Orange Makes Exclusive Offer of New Apple Watch in France

Orange France has begun accepting pre-orders for the LTE-enabled Apple Watch Series 3. According to the operator’s website, the device will be available exclusively on its network starting on 22 September 2017. Eligible customers—meaning those with unlimited calling plans with Orange or its budget brand Sosh—will have access to a voice and data add-on, called Multi-SIM, with which they can share their allowances with the watch.
 
This deal is being offered free of charge for the first six months, to customers who make their purchases between 22 September and 3 October. After that, the subscription for the add-on will cost €5.00 (US $5.97) per month. Customers must have a compatible handset (iPhone 6S or later model) in order to make use of the Apple Watch Series 3.
 
With all the fanfare surrounding Apple’s announcement last week of its iPhone X and iPhone 8 models, the new Apple Watch seems to have gotten a little less attention. However, while the improvements to the company’s flagship handsets are more or less incremental, the wrist-based unit comes with a quantum leap (albeit one already made by Samsung and LG)—cellular connectivity, and LTE at that.
 
Now that the Apple Watch no longer needs to be tethered to a nearby iPhone, users have greater freedom to access voice and data services at times when they may not have the ability or desire to have their handsets with them. And Orange is well positioned to benefit from this situation by achieving (for the time being) market exclusivity in its home base, France. While we of course cannot be sure at the moment what the level of demand and uptake there will be for the LTE-enabled watch, Orange’s first-mover status will allow it to garner all the revenue in this sector for a while and possibly to keep ahead of its competitors even after they enter.
 
According to a report, Orange’s exclusivity is due to technical reasons rather than to a privileged deal inked with Apple: Currently in France, only Orange’s network is capable of supporting e-SIMS, which is the system used by the Apple Watch Series 3. This circumstance could cause the period of exclusivity to last longer than it would otherwise.
 
Adding a free six-month promotional period to the offer is a savvy move, although the future cost of the Multi-SIM add-on is certainly not onerous. While the operator will make money from this surcharge, we expect that if the Apple Watch Series 3 catches on among French users, it will create a serious revenue opportunity in the form of increased data consumption. 

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance. 

To learn more about Tarifica, please visit www.tarifica.com 

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Orange Launches Mobile Money Service in France

France-based multinational operator Orange has launched a mobile money service in France, initially enabling money transfers to three countries in Africa as well as within mainland France. The move is part of Orange’s strategy to diversify and grow revenues by expanding in mobile payment and banking services. Recipients of Orange Money will be able to withdraw funds from over 30,000 points of sale in the three recipient countries. An Orange Money app will be available soon in France, and the operator plans to expand the money transfer offer from France to other countries over time. Run by Orange's subsidiary W-HA, which is authorized to issue and manage electronic money, Orange Money does not require customers to have a bank account, only a mobile number and ID. Orange aims to compete with traditional money transfer services by offering much lower fees. Within France, all money transfers cost just €0.50. For international destinations, the costs range from €3.00 for transferring up to €100.00 to €8.00 for over €250.00 to €400.00, the maximum for a single transfer. Deposits cost €0.50, and withdrawals cost €5.00.  Mobile money services originally took off in developing economies, especially in Africa, in which a large number of customers had mobile phones but not bank accounts. Lack of access to traditional financial services ceased to be an impediment to commerce once mobile operators allowed subscribers to pay each other using funds already applied to their mobile accounts. The huge success of services such as Safaricom’s M-Pesa has encouraged operators to establish similar mobile money arrangements in other markets, but uptake of such services in developed economies has been slower, mainly because banking services are already well established there. However, first-world mobile customers are using their mobile devices heavily to access banking services; this week Bank of America reported that 62 percent of American smartphone users use mobile or online as their preferred mode of banking, up 51 percent from last year. Orange is now trying to establish “unbanked” mobile money in a developed market, France, by using its Africa services as the thin end of the wedge: Orange Money already serves 18 million customers in 14 countries in Africa, and many Africans live in France and maintain financial relations with friends, family and associates back home. African expats in France who use Orange money for transactions back to Africa will likely also use it within France, and their use of the system may encourage French nationals to do the same. In this way, Orange may be able to establish itself as a mobile money provider in its home country.

