Orange Achieves Reduction in Capex Despite Enhancing Coverage

Orange, a leading telecommunications company, announced its financial results for the full-year 2023, revealing a sharp reduction in Capex despite expansion of coverage and marginal growth in revenue.
Orange CEO Christel Heydemann
The company’s eCAPEX stood at 6,815 million euros, marking a notable decrease of 6.7 percent (–487 million euros) compared to the previous year. This reduction, which represented 15.4 percent of revenues, aligned with the objectives outlined in the “Lead the Future” strategic plan.

The main contributors to the decline in annual Capex were France, with a reduction of 10.2 percent (–344 million euros), attributed to the maturation of fiber roll-out, and Spain, with a decrease of 12.5 percent (–107 million euros). Orange’s Capex in Poland fell 9.5 percent, Orange said in its earnings report.

As of December 31, 2023, Orange HAS reported 71.7 million households connectable to FTTH worldwide, reflecting a year-on-year increase of 10.4 percent, along with an FTTH customer base of 15.4 million, marking a 12.5 percent increase.

Orange has not revealed the number of 5G subscribers on its network. Orange does not even say that making investment in 5G network is one of its focus areas.

REVENUE

Orange reported revenues of 44,122 million euros for the full-year 2023, indicating a growth of 1.8 percent or 790 million euros compared to the previous year.

The revenue growth was fueled by a 3.5 percent increase in retail services, accounting for 1,109 million euros, and a 7.3 percent rise in equipment sales, totaling 238 million euros. However, this performance was partially offset by a decline in revenues from wholesale services, which decreased by 6.5 percent or -474 million euros.

Orange has reported a net income of 2,892 million euros, marking a 10.5 percent increase or 275 million euros compared to the previous year. This increase was attributed to higher operating income, increased financial expenses, and lower income tax.

In France, the main telecom market of Orange, revenues declined by 1.4 percent to 17,730 million euros, primarily due to expected declines in wholesale services and fixed-only narrowband services (PSTN), partially offset by growth in other retail services driven by the company’s value strategy.

In Europe, revenue growth accelerated in the fourth quarter, resulting in a 2.2 percent increase for the full-year 2023 (+248 million euros). This growth was driven by retail services and the strong performance of IT & Integration services, particularly in Poland, Spain, and Romania.

In Africa & Middle East, revenues experienced robust growth, rising by 11.4 percent (+729 million euros), driven by double-digit increases in mobile data, fixed broadband, Orange Money, and B2B services.

Orange Business segment reported revenues of 7,927 million euros in 2023, with slight growth of 0.2 percent, attributed to the growth in IT & Integration services and increased mobile revenues, offsetting the decline in fixed Voice and Data legacy activities.

Additionally, Totem TowerCo reported revenues of 686 million euros, with a slight increase of 0.3 percent, driven by a rise in hosting revenues from third-party customers.

Overall, Orange’s financial results for the full-year 2023 reflect a strategic focus on reducing eCAPEX while achieving revenue growth, particularly in retail and IT services, across its diverse geographical segments.

Baburajan Kizhakedath