Orange’s excellent results in Africa have confirmed its diversified investment policy. Attentive to the economic stakes of its 17 African countries of operation, the Orange group seeks to link up growth and CSR. Alioune Ndiaye, CEO of Orange Africa and Middle East, reflects upon his strategy. Interview by Hichem Ben Yaïche and Nicolas Bouchet
You took up your responsibilities in May 2018. How did you experience these two years of Covid? Were they an opportunity for Orange to reinvent itself or something that slowed its ambitions?
The Africa and Middle East area performed wonderfully during the year 2021 in spite of the health crisis. During the crisis, and because of restrictions, telecom infrastructure appeared more essential than ever for populations, for companies and for governments. In 2021, we observed an up to 60% growth in Internet traffic in some countries. This almost makes for twice what traffic per customer was in the previous year.
Rather, Covid-19 made for an accelerator for high speed activity and we can account today for about 44 million 4G clients, who represent two out of three Orange customers today.
As of today, have you fully completed the business model’s transformation or mutation?
We cannot say the mutation is complete but we have achieved a very large part of it. In 2015, the Orange group decided to create a dedicated entity named OMEA S.A. so to give more visibility and clarity to its activities on the African continent. This policy was followed by a transformation plan that was launched in 2017 and named Kilimanjaro. Its goal has been to develop our anchoring on the continent.
We were one the continent’s last major providers not to have operational headquarters in the area. Comparable to large international groups like Vodafone, with its South African subsidiary Vodacom, or Airtel, with Airtel Africa, we established an entity entirely dedicated to the continent.
Positioning these headquarters in Casablanca has been one part, among about 20 elements, of our coming closer to our clients in Africa. We now have joint and shared service centres in several countries. We have hubs in Abidjan, in Dakar and in Jordan.
You rightly are a multiservice provider today and this has forced you into major changes so you were able to operate from a different model. Orange works in the energy sector and in many other areas. Do you still feel at ease with your activity’s expansion?
This is indeed important. All telecom providers have understood that, in the coming years, providing connectivity, voice and Internet services to customers will be core to our trade.
Everyone realised that these essential services, though they are essential, tomorrow will be commodities just as water and electricity provision is. We will not, however, generate new growth with these activities and this is the reason why we want to be a multiservice player in the region.
In 2008, we launched the Orange Money mobile finance service to allow populations access to e-wallet and money transfer services and to in-store and remote, tax, and electricity and water bills payment. Today, out of 135 million customers across 18 countries (including Jordan), we account for 70 million Orange Money accounts open in 17 countries. This really is a way for us to participate in the financial inclusion of African populations.
Going into your daily reality, have you been able to visit all countries where you have responsibilities?
I have been to every country in this area. In 2019, I spent more than 180 days travelling. Every trip has been an opportunity of meeting the team and conducting a business review with the steering committee, and of meeting the country’s authorities. As you know, we are on a continent where many environmental, fiscal, legal and regulatory issues are at stake.
We must discuss these with national authorities so we can reach a common vision of the telecom industry. That is, ensuring an understanding that it is better to have reasonable tax levels that allow for digital inclusion to develop, rather than restraining activity from the start with excessive rates. We have maintained that dialogue with political authorities and aid donors alike.
What impulses will you give your projects on the continent?
First, we need to develop growth drivers. We know that, South of the Sahara, one in two Africans cannot access energy. We also know that only 20% of the population has access to a bank account. This is an important potential. With existing assets, that is telecom networks, retail networks that amount to a million outlets, a strong and trusted brand, and human resources, we can satisfy needs that are essential to African populations. In terms of forecasting, this is what positioning ourselves as multiservice should allow us to do.
Apart from business strictly speaking, we commit a lot to our foundations and our CSR action, and to contributing to economic and social development in our countries of operation. Taking an example, we have built ten Orange Digital Centres. There we offer youths free training in digital and coding jobs. We offer them support when they run startups. We operate incubation, acceleration and even funding.
The continent’s true wealth is its youths’ energy, providing they are trained and equipped. Through Orange Digital Centres, we help provide the means of taking charge of Africa’s digital future.
How do you integrate the startup dimension and innovations to help Africans go further in their training and fully be part of the times?
