Orange this week announced the creation of a new legal entity that will house its operations in the Middle East and Africa and indicated that it could look to welcome strategic or financial investors in the unit, and did not rule out the possibility of a flotation.
"We do not prejudge what we will do with the benefits of this legal structure," said Ramon Fernandez, Orange’s deputy CEO, at an event in London on Thursday.
"A pure Africa and Middle East platform," could attract strategic or financial partners, Fernandez said. "At some point you could consider listing this company, but it is not what we have decided," he added, in response to a specific question about the likelihood of an IPO.
However, the company made it clear that an exit from the region is not on the cards.
"Africa and the Middle East is at the heart of what we are doing," Fernandez said. Setting up the new holding company is not a way of "looking at different ways of exit," he insisted.
Indeed, Orange expects the new company, which comes into existence this month, to help it build its business in the region.
"It will be the basis for our future development in Africa and the Middle East," Fernandez said. The unit will enable Orange "to take opportunities where opportunities arise," he said.
Those opportunities will see the operator move to extend its networks within its existing markets, but also include in-market and inter-market consolidation. In a continent wi th 200-plus operators, consolidation is almost certainly on the cards.
"We are in a position to consider adding, on a selective basis, some assets, if we find the right price," and an acquisition makes sense, Fernandez said.
"There are many francophone countries," in the region, Fernandez said. "We have an open mind."
The telco aims to grow revenues in the region by 20% by the end of 2018 and turn in an EBITDA performance to match or better that. Profitability in the Middle East and Africa comes in ahead of the Orange group average, Fernandez explained, with an EBITDA margin of around 33% versus 31%.
The operator posted revenues of €5.7 billion across 20 countries in the region last year, an increase of 7% on the previous year.
