Good morning, ladies and gentlemen, and welcome to Orange's first quarter 2020 results conference call. The call will be hosted by Mr. Stephane Richard, Chairman and CEO, and Mr. Ramon Fernandez, Deputy CEO, Finance Performance and Europe, with other members of Orange's Executive Committee for the Q&A session that will start after the presentation. Thank you, and let me hand over to Mr. Stephane Richard. Please go ahead, sir.
Good morning, everyone, and welcome to this presentation of our Q1 2020 results. I expect that you will certainly have some questions about the events that we are living through, but I will first present the main highlights of this Q1. I will, of course, ask Ramon to go through the business review in detail. I suggest we start with slide number four, which presents the key highlights of this quarter. The first thing that I want to emphasize is that for this Q1 2020, we have revenue and EBITDA growing, and this despite two weeks of lockdown impact. This is, I think, a very interesting, important, and positive news in the current situation. Middle East and Africa is clearly still a solid engine of revenue growth, but at the same time, France, Europe, and enterprise are growing slightly at different paces, but are growing.
We have, and this is a very positive element, accelerating retail services revenue growth in France. We are quite proud since we have been ranked number one in Net Promoter Score in France on the whole 2019, which is clearly a very important achievement for our teams after years of management focus on the quality of customer experience. We had not reached this number one ranking in NPS for more than 10 years. A few pieces of information about the COVID-19 crisis. The first thing I would like to emphasize is that clearly our telecom services have become more crucial than ever, and we are continuing our business, our activity, and the networks are absorbing these amazing events and traffic very well. For example, in France, fixed traffic increased by 40%. Our high-quality network is a strong asset, and quality of service has been maintained.
Customer care was also maintained, leveraging on increased digitization. This has been made possible because Orange is a company that has never stopped working, in fact, in this crisis period. We have today around 100,000 people working remotely in the group. We rely on their agility and capacity of adapting very quickly to those new constraints. We have very efficient technical tools, and we've been able to switch to remote working very quickly. Another example is OBS, the enterprise business that has coped with the brutal and sudden increase in teleworking among teams throughout the world. To support our business, we can also rely on a solid balance sheet, as you know, with a net debt below two times EBITDA at the end of 2019 and on EUR 17 billion of cash position, including EUR 6 billion revolving credit facility.
This is also the result of years of effort, discipline, and good financial management. For sure, the telco sector will be one of the most resilient in these unprecedented circumstances, and Orange, I think, is very well positioned to deal with them, even though it will be, of course, impossible to totally withstand the impact of a crisis violently affecting the economy worldwide. Impacts already known are commercial dynamic slowdown, decrease in churn, which is nice, but also in second, FRC, which might be nice for the EBITDA and less for the revenue line. We will have a clearly slowdown in GNA cost, which is nice, but also a slowdown in the roaming revenue, which is less nice. Those are a few identified impacts today. Due to this substantial drop in business activity, many proposals and discussions in progress with customers have been suspended.
The same goes for many internal projects such as Orange Concession regarding our fiber in pin areas infrastructure, which has been postponed, of course. There are risks and opportunities during every crisis, and B2B is a good example of that. It will be directly impacted by the economic slowdown while at the same time emphasizing the crucial need for telco services as well as security and cloud services. It is too early, clearly, to assess the overall financial impact of the crisis for the group, but of course, as you can imagine, we are monitoring very closely those effects. With this, evolution of the epidemic situation in mind, it is also time to prepare for life after the crisis, which will, of course, be very different and also different from one country to another.
To start with, this crisis has underlined how important digital inclusion has become, and we will give priority to that. Everything that contributes towards providing better connectivity to our clients, fiber rollout or mobile or RAN sharing, and more generally speaking, optimized infrastructure management will be our priority. Digitization, together with simplification, were already a priority, but it will be speeded up with regard to client relations or internal processes. Lastly, the crisis emphasized the place of home and family, totally aligned with our strategic choice to focus on home. Homeland has to be accelerated, for example. Let's switch to page six, which resumes the main achievements of this Q1. I think we can say that Q1 2020 was a successful quarter for Orange, and this despite the beginning of the impact of COVID-19 in our activities in the last two weeks of March.
Let me give you a few illustrations of that. Firstly, we now connect 42 million very high-broadband homes, making us the absolute FTTH leader in Europe, with 39 million FTTH lines in Europe. We confirmed that as of December 2019, Orange is the leader in terms of customer experience in France, as I mentioned before. We've turned number one in the Net Promoter Score indicator, and in 2019, we gained 7.5 NPS points, which is just huge, and reached this number one position. This turnaround has been made possible thanks to the strong decrease of customer pain points such as network outages, lack of bandwidth, and up-to-date devices, reflecting in the reduction of number of complaints, but also speeding up the deployment of fiber and 4G, especially in rural areas, and proactive repositioning of our customers in more attractive offers with more data.
We are gearing up to launch 5G in some of our European operations, but of course, we need to think about it again in the light of two new issues. Firstly, the commercial launch in France and Poland will probably need to be postponed because of delays in spectrum auctions, even though we still have a lack of visibility in the agenda of those spectrum auctions. More importantly, in perspective of COVID-19, most operators and their B2C or B2B customers have observed that existing 4G networks associated with FTTH fully satisfy the customer needs. This raises this, well, crucial question about the pace of 5G rollout if you consider that the existing 4G networks did well the job. Those are very, of course, important topics that we will work about in the coming months.
Secondly, these investments enable us to post a solid commercial performance with more than 70 million 4G customers and 7.8 million FTTH customers, which is an increase of 20% year on year, thanks to France, which posted the highest first quarter for FTTH net adds ever, and Spain, which reached an 80% FTTH penetration rate in its broadband customer base. Orange remains the number one convergent operator in Europe with 10.8 million convergent B2C customers growing by 3%, and convergent revenue growing by 4.5% year on year in Q1 2020, representing 40.5% of the total retail service revenues in our European countries. Thirdly, we are successfully executing our strategy to become a leading multi-services operator. Orange Bank reached more than 580,000 customers in Q1 2020, thanks to an enriched portfolio of offers and the strong commercial performance in Spain since launch in Q4 2019.
