January 14, 2013 8:50 am

Baidu nets France Telecom browser deal

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Baidu, China’s biggest online search engine, is to launch its largest international expansion to date with an exclusive deal to provide a mobile browser across Africa and the Middle East for many of the smartphones sold by France Telecom.

As part of a broader expansion in the region, France Telecom will pre-install the Baidu-based mobile browser for its Android customers in Africa and the Middle East. France Telecom’s Orange has a total mobile base of nearly 80m customers in the region.

France Telecom said that Africa would be the world’s most dynamic telecoms market in the next few years, adding that the Baidu deal would help drive mobile data adoption in markets where Orange is already seeing increased demand for internet access via smartphones.

Orange, the third-largest operator in Africa, said that demand for Android devices had doubled in the second half of 2012 in the region. Mobile penetration across Africa varies from just 17 per cent in Democratic Republic of Congo to 102 per cent in Tunisia, meaning that there is potential customer growth in many markets. But the aim for France Telecom is also to give many customers their first access to the internet through their phones.

The deal marks the first global operator agreement by Baidu, China’s dominant search engine, which said that this was one of its biggest strategic moves outside of China to date.

The company said: “We see the Middle East and north Africa region as particularly important for Baidu. This deal with Orange for a mobile browser is of particular significance because of the rapidity of the shift towards use of the mobile internet – especially in developing markets where fixed-line internet penetration remains quite low.”

For France Telecom, the deal is another part of a wider strategy to double emerging market revenues to €7bn by 2015. The company wants to expand in a number of countries, in particular around a cluster of west African nations where France has strong connections, and strike commercial management agreements where there are state-owned operators.

Countries on its acquisition list include Togo, Mauritania, Burkina Faso and Gabon, while it is already among companies vying to take on the management of a state-backed group in Libya. The company also has longer-term ambitions in Ethiopia and Algeria, and is interested in the stake being sold in a Moroccan telecoms business by Vivendi.

Meanwhile, Baidu also has ambitions in Africa. Chinese groups have been active in investing in the continent given its minerals and other resources, but have also been involved in funding infrastructure projects as well as providing finance for other business ventures. This includes telecoms, where Huawei and ZTE sell equipment for operators as well as handsets for consumers.

Baidu has embarked on limited international expansion, with a search engine service in Japan and a web navigator application in Thailand, Egypt and Brazil. It is also working on a version of its flagship web search service for international use.

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