Orange deployed four top executives to London last week to showcase how innovative they are being in Europe, although impressive recent financial performances continue to be driven by good old-fashioned connectivity.
Telcos continue to be obsessed with the idea of being seen as cutting edge and Orange Deputy CEO Gervais Pellissier, whose remit includes the France-based operator’s businesses in Europe outside of its home market, began by talking up a new report from the Boston Consulting Group.
The management consultants’ annual ranking of the world’s most innovative companies, released earlier this month, showed Orange had jumped up from 44th place to 19th in the past 12 months.
Somewhat surprisingly, this not only meant Orange was the world’s most innovative telco, but also the most pioneering European company on the list.
BCG said: “One standout takeaway from this year’s survey is that companies are focusing significantly more than in the past on four elements of digital innovation: big data analytics, the fast adoption of new technologies, mobile products and capabilities, and digital design.”
Interestingly, it added: “Other areas of innovation—such as new products and new services—have become less of a focus.”
In short, becoming more digital internally is now seen as having more of a benefit than the launch of a shiny new digital product for customers.
But as is often the case with telcos, they are trying to do all of the above.
Orange certainly made a bold move last year with the launch of its mobile-only bank in France, and Pellissier talked up the impending arrival of Djingo, the digital assistant it has developed with Deutsche Telkom.
The Amazon Alexa rival is due to launch before the summer in France and before the end of the year in Spain.
Pellissier said the telco hoped to leverage the fact that Amazon is “a big enemy” to French retailers such as Carrefour and Fnac.
“We have a better chance to work with them [than Amazon],” he said.
Liudmlla Climoc, CEO of Orange Romania, has her sights set slightly lower, but was nonetheless keen to talk up the work the opco is doing in another innovation area – smart cities.
The company has been running five pilot projects across five different cities as it tests 14 use cases including smart metering, Wi-Fi on public transport and air quality monitoring.
Promisingly three cities have signed contracts, which are typically two to three years in length, Climoc tells European Communications.
Orange Romania has also launched a “pretty limited” mobile financial services offering, which has so far attracted around 80,000 users.
Climoc says it is “a priority” to enlarge the ecosystem of Orange Money, which is closer to what the company offers in Africa than to the bank it has launched in France.
And yet, for all the excited talk about innovative new ideas, the execs on show were agreed on one thing – it is traditional telecoms services that are driving growth at their businesses.
Orange Romania recorded double-digit revenue growth in each of the first three quarters of 2017. The telco bundles Romania into its wider Central Europe business unit, which saw sales increase 5.8 percent to €1.29 billion in the first nine months of last year.
Climoc is clear: “Broadband and internet services are driving growth,” she says.
Orange Spain was one of the best performing opcos with sales up 7.9 percent in the first nine months of 2017 to €3.99 billion.
Performance has been turbocharged by the 2015 acquisition of broadband player Jazztel and a regulatory environment that has seen Spain become the poster child of FTTH in Europe.
CEO Laurent Paillassot said growth last year was thanks to converged offers and the fact that the opco has, somewhat unusually, four brands in Spain.
While convergence lowers churn, the range of high-end, value for money and SIM-only brands helps to avoid cannibalisation, according to the CEO.
Pellissier said converged services are now available in every European country in which it operates and the reason is clear – converged customers are 40 percent less likely to churn, according to the Deputy CEO.
Understandably, the company feels convergence provides a platform on which it can launch new services.
Orange Moldova CEO Julien Ducarroz said his opco’s acquisition of cableco Sun Communications would enable it to launch the likes of smart metering and financial services.
Paillassot expects to bring Orange Bank to Spain early next year to join the likes of home security services that the division has already launched.
But with telcos’ poor track record in launching non-telecoms services, is Orange risking too much?
“We are growing well but we need to protect our presence through convergence,” responds Climoc.
“We need to become more relevant for customers, such as by being your financial services advisor.
“It’s a growth opportunity but also provides stickiness within the Orange ecosystem.
“We have to go there, there’s a lot to be done.”