France Telecom Ties Up with Akamai - Analyst Blog

France Telecom (FTE), which operates the brand Orange, has entered into a strategic agreement with Akamai Technologies (AKAM) to meet the growing demand of business customers in the media and e-commerce groups. This alliance marks the combination of two leaders in their respective domains; while France Telecom is the leading global telecommunications carrier, Akamai Technologies is a leading cloud infrastructure and content delivery network (CDN) services provider.

Per the agreement, Orange will utilize the Aura Network Solutions of Akamai to offer CDN services to various clienteles. Orange Business Services – the enterprise division of the French telecom behemoth – will initially sell these solutions in the nation.

Orange – the largest Internet service provider in France as well as in Europe – highlighted that CDN solutions will pave way for better web-based traffic, particularly in HD video and e-commerce sectors. A well connected network of servers enables the solution to distribute the content over a large area, which otherwise would have been limited within a small number of locations. This leads to a more efficient network and protected system. Also, end users will enjoy superior service quality with faster access and download speeds.

Additionally, Orange and Akamai have agreed to explore the different aspects of the CDN solutions for further improvement.

Both the companies are aiming to meet the surging demand for content delivery through this collaboration. The partnership interconnects Akamai’s know-how of Internet performance across multiple devices with Orange’s integrated network.

We believe that this collaboration will present Orange the opportunity to enrich its networking business unit and bring in more customers by offering upgraded and differentiated web features.

Paris-based France Telecom – one of the biggest wireless operators in Europe apart from Telecom Italia SpA (TI) and Vodafone Group Plc (VOD) – offers domestic and international long distance, data communications, wireless, multimedia, Internet access, broadcast and cable TV services along with local phone service.

In late October, France Telecom reported third-quarter 2012 earnings with revenue decreasing 3.5% year over year to €10.76 billion ($13.9 billion). Adjusted EBITDA dropped 7.3% year over year to €3.65 billion ($4.71 billion), resulting in EBITDA margin of 33.9%, down by a significant 140 basis points from the year-ago period.

France Telecom currently holds a Zacks #5 Rank, which implies a short-term Strong Sell rating.