Our value approach is bearing fruits, with 50% of new customers in France this quarter having chosen a paying offer compared to less than 15% two years ago. In Romania, we reached 201,000 Orange Money customers, out of which 61,000 clients subscribed to a debit card after only one year launch of this product. Orange Money remains a major growth driver for our Africa and Middle East operations, and we continued reinforcing it with the launch of Orange Money in Morocco in March. We will also remain a major player in content aggregation and distribution to consolidate our position as a leading multi-service operator. In Q1 2020, we had 10 million IPTV customers, adding 335,000 customers year on year, driven by France and Africa and the Middle East, while content revenues increased by 4.8% year on year.
During the lockdown period in France, we saw our video on demand sales multiplied by twofold. In this time of crisis, when telecom services to B2B have proven to be more crucial than ever before, OBS has successfully fulfilled the sudden and increasing connectivity needs of emergency medical service, hospitals, and companies operating in strategic or sensitive areas such as environment, energy, or transport, but also proposing tools to help them manage their emergency plans. In Q1 2020, in line with the Engage 2025 plan, we signed a long-term electricity purchase contract with Iberdrola for a 328-megawatt solar power plant in Spain, covering almost 9% of Orange Spain's electricity consumption. This is just an example. On page number seven, you have our financial achievement for this Q1 2020.
We posted Q1 revenues at EUR 10.4 billion, growing by 1% year on year, driven by a positive trend in all countries except Spain. The group reached an EBITDA of EUR 2.6 billion, improving by 0.5% year on year this quarter, of which 0.1% for telecom activities, whereas ECAPEX are slowing down by 3.1% compared to Q1 2019, reaching EUR 1.6 billion at the end of March. This reduction is partly due to the COVID crisis and relates to both fiber and mobile networks rollout. Thus, the group's EBITDA minus ECAPEX reached EUR 1 billion in Q1, significantly improving year on year by 6.8%. A few more elements on ECAPEX. To say that the acceleration of the fiber rollout in France led to an increase of 1.6 million new connectable homes in this Q1. It's a 2.5-time increase compared to Q1 a year ago.
Overall, we reached a total of 41.6 million very high-broadband connectable homes, of which 17.8 million FTTH connectable homes in France, 14.5 million in Spain, and 4.4 million in Poland. The group has kept consolidating its leadership position in 4G, reaching a coverage exceeding 96% of the population in all European countries and already commercialized in 15 Middle Eastern African countries. These continuous efforts were done in the back of a slightly decreasing telecom ECAPEX figure, down 3% this quarter, that is Q1 2019, which came this quarter as the result of three main effects, the first also extending into the coming quarters and the two other more limited to Q1 2020. Firstly, the COVID crisis started in the second half of March to slow down the pace of running out both addressable and connectable lines and connecting end customers.
Secondly, following an agreement signed by Orange and SFR in May 2018, by which Orange was to withdraw from 236 municipalities in the RME zone, we built SFR in Q1 for the remaining and larger part of these FTTH lines. Thirdly, following the sale announced in December 2019 of 1,500 non-strategic Spanish mobile sites to Cellnex, we booked in Q1 the remaining part of the proceeds not booked in Q4 2019. After this overview of our achievement in Q1 2020, sorry, let me now hand over the floor to Ramon to provide you more details about our operation. Ramon.
Thank you. Thank you very much, Stephane, and good morning.
I will start on slide number 10 with France, where you can see that in Q1, total revenues increased by 0.5% thanks to an improvement in the trend in our retail service revenue for the second quarter in a row, thanks also to an increase in our fiber-related revenues linked to the acceleration of our deployments, in particular in the PIN area. This quarter, the impact of digital content offers is really very small, with only EUR 1 million of tailwind. Let's see, in order to assess the underlying performance as we do traditionally, let's see our retail activities, starting with retail services, excluding PSTN, which has been increasing by 2.2%, an acceleration compared to Q4, where it was increasing by 1.7%. Even if you take into account the PSTN impact, we were stable year on year in Q1.
This is minus 0.1% compared to minus 0.6% in Q4 2019 and around minus 0.7-0.9% in the previous quarter. It is really a nice improvement. The convergent ARPU grew by 2.3% to EUR 68.6 in Q1 compared to plus 1.6% in Q4 2019, driven by back book price increases in Open Mini effective from the end of Q4, driven also by the increase in the number of lines per convergent offer and by fiber penetration. The mobile-only ARPU decreased by a limited 0.5% to reach EUR 16.6, impacted by the decrease in out-of-bundle international voice calls related to EU regulation and also by international roaming linked to COVID-19. In broadband-only, price increases in the front book effective since Q4 2019 and the reduction of the level of promotions in broadband helped to nearly stabilize the broadband-only ARPU with a limited decrease of 0.5% to settle at EUR 36.2 in Q1.
Equipment sales decreased by 15.2%. This is minus EUR 45 million in Q1 compared to a more limited decrease of 2.6% in Q4 2019, largely impacted by the impact of COVID-19 with the closing of our stores in France, as Stephane explained, and also by a decrease in global market demand in Q1. Wholesale revenues grew by 2.6%, driven by FTTH, which offset the decline in unbundling and national roaming. Finally, the growth in other revenues of +29% in Q1 was driven by the start of the Build to Suit program in France, allowing Orange to accelerate the deployment and strengthen coverage of our mobile network in non-dense areas and also along transport routes while limiting investments. Turning to the next slide, slide 11, our commercial performance. We have delivered solid figures in broadband in this first quarter with a record Q1 in fiber.
On fixed, we recorded plus 37,000 broadband net adds, with the high-end customer mix improving by 0.2 percentage points. This solid performance is supported by a record first quarter in fiber with 192,000 FTTH net adds compared to 168,000 in Q1 2019. In Q1, 54% of FTTH net adds are new customers to Orange. This is still a very strong acquisition tool, consolidating our absolute leadership position with 3.5 million FTTH customers. On mobile, we observed in Q1 an encouraging price recovery movement initiated by SOSH with the launch of a EUR 15 SOSH lifetime offer at the beginning of March, which was followed by two of our three competitors increasing their own prices from EUR 12 to EUR 14. In the context of our value approach, we posted minus 58,000 net adds compared to a positive figure of 19,000 in Q1 2019.
