Rolling out Orange Bank to Belux over time

16/04/2018 - 12h23

Opening of an incubator in 2018, 5G tests "very soon" and the launch of Orange Bank by 2021... The Orange group’s European Director, Gervais Pellissier, visited Luxembourg on Friday. He provided an update on the French group's strategy in Luxembourg and Europe. 

Mr. Pellissier, Orange has a "fab lab" in Belgium. Do you have any plans to create one in Luxembourg?
Yes, we are looking into this and it is quite probable that we will set up a "fab lab" in Luxembourg in 2018. However, this will be directly connected to our business. We want to open up to start-ups who will play a role in our ecosystem, not necessarily by working with Orange, but by contributing to the development of the digital world.

For us, this will mean providing a small investment to the entrepreneurs we work with, but most importantly trying to bring them the benefits of our technical services, such as use of 5G, as well as our customer base.

"More of an incubator than a simple ‘fab lab’.”
Gervais Pellissier, European Director of the Orange group


We will also put these young entrepreneurs in contact with our R&D centres in Paris, to open up European opportunities to them. It will therefore be more of an incubator than a simple ‘fab lab’.

Orange also has an investment fund for start-ups. Is this connected?

Our Orange Digital Ventures can invest in start-ups present in our Orange Fabs (the group has several around the world, editor’s note) that it regards as interesting. But this is not mandatory. Once again, as an operator, our interest lies in trying to develop the ecosystem of companies offering digital services, because the more of these there are, the greater the consumption of our network will be.

Has Orange Digital Ventures invested in a Luxembourg start-up?
No, not to my knowledge.

Some people state that use of 5G will initially affect the industrial sector before opening up to consumer telecommunications. Do you share this opinion?
It's not quite what I think. For Orange, the first 5G roll-outs will be aimed at consumers. In addition to the innovative aspect that this technology will be capable of providing for industrial scenarios, above all, it represents the ability to offer, with a smaller spectrum, greater capacity to each client and faster speeds.

In our view, the main interest of 5G is improving the customer experience, but following on from 4G. In other words, moving up to higher speeds for more customers. To take a local example, this will make it possible to offer better connection services at Luxembourg train station in the morning.

"5G will allow us to provide a speed equivalent to ADSL in the home."
Gervais Pellissier, European Director of the Orange group

The second interesting aspect is that 5G will allow us to offer fixed connectivity services. This will enable us to compete with the operators who own the fixed network by providing an internet connection at home. We are already testing this in 4G in selected countries, including Poland and Slovakia.

With 5G, we will be able to provide a speed equivalent to ADSL, in other words at least 30 MB per second. And the timescale for this is 2020 or 2021.

Does this mean that you are planning major investments in 5G in Luxembourg?
We have already invested a lot in the 4G infrastructure. We are carrying out laboratory tests in Paris, as well as in some European cities, notably Bratislava. We are also investigating whether we can launch some in Luxembourg over the coming months. This would be either on our own or as part of a partnership.

We have the impression that for the first phase of 5G we will not necessarily need to install new aerials. We will, of course, need to modernise the existing ones, but it will be possible to reuse them.

If 5G allows you to compete with local operators on fixed services without using their networks, does this mean a new market is opening up for you?
Yes, that’s right. The question now is to see how competitive this new infrastructure will be. If competition is high, we might imagine that operators will open their fixed networks at more interesting bulk prices.

"These technological transformations will lead to a review of existing balances."
Gervais Pellissier, European Director of the Orange group

If you are a fixed infrastructure operator, as Orange is in France, you have great interest in having bulk customers. Amortising this investment over your only customer base is very onerous. I therefore think that all these technological transformations will lead to a review of existing balances, in particular in Luxembourg.

Following its launch in France in November, Orange Bank already has over 100,000 customers and, since 22 March, has offered consumer credits. Will it be launched in Luxembourg?
Today, we officially decided on an imminent launch in Spain.  After this, we will consider rolling out Orange Bank to Belux over time.

In Central Europe, we will probably use a different model, for example, through partner banks, as we are doing in Poland. As a reminder, the Orange group turns over 40 billion euros, 31 of which in Europe - around 20 billion in France and 11 billion in the other countries.

Within Europe, we have a large West division, consisting of France, Spain and Belux, and an East division of Poland, Slovakia, Romania and Moldavia. The idea is not to offer exactly the same services across these two zones.

Within what timescale will we see Orange Bank in Luxembourg?
Probably around 2020 to 2021. We don’t want to roll out this service too quickly. In France, we fell six months behind our initial estimates. We prefer to take our time to avoid risking any adverse effects on our reputation for quality services.

"Providing a very different customer experience to that offered by the major banks on the market."
Gervais Pellissier, European Director of the Orange group

With Orange Bank, we want to provide a very different customer experience compared with an equivalent service offered by one of the major banks on the market. We are currently testing a small set of different functionalities.

With Orange Bank in France, for example, if people lose their credit card, we offer them the option of stopping its use simply by clicking a button on their phone, without having to cancel the card completely. If you are travelling and can't find your credit card, but aren't sure whether it's simply back at the hotel, your first instinct is to cancel it. Thanks to our service, you now have 48 hours to find it and unlock it again.

Interview by Jonas Mercier for Paperjam.