Orange proves convergence should be telco business basics

A decade ago, Orange started trialling convergence in the Slovakian market, but today the success proves it should be the foundation of every successful business.

“Europe is a success story and convergence is the jewel in our crown,” said Ramon Fernandez, Orange CFO and Head of Europe.

In fairness to the Orange business, it has a way of investing in ideas and leading innovation for the European telecoms industry. It wanted to diversify into financial services, so it bought a bank. It wanted to drive home convergence, so started investing heavily in fibre. The smart home, security and energy services are on the horizon, once again proving Orange does not wait around for industry consensus before making its move.

Convergence is a trend which has now seemingly caught fire in the telecoms industry, with Orange arguably the most advanced telco strategically worldwide, but perhaps it should no-longer be considered innovative. Any telco with any sense is positioning themselves for a convergence play.

In the UK, BT is making the ‘Halo’ initiative the centrepiece of the consumer business, while Vodafone’s purchase of Liberty Global’s cable assets in Germany, Hungary, Romania and the Czech Republic sets the telco in the same direction. Convergence is not innovative anymore, it is something that telcos just have to do to stay relevant.

Looking at the Orange business, Fernandez said the telco now has 10.6 million convergence customers across Europe; 5.8 million in France, 3 million in Spain and the rest split across the remaining territories in Europe. Convergence customers now account for 40% of revenues across Europe.

Territory Revenue to Sept 2019 Convergence customers
Romania 813 million 227,000
Poland 1.9 million 1.3 million
Belgium 1.2 billion Unknown
Slovakia 409 million 77,000
Moldova 103 million 27,000

In terms of Group revenues during the last period, Orange reported growth of 0.8% to €10.57 billion for the third quarter, adding to €20.57 billion brought in over the first half. While financial growth might not be eye-watering, the foundations being laid through the convergence strategy offer excellent opportunities in the future.

After years of investing in both mobile and fixed networks across Europe, Orange’s fibre deployments are progressing very effectively, the connectivity foundation is sound. Few telcos can compete with Orange in terms of assets across the bloc, but the customer retention benefits of convergence are allowing Orange to explore new services. Security products are being launched, connected objects are being sold, banking is expanding, energy services are being played with and the team is investing in a smart home platform. Orange is making the evolution through to Digital Service Provider, built on the foundation of connectivity convergence.

While this is an enviable position, it is not one which can be created overnight. Orange has been investing towards the convergence strategy for years, and now other operators are playing catch-up. With results proven, perhaps we should stop talking about convergence as innovation, and just the way telcos should do business.

Spain pitches for connectivity leadership with Vodafone 5G launch

Spain is not often mentioned when discussing the leaders for connectivity in Europe, but it does seem momentum is gathering pace in the country.

The most recent announcement will see Vodafone debut its 5G offering in 15 cities, the first to hit the on-switch in Spain. The Spanish business is also sneaking in just ahead of the Brits in the internal Vodafone race. Quoting speeds up to 1 Gbps, the hope is to be up to 2 Gbps by the end of the year.

And its not only the mobile side which is demonstrating some interesting trends. Looking at the fixed broadband segment, Spain is one of the leading nations when it comes to fibre penetration. According to the latest statistics from the Fibre to the Home Council Europe, 44% of Spanish citizens subscribe to FTTH broadband services, with only Latvia and Lithuania ahead of the country.

One of the issues which Spain will face is the digital divide however. This is a challenge which is unavoidable across the country when you take into consideration its size. At 498,468 km², it is the third largest by geography (fourth if you include Russia) and the seventh largest by population.

This perhaps makes the 44% fibre uptake more impressive, though there will still be those in the countryside who perhaps feel underserved. However, Movistar, one of Telefonica’s brands, has suggested it hopes to have 100% fibre coverage by 2024. This ambition is dependent on the availability of public funds, but should all the pieces fall into place, it will achieve the milestone almost a decade ahead of the UK.

Five years is a long time to wait if you are struggling today, therefore there are various options including WiMAX, satellite and fixed wireless access over 4G products available today. For a country which is scarcely mentioned as the leader in the European connectivity rankings, it does seem to have the right blend when satisfying the insatiable data diets of its citizens.

Looking at the 5G race, Vodafone España is certainly putting itself at the front of the pack with a timeline geared towards June 15. What is also quite impressive is the breadth of the launch. 15 cities on launch date is an impressive haul, and while the coverage might be limited it does give the telco the first step to build outwards and onwards.

Once launched, Vodafone España claims the network could provide latency of less than five milliseconds. For the man-on-the-street, this will mean little, though it will give the technologists the opportunity to explore new services in for real-time applications such as autonomous vehicles, tele-medicine, VR, 8K video and cloud gaming.

This is the most important aspect for any 5G network; it has to have scale. Not only do you have to meet expectations for those who are paying for 5G connectivity, there has to be enough coverage to beta-test and eventually launch new services. The countries which reach this scale the quickest, will give their innovators the best possible start to create the 5G-specific services and applications.

This is not to say they would dominate the market in the way Uber did with the introduction of 4G but having months (or perhaps years) more time to create and hone an offering would certainly be an advantage.

The Spaniards might be guilty of the odd siesta, but they certainly haven’t been sluggish when it comes to getting 5G up and running.

Telia bags GET and TDC Norway for €2.2 billion to bolster convergence game

Telia has announced the acquisition of GET and TDC Norway for roughly €2.2 billion as the telco looks to strengthen its hand in the convergence business.

The Norwegian business of Danish operator TDC encompasses GET, a provider of fixed and TV services, as well as the B2B business in Norway. The team claims there are more than 518,000 households and businesses connected to the fiber-based network, as part of a total of one million private and business customers who use the TV and broadband services.

“It is with great excitement and commitment that we announce the agreement to acquire GET and TDC Norway,” said Johan Dennelind, President and CEO of Telia.

“It will create a leading convergent operator for both consumers and enterprises in Norway which can compete in the market with a lot of attractive and new products and services. This transaction is beneficial for the Norwegian customers and society. We are building a great company with passionate employees where we have invested heavily in our mobile network which now covers 98 percent of the country. As part of Telia Company, GET will continue to invest in the rollout of broadband and fiber.”

Telia has been making progress in the Norwegian market with 2.3 million mobile subscriptions, a market share of roughly 42%, with the company’s 4G network covers 98% of the country. Telenor is leading the country’s mobile stakes, though investment in fibre and video assets will certainly give Telia impetus to make moves in the market.