This typical negative performance is mainly due to a specific SOSH cohort. These very price-sensitive customers generated a peak of churn in SOSH in January and February when we decided not to renew a promotion after the 12-month promotional period. This attempt of pricing traction turned out to be inefficient in the context of market aggressiveness with lifetime promotions. It is worth noting, though, that the launch of this EUR 15 SOSH lifetime offer at the beginning of March was successful, but the whole market slowed down with the eruption of the COVID crisis. We have also seen price aggressiveness back in April, but it is too early to draw any conclusions from this latest move.
Despite this atypical churn event on SOSH, the mobile churn continued to drop by 0.6 percentage points year on year, and it stood in Q1 at 11.7% compared to 13.3% in Q4, linked with the fall in the churn in the whole market, obviously accentuated by the COVID-19 effect in March and also by the progress we're making with convergence. Convergence remains a strong acquisition tool supporting our performance both in fixed and mobile, with 30,000 net adds in mobile reaching 1.68 lines per convergent offer, which is an increase of 2% year on year. Let's now turn to Spain on slide number 12. In Spain, the market is clearly polarizing. The development trend can be seen when looking at the segmentation based on price points. The low-cost convergent segment, which is below EUR 45, boosted an acquisition share at 30%, up by 10 percentage points year on year.
All operators now in Spain now have an entry price point below EUR 40, while on the other side, value proposals strengthened in the high-end segment above EUR 70. Our commercial performance here reflects this trend and also our strategy, which has been focused on value over volumes. In the high-end segment, the launch of our Love Unlimited offers on the Orange brand, targeting customers with an ARPU higher than EUR 80 in February, was a clear success with more than 1 million subscribers. Our more-for-more moves and our football offers resulted in a convergent ARPU increase by 20 cents year on year to achieve EUR 58.3 and even plus EUR 1 year on year if you look at specifically the Orange brand B2C convergent ARPU.
The trade-off was a volume downtrend with fixed broadband and mobile net adds negative in Q1, respectively at minus 59,000 and minus 127,000. Mid-March, as part of the government measures regarding the COVID crisis, portability and aggressive commercial campaigns were banned. The effect of this policy remains low in Q1 but should be a bit more visible in Q2 until the end of the lockdown, even though the portability on mobile has now partly reopened. As announced during the Capital Markets Day and when we talked about the full-year results, our target in Spain is to increase our market share in the low-end segment. We have managed Amena volumes to ramp up progressively, but with still sizable potential to capture before the implementation of convergence on our low-cost brands within the next few months.
The launch of these convergent low-cost brands has been slightly delayed due to the current portability limitation. As a result, our revenues decreased by 2.4% in Q1, in line with Q4, with retail service revenue falling further still at -4.6% compared to -3.4% in Q4. As you know, 2020 is a year of transition for our own Spain, and the current crisis is putting some additional pressure on our margin performance. On the positive side, our wholesale business is more than ever a source of strength, providing a powerful hedge against the current economic volatility. Let's turn to our Europe 6 countries segment on slide 13, where retail services grew by 4.3% this quarter compared to 2.4% in Q4, with 35% of this growth coming from connectivity, namely convergence, fixed only, and mobile only, and 65% from IT and integration services.
Our performance in connectivity reflects our ongoing focus on convergence, with revenues from convergence, which today represent 19% of retail services. Convergence maintains a resilient +25% growth this quarter compared to +28.5% in Q4. Our focus on convergence was also visible in our commercial performance, with stronger mobile contract net adds at +28,000 and resilient fixed broadband net adds at +51,000, with a stable or improving share of convergent contracts in our customer base. After the last four quarters, which were declining, wholesale services are now back to positive growth at +0.6%, thanks to better MVNO trends, compensating some losses from a mobile termination rate cut and the ending of national roaming deals.
This quarter for this Europe 6 segment also saw the decline of equipment sales, minus 8.3%, mostly because of the health crisis, and of other revenues at minus 30% due to lower Orange Energy sales in Poland. Although their impact on EBITDA was minimal, these two effects drove down the overall revenue growth in the Europe segment to plus 0.3% compared to plus 1.7% in Q4. From a country perspective, we are reporting a seventh consecutive quarter of revenue growth in Poland at plus 0.9%, driven by plus 5.1% growth in retail services compared to minus 0.2% over the full year 2019. This result is a consequence of the more-for-more strategy initiated by Orange Polska in 2019, now filtering through to our results. It's also the result of a stronger performance in IT and integration services at plus 58%, of which 32% come excluding the Bluesoft integration.
You know we acquired this company, Bluesoft, in 2019. Finally, it is also the result of a higher mobile wholesale revenue because of the health crisis. Our revenue performance at Orange Belgium is also worth noting, up 1.9% this quarter. This was driven by a solid growth in retail services, plus 4.6%, itself driven by plus 36% growth in convergent sales, mitigating lower equipment sales and other revenues. Let's now turn to Africa and Middle East, slide 14, the main contributor to the group growth, with revenue increasing by 6.2% in Q1 and no significant impact from COVID in Q1. The revenue performance was driven here by a very solid growth of retail services at plus 9%, fueled by three robust drivers that you know well now. First, DATA, with 26.5 million 4G customers growing by 51% and revenues associated growing by 27%.
Second, Orange Money, with an active customer base of 18.6 million customers, up 20%, and revenue growing by 22%. Third, fixed broadband, with over 1.3 million customers, up 21% year on year, with revenue growing by 22%. Looking at the commercial KPIs in Africa and the Middle East, the mobile customer base increased by 4.8%, up to 123 million customers, including the impact of the exit from Niger. The customer base quality keeps improving, as reflected by an increase of plus 1 percentage point in the charged base rate and the reduction of 2 percentage points in mobile prepaid churn. From a geographical perspective, the top contributors to total revenue continued to deliver solid growth in Q1. Egypt grew at 10.6% thanks to retail services and sustained by data and by a massive equipment sale. Ivory Coast cluster grew at nearly 10%, 9.9%, sustained by data development and market repair.
