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Telia, Orange and Verizon are among a growing number of major telecoms operators looking to diversify, as this week’s news highlights show.
Some of the global telecoms industry’s biggest players made headlines this week, and despite the diversity of their current strategies, they all have something in common: the desire to shake off legacy trappings and embrace a new future in the digital world.
At its AGM last week, shareholders of Telia Company – as it is now known – voted in favour of a name change and the company has rolled out its new identity, leaving behind its links with the past.
TeliaSonera came into being in 2002 following the merger of Swedish incumbent Telia and its Finnish counterpart Sonera; both firms still use their original names for their domestic operations. The new brand, if the loss of a suffix can be described as such, emphasises the group’s "common purpose, culture and values," chief executive Johan Dennelind said alongside the telco’s Q1 results announcement on Thursday.
The rebrand is about more than that, though. When Telia revealed it was planning the name change earlier this year, it indicated that the move was linked to its changing role in the new digital society, a key consideration for many top telcos at present.
Orange is high on that list. The French telco dealt with its own rebranding many years ago, although last year’s Essentials 2020 announcement covering its latest five-year plan included some tweaks to its visual identity that reflect its focus on new digital services. At that same event, Orange revealed that it aims to generate €1 billion-plus in revenue from new services in 2018, including €400 million from financial services.
On Friday it took a step towards achieving that goal with the purchase of a 65% stake in France’s Groupama Banque, which will become the foundation for Orange Bank, due to launch at the start of next year.
Orange Bank will be a mobile-specific offering with all the usual banking services. Following its launch in France, Orange plans to take it to market in Spain and Belgium too.
Incidentally, Orange made progress with regard to its non-European ambitions this week, closing the acquisition of Millicom’s Tigo business in the in the Democratic Republic of Congo, thereby doubling its mobile customer base in the country. The announcement came just a fortnight after Orange entered its 20th market in the Middle East and Africa region by acquiring Liberia’s Cellcom.
It was also named as a possible buyer for America Movil’s stake in KPN. The Mexican incumbent is looking to sell out of the Netherlands, having failed in a takeover bid for the Dutch incumbent a few years ago. Bloomberg sources suggested the 21.1% stake could be attractive to other telcos, mentioning Orange in particular. Orange said it is not working on any specific plans around KPN, but given its track record in denying press speculation only to subsequently backtrack, nothing is out of the question.
Across the Atlantic, Verizon is leading the charge when it comes to diversification.
According to a number of press reports this week, the telco is leading the race for beleaguered Internet company Yahoo, whose core business could be a useful addition to Verizon’s growing portfolio of online news, entertainment and blogging platforms, as well as its online advertising business.
Verizon added to its content assets on Monday, acquiring pop-culture portal Complex via a 50:50 joint venture with publishing company Hearst.
And in its first quarter results announcement, Verizon revealed a growing contribution to revenues from the IoT space, which added US$195 million to its top line in the three months to the end of March, up 25% year-on-year.
The above are just a handful of examples of big operators looking to do something different, but there are many more out there. Which is why, at this year’s World Communication Awards, there will be a new award specifically geared to telcos looking to transform their businesses to enable them to compete in the new digital world.
Entries for the World Communication Awards 2016 will open shortly. Keep an eye on the Total Telecom Website for more information.
In the meantime, have a lovely weekend. We’ll be back on Monday with more from the world’s leading telcos.
