Increased 4G network rollout, new service launches and successful divestiture goals continue to propel growth for Orange (ORAN).
While management’s efforts toward driving 4G expansion supports wireless growth in France and other key regions, low recovery in domestic economic conditions, sustained fixed access line erosion, stiff competition, labor concerns, lower mobile termination rates and unfavorable regulatory measures across the company’s key European markets pose considerable headwinds.
Currently, Orange is ramping up infrastructural development in France and other European countries. The company enjoys 4G penetration of 71% in France, 75% in the U.K., 66% in Spain, 59% in Poland, 81% in Belgium and 48% in Romania. Apart from Europe, Orange is also focusing on the African and the Middle Eastern markets. Meanwhile, the company has teamed up with Tesla Motors to deliver wireless connectivity service to the latter’s vehicles. Initially, only the model S owners will be able to avail the service.
In Sep 2014, Orange had signed a five-year deal worth $12 million with BW Offshore. Per the contract, Orange will offer end-to-end satellite communication service for its fleet of highly-specialized oil and gas production vessels. In an attempt to boost its Machine to Machine service, Orange is also helping enterprises to locate corporate assets and equipment across the globe by means of the SIM card, irrespective of the operator. Notably, Orange continues to see customer growth in its mobile business backed by the success of “Open”, “Origami” and “Sosh” offers, and strong adoption of smartphones.
Orange currently has a Zacks Rank #2 (Buy).
Other Stocks to Consider
Other favorably-ranked stocks in this sector include BlackBerry Limited (BBRY), America Movil S.A.B. de C.V. (AMX) and Ceragon Networks Ltd. (CRNT). All these stocks carry a Zacks Rank #2.
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