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Summary

Orange has invested €75m in Africa Internet Group (AIG), in what could be the first step in making its regional mobile commerce infrastructure part of a global services platform. The outcome could be new network and cloud service platforms for regional and global enterprises.

Enterprise e-platforms: a fresh focus for service providers

This investment is a new development for Orange’s emerging market strategy, which has till now been focused on mobile network operations. Orange is clearly looking for new types of resources to develop its network, cloud, and online services platform to broaden the scope of its current enterprise services from connectivity to digital commerce and potentially dedicated enterprise cloud services

Orange is joining existing AIG shareholders MTN, Millicom, AXA, Goldman Sachs, and Germany’s Rocket Internet. So there are new potential partners here, both with other emerging markets mobile operators and cloud service providers.

Investors have their own undisclosed partnership agreements, but they highlight the increased importance different types of service providers are placing on new platforms for Internet, e-commerce, and cloud services.

Other telcos such as Verizon have made moves to acquire online and Internet content properties, and Verizon may be in the running to acquire Yahoo. But AOL and Yahoo belong to an older ISP engine model, while AIG and Rocket Internet look more like a new type of enterprise cloud platform that could develop into industry-dedicated cloud services.

AIG, founded in 2012, currently operates in 26 African countries, with 71 companies in eight vertical sectors: online retail, food ordering platform, online marketplace, real estate marketplace, vehicle marketplace, taxi hailing, online travel agency, and P2P lending marketplace.

Orange will be able to leverage its already extensive investments in network infrastructure and data centers while driving increased revenue growth via a rise in network traffic. But most significantly, the move will allow Orange to begin playing a more meaningful role in the cloud and network value chain by adding further value in the services layer.

Appendix

Further reading

Service Provider Snapshot: Orange Business Services 2016, TE0005-000779 (February 2016)

Enterprise Services Snapshot: Dimension Data, TE0005-000729 (August 2015)

Service Provider Snapshot: Ooredoo Business Services, TE0005-000754 (October 2015)

Service Provider Snapshot: Tata Communications, TE0005-000701 (April 2015)

Author

Richard Hurst, Senior Analyst, Enterprise

richard.hurst@ovum.com

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