Squeezed by a price war in its home country, Paris-based telecom Orange is reportedly eyeing Canada.
Orange Horizons, an Orange subsidiary created to look for new market opportunities, has held exploratory talks with Canada’s industry, trade and telecommunication agencies, according to The Globe and Mail.
Apparently Orange is not interested in Canada’s upcoming spectrum auction. Rather, the carrier is looking at options such as an MVNO (mobile virtual operator) play that would allow Orange to rent infrastructure and avoid a heavy network investment.
Publicly, Orange officials have been cagey about the company’s interest. One spokesperson told The Globe and Mail that Orange was focusing on consolidation, and cited Africa as a strategic area of interest. “This prudent and selective strategy precludes any major investments,” the spokesperson said.
Then, there is this praise for the idea followed by a denial of any immediate action in Bloomberg News: “Given the migratory flow of tourists and professionals between France and Canada, the Canadian market could be of interest to our subsidiary Orange Horizons,” wrote spokesperson Tom Wright in an email. Then the same spokesperson went on to say: “Orange is not going to launch activities in Canada right now.”
Orange, the world’s eighth largest carrier, has been facing stiff competition in its home country ever since the low-cost carrier Free Mobile entered the market in 2012. Free, which is run by Iliad AS, has gained market share and triggered a price war. The start-up recently upped the ante by offering 4G to its customers at no extra cost.
Elsewhere, Orange has been cutting back. Recently, the company reached an agreement to sell its Dominican operations to the Luxembourg-based Altice for $1.4 billion. Orange also announced earlier this month that it was asking for nearly 3,000 voluntary layoffs in Poland, the telecom’s biggest market outside of France.
Yet, Orange could be tempted by the estimated $20 billion Canadian wireless market. The Canadian government has been actively looking to boost competition in the market which has been dominated by three carriers, Rogers, Bell Canada and Telus Mobility.
At one point, Canada managed to attract interest from Verizon Communications, but the company ultimately decided against a move in Canada after it agreed to buy the part of Verizon Wireless that it did not already own.
Currently, 11 telecoms are slated to participate in Canada’s 700 Mhz spectrum auction now scheduled to take place on January 14. However, outside of the three dominant carriers, the other participants are regional players, and none have the investment potential of Verizon or Orange.
