Orange with Water Is No MVNO in Senegal

September 23, 2009

In May 2009, Kirene, a local mineral water company in Senegal, announced that it was launching an MVNO in conjunction with Orange Senegal under the joint brand “Kirene Mobile avec Orange.” Kirene said it would outsource its billing and other back-office processes to Paris-based Transatel. (Orange Senegal is a subsidiary of Sonatel, which in turn is controlled by France Telecom.)

The number of mobile subscribers in Senegal grew 81% from 2006 to 2008 (see our Africa & Middle East Mobile Demand Forecast, Q2 2009). Since MVNOs are mainly about tapping niches in markets close to saturation, growth that strong raises the question of what the purpose of Kirene Mobile avec Orange is. When there’s lower-hanging fruit to pick, why would Orange hand over a whole lot of customer relationships to someone else?

It turns out Orange is doing no such thing. ARTP, the Senegalese telecom regulator, has ruled that Kirene is actually not an MVNO, and that the Kirene service is merely a co-brand. ARTP also made Sonatel and Kirene delete a clause in their contract that had barred Kirene from selling products that compete with Sonatel’s. Moreover, to make clear that Kirene is actually a brand of the operator, the regulator decreed that the Sonatel logo has to be more prominent in Kirene Mobile advertising. Put simply, Kirene Mobile is not an MVNO, but a brand, enabling Orange to leverage the mineral water company’s distribution and marketing. Indeed, per-minute prices are the same as Orange’s, except for roaming services. In addition, Kirene Mobile subscribers can collect points and win Kirene products. (For more about Senegal, see our recent report Communications Markets in Senegal.)

It is relatively common for operators to develop sub-brands and try to distance them from their own brand in order to attract different market segments. In France, for instance, Orange has the M6 Mobile brand and Bouygues has Universal, each of which targets the youth market. Even Virgin Mobile South Africa is 50% owned by third mobile operator Cell C, and as such is not an MVNO in the true sense.

— Yejide Onabule, Analyst

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