Operators are often referred to as oil tankers – big behemoths that take forever to turn around.

After drifting for the past couple of years, preoccupied as it has been with the Free Mobile-inspired price war in its home market, Orange is now set on a new course. The question is, is it enough?

CEO Stephane Richard and CFO Ramon Fernandez unveiled their strategic plan on Tuesday that sees the France-based operator target €1 billion in revenues from connected objects and mobile financial services over the next three years.

Essentials2020 also features a commitment to invest €15 billion in networks by 2018, a focus on customer experience and new targets for its enterprise arm.

In addition, Orange revealed 25,000 staff would leave the company between now and 2020 as part of a cost-cutting programme that is expected to deliver €3 billion in gross savings.

The announcements came just a few weeks after the operator announced revenues declined 2.5 percent last year.

CFO Fernandez predicted revenues would begin to grow from 2018 in its home market and from next year in the rest of Europe. Revenues in Africa and the Middle East are set to grow over 20 percent over the period.

But it is the clear focus on, and putting concrete targets against, connected objects and mobile financial services that is most welcome.

Many rivals have been happy to talk up new similar business opportunities but have been coy about what they might deliver.

Richard revealed the company was targeting €600 million in revenues from the IoT/M2M space and €400 million from mobile banking. This represents sales growth of six and 10 times respectively on 2014 figures.

The CEO said Orange wanted to be present “across the entire [IoT] value chain”.

He explained this meant targeting the distribution of devices, the supply of services – he cited healthcare and the connected home – and the management of data from connected devices.

Orange made its entrance into the connected home space late last year with the launch of Homelive, an app-based solution that promises customers the ability to control connected appliances.

It revealed 10,000 customers have signed up to the service in France, giving it the confidence to expand Homelive across its European footprint from later this year.

The challenge for Orange will be gaining much needed scale amid competition from the likes of Deutsche Telekom, which looks to be leading telco in the space with its Qivicon platform.

[Read more: Deutsche Telekom looks to the Netherlands, UK in bid for connected home leadership]

Richard also committed the company to selling anonymised data to third parties.

However, mindful of the problems Telefónica has faced in this field – the Spanish telco refocused its Smart Steps programme last year – Fernandez told European Communications that this “would not form a substantial part” of the €600 million.

The numbers related to mobile banking look more solid and scalable. After a number of launches in Africa and the Middle East, Orange said its user base now stands at 13 million.

It is targeting €200 million revenues from the region and intends to more than double the number of customers there to 30 million by 2018. The remaining €200 million in revenues are expected to come from Europe.

Orange said it intends to launch services in France and Spain by 2018 after Orange Finanse, which launched in Poland late last year, attracted 100,000 customers.

The proposition, which the operator has developed in partnership with mBank, enables customers to access current and savings accounts, money transfers, NFC and online payments via an app.

Laurent Paillassot, who heads up Orange’s mobile banking and customer experience teams after arriving from French bank Le Credit Lyonnais six months ago, said the aim was to replicate what it had done in Poland in France and Spain.

No deal has yet been signed with a bank in either country, but Paillassot said discussions were under way.

He claimed that there is “a profit pool” of €27 billion up for grabs in France and Spain, and that an opportunity existed as the banking market remained fragmented, with the leaders typically having no more than 20 percent share.

Aside from the focus on new growth areas, Orange revealed it would invest €4.5 billion in FTTH and €5 billion in mobile access over the next three years.

Richard said the aim was to triple average data speeds on both networks in the same timeframe.

Like rivals Deutsche Telekom and Vodafone, Orange has gone back to basics with a focus on improving its bread and butter.

Orange Business Services has also been given a target of increasing the share IT services adds to its revenues by 10 percentage points by 2020.

[Read more: OBS Chief: revenue growth at least five years away]

As we reported yesterday, the operator is redoubling its efforts to improve the customer experience.

All told, the most important thing is that Orange has a clear plan with a welcome, narrow focus on two growth areas.

Whether it has chosen wisely and whether it has done so in time will become apparent in the next few years.

Analysts were broadly approving, if a little underwhelmed.

451 Research’s Declan Lonegan said: “The figure of €1 billion from new services is in the right ball park and should be achievable.

“By focusing on the IoT and mobile banking [Orange] should be able to allocate significant resources in each of these areas, and improve its chances of success.”

CCS Insight’s Kester Mann agreed but said they represented a safe option.

He commented: “They’ve already done a lot of that and didn’t really go for anything that pushed the boundaries. For example, 5G hardly got a mention, which is interesting for a five-year plan amid telcos claims that it will be implemented in 2020.”

Lonegan warned that the very notion of long-term plans is beginning to feel outdated.

He said: “I can’t imagine Google or Facebook looking too far beyond the next couple of years as they assess strategic goals.

“However, investors in telcos like certainty and there was little in Orange’s statements that should cause them too much discomfort.

“From that perspective, as far as Orange’s leadership team is concerned, it’s a job well done.”

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