Fastest 5G Network And Fiber Expansion Will Support Long-Term Upside Potential

Catalysts

About Orange Belgium

Orange Belgium provides mobile, fixed broadband and convergent telecom services to residential and enterprise customers in Belgium.

What are the underlying business or industry changes driving this perspective?

• Recognition from Ookla for having the fastest 5G network in Belgium positions Orange Belgium to capture higher value mobile usage and premium customer segments, which can support service revenue and ARPU over time.
• Ongoing 5G and fiber investments, including the Last Mile program in Wallonia and future access to Proximus and Telenet Wyre fiber, expand the addressable high speed broadband footprint and can underpin growth in convergent revenues and eCapEx productivity.
• Synergies from recent acquisitions, mutualization and platforming within the Orange Group, plus AI driven efficiency projects, create room for further cost savings that can support EBITDAaL growth and net margin resilience.
• Strong brand momentum with awards such as Brand of the Year 26 for hey!, combined with an expanded entertainment portfolio including Disney+ and Belgian football, strengthens customer loyalty and can support convergent ARPU and limit churn related pressure on earnings.
• Planned fiber access arrangements with Proximus in Wallonia and with Telenet Wyre in Flanders, together with ongoing HFC upgrades in the south, can support broadband subscriber gains across regions and contribute to service revenue and EBITDAaL growth.

Assumptions

How have these above catalysts been quantified?

• This narrative explores a more optimistic perspective on Orange Belgium compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming Orange Belgium's revenue will grow by 2.6% annually over the next 3 years.
• The bullish analysts assume that profit margins will increase from 2.9% today to 3.8% in 3 years time.
• The bullish analysts expect earnings to reach €80.7 million (and earnings per share of €1.23) by about August 2029, up from €56.4 million today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as €26.6 million.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 28.2x on those 2029 earnings, up from 26.3x today. This future PE is greater than the current PE for the GB Wireless Telecom industry at 26.3x.
• The bullish analysts expect the number of shares outstanding to remain consistent over the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 6.44%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

• Orange Belgium operates in a highly competitive Belgian telecom market where Digi, Telenet, Proximus and multiple secondary brands run frequent promotions and discounts on both primary and secondary brands, which can pressure pricing power and ARPU over time and weigh on revenue and earnings.
• The recent uplift in EBITDAaL to €292.5 million for H1 2026 is partly linked to one off items such as timing of Disney+ and football content costs and a change in tax accounting for pylons, so a future normalization of these temporary benefits could limit EBITDAaL growth and net margin expansion.
• Orange Belgium is committing sizeable and recurring eCapEx, including €184.8 million in H1 2026 and guidance of about €360 million for the full year, and if revenue growth from 5G, fiber, HFC upgrades and convergent offers does not keep pace, the return on these investments could prove modest and weigh on earnings and cash generation.
• The company relies on regulatory clearance and cooperation with partners for key long term projects such as the Orange NetCo arrangement in Wallonia and fiber access with Proximus and Telenet Wyre, and any delay, change in terms or lack of approval beyond expectations for late 2026 or Q1 2027 could slow broadband expansion and limit future revenue and EBITDAaL contributions.
• Orange Belgium is migrating VOO customers and running a dual brand approach with hey! and Orange in markets with different dynamics between the north and south of Belgium, and any misstep in brand positioning, customer migration or retention in these mature and partly anti churn markets could increase churn, slow net adds and put pressure on service revenue and earnings.

Valuation

How have all the factors above been brought together to estimate a fair value?

• The assumed bullish price target for Orange Belgium is €28.0, which represents up to two standard deviations above the consensus price target of €22.15. This valuation is based on what can be assumed as the expectations of Orange Belgium's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of €28.0, and the most bearish reporting a price target of just €17.0.
• In order for you to agree with the more bullish analyst cohort, you'd need to believe that by 2029, revenues will be €2.1 billion, earnings will come to €80.7 million, and it would be trading on a PE ratio of 28.2x, assuming you use a discount rate of 6.4%.
• Given the current share price of €22.0, the analyst price target of €28.0 is 21.4% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.