Orange eyes more African 5G launches in 2024

Telecoms operator Orange plans to launch 5G services in most of its African operations by the end of 2024, with Senegal and Côte d'Ivoire next on its roadmap.

That's according to Jérôme Hénique, CEO of Orange Middle East and Africa, who spoke to Connecting Africa in an interview on the sidelines of MWC Kigali 2023 in Rwanda.

"In terms of commercial [5G] launches, we launched in Botswana in November 2022, we'll be launching very soon in the countries where we already acquired licenses and spectrum, which is the case in Senegal," he said.

Senegal's telecoms regulator granted a "provisional" 5G license to Sonatel (Orange Senegal) in July 2023.

"We are currently discussing with Côte d'Ivoire, and we hope that in Côte d'Ivoire we'll be able to reach an agreement with the government soon. Because the [Africa Cup of Nations] football will be in Côte d'Ivoire in February 2024 and will be a testbed for 5G, and we hope to be able to continue with commercial rollout after that," Hénique added.

Orange already has a number of 5G Labs in Africa, including one in Abidjan in Côte d'Ivoire. Hénique said the 5G Labs are a place to test 5G within the ecosystem and develop use cases for small, medium and large enterprises.

"In most of our countries, we consider that by the end of 2024, we should have either a full commercial 5G launch or a soft launch based on the temporary licenses that we will get from the governments," he said.

In the Middle East, Orange launched 5G in Jordan in July 2023.

Despite focusing on growing 5G in Africa, Orange is still investing heavily in 4G to grow coverage and deal with the skyrocketing level of 4G traffic on its networks.

"Every year, we see more than 40% 4G data traffic growth so we have to densify our networks to be able to cope with the increase in 4G traffic. Most of our investment still goes to 4G, but we have to make room for the 5G launches in the main cities in 2024," he explained.

Telcos target affordable smartphones

Improving the affordability of devices in Africa was a major discussion topic at MWC Kigali 2023 and how lower-cost smartphones could help minimize Africa's mobile Internet usage gap.

The usage gap refers to individuals not using mobile Internet despite living in an area covered by a mobile broadband network. The GSMA's 2023 Mobile Economy Sub-Saharan Africa Report showed that in Africa, 59% of the population fall into this category, including 42% of the adult population.

Hénique said the usage gap is a strong concern for the telecoms industry, and one of the main barriers is the cost of mobile devices.

"At Orange, we've been doing a lot of efforts to make the handsets affordable – 3G and 4G handsets and then 4G smartphones – working with manufacturers, working with operating system providers – not only Google Android but also KaiOS in the past to brand our own smartphones, like the Sanza Touch for instance, which was a success," Hénique said.

"The aim was to bring the first 4G smartphones under the $30 barrier, and we know that the next step is $20, which is very difficult to achieve. To achieve that, African governments have a specific role to play in reducing the duties and the taxes on handsets because it's one of the burdens in your final price for the consumers," he added.

The price of connectivity

The second barrier is the price of the connectivity itself and the Orange Africa CEO said this is impacted by a number of factors.

"Sometimes people compare the prices in Africa and in Europe and they consider it can sometimes be cheaper in Europe than in Africa, but the production costs are not the same. So, we have to work a lot to lower the production costs to be able to offer the mobile data at the lowest possible price," he explained.

"It means international bandwidth and all the work we do in bringing more submarine capabilities, new submarine cables – we are part of 2Africa, we were part of the ACE cable in the past – these are instrumental because they will allow you to divide the cost of the international bandwidth for the same capacity by five times or 10 times," he said.

"Here again, operators are suffering from taxations, which are very often specific to the telecom industry, these are strong burdens that in the end will pass on to the consumer and will make the price not as affordable as we would like," the CEO continued.

According to the UN Broadband Commission, the price of 1GB of data shouldn't be more than 2% of Gross National Income (GNI) per capita.

"This is the case for around 50% of our 17 countries in sub-Saharan Africa right now. But we still have work to do collectively as operators to lower our production costs, and as governments to also lower the tax burden on connectivity to make it more affordable for populations," Hénique continued.

