Wed. Feb 26th, 2020

The supply of mobile phones, at risk for the coronavirus

Orange says there will be problems with the “stock” of terminals if the epidemic does not subside in three months

Something that seems so accessible to everyone and as easy to get as a mobile phone could become a very precious asset in just a few weeks. China It is the factory of the world. And among the products that it manufactures profusely are the terminals that the operators and their components sell. And, right now, these factories are minimized by the coronavirus. So at a minimum that Orange calculate that if the epidemic does not remit, In three months there could be supply problems. Diego Martínez, director of Residential and Financial of the company, has ensured that the French operator launched a contingency plan weeks ago so that stores have a sufficient “stock” of terminals given the supply difficulties they are experiencing from their suppliers With the Chinese manufacturers. However, he has assured that, if the pandemic does not remit, there may be difficulties with the supply within three months. Martinez, however, prefers to be optimistic and stick to the latest reports on the epidemic, which ensure that, if not remitting, at least it would be stabilizing.

Martínez has referred to the coronavirus and its incidence in the “telecos” sector during the presentation of rresults of the Spanish subsidiary of Orange. In 2019, the company billed 5.280 million euros, 1.5% less than the previous year. A cut that reflects the situation of extreme competition in a sector in which “low cost” companies such as Mas Movil or Lowi are marking the step to the rest. Despite this drop in turnover, Orange managed improve its EbitdaaL (gross profit after rents) by 0.3%, to 1,646 million, thanks to its operational model of cost optimization that is based on an intensive use of “big data”. The company closed 2019 with a 1.9% decline in its fixed broadband customers, 4,075 million, of which 83.4% are customers with convergent packages (mobile, internet and television). Laurent Paillasot, CEO of the company in Spain, has attributed this setback to the company’s lack of positioning in the “low cost” segment. “We have defended the position of Orange and Jazztel well [marcas de gama media y alta de la compañía], but we have negative portability rates because we have not entered into the low cost price war, ”Paillassot explained.

Without his plan going to compete on prices with other companies, Orange says he is aware that he must win positions in the most economical segment. For this, Paillassot has explained that, instead of focusing on the price, the company will bet on positioning its three “low cost” brands, Simyo, Amena and Mobile Republic, to reach different types of customers. “We have a lot of potential using the three brands with different positions, with different and complementary strategies to attract market sectors without cannibalizing our premium brands,” Paillassot explained.


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