Orange SA has revised its financial outlook for 2025, citing growth in Africa and the Middle East as a key factor.

This adjustment comes despite a decline in the company’s home market of France.

The company now expects earnings before interest, taxes, depreciation, and amortization after leases (EBITDAaL) to exceed 3% growth this year.

This is an increase from a prior estimate of about 3%.

In the second quarter, sales in Africa and the Middle East increased by 13%, reaching €2.1 billion (US$2.4 billion) after adjusting for currency fluctuations.

This figure surpassed the average analyst forecast of €2.05 billion (US$2.23 billion).

Overall revenue for the quarter remained flat at €9.94 billion (US$10.83 billion).

.source-ref{font-size:0.85em;color:#666;display:block;margin-top:1em;}a.ask-tia-citation-link:hover{color:#11628d !important;background:#e9f6f5 !important;border-color:#11628d !important;text-decoration:none !important;}@media only screen and (min-width:768px){a.ask-tia-citation-link{font-size:11px !important;}}

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Geographic diversification shields telecoms from mature market pressures

Orange’s reliance on Africa and the Middle East highlights how European telecoms use emerging markets to counter stagnating home markets.

The company generated €7.2 billion in revenue from Africa and the Middle East in 2023, serving 149 million customers across the region, with 3 out of every 10 Africans being Orange customers1.

This diversification strategy proves particularly valuable given that French consumers show the highest churn intention in Europe at 51%, compared to the European average of 44%2.

Orange Money, their mobile financial service, demonstrates the revenue potential beyond traditional telecom services with over 90 million users across 17 countries1.

The success in less saturated markets provides breathing room while European telecoms face commoditization challenges and industry revenues projected to grow at only 2.9% annually from 2023 to 20283.

2️⃣ European telecom consolidation gains regulatory acceptance despite historical resistance

Orange’s interest in the SFR acquisition reflects a broader shift toward accepting 4-to-3 market structures in European telecommunications.

Recent analysis of completed four-to-three mobile mergers shows they typically led to higher service quality without increasing prices, challenging long-held assumptions about consumer harm4.

The European Commission is now actively reviewing merger guidelines to assess competitive impacts, potentially paving the way for consolidation that was previously blocked5.

This regulatory evolution comes as six European competition authorities recently emphasized that competition drives innovation, yet acknowledged the need for a “differentiated approach” to ensure viable market structures6.

For Orange, France’s largest operator, any SFR acquisition would likely face scrutiny about market concentration, but the changing regulatory environment suggests greater openness to consolidation that enhances infrastructure investment and operational efficiency.

……