Orange laments Africa incumbent, tax challenges

INTERVIEW: An Orange executive bemoaned challenges it faces in improving connectivity across Africa, noting some governments opted to protect incumbents in favour of development, while regulators continued to hike taxes on mobile operators.

Elisabeth Medou Badang, SVP Africa and Indian Ocean (pictured), told Mobile World Live the operator was committed to improving the quality of connectivity, looking specifically at investing in fibre to cope with growing data usage, alongside its 4G progress.

Orange has a presence in 18 countries in Africa and the Middle East: it is investing €1 billion every year to expand coverage and increase network speeds across the region, she added.

However, Badang suggested the operator’s strategy to address the digital divide was not the issue, rather it was facing external challenges as some markets “were not necessarily open”, with incumbents retaining more rights than it did.

“In some countries, our affiliates are able to build fibre. In other countries, there is a monopoly from the incumbent and this is one of the challenges we face, as we need to go through the incumbent.”

She said this was a hindrance, as often the incumbent didn’t have the investment capacity and sometimes “the operating model was not satisfactory enough to be able to provide us with the right service at the right cost”.

Another challenge lies on the regulatory side and the fact mobile operators “are perceived as very profitable companies”.

“There is a temptation to increase tax or fees…in some countries it can go up to 15 per cent of the turnover. This is a very limiting factor. It is making the business model less robust and giving us less opportunity to invest,” said Badang.