From operator to bank - Orange MEA’s Alioune Ndiaye

From operator to bank - Orange MEA’s Alioune Ndiaye

At MWC 2019, we spoke to Orange’s MEA chief Alioune Ndiaye about the group’s ambitions in the region. Whether it’s eliminating the digital divide or empowering the masses through mobile money, Orange foresees a prosperous future for the continent.

At the start of May 2018, Alioune Ndiaye was appointed CEO of Orange MEA. Having started in the Sonatel Group as the CFO, he spent 10 years there before moving to Orange Money to launch operations - initially branded as Ikatel, it was folded into Orange in 2006. Ndiaye was CEO there for 10 years, then moved back to Sonatel Group but this time in the position of CEO. The group has revenue of around €1.5B - roughly 30% of Orange MEA – and covers five countries: Senegal, Mali, Guinea, Bissau, and Sierra Leone.

Could you go into detail about Orange Money and how it is performing?

We launched mobile financial services in 2008, and the service now has 40 million subscribers across Africa and the Middle East. Of these, 15 million are active customers – i.e. they have made at least one transaction in the past 30 days. Now Orange Money represents up to 15-20% of our revenues depending on geographies; it has become a growth engine for Orange, enabling us to compensate for the decreased revenue coming from voice and text messaging, which have been on a fast decline for the past few years because of tougher competition from OTTs. With the increasing penetration rate of the internet, many of our subscribers now use services such as WhatsApp or Viber so our revenues from voice are decreasing. Orange Money combined with the development of data users has enabled us to offset this fall in voice revenue – revenue grew by a substantial 5.1% in 2018, driven by mobile money and data. These are the two growth engines for MEA at this time, but it’s not all about the model of increasing revenue – when you have 40 million people who are totally excluded from any financial services, and you can offer them access to this world via their mobile phone in a very easy way, with great customer experience, that’s also very important for us.

How do you plan to develop and spread the service?

We still have huge potential to develop mobile financial services. We have 120 million telecom subscribers, of which 40 million use Orange Money. The 15 million active users of Orange Money only represent 13% of our mobile customer base – some operators have reached mobile money penetration rates of 70% among their user bases, so we have this potential. Additionally, we have not yet launched all the possible use cases; today, our subscribers can make P2P money transfers, pay utility bills, make merchant payments and buy airtime, but we haven’t launched credit and saving services. While we offer these services in Mali and Madagascar, we’ve done this using the licences of banks and financial institutions, and this involves revenue sharing. We have requested a bank licence in West Africa in order to offer these services via Orange Money – we’re waiting to hear about this but we’re expecting it to be granted by the end of April or May. Once we’ve received the licence, we’ll launch microcredit and savings services – there’s huge potential here, because in Africa around 70% of the jobs are informal roles, so people often need credit services to buy goods. We can be more efficient than banks and other financial institutions by allowing customers to apply for credit via their phone. We have a scoring platform that uses all the data we have on the telco side. If one of our customers asked for credit, it would take a few seconds to tell them how much we’d be able to grant them using these scoring facilities. If they agree to the amount, they can have it in their Orange Money account immediately – that’s a very simple journey for the customer, and makes us more competitive than banks and other financial institutions.

In this space, who are your competitors?

Some mobile money providers and operators are offering this kind of proposition; operators can get to know their customer, understanding their purchase power, how often they buy airtime, how much money they spend on telco services. This is a great deal of data that enables a strong scoring platform that provides a competitive advantage over banks and other institutions.

Is mobile money interoperability on your agenda?

One of the initiatives we’ve taken is an agreement with MTN – one of our main African competitors. We’ve set up a JV with them called Mowali, which enables interoperability between Orange Money and MTN across our footprints. This grants both groups the opportunity to address all users across both of our subscriber bases, and this will attract other providers – Airtel is already interested. Banking regulators are also likely to push for interoperability between telcos – otherwise it’s not sustainable. They did this for the banks, and when you look at services like M-Pesa, they had a quasi-monopoly in mobile money and that extends to telco services. Mobile money is very ‘sticky’ – people don’t change their bank every month.

What kind of services are you looking to offer in the future?

We used to just be a telco – we’ve now become a mobile finance provider in addition to this. We will continue this strategy of offering many services – we’ve already launched an energy service in eight countries, providing solar home systems to customers. This leverages our assets as we have a strong distribution network with 700,000 points of sale across Africa. We have a strong network and brand, and all these assets enable us to be a key player even in fields not traditionally associated with telcos. We’ll be able to make the energy service very successful, and we will move to offer services that provide basic needs for Africans around areas such as agriculture and education. Millions of people can’t access education due to lack of schools and teachers, but digital can provide a solution to this by offering a platform that enables people to learn with just an internet connection.


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