The Sonatel cluster keeps a good trend thanks to data and Orange Money, with Senegal, which has regained strongly its leadership in mobile net adds after a very competitive fourth quarter. Turning to the enterprise segment on slide 15, you can see that enterprise OBS posted a revenue growth for the sixth consecutive quarter at +0.8%, driven by ongoing network leadership and solid performance of IT and integration services, notably cloud and cybersecurity. IT and integration services revenue growth reached 6.9% this quarter, and they now represent 38% of the total revenue of the enterprise segment. This is an increasing proportion of +2 percentage points year on year. Besides, the group obtained several market recognitions this quarter, confirming our status of major player in our growth areas, in particular cloud and cyber defense.
It is also worth noting that following up our latest acquisitions in cybersecurity, less than one year post-acquisition, SecureLink and SecureData have been fully integrated and rebranded under Orange Cyber Defense, so we are now fully set up for capturing value. DATA network services, still resilient, posted a revenue growth at +0.5%, driven by our leadership in fiber and software-defined networks. These performances more than compensate for the decrease of voice at -6.5% this quarter, structurally impacted by the decline in France and also for the drop in mobile to -5.8% in Q1, mainly due to the fall of roaming revenues in relation with the COVID crisis.
Let me also remind you that the enterprise segment is going through a transformation and that we do not plan to be back to a beacon growth before the end of 2021, as we said in December and in February. Regarding the commercial activity, Orange has been chosen by Abu Dhabi for its smart cities tailored solutions and by AkzoNobel to provide a range of services for global connectivity transformation, including SD-WAN, SD-LAN, and security solutions. Last but not least, I would like to emphasize that in the context of this unprecedented crisis, Orange Business Services Teams activated our worldwide business continuity plan, which demonstrated to be crisis-proof, as commented extremely positively by numerous customers in France and around the world. Let me now hand over back the floor to Stéphane to conclude this presentation.
Thank you, Ramon.
Before going to Q&A, and as said during our April 17 call, I want to confirm that based on the information available today, we do not expect a significant deviation from our 2020 objectives, but we are closely monitoring the situation and its developments. We will consider an update of our 2020 financial guidance along with Q2 results once we have improved visibility on the effects of the COVID-19 crisis. This concludes this presentation, and we are now ready for the Q&A session.
Thank you, ladies and gentlemen. We will now start the question and answer session. In the interest of time, please limit your questions to one or two at a time. In order to ask a question, please signal by pressing star one on your telephone keypad.
Please ensure that the mute function on your telephone is switched off to allow your signal to reach our equipment. If we do not have time to take your question, then please contact our investor relations team after the call. If you find that your question has already been answered, you may remove yourself from the queue by pressing star two. Please press star one to ask a question today. We will take our first question from Stéphane Beyazian from MainFirst. Please go ahead. Your line is open.
Yeah, thank you. Two questions, if I can then. On the CapEx, are you able to differentiate between the slowdowns that come from the COVID-19 and your own willingness to sort of slow down the CapEx and meet the free cash flow guidance?
I'm just trying to understand if you're going, I mean, if you want to catch up as fast as possible and at any cost in the coming quarters once the lockdown is in. My second question is also there again about trying to limit the spending. Looking at Orange Bank, can you say anything about how it is performing commercially in the current situation and if there is any change in your plans? Because I have in mind that you have more launches on the way and that remains an investment line for the group. Thank you.
Thank you, Stéphane. Regarding your first question, there's no doubt that the current conditions will bring about a reduction and slowdown or postponing of some CapEx during 2020.
As you can imagine, the building of new lines, FTTH lines, is very much impacted by the lockdown constraints and the fact that our subcontractors are not today in conditions to keep on the pace of running out as previously. It is difficult to say how long it will take to get back to, let's say, a normal production pace, but no doubt that it will take a few months. This will have clearly a significant impact on our ECAPEX numbers. I think that we cannot say that we have a specific plan to reduce CapEx this year. Once again, I would say the mechanical effect, impact of this crisis, and especially of the lockdown period, will be significant in our 2020 figures. Maybe I ask Ramon to answer to the second question and, of course, to provide any additional comments on the first one, Ramon.
I think Paul Deleuze is with us this morning, Stéphane. Maybe on the bank, we will ask to take this. On CapEx, I really do not have anything to add except that clearly when we look at our target for the year, this is an area where we have some space for monitoring, obviously. Paul on the bank.
Yes. Hello. Can you hear me? Yes. Yes. Okay. Just to answer on the current impact and perhaps the future impact of the crisis on the bank, obviously, as a large part of our sales rely on the physical shops of Orange, this part of our sales has dramatically reduced. On the other side, we have made strong efforts to develop our digital sales during this period with quite a strong takeoff as of now. We have increased our digital sales by around 40%, which is good news.
We rely very much on the mobile payment because, obviously, the mobile payment is by far the most secure way of payment right now because with your mobile, you can pay without touching any physical cash or any device when you are in a shop. We have seen a strong increase on the average amount of money which is paid by the mobile. It is good news for us. That is why we will be launching a TV campaign beginning of May to promote mobile payment. I remember you that Orange Bank represents 17%, so 1/7, of all mobile payment made in France. We believe that in a way, this crisis is an opportunity for us to promote this way of payment. That is on the activity.
On the revenue, there is a limited impact because, as opposed to many new banks which are in a freemium model where most of the clients would pay nothing to the bank and the bank would earn money only by the interchange, which has dramatically reduced, our model is rather different because, as it was said by Stéphane in his introduction, 50% of our new clients pay us something on a monthly basis. It could be a commission on our premium card, or it could be an interest rate on a consumer loan. With 50% of our new clients paying us something, even if our clients are less active during this period, we still gain revenue from them, which is very, very different from many new banks where the client pays nothing. If the client doesn't transact with his card, well, the bank gets nothing in terms of revenue.
That makes us much more comfortable going through this crisis. You also asked if we are to release some new products. The answer is yes. We plan to release in next September or October a family account, which would be quite an innovative product allowing all families to monitor one single account. Obviously, this fits very well with the family strategy of Orange, with the open model of Orange. We plan to go deeper into the integration between Orange Bank and Orange. I hope that answers your question.
Thank you. Overall, we should still be expecting lower losses this year than last year for the total Orange Bank operation in ABDA.
Yes, clearly for France, the losses will be reduced this year compared to last year. Don't forget, we have launched Spain as well.
We've produced some losses, but much more limited than the French one. Yes, for France, we are limiting losses compared to last year.
