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Orange indicates strategy of monopolizing household services

Stephane Ricard

At its recent annual technology showcase Orange offered some interesting hints towards a long-term strategy to create a single household bill for customer.

Like Facebook and Google, Orange is seemingly making a play to control access to the customer, through monopolizing services to the household, while also creating the living room gateway through the introduction of Djingo, its own virtual assistant.

Diversification is the holy grail which every telco is moving towards currently, thought Orange is moving at a quicker pace than most. Its core broadband and mobile seem to be doing well enough considering the landscape, however Orange TV is an established business in France, while the introduction of Orange Bank is an interesting move, as is the energy experiment in Poland.

Having proved the potential of a banking service, Orange Polska, the former incumbent in Poland, now appears to be a testing ground for new ideas. Energy is the next venture, having launched Orange Energia in 2014 for both B2B and B2C customers. The team claim to offer 10% discounts over market incumbents, and would appear to be proving a successful undertaking. How much profit is being made is unknown for the moment, but it is certainly an interesting idea to make the brand a more prominent fixture in customers lives.

Currently in France, Orange offers mobile, broadband, TV and music content services. With the introduction of Orange Bank, the team can now offer current and savings accounts, as well as payment solutions, while before too long short-term credit contracts (such as credit cards) and insurance products. Should the energy venture in Poland prove to be successful, it would be a fair bet that would also be brought into France and who knows what else the team will come up with.

The success of the bank will probably be the defining factor in the pursuit of the single bill, after all, if people trust Orange with their money, they would likely be open to trusting the company with other aspects of their lives. Especially if it would save them money in the long-run. Convergence and multi-plays generally come with saving incentives, and with this many offerings there could certainly be an opportunity for the consumer to leverage the now-buyable metric of loyalty.

It certainly sounds like an effective strategy for most businesses. In theory, the more points of contact which you have with the customer, the more likely you are to create loyalty and longevity. As the connected era is all about efficiency and speed, the attractiveness of only having one bill to pay each month would certainly work for some customers.

That said, it’s not only the ease of paying monthly bills, but the complications of moving suppliers. Once Orange has got a customer committed to three or four services, price comparisons become more difficult. An individual might be tempted to change energy supplier once the contract has come to an end, but who would want to do the legwork several times over for mobile, broadband, TV, insurance, credit cards and insurance.

For those customers who merge their bills into one place exiting such a situation would be a very time consuming task. It’s a slightly negative and conniving view on such a strategy, but one which would work to the benefit of the Orange business. The laziness of digitally native millennials could potentially reduce churn, though this is certainly a pessimistic view on the situation.

In a more positive light, the single bill could be the central pillar of the smart home strategy for the business, with the new Djingo virtual assistant as the in-house presence, controlling the living room gateway for third-party access. The connected era is all about efficiency and seamless cohesion of all aspects of a consumers life; if the OTTs are making a play to control the consumer, why shouldn’t the telcos?

Creating a single bill household will certainly not be a simple task, though if Orange has shown us anything over the last couple of years, it’s that it has a couple of interesting ideas up its sleeve.


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