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Orange Offers to Buy Jazztel

French multinational telecommunications company Orange has made a €3.4 billion (US $4.4 billion) cash offer to acquire Spanish broadband provider Jazztel, valuing it at €13 (US $16.83) per share, which Orange said was 22 percent more than Jazztel’s closing price on the Madrid exchange on 12 September and 34 percent more than its average price over the past 30 days. The deal is subject to regulatory approval, and also to Jazztel’s shareholders tendering at least 50 percent of the stock, on top of an almost 15 percent stake held by executives—including chairman Leopoldo Fernandez Pujals—who have agreed to sell. This acquisition move, which had been rumored since February, would be Orange’s biggest such attempt in nearly a decade and would allow the operator to provide converged fixed and mobile services in Spain. It would thereby place Orange, currently the third-largest MNO in Spain, in a significantly improved position relative to its chief rivals, Telefónica and Vodafone. (The latter company acquired a broadband provider of its own, Ono, in July.) If the deal goes through, Jazztel would bring with it 1.5 million broadband subscribers, causing the resulting entity to be the second-largest broadband provider in Spain. Orange clearly hopes that the acquisition will boost it to the number-two spot among Spanish MNOs, as well. It projects that a takeover of Jazztel would generate revenue and savings amounting to €1.3 billion (US $1.68 billion). “Orange and Jazztel together, that’s the combination of two success stories in Spain,” said Orange CEO Stéphane Richard. “With the economy recovering, it’s the right time to reinforce our presence.” There is a pre-existing synergy between the two companies—Jazztel also offers MVNO services which run on Orange’s network, and it would bring a further 1.5 million mobile customers with it. Fixed-mobile convergence is an active trend in Europe, as well as in other developed markets where competition is intense, and Orange is clearly embracing it in its search for a competitive edge.

The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week :  http://www.tarifica.com/storyoftheweek.aspx

Many Consumers Unaware Of Throttling.

EU Confirms Roaming Rate Cuts Starting in July

The European Commission has confirmed its new cuts in mobile roaming rates, which will take effect starting 1 July 2014. The cost of making a call when traveling in the EU drops 21 percent to €0.19 (US $0.26) per minute; the cost of receiving a call falls by 28.5 percent to €0.05 (US $0.06) per minute; SMS costs decrease 25 percent to €0.06 (US $0.08) per text and data services fall by 55.5 percent to €0.20 (US $0.27) per MB. (All prices exclude VAT.) The rates are now down 80 to 90 percent from when the EU first started regulating prices in 2007. Proposed legislation would see roaming surcharges eliminated entirely beginning next year; operators would be required to charge the same prices as they do in their home markets.

The size of these cuts shows that the EU is serious about dialing down roaming within its borders. The rate reduction for data use, at 55.5 percent, is particularly significant, not only for the generosity of the amount but because of the increasing importance of data services for those traveling abroad. The falling rates may have the effect of increasing subscribers’ use of roaming services and thereby offset mobile operators’ losses to some extent. However, the writing on the wall could not be clearer: Now is the time for MNOs to find replacements for a revenue stream that will almost certainly run dry in the near future.

The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes two noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week :  http://www.tarifica.com/storyoftheweek.aspx  

Orange Slovakia Gains 100,000 Customers Over Several Days

Within 10 days of introducing unlimited on-net calls within a group of five users, Orange Slovakia gained 100,000 customers for the service, which became the most successful new product ever launched in the history of Slovak mobile market. To be eligible for the service, customers must have a minimum monthly expenditure of €20.00 (US $TK). If they do, they will automatically be given the opportunity to make four of their contacts available for unlimited free calls within the group. A group can be designated via SMS, via the mobile app Orange Go, on the operator’s website, through the customer-service hotline, or at Orange sales points. We think this idea is an excellent one, and a reminder that even in today’s jaded, saturated marketplace, and even with a basic, supposedly unexciting service such as voice calling, a major impact can be made if an operator tailors an offering very directly to the tastes and usage patterns of its subscribers. It may seem elementary that consumers spend most of their voice minutes talking to the same few people, but apparently, until now, no other operators in this market have taken this behavior seriously as the basis for an offering. Sometimes, a simple idea can be the best one. It should be noted that since this is an unlimited calling plan without an additional subscription fee, it will not directly generate revenue for Orange. However, it provides the operator with three benefits: First, it tends to maximize the use of network capacity. Second, it stands to significantly increase the customer base over time, if some of the contacts that customers wish to add are not currently Orange subscribers. Third, given its huge popularity, we expect that the service will boost customer retention, if the operator keeps it in place over the long term. While we do not know for sure whether other markets would show as much enthusiasm for group calling as Slovakia has, we think it is likely that many would. And we think it is certain that knowing one’s subscribers well is still the key to success in the mobile marketplace. The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes two noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week :  http://www.tarifica.com/storyoftheweek.aspx