Thank you. Next question.
Thank you.
Thank you. Our next question comes from Nicolas Cote-Colisson from HSBC. Please go ahead. Your line is open.
Thank you. Some operators have already indicated higher provisions for bad debt. Could you tell us a bit more about the situation for Orange and what are the learnings from the global financial crisis a decade ago? What happened then? Have you a different setup now in terms of this monetization or securitization programs? Also, a comment on the change in the working capital requirement would be great too. Thank you.
Okay. Ramon.
On the first question, for the time being, we do not see any increase in bad debt figures.
We are monitoring this on a weekly basis. The way customers are behaving on both the B2C and B2B markets is obviously an issue of vigilance. For the time being, we do not see any impact. In fact, from time to time, we see some customers who pay in advance, which seems to signal the fact that the telecom services are really an essential service that is going to be protected for quite a long time. No evolution there, but very strict monitoring. When you look at the lessons from the past global crisis, you can see that if you look at 2008, 2009, 2010, the telecom sector has a limited relation with the macro figures. It does not mean that there is no impact, but it is an area where elasticity to macro figures is quite low.
Depending on the countries, depending on the type of services, of course, this can vary. If you look at, for instance, 2009, 2010, 2011, you will see a very limited impact on the evolution of, at the time, France Telecom Orange revenues. We are also monitoring this because the telecom sector cannot be totally immune, obviously, from a major macroeconomic shock. We are in an area where we are now looking at the B2C market massively postpaid with an economy of abandonment. The English term is failing me, but you see what I mean. You have a massive intervention of governments in many countries, and France is not the last one, where you have a very heavy public policy support in terms of cash to the enterprise, but also, in fact, to households through unemployment schemes which are supported by the government.
This impact should be mitigated at least for some time. If you look at the B2B markets here also, for the time being, we see some light signals from some customers asking for delays, but it's not significant yet. What we have done in order to make sure that we are going to help part of these partners, customers, or suppliers to go through the crisis and to be in a position to bounce back when we are out of the peak of the crisis with getting out of confinement, we've been accelerating our own payments to our suppliers. We have mobilized an envelope of roughly EUR 300 million to pay all the bills to our suppliers below EUR 50,000 in order to help them go through this two months' very critical period.
Looking at the customers, we have a very pragmatic case-by-case approach in order to make sure that we can also support these customers to go through the more complicated parts of the crisis. We have very strong credit management teams in the group who are mobilized to have the good monitoring and good handling of potential issues with different customers or suppliers. If you look at the working cap requirements, we will see by the end of the year if all these positive measures we are taking will have some impact, but it should be limited.
Thank you very much.
Thank you. We'll take our next question from Aqil Dattani from JPMorgan. Please go ahead.
Yeah. Hi, good morning. Thanks for taking the questions. My first question is just on Spain, just to follow up on some of the comments that you made in the introduction.
As you said, you've been much more focused on value over volume. I guess it's fair to say the KPI trends this quarter are probably softer than we would have expected. Can you just talk us through the steps that you expect to take as we look forward, particularly given the expectations that we would hope to get back to growth in revenues in 2021? I guess with that, just any thoughts around whether or not you consider the Euskaltel National Expansion Plan a source of concern or not would also be interesting. Moving over to France, I guess interested in the comments you made again through the introduction around French competition. As you said, SOSH was constructive on pricing. There's been a bit of volatility from your peers year to date in terms of what they're doing.
Any sort of comments around why you think price increases have not stuck and how you think about your overall competitive environment would be very useful as well. Thanks a lot.
Okay. On the Spanish situation, do we have Laurent on the call? Yeah. Yeah. Sure. Laurent, go ahead.
Yeah. Thank you for the question. On Spain, basically, as we said in February, the overall trend remains the same in Q1. We have had a lot of promotions and discounts. A lot of the low-cost growth is happening, and it is driving the overall value of the market. As we said, we would launch a convergent offer in the low-cost brands in the low-cost segment to capture our fair share in Q2. Q2 is not yet in Q1, right? What you see there is really the follow-up on the trends that you already had end of 2019.
Our plan on that has not changed. We are focusing on value on the Orange brand. As you've seen, we've launched in limited offers, which is driving our ARPU significantly. The value mix is improving. What we're missing and still missing is, obviously, the low-cost volumes. We said we will launch low-cost convergent offers in Q2 using República Móvil, using Simyo, using Amena. We are ramping up slowly Amena, but obviously, with the lockdown period, which is correlated to a fixed portability ban, there's no sense for us to accelerate or to anticipate any convergent launch. This remains on our plan for Q2. We will be launching convergent offers. As we speak, we are working on the whole portfolio of customers to preserve and to maintain the value on the existing customers.
The crisis there is just making even more important what we're doing, which is to remain focused on value on the high end of the segments and to push for volumes on the low end. We're also working, obviously, taking into consideration the crisis on optimizing even more all our processes, streamlining our processes, streamlining, simplifying our offers. Obviously, the digital has to take a higher share in the future. There's a lot of things going on to try to optimize even further our pay space. On the B2C, we'll remain focused on what we said to you in February. We're missing volumes in the low-cost segment. The crisis is going to make the low-cost segment even more important in the Spanish context. Even without Euskaltel launching the virgin offers, I think this is part of the low-cost movement in the Spanish market.
We are not present there. We need to be present, and we will be there by the end of Q2 with Amena, with Republica Mobile, and then with Cineo, and even with Jazztel, a significant market share in these low-cost segments. Again, also, as we mentioned, part of the growth that we are expecting for 2021 will have to come from the B2B segments. That is something where we need to see what is going on with the market context. We are obviously in a situation of attacker on these segments because we are number four on the market. We are going to come strong on these B2B segments. Keeping in mind that the wholesale is also providing us with a huge hedge on this market, we have also good news, and we expect to remain with good news on the wholesale segments.
Again, it's low-cost, and that's what we are implementing.
Okay. Thank you, Laurent. Maybe Fabienne for the French market.
Y es. You hear me?
Yes. Very well.
