PYMNTS-MonitorEdge-May-2024

Report: Orange Could Sell Its Banking Unit

Orange Bank

French telecom Orange is reportedly weighing its options for its online banking division in the wake of media reports that the company was considering the sale of Orange Bank.

“In a very highly competitive environment in the banking market, Orange is considering all opportunities to develop Orange Bank’s activities and support its growth,” a spokesperson for Orange told Reuters Wednesday (Oct. 12).

Earlier this week, France’s Les Echos — citing unnamed sources — said Orange had instructed investment bank Lazard to embark on a new sale or possible alliance. Orange would not confirm those reports, Reuters said.

The Reuters report said that Orange had previously shown a willingness to give up control of its banking operations, with BNP Paribas seen as the top candidate among French lenders.

Orange was not immediately available for comment Wednesday afternoon.

Read more: Personalization Becomes Competitive Advantage for Digital-First Banks

The report comes at a moment when digital banking is growing in importance. Sparked by the closure of close to 3,000 physical branches in the U.S. last year, customers say they expect 61% of their banking business to be digital by 2024, with the largest increases coming in the form of more ATM- and mobile-facilitated transactions.

See also: French Telecom CEO Suggests Big Tech Platforms Should Share in Cost of Infrastructure

Earlier this year, Orange CEO Christel Heydemann said Big Tech companies had been “forcing” telecoms to invest more in boosting network qualities but not helping to meet the cost.

Heydemann, addressing an audience at the Rencontres Economiques conferences in Aix-en-Provence, France, projected network traffic will be three to five times higher in the next six years. She added that the big growth has been “essentially captured by a few players, the big content providers, five players that force us to invest,” she said.

While she didn’t mention Netflix, Amazon, Meta or Google by name, she did say the big challenge in the future would be working with tech companies that have been “forcing” behavior on their users.

Her comments echoed those of Orange CFO Ramon Fernandez, who has said tech giants have barely participated in the development of the required infrastructure. This is troubling because there will be around 15 billion euros ($15.3 billion) more invested to absorb the traffic growth.

PYMNTS-MonitorEdge-May-2024