What implications for Orange & Google “strategic partnership” in Africa

The French operator Orange announced Monday a “strategic partnership” with Google to offer attractive prices for customers in high growth regions.

A new package including a smartphone and a communication package with air time, SMS and data will be proposed at an entry price of 40 dollars. This “strategic partnership” with Google is aiming to offer affordable mobile internet throughout Africa and the Middle East.

“Customers will have access to a formula with the most competitive prices in the region,” and said the operator in a statement. The Orange smartphone Rise 31 Special Edition, an exclusive 3G device proposed by Orange and built by former French manufacturer Alcatel (now acquired by Nokia), will be included in the offer and proposed with some Google services.

Orange customers will have access “to popular content in the fields of fashion, sport and music” and the Google Search application, YouTube and Google Maps pre-installed. The objective of the partnership is to further develop the services and local content, say the two partners.

“Mobile partnership between Orange and Google is the first of this scale in Africa and the Middle East and allows us to provide real value to our customers by offering the best possible access and the best services, so they can fully enjoy the mobile Internet, “noted Yves Master, vice president of connected objects and Orange in partnerships cited in the text.

Orange and Google want to go “to the general public in the region” and they plan a campaign to explain the benefits of mobile Internet in several of local languages including Arabic and Wolof. These offers will be gradually deployed in all countries covered by Orange subsidiaries in Africa and the Middle East, it will start from the second quarter of this year.

On Google’s side, Richard Turner, director of Android partnerships in Europe, Middle East and Africa, said that the engine of growth of Internet use today is “embodied in smartphones, particularly in Africa and in the Middle-East “. “We are very excited to work with Orange to gather data services and content in a high-end device running Android, which will provide an excellent experience to smartphone users, whether beginners or experienced” he said.

Orange had 110.2 million mobile customers in Africa and the Middle East in late 2015, an area considered key by the operator to its growth. Orange is well implanted in the Maghreb and across West Africa, these packages are set to start in this area while Google might seek doing similar deals with other operators such as MTN which is leading the market in Nigeria and South Africa the two most profitable markets in Africa.

No declaration have been made about the commercial strategy that Orange will design to launch this new offer. I think that making e-commerce a primary channel in the distribution of this new package will serve the purpose and logic of this partnership. There is only one platform that covers most of the countries where Orange operates, it is Jumia the e-commerce website (Amazon like) owned by Africa Internet Group. It seems logical that Jumia (biggest smartphone e-retailer in Africa) would be eager to monetize this new package offered by Orange. The only thing that could block such a deal is the fact that MTN is a major shareholder of Jumia, and they might not want their competitor gaining market shares through a venture they fueled.

However, regarding the latest developments of Orange strategy towards e-commerce, it is very possible that they will bypass current e-commerce platforms and deploy in-house platform to sell this new offer alongside other services they are structuring with the support of Google.

There are many discussions undergoing in the mobile and e-commerce industry in Africa, and this “strategic partnership” is surely only the first of the year. The mobility African market is gaining in traction and maturity and I won’t be surprised that some serious announcements will be shortly made within the connected device market.

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