euronews interview – Orange won’t be squeezed says Richard

http://www.euronews.com/ France Telecom Orange is the leading telecommunications operator in France and is one of the most active internationally, with a turnover of 46 billion euros.

Present in 35 Countries, it is facing, like its competitors, the challenges of a sector going through a top-to-toe evolution, not only because of the current economic crisis. Euronews’ Giovanni Magi interviewed CEO Stéphane Richard:

“France Telecom Orange just announced it is creating 4,000 new jobs, but this only partially offsets the number of retirements. Is this due to the general economic crisis or the arrival of France’s 4th mobile operator?”

Stéphane Richard:
“Both. It is true that the French market has seen a sharp decline in operators’ turnover; this is related to a decrease in the revenue per subscriber of around 10 per cent this year, which is considerable.

Plus, you have an economic environment that remains depressed. There is no growth, there is no growth in purchasing power and so all these effects accumulate.

We’ve announced 4,000 new jobs over the next 3 years, which is is still good news for employment in France. It is clear that these 4,000 jobs will not replace all the departures, it is impossible to say yet how many departures there will be, but it is clear that overall the situation of employment in France, (and nobody is going to lose his job, it is very important to say), will be that at the end of this period we’ll have fewer French employees.

This is clearly the consequence of adaptation required by the company to a new setting, characterized by the coming of the 4th operator and an economic environment that is still depressed.”

euronews:
“The arrival of a 4th mobile competitor last January caused a haemorrhage of customers for the traditional operators. What is the situation now? Have you regained customers?”

Richard:
“There was a loss of customers. I would not say that it was a hemorrhage, there was some migration of customers. If I take the figures of Orange, with a little more than 26 million mobile clients in France, in the first 2 quarters we lost about 600,000 customers. 600 thousand out of 26 million is not a haemorrhage.

Since the month of June we have been gaining again. This means that we are not losing customers. At the moment we are getting more than we lose, because there is always movement in both directions. The true effect of the arrival of the 4th operator is not the loss of customers, it is the drop in prices. Because the 4th operator, just like everywhere this has happened in Europe, has established a new standard on the market.

This is around 20 euros for a unlimited monthly phone and internet subscription. A cheap Sim Card, with the customer free to buy the phone they want. That’s the way I see the market going, with this new price standard, and compared to the previous situation, it means a big drop in income. That is by far the biggest impact associated with the 4th operator.”

euronews:
“Will the drop in prices from competition also hit investment?”

Richard:
“Of course. And here we must say some things: obviously, lower prices in the short term are helpful for the consumer and I understand that everybody sees this as a very positive move. The problem is that we are in an industry of infrastructure.

Every year we need to invest, in maintainance and building the networks of today and tomorrow. Today, our priority is bringing out ultra-mobile broadband, 4 G, 10 times faster. It’ll be a whole new user experience, with much more enjoyable download speeds, and mobile internet access. It’s really a spectacular improvement. To be able to invest, as is expected from us, we must have the resources to do it and it is clear that we we give away today to consumers, we won’t have to invest in the coming years”.

euronews:
“Some time ago, France Telecom Orange was at the centre of an acute social crisis, with a rash of suicides amongst employees. You have launched a program to address this. What are the results?”

Richard:
“When I took the job 3 years ago, the company was in the middle of a very deep, special crisis. It wasn’t a crisis where there were demonstrations in the street, it was almost a kind of collective depression that had been generated by some very tough years after the dot-com bubble, roughly from 2000 on.

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