Orange sees strong 4G growth in Africa

French operator Orange is making strides in its 4G rollout in Africa and the Middle East, with 4G customers growing 40% in the region over the past year.

This is according to the group's second-quarter trading update published on Thursday, which shows 4G deployments now reach 27.9 million customers in Africa and the Middle East.

Africa has traditionally been a strong growth driver for the French company, and the second quarter of 2020 saw the trend continue, although growth was slightly dampened by impacts from the COVID-19 pandemic.

Revenue for the Africa and Middle East region rose 1.3% year-on-year (YoY), to 1.4 billion euros (US$1.6 billion) for the quarter ended June 30, 2020. This was considerably lower than the 6.2% revenue growth seen in the region during the first quarter.

Quarterly revenues in France also rose 2.7% helping to offset a combined decline in other segments, including a drop in Spain (-6.8%), Europe (-3.6%) and the enterprise market(-3.3%).

Overall the Orange Group's second-quarter revenues declined 0.4%, negatively impacted by a decline in roaming and equipment sales directly linked to the health crisis.

Africa growth story
In Africa and in the Middle East, revenues grew 3.8% in the first half of 2020, to 2.8 billion euros (US$3.3 billion), and EBITDAaL rose by more than 7%.

"Despite the impact of the health crisis which caused shop closures, the resilience of retail services (+4.7%) fueled this momentum, due in particular to the growth drivers of mobile data, fixed broadband and Orange Money, whose growth has however slowed compared to the 1st quarter," the group said in a statement.

It added the revenue growth was driven by mobile data, by broadband and by Orange Money, "that will be further strengthened by last week's launch of Orange Bank Africa."

Last week, the telco announced it was launching the digital bank in West Africa, with the first rollout in Côte d'Ivoire, and plans to expand into Senegal, Mali and Burkina Faso over time.

The second quarter saw mobile-only revenues grow 3.9%, supported in particular by data revenue which grew 26.5%. Overall the Africa and Middle East region's mobile customer base remained stable with 123.5 million customers.

The group's mobile money platform, Orange Money, also saw customer growth of almost 19% YoY in the quarter, and now has 19.6 million active customers in Africa and the Middle East.

Orange Money revenues were up 12.5% in the second quarter, compared with a 22.3% rise in the first quarter, "adversely impacted by both the lockdown and free transactions recommended by the Central Bank of West African States in the context of the health crisis".

During the quarter, ten countries in the region grew, including five that posted double-digit revenue growth.

"Among the countries contributing most to total revenues in Africa and the Middle East, the Côte d'Ivoire cluster posted 7.3% year-on-year growth, thanks to the good performance from Burkina Faso and value offers in Côte d'Ivoire, and Egypt grew 3.3%," it said.

The group's fixed broadband business also recorded success in the region. The number of fixed broadband customers grew 31% YoY, reaching 1.4 million, and fixed broadband revenue was up 32.9% in the second quarter.

— Paula Gilbert, Editor, Connecting Africa