Orange (ORAN): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report
Summary:
Orange reported year-over-year deterioration in revenues and EBITDA in the third quarter of 2014. 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. Nevertheless, increased 4G network rollouts, new service launches, ongoing strategic acquisitions plans and successful divestiture goals continue to propel growth. The stock has moved up by more than 30% in the past one year and is trading near its 52-week high end, providing limited upward potential. We, thus, maintain a Neutral recommendation on Orange.
Overview:
Paris-based Orange (ORAN) is one of the world's largest telecommunications carriers. The company serves 239 million customers across 33 countries. Orange is the third-largest wireless operator in Europe. In addition to local phone service, the company provides domestic and international long distance, data communications, wireless, multimedia, Internet access, broadcast and cable TV service. The company also provides value-added services, such as voice mail, call waiting, callback, call-forwarding, three-way conferencing and caller identification services.
On May 28, 2013, France Telecom's shareholders had approved the company s change of name to Orange, which came into effect from Jul 1. Orange is the group's single brand for Internet, television and mobile services in majority of the countries where it operates. Currently, Orange is the largest Internet service provider (ISP) in France. Orange replaced the company s former ISP brand, Wanadoo, in Jun 2006. "Orange Biness Services" (formerly Equant) the business arm of Orange is one of the leading providers of communications services to multinational companies. Orange is the number three mobile operator and the number three provider of broadband Internet services in Europe.
Orange operates through six reporting segments: France (accounted for roughly 50% of 2013 revenues), Spain (10.1%), Poland (7.6%), Rest of the World (18.1%), Enterprise (15.7%) and International Carrier and Shared Services (4.4%). The services provided by the company include personal communication services and home communication services. In personal communication, Orange offered data services, mobile broadband services and Internet/Business Everywhere. Home Communication services include Internet services, digital television customers and telephone services.
As of Jun 30, 2014, Orange had 178.7 million mobile and 15.7 million broadband Internet (ADSL, fiber) customers worldwide.
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