14 January 2013

Africa: Baidu Targets Africa With Orange Tie-Up

Baidu, the Chinese search engine, is building its international mobile footprint through a partnership with Orange in the Middle East and Africa

China's search giant Baidu has partnered with France Telecom-Orange to launch a co-branded browser for low-cost smartphone users across Africa and the Middle East.

The service compresses data to provide customers with a faster, more data-efficient service, while reducing the traffic on Orange networks at the same time. Launching in English and Arabic, it offers one-click access to web-based apps and internet services like Facebook and Twitter.

This marks the first time that Baidu has signed an exclusive strategic partnership with a global operator, pointing to the company's efforts to asset itself in the international mobile space. Africa - with upwards of 700m mobile subscribers - looks like a good place to start. The tie-up with Orange - which has 81m customers across 20 countries in Africa and the Middle East - will bring the search provider a considerable regional footprint.

"This deal places Baidu firmly on the international mobile browser market. Their focus on Africa is a statement of intent, and is a continuation of their internationalisation strategy," says Nicholas Jotischky, principal analyst at Informa Telecoms & Media, the research group.

Baidu adds its name to a growing list of Chinese companies looking to carve out their slice of the African telecoms boom. Manufacturers of low-cost smartphones have led the charge, with the likes of Huawei and ZTE using their emerging market expertise to cash in as customers upgrade from basic mobiles and feature phones.

"Chinese manufacturers of low-cost smartphones are viewing the African device market as one of great potential. The tie-up between a Chinese device and Chinese internet browser is one that is perhaps helping to drive such a partnership [between Orange and Baidu]," Mr Jotischky explains.

Orange is also set to benefit. It hopes that services targeting bottom-end devices will help democratise mobile internet usage across the region, driving its mobile data and content revenues.

"This is a key message regarding data and the digital revolution: where we are, where we want to be and what services we want to deliver," Arnauld Blondet, director of AMEA at Orange's Technocentre tells This is Africa.

After years of neglect, Africa's mobile content market is deepening, with mobile operators and search groups - led by Google - racing to create relevant local services. Informa forecasts that annual non-voice end-user service revenues for Africa will hit $26bn by 2016, up from $7bn annually in 2011. Messaging revenues will still contribute 50 percent of non-voice profits in 2016, but that represents a 20 percent drop from 2011. The growth of mobile internet services will play a large role in the growth of data revenue.

The new browser will be launched in Egypt, where Orange saw demand for Android devices double in the second half of 2012. The group hopes to increase its revenues from Africa and the Middle East to $7bn in 2015, from $4bn in 2011.

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