Orange telecoms has announced plans to review its operations in Kenya and Uganda as part of the group’s 2015 strategic plan, in order to optimise operational performance in East Africa.
Orange says that the review will enable them to find new strategic partners in the region and ensure that the necessary financial and operating resources are available to maintain investment and support the continued development of operations.
Industry analysts suspect that Orange will have no choice but to withdraw from Kenya in an effort to avoid further losses. Orange was never a large player in the Kenyan market and they were unable to capitalise on what could have been a clear advantage in data quality, to the point that Safaricom first caught up, and then overtook them.
This comes on the heels of the announcement that Essar Telecom, the owners of yuMobile are winding up their Kenyan operations. Essar has already applied to the Communications Commission of Kenya (CCK) to sell their infrastructure and customers to Safaricom and Airtel, respectively.
If both Essar and Orange withdraw from the market it will put Safaricom at a distinct advantage giving them dominance in the market which any new entrants would find difficult to overcome.
In the Ugandan market MTN and Vodacom are both supposedly eyeing partnership opportunities with Orange. For MTN this would mean strengthening its position as the largest operator in Uganda whereas for Vodacom it would mean entering a new market as part of their African expansion plan.
The reviews are not expected to influence Orange’s presence in South Africa. Orange has said that SA remains a top target and they will continue their plans to become a mobile virtual network operator (MVNO) in South Africa and take on the country’s mobile giants. The latest development of this is a pilot WiFi project due to launch this year.
Tom Wright, corporate press officer at Orange reportedly said, “We will continue to extend our existing offers throughout 2014 – both through the development of our online catalogue and the introduction of new travel products and services. We are also hoping to launch new services this year based on WiFi. We are here to stay.”