Orange backs network to attract customers rather than bells and whistles

Orange put out another strong statement of intent, preferring infrastructure investment to attract customers over acquisitions of rivals or purchasing expensive content.

Although it shouldn’t be, it is a novel approach to attracting customers. While many rivals are trying to increase subscriptions with glossy new content offers, leaning on the credentials of a breakfast themed, past-it celebrity or acquiring competitive businesses to absorb customers, Orange has reaffirmed its long-game strategy. Create the best network, improve customer experience and the customers will come.

“Today we are halfway through our Essentiels2020 strategic plan, which gives me an opportunity to take stock of some of the fundamental elements that make up our strategy,” said Stéphane Richard, Orange CEO. “Through this plan, we aim to define ourselves by the excellence of our networks and by the innovative and enriched services that we provide our customers, offering them an unmatched customer experience.

“This strategy is now bearing fruit: we have seen a return to revenue growth a full year ahead of plan, and this momentum, combined with our operational efficiency programme, Explore 2020, has enabled us to renew growth of our adjusted EBITDA and engage us in a cycle of sustainable value creation.”

The numbers are looking pretty positive on the network side of things as well. 25 million FTTH connectable households as of 30 September 2017, 8.4 million of which are in its domestic market of France. Orange has the highest number of 4G customers in seven of its eight European countries, and best network quality in six of them. It has 10 million customers across Europe in terms of fixed-mobile convergence, a strategy which has been working very well for the telco.

And while the money is being spent on the network, the content business is also growing quite well, though there is a different strategy here. Orange is seemingly happy to play the aggregator-distributor player in the value chain, using its connection with the consumer to aid content owners and creators.

This is a model which we have been very interested in for some time, as it is logical for the telcos. You don’t have to compete against someone who is better at creating content than you, and it allows the telcos to do what they do best; facilitate a relationship between two parties. There is no ego here about being a major player in the content game, it is a sensible means for Orange to add value to the content ecosystem, rather than try to disrupt it and inflate the prices of content.

The strategy itself is a simple one; invest in a communications network which provides the best possible product for the customer. This is what should be the primary aim of telcos everywhere, but some seem to have become lost in their mission. Perhaps it is the fear of data commoditization and the need to remain a flashy brand, or the inability to realize what long-term network investments can achieve, but Orange is doing the job a telco should be doing, and it seems to be working.