006, Virgin Mobile has struggled to gain traction in the country. With four operators and mobile penetration in excess of 100 percent, the mature and competitive South African mobile market is a challenging one for new entrants.

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