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Proximus joins DT and Orange’s purchasing alliance

Proximus joins DT and Orange’s purchasing alliance

Source: BuyIn

Belgian mobile network operator Proximus became the latest player to team with Orange and Deutsche Telekom’s BuyIn joint venture, combining their purchasing power for telecoms goods and services.

The provider is understood to have become a BuyIn Alliance Member as part of a broader refresh of its network strategy that accompanied a link up with rival Orange Belgium on infrastructure-sharing JV MWingz last year.

A spokesperson for Proximus told TelcoTitans that “Proximus became a member of the BuyIn Procurement Alliance mid‑2019, to ensure the efficiency of the procurement process for the planned RAN renewal”.

“As BuyIn is a major procurement alliance in telecommunication, providing services to over 45 operators worldwide, the alliance membership allows Proximus to achieve lower input pricing, procurement efficiencies, and share procurement best practices.”

— Proximus.

BuyIn and Orange declined to comment.

Opportunity Noks for a discount

The collaboration is already evidently having an impact as Orange Belgium and Proximus move to meld their wireless infrastructure under MWingz — which aims to go beyond many traditional tie‑ups and see sharing of both active and passive RAN elements (but management of core network kit and spectrum separately).

Proximus confirmed on 9 October that it had selected Nokia to “progressively modernise Proximus’ existing 2G/3G/4G network by 2023. In parallel, Nokia will be a key partner in the deployment of the 5G network”. Ericsson was named the operator’s main mobile data core partner. The same day, Orange Belgium said Nokia had been handed a contract to “progressively renew its existing 2G/3G/4G mobile radio network”, also by 2023.

While no mention was made of any BuyIn involvement, Proximus indicated that it had managed to knock “up to €80m [£72m]” off its projected capital expenditure for the next three fiscal years through the “extremely competitive selection process”.

The savings came despite the shackles that Huawei Technologies is being bound by when it comes to participating in European markets’ 5G rollout. Both Belgian operators’ vendor announcements were widely noted for Nokia displacing Huawei from their RANs.

Gang growing

Proximus is the third operator to amalgamate some of its purchasing with DT and Orange, following the recent addition of Bell Canada and Portugal’s NOS as BuyIn Alliance Members (Deutsche Telekomwatch, #91). However, it is the first — at least publicly — to come into the grouping from a territory that sits within DT and Orange’s footprint, thus adding a new layer of significance to the alliance.

BuyIn, formed back in 2011, has for several years been seeking to woo new partners and expand its scale and reach (Deutsche Telekomwatch, #61 and passim). Initially, though, business development progress was slow, and there were suggestions that concerns over potential regulatory exposure were putting prospective buddies off. In 2018, the JV employed KPMG to undertake an audit of its internal processes in a bid to assure prospective new allies of antitrust law compliance within its organisation (Deutsche Telekomwatch, #4, #75, and #77).

MWingz became operational in April, after a period of regulatory scrutiny instigated by Orange and Proximus’ rival Telenet.

Bigger picture

A further aside to Proximus’ support for BuyIn is that it may well set off alarm bells at DT arch-rival Vodafone, whose Partner Markets federation counts Proximus and its Luxembourg subsidiary Tango as long-time members. Supply chain collaboration is one of the main service categories that Vodafone has on its menu for Partner Markets allies, alongside branding, roaming, and product collaboration. Further, DT has more broadly been hinting at other cross-operator services plays that are reminiscent of Partner Markets offerings, such as brand licensing.

A further note — which could have read-through for DT’s evolving strategy for regional revival — is that Dominique Leroy, the incoming Head of DT’s Europe segment, helped instigate the infrastructure management and purchasing tie‑up with Orange in one of her last moves as CEO of Proximus. Soft-M&A and pushing regulatory boundaries may end up forming part of DT’s plan for Europe, under Leroy.

BuyIn moving to “next chapter”

The addition of a new partner comes with BuyIn appearing set for a refresh after the recent appointment of a new Chief Executive, in Béatrice Felder, as well as other leadership changes at the JV (Deutsche Telekomwatch, #97–#99).

After taking over from founding CEO Volker Pyrtek, Felder recently highlighted plans to “open a new chapter” for the business, in a blog post offering glimpses of her key strategic priorities for the near-decade-old JV.

High on the list, naturally, was supply chain resilience — a key headache facing DT, Orange, and other operators following the COVID‑19 pandemic and China–US trade war. The former Orange executive stressed that BuyIn needs to look “beyond the traditional savings KPIs” and work to ensure “supply chain stability”, adding that “risk management has become a big part of our strategy and tactical thinking”.

Innovation and adaptability also appear to be elevated above the top-down, economies-of-scale-based focus that has traditionally driven telecoms operators’ procurement consolidation efforts, with Felder keen on “using data-driven insights to generate new solutions” and enthusiastic about “exploring new frontiers”.

Under Felder, there is an indication BuyIn will install more “local expertise” to “match” supply and demand from its parent operators’ country businesses. It currently has offices in Belgium, Canada, France, and Germany, but its reach extends much wider.

There was no mention of pursuing greater scale through further expansion of its buying pool.