Fiber Bolsters Orange's Financials

French service provider Orange credits surging sales of fiber for much of the company's continued commercial momentum during 2016.

Full-year 2016 revenues increased 0.6% on a comparable basis to about €40.9 billion ($43.1 billion); adjusted earnings (representing monies before taxes, interest, amortization and depreciation are accounted for) grew 1.3%, to €12.7 billion ($13.4 billion). (See Orange Hints at 2017 Capex Rise as Spain Buoys 2016 Sales.)

As a result, shares in Orange (NYSE: FTE) traded slightly higher -- up 0.86% in Paris at lunchtime, locally, earlier today -- at €14.66 ($15.46). However, that is approximately 7.9% lower than at this time in 2016, Light Reading reports.

But Orange's broadband-based results shone brightly. In the fourth quarter, Orange deployed fiber to an additional 393,000 customers, to reach a total of 3.3 million fiber customers by the end of 2016. This represents an increase of 75%, year-over-year, according to Orange.

The service provider's investments in fiber increased and, in addition, it continued to deploy 4G and 4G+ as part of its Essentiels2020 strategic plan. Unveiled in 2015, the initiative's mission is "to be always there to connect everyone to what is essential," said Stéphane Richard, chairman and CEO of Orange Group, during a press conference in 2015.

One of the five pillars, or levers, for this transformation is fiber, Richard said. Orange intends to run its access fiber networks past 20 million French households by 2022, up from 4 million in 2015, he said. As part of that push, Orange created nine new 100 percent fiber cities by the end of last year; cities include Nice, Lyon, Montpellier, Lille and Paris. Orange planned to invest €4.5 billion in its fiber-to-the-home (FTTH) infrastructure between 2015 and 2018, with €3 billion of that sum designated for France.

Elsewhere in Europe where Orange is active, the main part of its capital expenditures and investment will revolve around FTTH, Alain Maloberti, senior vice president of Network Architecture & Design at Orange Labs Networks told Ray Le Maistre in November 2016.

"We believe the technology, which is future-proofed for customers taking into account their needs, is fiber. We are making sure we have a convergent [approach] both for mobile and fixed," he said. "We are clearly part of the NG-PON evolution, in terms of rollout. At the moment, the investment in the network and the access network is very necessary to meet the demands of our customers."

The remaining levers include simplifying and personalizing customer relations, becoming each customer's trusted partner, building a "digital and human employer model" and diversifying by capitalizing on company assets.

"Our investments are driving our commercial performance, led by very high speed fixed and mobile broadband and despite a level of competition that is intense and unprecedented, particularly in France," said Richard in a statement about the recent financials.

Related posts:

• What Is Europe's Real FTTH Price Tag?
• 7 Best Practices for Broadband Public-Private Partnerships
• Orange Forecasts 'Common' Gigabit by 2018

— Alison Diana, Editor, UBB2020. Follow us on Twitter @UBB2020 or @alisoncdiana