Orange launches $50 smartphone in emerging market push

Orange will launch a new, ultra-cheap smartphone in select emerging markets week, starting with Madagascar. The Alcatel OneTouch Pixi 2 Maxi smartphone, which features a dual-SIM port, will be on sale for about $50, competing aggressively with the $105 Google Android One, first launched in India.

Although the phone, which is the latest of a line of Orange branded Alcatel smartphone launches, includes a new app ‘store’ where Orange’s own applications can be downloaded for free, it allows the use of another provider’s SIM card simultaneously, and data usage is limited only to work with an Orange SIM. According to the carrier, this provides the kind of user flexibility needed in emerging markets where people are on limited budgets, but at the same time with the restriction on data usage customer retention is secured.

Marc Rennard, Orange International EVP, said: “This increases customer loyalty. We are not there to put limitations to the way people use mobiles, we are there to provide the kind of service people need.”

Orange is also offering a range of other services alongside the Pixi smartphone family, such as ‘emergency credit’, ‘no credit beep’, ‘credit transfer’, ‘please call me’, and ‘pay for me’. The company is also running its mobile payment service, Orange Money, run in partnership with the Bank of Africa, in 14 countries, and an SMS-based hotline service, My Healthline, which provides advice on various health-related matters.

Despite some speculations that Orange could be looking to eventually selling its African operations off to become a European-focused provider, Rennard insists AMEA remains one of its key regions, and Africa in particular. “Africa is at the centre of Orange Group’s strategy, we want  to be the first choice for people there. More people [in Africa] now have access to mobile phones than to electricity and the market is growing,” he said.

AMEA currently represents 38% of Orange’s customer base and the company said its Capex in the region represents 15-20% of overall Group expenditure.  But Arnauld Blondet, Orange VP Marketing Products AMEA admits revenue from voice in the region is decreasing. “This year we expect around 6% growth overall. In voice we probably see a decrease but we have lots of other services like Orange Money and we think future in the region is looking bright.” He admitted the decline in voice is partly due to the increased use of OTT apps such as Skype, WhatsApp and Viber.

The launch of the new Pixi 2 Maxi smartphone at such a low price indicates the race to grab a share of the feature phone upgrade action in developing markets is getting more intense. It remains to be seen just how cheap a functional smartphone can be, but it’s likely we haven’t got there yet. With developed markets already close to full smartphone penetration, growth opportunities are increasingly looked for elsewhere.