Yeah. Okay. Good morning. In Q1, there were two periods. In January and February, specifically, the market is still very highly promotional, especially on the mobile. We observed, and it was good news, at the beginning of March, an encouraging price recovery movement initiated by EUR 15. This move has been followed by two competitors. They've increased their price from EUR 12 to EUR 14, EUR 15. It was a very significant move and very interesting move. If you remember, one year ago, we were around EUR 5 for the same offer. It was a very significant move for all the markets. In April, and we are in a very specific period during the lockdown, we observed a context of price aggressiveness back.
It is due to the closure of business. It is too early to have any conclusion now on the sustainability of the pricing movement, recovery, or aggressiveness. We have to wait until the end of the lockdown. When we all reopen our stores, we can be confident because we launched two weeks ago, three weeks ago, a new SOSH offer for EUR 15 lifetime, and it is very efficient and very sustainable. I think we have to wait and see. The last move made by all competitors is really encouraging for the future.
Thank you.
From Roshan Ranjit from Deutsche Bank. Please go ahead.
Hi. Morning. Thanks for the question. Two for me, please. Just a follow-up on the fiber rollout now, despite the record connections this quarter for Q1, you mentioned the slowdown.
How does that rollout and the slowdown compare to the obligation that you need to meet from our set by the end of the year? I think it was 95% or so of your coverage area in the mid-depth. Any update there would be good. Secondly, a quick follow-up on the previous question. Anything you could say on the churn metrics in these last few weeks, given you have seen competitors increase their pricing as well because that was clearly the driver of that reverse in your mobile ads this quarter? T hank you.
On your first question, we have clearly started a dialogue with the regulator, with ASEC, on the fiber rollout agenda, let's say. I think that, of course, the regulator understands and takes into account the very specific circumstances that we are knowing now.
Of course, it will take into account the consequences of the current situation on the rollout calendar. It is probably too early to give you more details about that, but I can just confirm that we have started to talk with the regulator regarding this very important issue of fiber rollout agenda in France. There is no doubt that we will have to adapt and clearly to postpone some of the main steps in this rollout. We have a regulator who is open-minded, of course, about this. It is just impossible to imagine that the operators globally could do this rolling out as if there was no lockdown, as if there was no particular problem with the subcontractors and with the thousands of sites in which we are running out.
I am, I would say, relatively confident in our capacity to find the proper, let's say, new agreement or new frame on the FTTH rollout agenda with the regulator, taking into account, of course, the impact of the current crisis. Fabienne, on the churn topic.
Yes. During the lockdown, both on mobile and broadband, we observed the same movement. From March 11, our growth had dropped by 60% due to the closure of the stores. It is true for the mobile and the broadband. At the same time, the churn also decreased significantly and at a similar pace. At the end, the result is a neutral impact on the net head level, but for Orange positively due to the high-end position we have and the mixed premium we have, it is a better value mix we can deliver. The churn is very low.
We divide by three, and this helps us to maintain the value and to improve the value and the mixed value of our customers. It is a good move.
Just quickly, on the mix, we are still looking at the 80-20% high-end versus SOSH split in France?
What is the mix between SOSH and high-end during the lockdown period? This is your question?
Yes. SOSH is still around 20%.
Yes. Yes. Yes. Yes.
Great. Thank you.
Thank you. You will now take our next question from Andrew Lee from Goldman Sachs. Please go ahead.
Yeah. Good morning. I have a couple of questions, one on France and one on Africa. On the French competition, just kind of following up on the questions we have had earlier, as you highlighted, your weaker net adds but stronger ARPU shows a rational incumbent, which is supportive for the market.
Obviously, you commented on how your competitors have responded to various things you've done. I wonder if you think that that positioning that you've taken of being a rational supportive pricer is sustainable with or without COVID. The second question on African top-ups and broader COVID impact anticipation in the African market. We heard from Telenor that in Asia, while new subs have slowed, digital top-ups have picked up dramatically to make up for a lot of the reduced physical top-ups. Do you see this cushion opportunity in Africa? Thank you.
Fabienne again on the French market.
Yes. It's too early to have any definitive conclusion about this one.
What we can observe during the lockdown period, and now we are starting again some commercial action, we observe that our customer base and specifically our premium customer base is very resilient, no churn and specifically on the premium customer base. This is due to all the efforts we made to develop convergence on our base, and it's a very strong asset due to the quality of our network, mobile and fixed, due to the quality of customer relationships, sorry, as reflected by the NPS signed just before, and the way we support our customers during the lockdown. The second point we observe is the quality of the network and connectivity is a really strong asset. We can observe from a few weeks an appetite for fiber.
We are convinced that we growth because the connectivity at home, at home, I think will be maybe the most important learning from this period. The third point we can see is that the COVID period highlights the place of home and family. It is totally aligned with our strategy and with the services we launched around ATV, Maison Protection, Maison Connect. All these points are very significant and strong. That confirms our strategy, and that confirms we can maintain a value strategy. It is exactly what we think and what we can observe from this two last weeks where we launch again different commercial actions. This is the point we have in front of us.
Okay. Thank you, Fabienne. Do we have Adjovi on the call?
Yes. I'm on the call, Stephane.
Okay.
Adjovi, you can take the second question on the digital top-ups and maybe broadly the opportunities that this crisis may generate for Africa.
Thank you, Stephane. Thank you for your question. Let me, first of all, say that this COVID-19 crisis started a bit later in Africa than in Europe. We have suffered from some decrease of the activity for the first weeks, but we have already recovered the level we had before the crisis in terms of top-up and in terms of also usage from our customers. More specifically on your question, of course, yes. With the crisis, the level of electronic top-ups has increased by 19%. We encourage also all our customers to move from scratch card to electronic top-up. Also, the merchant payments have increased by 20%. This kind of usage from our customers is really growing up.
I think for the future, this tendency will certainly be maintained or be retransmitted by the policy we are putting in place now. I hope I've answered your question.
Very helpful. Thank you.
Thank you, Adjovi.
Thank you. We'll now take our next question from Jakob Bluestone from Credit Suisse. Please go ahead.
Hi. Good morning. I'll keep it to one question, please. You touched a bit on bad debts within the telco business earlier, but I was wondering if you could maybe expand a little bit about the credit risk within the Orange Bank. You obviously haven't taken any provisions for bad loans, which is obviously in contrast to many banks around Europe. Could you perhaps just sort of expand a little bit about how you manage the credit risk and why you're not expecting any sort of additional bad loans in that part of the business?
