On Mar 27, we issued an updated research report on
). Despite the plunge in the company's top-line, Orange managed
to improve its bottom-line year over year in 2013.
Orange is ramping up infrastructural developments in France
and other European countries. The company has accelerated 4G
rollout and captured over 40% of the French population in 2013
with 4,200 sites. In Spain, the company remains one of the
leading telecom carriers in 4G deployment and covers over 0.5
million customers and 30% of its network coverage. In UK, the
company boasts over 2 million 4G customers and foresees further
growth in this market given the country's highest ranking in 4G
Apart from Europe, the company is also focusing on Africa and
the Middle Eastern markets. The company has already launched 4G
in two countries in this market and expects to launch 4G in two
more regions, namely, Senegal and Botswana.
In order to drive growth in the domestic segment, Orange is
shedding underperforming assets. Due to weak economic conditions
and unfavorable regulatory measures, these assets continue to
hamper its top-line growth. The company divested its stakes in
the Orange Austria unit to Hong Kong-based Hutchison Whampoa Ltd
for cash proceedings of €70 million. Orange also reached an
agreement with Altice to sell 100% of its subsidiary in the
Dominican Republic-Orange Dominicana S.A for $1.435 billion (€1.1
Orangecontinues to strengthen its balance sheet and achieved
its target of net debt-to-EBITDA ratio of 2.2 in 2013 and expects
net debt/EBITDA ratio of approximately 2x in 2014. The company
generated operating cash flow of €7.02 billion, more than its
targeted €7 billion in 2013.
Orange currently has a Zacks Rank #2 (Buy).
Other stocks in the telecom sector worth considering include
Shenandoah Telecommunications Co.
Nippon Telegraph and Telephone Corporation
Level 3 Communications, Inc.
). While Shenandoah and Nippon sport a Zacks Rank #1 (Strong
Buy), Level 3 Communications carries a Zacks Rank #2 (Buy).
LEVEL 3 COMM (LVLT): Free Stock Analysis
NIPPON TELE-ADR (NTT): Free Stock Analysis
ORANGE-ADR (ORAN): Free Stock Analysis Report
SHENANDOAH TELE (SHEN): Free Stock Analysis
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