It is not difficult to make money from mobile financial services in the Middle East and Africa, Orange said this week, adding that it plans to extend certain offers to Western Europe, including a launch in France next year.
From 2016 customers in the telco’s home market will be able to transfer sums of money to friends and family in the Middle East and Africa via Orange Money, Ramon Fernandez, deputy CEO at Orange, told journalists at a an event in London on Thursday.
"It’s going to be a revolution," he said.
Orange Money launched in 2008 and now has 14 million customers in 13 countries transferring €500 million per month. Last year the service generated around €50 million in revenues for Orange.
"We plan to augment this segment of revenues to 200 million in 2018," Fernandez said.
Users of the service generate on average an additional €1.80 in monthly average revenue per user (ARPU), which is a significant sum in markets where ARPUs are generally in the €2-€5 range.
"You could double your revenues just by launching these financial services," said Marc Rennard, senior executive vice president for Africa, the Middle East and Asia, at Orange.
"[Orange Money] will bring us new revenues, it will increase the loyalty of our customers," he said.
Orange Money accounts for 5%-7% of the telco’s revenues in some markets, Rennard added.
"It’s not very difficult" to make money from th e service, Rennard said, noting the customers pay a fee for using it and that fee is "much cheaper" than established money transfer services like Western Union.
"We don’t have difficulties at the moment to monetise Orange money," Rennard said.
The service also brings other advantages, such as increased customer loyalty, lower churn and cheaper prepaid top-up than would be possible through physical outlets.
Unlike some of its rivals, Orange has yet to announce any interoperability deals that would enable Orange Money customers to transfer money to other mobile financial service platforms. MTN and Bharti Airtel agreed to allow the transfer of money between MTN Mobile Money in Cote d’Ivoire and Airtel Money in Burkina Faso more than a year ago, for example.
However, "we are resolutely catching up," Fernandez said.
He highlighted the fact that Orange is one of a number of telcos to have signed up to a mobile money interoperability programme, alongside Bharti Airtel, Millicom, MTN, Ooredoo, Vodafone and others.
Fernandez also pointed out that while there have been a number of big announcements on mobile money interoperability, little is actually happening in reality.
"In the field it’s more difficult than it was expected [to be]," he said.
While operators have agreed to cooperate at group level, often their local affiliates are more cautious about working with their competitors, he said.
"It will take time," Fernandez said, but "the direction is there."
