On Tuesday 4 August the leaders of the Orange-Sonatel group surrounded CEO Sékou Dramé to launch a fight-back. At the operator’s headquarters in Dakar and for more than an hour, the managers fine-tuned their arguments in order to respond to their critics.
Since 22 July, the Senegalese subsidiary of the French group has once again been under fire. At issue: a change in its range of mobile packages perceived by many users as an unacceptable increase in rates. For example, some packages have gone from 5,900 ($10.6) to 7,500 CFA francs.
Calls for a boycott and clips of people destroying SIM cards live on social networks have multiplied, increasing the pressure on the operator. Initially very cautious about its communication strategy, the company finally regretted an “immense incomprehension” and renewed “its commitment to make access to the internet and mobile communications affordable for all Senegalese.”
This was not enough to calm consumers, who were calling for a day of boycott of the operator on 7 August. While Orange maintains that its offers “meet the Senegalese people’s need for connectivity”, the regulator has heard the voices of the disgruntled. On Friday 7 August, the Autorité de Régulation des Télécommunications et des Postes, alerted by several consumer associations, asked the group to “suspend the new offers put on the market on 22 July 2020”. However, the operator is not required to comply with this request immediately.
2019: the price war
To understand the grumbling that is currently upsetting Orange, we have to go back to October 2019. At the time, while the streets of Dakar were adorned with mysterious red and white advertising posters, the French operator Free made a sensational entry into the telecoms landscape with ultra-competitive offers.
Orange, which controls more than 50% of the telecommunications market share in Senegal, responded quickly. The new rates for its “Illimix” – the name given to packages that combine internet connection, phone calls and text messages – are in turn displayed in capital letters on billboards, taunting the newcomer.
Has Orange lowered its prices too quickly and proposed unsustainable offers? The group does not want to comment on that. “At the end of 2019, the telecoms market experienced a sea change with the arrival of more than abundant offers in a context of a price war. This unprecedented situation had an impact on the quality of service that operators were offering their customers and led all players to launch changes. But this price battle will only be disastrous for the whole system,” says Sonatel’s CEO Sékou Dramé.
“More for less”
While it assures that this “price war” is not beneficial for either operators or consumers, Orange refuses to talk about a price increase. “We have completely revised our range, it makes no sense to compare the price of a previous offer to that of a new one because the content is no longer the same. We have adapted our content to the needs of users with, for example, offers that provide more internet access at night. If you look closely today, customers get more for less,” says one of the group’s executives.
Still, consumer dissatisfaction has made made its way to the government. The operator was thus received by the telecommunications ministry on 3 August. “The change in rates was a surprise, because of the competition, we expected a further reduction and an increase in quality,” says a ministry official who admits that the changes were perceived as an increase by the authorities.
The article continues below
Get your free PDF: Top 500 african companies 2019
Your guide to Africa's leading corporates
Complete the form for your free download of The Africa Report’s 2019 Exclusive Ranking of Africa’s top 500 companies from last year. Get your free PDF by completing the following form.
“If Sonatel maintains that it has changed its tariffs downwards as much as it has gone back to the previous ones, since it is obvious that the Senegalese do not want new ones,” says Momar Ndao, president of the Association des Consommateurs du Sénégal (Ascosen). According to him, since 22 July, a new complaint against Orange is registered every two hours.
President of Ascosen since 1994, the industrial engineer has seen the operator shaken by many controversies. Since it began marketing its offer under the Orange brand in 2006, Sonatel has regularly been singled out for its “exorbitant tariffs, given the poor quality of the network and the failures of money transfers with Orange Money”, points out Aliou Santé, coordinator of the Y’En à Marre citizen movement, which is a major backer of the call for a boycott against the operator.
“How can Orange justify an umpteenth increase at a time when, with the Covid-19 pandemic, the purchasing power of Senegalese is being undermined by the economic crisis,” the activist, who is pushing for mass SIM card cancelations and protests, said.
“Orange is a concessionary company of the public telecommunications service, which belongs to the state,” Momar Ndao added. “So how can we understand that, at a time when the pandemic is supposed to encourage social distancing, and therefore communication and distance working, Orange is raising its prices? This is against the public interest.”
A French multinational
Despite its line of defence, according to which Orange is committed to “making telephone and internet communications accessible to all”, the operator is also the victim of a long-standing Senegalese struggle against economic imperialism and regularly comes under fire from nationalists.
“Orange is a French multinational that makes most of its profits in Africa. In 2019, it generated 196bn CFA francs of profit in Senegal and despite this, it does not have the consideration for its customers to apply rates commensurate with their purchasing power,” denounced Aliou Sané. Faced with the accusations, the operator retorted by displaying the amount of its investments at a press conference, with 585bn CFA francs in three years, especially for the extension of its network coverage.
1997, a wave of privatisations
That is not enough to ease the frustrations, whose origins go back more than twenty years. In 1997, countries dependent on loans from the World Bank and the International Monetary Fund were forced to reduce the scope of state intervention in the economy. Senegal, then led by Abdou Diouf, who adopted the motto “smaller state, better state”, was no exception to the rule. Sonatel then sold a third of its shares to France Télécom.
For some consumers, Orange thus embodies the imperialism that keeps Senegal under the economic yoke of France. Because it is a French brand, of course, but above all because it has taken over a public company, according to the president of Ascosen, Momar Ndao. “At the time, Sonatel was seen as a public company that operated on its own. Privatisation by French groups has left the Senegalese people resentful: Orange earns 3bn CFA francs every day and some people think that this money could have belonged to a Senegalese public company.”
Although the square logo of the brand is displayed throughout the country and the sub-region, its practices are regularly denounced by consumers. In Senegal, where the government adopted – in collaboration with operators – its “Digital Strategy 2025” aimed at reducing the digital divide in the country, every change in tariff is perceived as an insult to consumers.
So far, Orange’s business is not being hindered. According to the Autorité de Régulation des Télécommunications Electroniques et des Postes, Orange’s market share was on the rise in 2019 with 53.62%, while those of its competitors Free and Expresso, with 20.99% and 25.38% respectively, were slightly down.
Understand Africa's tomorrow... today
We believe that Africa is poorly represented, and badly under-estimated. Beyond the vast opportunity manifest in African markets, we highlight people who make a difference; leaders turning the tide, youth driving change, and an indefatigable business community. That is what we believe will change the continent, and that is what we report on. With hard-hitting investigations, innovative analysis and deep dives into countries and sectors, The Africa Report delivers the insight you need.View subscription options