Thank you. Thanks. Maybe Paul back.
Yes. On the bad loans, we have two different types of portfolio. One is the SME portfolio, which is a portfolio of around EUR 250 million of assets. Then we have the pure retail to individual customers portfolio, which is made of mortgage and consumer loan, which represents EUR 1.7 billion. On the SME portfolio, we have made some provision on bad debts. We have seen so far 25% of these customers asking to delay the repayment of their loan, which is a loan encouraged by the French government. We have obviously accepted that. We have taken a little bit of provision. These customers are mostly former Groupama clients. We are quite confident about the risk, but we have taken some provision.
On the pure retail portfolio, which is more than consumer loan, so far we do not see any major risk. Only a very tiny proportion of these customers have asked to postpone the repayment of their debts since less than 2%. We do not see any major risk arising on that part. That is on the provision. On the risk acceptance, yes, obviously. So far, a large part of our loan were accepted automatically, and we have changed that. Now most of our consumer loans need a human analysis before being accepted because we want to tighten our risk policy as many banks have done so far. That is it, I think.
That is great. Thank you very much.
Thank you. Our next question comes from Giovanni Montalti from UBS. Please go ahead.
Thank you. Good morning.
You were mentioning on Orange Concession that you are planning to put the project on hold for the time being. I wanted to know if this applies also to the other projects you were working on, particularly on TAWA or on fiber in Spain and Poland. Thank you.
Ramon.
The short answer is no. Yes, we have postponed Orange Concession because the timing to have the due diligence process, etc., was not really easy in this time. This will be brought back at a later stage. Obviously, work has not stopped, and we will be putting through the project at a later stage. On all what we said in December and February about preparing for setting tower companies for France and Spain to begin with in 2021, this is still the intention.
Now we will need to check, obviously, if the current time has an impact on precise timing. Overall, I would say that there is no significant change there, but this will need to be confirmed. Looking at how we can fundamentally accelerate and continue to maximize value creation with fiber in Poland and in Spain, we are still working. Work has never stopped on our projects, both in Poland and in Spain. Nothing has changed there.
Thank you very much.
Thank you. We'll take our next question from Mathieu Robilliard from Barclays. Please go ahead.
Good morning and thank you. I had a question on the B2B segment. You made some interesting comments about the impact of COVID-19 on the enterprise segment at the beginning of the presentation, flagging some positives and some negatives.
Could you elaborate a bit on the positives, specifically thinking about what kind of percentage of your revenues or your activity can be positively impacted by the current trends and maybe the more structural trends of more video conferencing, work from home, etc., etc.? A second question on Spain. You talk about a polarizing market between low and high-end. You also mentioned a shift towards low-end. If we think about the market as a whole and considering that the economy is going to slow, as in other countries this year due to COVID, do you think the market can grow, or do you expect the economic slowdown to actually push more and more people towards low-end bundles and therefore have a negative impact on the total size of the market? Thank you.
Maybe Helmut on the positive outputs of the crisis on OBS business.
Yeah.
Thank you, Stephane, and thank you, Matthieu, for this question. Now, indeed, in terms of enabling in our first phase of the response to this crisis, we at Orange Business Services, of course, focused on resolving and the resilience for our customers. Resolving means short-term demands that were there because, like us, we are 27,000 staff across the world. When we went into lockdown in France, China already came back, our staff, into our offices. You see we have quite a mixed bag even internally. More than 90% of our staff are actually working from home. In short, resolving and resilience, we had, for example, multiplied by seven roundabouts, particularly on the multinational customer segment, all the teleworking capabilities. This is a positive trend.
Also, a positive trend is to provide the security, the cyber defense solution around this because you need all this end-to-end cyber secure solution if you do those secure remote accesses. The collaboration platforms on video also have seen a nice uptake. Therefore, Ramon has mentioned it as well, the IT and integration piece definitely is seeing some positive impact. If you think about cloud, which again has seen a notably nice double-digit growth in our services part. Of course, short-term, there were also some capacity upgrades that were needed by customers to cope with the situation. These are the positives. To answer specifically to your question, what's the revenue mix on that? The revenue there, I would say, this touches roundabout 25% of our revenues.
Yet there is one clear trend that we have seen in Q1, and Stephane also has mentioned this, and I think we're going to see this continuing floating along with this COVID situation, which is that the roaming impact, as we are serving also global clients, could be already seen in a slowdown in January, but it was basically almost coming to a halt on the roaming side, also on the mobile. That's why you see quite a decreasing trend on the mobile revenue section on our presentation on page 15. I hope, Matthieu, this answers the question.
Thank you.
Thank you.
Thank you. Our next question.
There was a second question. I think there was a second part of the question.
Yeah. I think it was on Spain. Yeah. We've seen the figures for Q1. The GDP growth in Spain decreased by 5%.
Bank of Spain has communicated also recently that they expect the GDP to decrease by between 7-14%. Obviously, it all depends on how deep and how long is going to be the economic crisis. It is true that the trend toward low cost is the name of the game for the coming months, right? Again, for us, it makes it even more important and urgent to be capturing our fair share on this segment. Again, we have assets there, right? We have fiber networks, which we own, which allows us to not depend on any bitstream prices. We can price aggressively in these segments while maintaining margin. The issue for us is the same. We want to defend value on the high-end of the portfolio, and we are doing it with contents. We are doing it with also multi-services strategy.
We have the bank now. We have announced an agreement with Zurich Insurance Products. We will be launching in September. We are adding up services in the high-end of the service part. In the low-end, we need to be there, and we need to be there strong. That is what we are going to be doing in the coming months with all the brands that we have. Again, to your question, I guess, yes, the impact on the economy is going to accelerate the trend toward low cost. That is a possibility. The response that we have is the same one. We have to be present in these segments, which we are not. We are maintaining the value, and what we have done with the unlimited offers has proven right.
We're improving the overall average ARPU on the portfolio, but we need to have more volumes in the low-end, which we will do without penalizing the rest. That's the name of the game for Spain.
Thank you very much.
Thank you.
Okay. Thank you, we will pass to Our next question from Sam McHugh from Exane. Please go ahead. Your line is open.
