“There are a lot of banks in Romania but when you look at the banking consumption, we believe there is really room to bring a service where we could facilitate two things: exchange of small and medium amounts of money between Romanians (…) and enabling people to pay invoices,” Fallacher said.
He did not reveal the name of the partner bank, merely saying Orange would launch the service in partnership with one of the Romanian banks.
According to market data, about 60% of Romanians have a bank account, and even fewer have a bank card.
Orange Money will allow people to transfer about 10 lei to 300 lei and customers will be able to deposit and withdraw money from Orange stores and from its partners’ stores. Orange will charge a fee for each transfer or withdrawal of cash. Orange Money is already available in a number of emerging markets.
“To be clear, we do not want to become a bank, so we are not going into competing banks, we are just adding a service that we believe will be adding a lot of convenience to Romanians,” Fallacher insisted.
As for the rest of its business, the Orange Romania CEO says revenue is back to growth mainly thanks to the “explosion” of mobile data, a trend that will become even more visible this year once the 4G network coverage extends.
“The market today is shifting from voice to data,” he said.
The Orange CEO did not provide details about how much of the revenue of the operator data services generate. Its service revenue reached EUR934 million in 2012.
Non-voice services accounted for 23% of the total services of the company in the last quarter of 2012, double as much as in the same quarter of 2007, according to the data published by the majority shareholder, French-held Orange group. The company has not published revenue breakdown by voice and non-voice since 2012 but the latter may have reached about 30% as a result of the increase in the number of users.
Romania had 11.2 million users of mobile Internet services in mid 2013, up from 10.1 million at the end of 2012 and 7.5 million at the end of 2011. Orange had 3.5 million users of mobile data services in mid 2012, and has not provided updated figures ever since.
The increase in data service usage is one of the explanations for the revenue growth that Orange saw each quarter last year. The result was made possible by the investments in the network, the store chain, smartphones and tablets, Fallacher said.
A few years ago the smartphone penetration rate was 15%, last winter it was 50%, he said. “The fact that we continuously invested in our shops, in our distribution networks and in making available the widest range of smartphones and devices in the country explains this (the increase in revenue i.e.) as well.”
This is “definitely thanks to appetite of Romanians for smartphones. We see an explosion of data, which is indeed quite logical.”
According to market estimates, sales of smartphones reached 1.5 million units in Romania last year, 50% more than in 2012.
Romanians’ appetite for smartphones and mobile data services is also behind the increase in the number of Orange subscribers, Jean Francois Fallacher said.
“Indeed there is a growth in our post-paid base. You have more people interested by smartphones and therefore they take a subscription. It’s definitely interesting to buy a smartphone together with a subscription, rather than buying it directly and taking a SIM card. Prepay is rather stable, as well.”
The Orange representative did not say how many post-paid users the company has. In mid 2012, the number of post-paid users was 4 million. The trend Fallacher is talking about is not valid for the entire market, as the number of mobile phone subscribers was down 0.3% to about 9.3 million in June 2013, according to telecom market regulator ANCOM.
Orange was the only major company on the local communications market that saw revenue rise in each quarter of 2013. Year-on-year growth was 1.8% in 2013 and it was the first since the start of the crisis. The main reasons for this are the constant investments and the stable top management team, Fallacher said.
“If you ask me why these results, I believe this is because we have been consistent.”
Orange also entered the DTH TV service market last year, and even though Fallacher did not reveal any figures, he said they were better than initially expected. That is especially true for the Orange TV Go, the application enabling users to watch TV and movies on smartphones and tablets.
“A few months after we launched (September 2013, i.e.) we are very surprised with the takeoff of the usage of Orange TV Go. We were not expecting such an uptake and such a usage.”
(English version by Loredana Fratila-Cristescu)