French Telecom Operator Orange SA to Invest in Networks to Boost Earnings

Published Date : Mar 18, 2015

French telecom company Orange SA has said that it will invest around US$15.87 billion in expanding its network over the next four years to revive company’s profitability and sales prospects after the company has seen decline in business over the past few years.

The new five year strategy plan devised by the company is aimed at making Orange stand out from the competition and rivals in the highly competitive telecom industry of France. By improving the quality of company’s consumer services and networks, the company is betting that consumers will spend more on company’s services if the networks are faster.

Orange’s Chief Executive Stephane Richard said that the goal of the new plan is simple: making a difference to the services by creating a better user experience.

Orange’s plan has come ahead as the highly fragmented telecom industry of Europe is undergoing a spectacular change – telecom operators in Europe are searching for growth prospects, while trying to be in pace with the rapidly shifting set of consumer preference. The consumer is rapidly giving more weight to watching TV sitcoms and shopping on e commerce sites and giving traditional services such as calls a backseat.

Orange is observing harsh competition in a number of its key markets, especially in countries from the European Union where telecom operators are competing intensely to gain market shares by reducing prices for mobile and broadband services. In France, Orange SA’s largest market, the company has been hit most from the increased competition in the market due to the entry of a new telecom operator, Iliad SA, which entered the French telecom sector three years back and took a huge share of Orange’s profits and sales.