Yeah. Good morning, everyone. Just two quick questions. First one is on football rights in Spain. Do you see any scope to get refunds on your football costs in Spain? Then secondly, a bit of a longer question, sorry, on towers and your MSA. I'm not sure how far along you are in terms of defining an MSA for Orange Tower Co. We see independent tower operators in Europe generally charging a much lower rent for secondary tenants.
For Orange Towers, how do you think about charging for secondary tenants philosophically? Would Orange be happy to give your competitors access to towers at a lower rate than Orange itself pays, or do you think you'd adopt a different business model for the likes of Cellnex? Thanks very much.
Laurent in Spain and Ramon, the second question.
My understanding is that in Spain, the Liga is willing to complete the season. If it is the case, there are no questions really about claiming anything if it is completed. If it were not to be completed, then we will have a right to claim for these matches not happening, right? Keeping in mind that even though we do not have live content as of today, we do have content for football.
We have customers which are still looking at football, even though it is not the online or the actual matches for the Liga, right? To your question, if we have a season that is interrupted and is not finishing, we will claim. If it is supposed to be maintained, which my understanding is that everyone is working to make sure that this season will be completed, then there is no necessity to claim or right to claim anything.
Thank you. Maybe Ramon for the second question.
Yes. I think, honestly, it is a bit premature to enter into this discussion now because for the time being, what we are going to do in the next year is really, once again, for France and Spain, working on the carve-out of all our towers to put them in a dedicated entity.
Honestly, looking now to the other questions, which are extremely relevant, of course, that you put on the table, it is a bit premature. We are going to go step by step and also reflect with some of our other colleagues. François Farichet, for instance, for Poland, is also on the line. We said we would start with France and Spain. We are also reflecting, as you know, on a broader scheme at some point with going towards a European tower company. Let us do it step by step, and then we will go to the specific model when the time is right. This is a bit too early.
Just to follow up very quickly on that, if I can, I do not know if you would be willing to say what kind of a policy is today for secondary tenants. Is it similar to the.
Maybe you do not want to give details.
Once again, you will have to be a bit patient. What you can do in order to see what we have done in other countries where we have already some JVs, where we share some of our towers in Poland, in Romania, soon, very soon, in Belgium. You can look at the history of what we have done when we partner with Deutsche Telekom, with Vodafone, with Proximus, and it will give you some information about how we can view the answer to this question. For the rest, once again, you will have to be a bit patient.
Fantastic. Thank you so much.
Okay.
Thank you.
I think we have time enough for a last question.
Thank you. We will now take our final question from Frederic Boulan from Bank of America. Please go ahead.
Hi. Good morning.
Thanks for taking the question. The question is on COVID-19 and impact for the year. I understand it's a bit early to give us a full detail. If you can clarify, A, what is your exposure to roaming, and then detail some of the mitigation actions you have in place. You mentioned lower churn acquisition costs. Any other levers you can pull, for instance, on the marketing side where you could curb some of the spending? Just for us to understand where you could end up from a NPS standpoint. I just have a quick follow-up on France. You mentioned kind of a bit of a specific situation in Q1 on the mobile churn at SOSH. However, if you look at the numbers, the base at SOSH was down a little bit, but the overall base was down much more.
You still seem to have some equal of net losses at the Orange brand. Is there anything specific going on there, any dynamic which you should be mindful of, and what is your expectation going forward? Thank you.
Ramon and then Fabienne.
Sorry for the mute. On the COVID-19 expected impact, you have seen what we said regarding events. We do not expect, with the information we have today, that we will have a significant deviation compared to our objectives for 2020. That, obviously, the situation is evolving extremely rapidly. There is a lot of uncertainties. We will consider an update of what we say now when we will be meeting or talking end July, looking at H1. This is the very general picture.
On roaming, and I'm talking here under the control of Jérôme Barré, who's also with us, it's clear that COVID has a mechanic impact on the roaming traffic. You don't have anybody bling, basically, so no roaming. It's not structural. It's due to the current situation. We do not expect a significant impact on the wholesale result because here you will have in-and-out compensating. What will be impacted on a mechanical basis is the retail revenues because of the absence of travelers. It's too early to see the yearly impact, but you have to know that the roaming retail revenues yearly represent less than 1% of total group revenue. It's not really massive. It's not very important. About mitigation actions, you have listed a number of them. SG&A also, obviously, will be part of the game going back to traveling.
These are costs that are going to be faced. You will be looking at consulting fees. You will be looking at all the indirect cost base. You know that we also have this objective by 2023, which is still there, to obviously reduce our indirect cost base by EUR 1 billion. Everybody's working in the company both on short-term measures but also medium to long-term measures on how we're going to work on our cost base. It will be linked to this specific situation. We will not, of course, stop working on the more, let's say, structural long-term measures, looking at the impact of digitalization, of smart spending, etc., etc. There is, in fact, a lot of work which is being done. This will be on the OPEX side.
As we said at the very early of this call, you also have the CapEx side where here there will be some kind of mechanistic impact of the lockdown period. We talked about it briefly. We can also have a voluntary approach in order to make sure that at the end of the day, in 2020, we are where we want to be. You have understood what we want to achieve when we talk about avoiding any significant deviation compared to our objectives.
Thank you, Ramon. Very quickly, Fabienne?
Yes. As I explained just before, despite the lockdown, we observed that our customer base, as I said, the premium customer base, is very resilient.
We are really confident that in the future, due to the strategy we have and all the effort we made, we can come back and have the same kind of trend we had in the past. This period can be an opportunity too for the business driven by fiber because fiber, it's the best answer to have a good quality and good connectivity at home, both on mobile or fixed through the voice on WiFi. It will be the same for the convergent and the multi-service strategy. I am not worried about that. I think when we will have reopened our stores, and it's what we want to do from the 11th of May, all the dynamic will be back on the mobile, on the broadband, both on the low cost.
The last offer we launched, EUR 15 lifetime plan for Orange, is very efficient and very successful, and both on the high-end market because we will have all channels to be complete in our strategy to deploy.
Okay. Thank you.
I think it is time to leave. Thank you very much for being with us. Thank you for also your questions. Have a nice day.
Thank you, ladies and gentlemen. This concludes today's conference call. Thank you for your participation. You may now disconnect.