I would distinguish between several aspects. First, supporting youth projects and the innovation ecosystem in general. We have done this with Digital Centres and we will keep on developing them as country networks. This has been our flagship project for supporting innovation ecosystems. We know that, by 2030, 60% of the continent’s jobs will require digital skills. This is where we need to go.
We also facilitate employability. We have trained 38,000 youths since we have opened these centres and, out of these, 17,000 have found a job rather easily. The others are conducting personal projects with support from Orange. This especially through incubation, acceleration, the providing of fab labs for object prototyping, and funding from the dedicated Orange Venture fund. This 50 million euros fund is entirely dedicated to African startup projects from the digital industry.
How do you invest profit made in Africa? Many wonder whether they stay in Africa?
Orange Middle East & Africa has not yet paid major dividends to Orange S.A. As of yet, we have invested a little over a billion euros every year to expand networks and high speed networks specifically, using 4G or fixed technologies. Still, we account for 44 million 4G customers, and a million fixed broadband customers, of which a little less than half connect through optical fibre.
We invest massively in developing connectivity and in providing new services, and at the same time, we are also developing new services that act as growth drivers for us and are in turn drivers for the energy, health and education sectors.
Has choosing to set up HQ in Casablanca allowed you to have a new way to operate with your subsidiaries and to make faster and more efficient decisions?
That is one of the key points of the transformation programme launched in 2017. We actually had subsidiaries that operated in silos. The entity we created allows more coordinated steering and a consolidated group that offers vista over all 18 countries. That was the first step: functioning as an autonomous entity equipped with a board that pilots and consolidates all 18 operations.
We then develop tools and processes that allow us to harness all possible cross-country synergies. This is why we noticed that, over the 2008-2019 decade, OMEA’s average annual growth was 4.2%. It accelerated in 2019 and reached 6.2%. In 2020, in spite of the health crisis, we recorded a 4.3% growth. And 10% in 2021! Growth accelerated thanks to the transformation we implemented not only at a global level but also in every country.
So to give a clear idea of your group’s size and activity, you are present in 18 countries, have an 18,000-strong staff, 130 million mobile customers, 2 million fixed broadband customers etc. Have these figures changed?
They have not changed. These figures are the result of all the investments we made and result from exceptional growth. Growth in 2020 in the Africa and Middle East area has been unprecedented, and so have profitability and customer numbers. With that transformation, we accelerated growth while making it more profitable, so to continue our investment action and prepare the future, and at the same time contribute a little more to the countries’ economic and social development thanks to our CSR policy.
Why is Africa one of the places where data has not been fully made untouchable?
The United Nations considers that the price of 1GB of data should be lower than 2% of average monthly income so it can be accessible to populations. We have reached that point in 7 out of our 17 African countries, when considering per capita income. In other countries, we see considerable improvement. Four or five years ago, the cost of 1GB made for 13.2% of per capita income and, today, we see an average 4% rate.
Your africanisation has been fully achieved since you were appointed. What are your challenges in months to come?
We face many challenges. The biggest ones unfortunately are linked to current events. Today we must face issues of political stability in some of our countries, taking into account three coups in Western Africa. This does not mean our business is not doing well but that we must guarantee our staff’s security. And we do not know how far that can go.
Secondly, there is the war in Ukraine, even if it seems far away. It has had price hike impacts over food, fertilisers, oil and gas. Because the dollar will rise, our countries’ currencies will depreciate. This represents financial risks for states in the coming weeks and months. Some are experiencing this already. And we are taking the risk of stronger fiscal and regulatory pressure coming from governments, on the telecom industry especially. We are hearing about major amounts. This is normal as it relates to a highly capitalistic industry where you need to earn much money to make major investments and prepare the future and future networks.
Ending on a positive note, how do you recruit your talents? As we can see, digital technology is changing everything.
Exactly. As I said, digital skills are essential to Africa’s future. At the level of countries where we operate, we try to recruit the best talents from the best international schools. At OMEA Corporate’s level, we have launched a recruitment programme for young talents graduating from these schools. We have hired about thirty of these these past years, of which more than half are women. These youths have excellent skill levels and are destined, tomorrow, to ensure Orange’s success on the African continent.