Investments ahead

At the Kigali conference, six operators – Orange, MTN, Vodacom, Airtel Africa, Ethio Telecom and Axian Group – came together with a united message for Africa's policy makers, calling for fiscal policy reform on taxes and fees in the telecoms sector; support for new financing models for the digital infrastructure; and political support for climate action.

Hénique said that Africa is now entering a new phase of development when it comes to connectivity, which comes with a large level of investment into fiber networks, enhancing 4G connectivity, preparing networks for 5G, and targeting better reach into rural and ultra-rural areas.

"We have a wall of investment in front of us and we consider that we should face it, but we cannot face it alone, we will need the government to support us to make sure that we have this win-win approach between the public and private sector to reach the next frontier of connectivity, which is to reach the unconnected," he said.

"We are committed on our side, the industry as a whole considers they will invest another US$75 billion by 2030, which is a lot, but in front of that we need to have more room to maneuver with a lower level of taxation, be it for handsets or for services," he explained.

"We also need better intention from the government on regulations such as access to spectrum for 5G as well as supporting our commitments towards the environment. For Oranges we are committed to be net zero carbon by 2040. For that as well, we need some support from the government," he said.

Room for growth

On the growth strategy for Africa, Hénique said that Orange already has a lot on its plate in its existing footprint.

"On average, only 50% of all consumers are using mobile data. Which means there is still half to convert to mobile Internet, [with barriers being] affordability reasons and the usage gaps that I've mentioned," he said.

Hénique explained that only about 40% of Orange data users are using 4G, so the telco is working to convert more 3G users to 4G.

When it comes to mobile money, on average, only 23% of Orange Africa consumers have opened and are actively using a mobile wallet – which leaves 77% to still convert. Even so, Orange Money has more than 90 million subscribers, 35 million of them are active on a monthly basis.

When asked about possible expansion opportunities to other African countries, like Ethiopia, Hénique said Orange is "opportunistic" when it comes to non-organic growth.

"We look at the large markets, with large demographics where we are not present right now to see if there is opportunity to enter. However, we always have in mind, is there possible value creation? For that, usually we have to be number one or two in the market, or we have to be able to become number one or number two in the market, which is the case in all our markets except one," he explained.

Only about 40% of Orange data users in Africa are using 4G, so the telco is working to convert more 3G users to 4G. (Source: Image by wirestock on Freepik).

"We also need to know if there is something to sell [in a new market], which is not always the case. Also, can we control the operation? Because we want to roll out the same model that we [have across Africa] in terms of investment in the network, quality of service, but also commitment to the societies through Orange Digital Centers (ODCs) and so on," he said.

"So far there is no project corresponding to those different criteria that I could announce to you today, unfortunately," Hénique continued, alluding to the fact that an expansion into Ethiopia is off the table for now.

Digital inclusion initiatives

"Beyond the role of a telecom operator - which means connecting the unconnected and deploying connectivity as far as we can and as permanently as we can - we have another role that deals with digital inclusion. Of course, it deals with our core business, but also with what we do in corporate social responsibility (CSR), and in particular, the ODCs, which are the initiatives that we launched 12 years ago in Tunisia and now we have rolled it out in 16 countries," he said.

The ODCs are designed to improve young people's digital skills and foster their employability, and Orange recently announced a partnership with the Smart Africa Digital Academy (SADA) to bring Smart Africa's digital training to the centers.

Orange has reached a milestone of 1 million beneficiaries and more than 220 startups trained in digital technologies at Orange Digital Centers.

"It's quite a unique concept because it is free and open to all and gathers in the same physical place a coding school, but also an incubator and accelerator, a Fab Lab - which is a digital manufacturing workshop allowing startups to make prototypes - and an investment fund, Orange Ventures Africa, which invests in the most promising startups," he concluded.

*Top image is of Jérôme Hénique, CEO of Orange Middle East and Africa (Source: Orange).

— Paula Gilbert, Editor, Connecting Africa