France telecom

Orange S.A.
Société Anonyme
Traded as ORAN
Industry Telecommunications
Founded 1988 (spun off from governmental control)
Headquarters 15th arrondissement, Paris, France
Area served Worldwide
Key people Stéphane Richard (Chairman and CEO)
Products Landline telephony, mobile telephony, fixed internet, mobile internet, IP television, IT services, Livebox
Revenue Decrease  43.513 billion (2012)[1]
Operating income Decrease € 04.063 billion (2012)[1]
Profit Decrease € 01.104 billion (2012)[1]
Total assets Decrease € 89.980 billion (2012)[1]
Total equity Decrease € 24.306 billion (2012)[1]
Owner(s) See shareholders
Employees 170,000 (2012)[2]
Subsidiaries EE (50% stake with Deutsche Telekom)
Orange Marine
Website www.orange.com

Orange S.A., formerly France Télécom S.A., is a French multinational telecommunications corporation. It currently employs about 170,000 people, 105,000 of them in France, and has 230 million customers worldwide.[2] In 2012, the group had revenue of €43.5 billion.[1] Its head office is in the 15th arrondissement of Paris, and the current CEO is Stéphane Richard.

Orange has been the company's main brand for mobile, landline, internet and IPTV services since 2006. The brand originated in 1994 when Hutchison Whampoa acquired a controlling stake in Microtel Communications Ltd during the early 1990s and rebranded it as Orange. It became a subsidiary of Mannesmann in 1999 and was acquired by France Télécom in 2000. The company was rebranded as Orange in July 2013.[3]

History

Nationalised service (1790s–1980s)

In 1792, under the French Revolution, the first communication network was developed to enable the quick transporting of information in a warring and unsafe country. That was the optical telegraphy network of Claude Chappe.

In 1878, after the invention of the electrical telegraph and then the invention of the phone, the French State created a Ministry of Posts and Telegraphs. Telephone Services were added to the ministry when they were nationalised in 1889. However, it was not until 1923 that the second 'T' (for 'telephones') appeared and the department of P&T became PTT.

In 1941, a General Direction of Telecommunications was created within this ministry. Then, in 1944, the National Centre of Telecommunications Studies (CNET) was created to develop the telecommunications industry in France.

In the 1970s, France tried extra hard to make up its delay on other countries with the programme "delta LP" (increasing the main lines). It was at the time when was built the main part of the local loop that is all the cables linking the consumers to the operator. Moreover, with the help of French manufacturers, the numerical switching, the Minitel and the GSM norm were invented by engineers and CNET researchers.

Creation of France Télécom (1988–1997)

Until 1988, France Télécom was known as the Direction Générale des Télécommunications, a division of the Ministry of Posts and Telecommunications. It became autonomous in 1990. This was in response to a European directive, aimed at making competition mandatory in public services from 1 January 1998. The 2 July 1990 Bill changed France Télécom into an operator of public law, with Marcel Roulet the first Chairman. Since then, the company has a separate body corporate from the State and acquire a financial autonomy. It was privatised by Lionel Jospin's Plural Left government starting on 1 January 1998. The French government, both directly and through its holding company ERAP, continues to hold a stake of almost 27% in the firm. In addition, the government Conseil of Ministers names the CEO.[4] In 1982 Telecom introduced Minitel, for its customers to for the first time to perform online ordering. In September 1995, Michel Bon was appointed to run France Télécom Group.

The 'Roaring Nineties' (1997–2000)

In 1997, the capital of the new public company was successfully open whereas the dot-com bubble phenomenon made the stock exchanges bullish. A second capital opening occurred in 1998. France Télécom got behind in the internationalization launched by its international competitors such as Vodafone, thus, it started looking for targets at the highest speculation rate of the dot-com bubble. Moreover, its alliance with Deutsche Telekom based on a reciprocal capital contribution of 2% broke off when Deutsche Telekom announced that they were planning to do business with Telecom Italia without letting the French know – even if this project ended up failing.

Acquisition of Orange and the 'Dark Days' (2000–2004)

In 2000, the group bought out the majority of British mobile phone network Orange plc. At the time, France Télécom also bought stakes in several other international firms (GlobalOne, Equant, Internet Telecom, Freeserve, EresMas, NTL, Mobilcom) some of which have since been sold back. Through this process, it became the fourth biggest global operator.

The mobile telephone operations of Orange were merged with the majority of the mobile operations of France Télécom. On 13 February 2001, Orange was listed in an initial public offering on the Euronext Paris stock exchange at a price per share of €95, with a secondary listing in London.[5] In May 2001, Orange was listed in the CAC 40,[6] the benchmark stock market index of the top 40 French companies in terms of market capitalisation.[7]

In June 2001 the France Télécom's mobile brands, Itinéris, OLA and Mobicarte, were replaced by the Orange brand (“mobicarte” became the name of one of Orange's offers, and the two other brands dropped).

After a change in qualification of a part of the liabilities from long-term to short-term in order to get a better interest rate, the stakeholders realized that between 2002 and 2005, France Télécom had to pay back between €5 to 15 billion of debt each year. Therefore, the share price collapsed to €6.94 on 30 September 2002 whereas it was at €219 on 2 March 2000.

On 2 October 2002, the CEO, Thierry Breton was called to turn the company round, since at that time, France Télécom was the 2nd most in debt company worldwide in terms of short-term liabilities. He obtained 15 billion of debt adjustment that needed to be borne by banks and investors, another 15 billion of capital increase claimed to the State since it was still the majority shareholder, and an additional 15 billion of cash to be found from internal savings. At the end of February 2005, Thierry Breton resigned from France Télécom since he was appointed to be a member of the government. In March 2004, the mergers made by France Télécom between its mobile phone subsidiary Orange, bought at full price during the dot-com bubble, and its internet provider subsidiary Wanadoo which was renamed Orange led to a controversy. Indeed, a Wanadoo share was worth €19 in the spring of 2000 and France Télécom sold it for €8.86 only four years later.

In 2003, France Télécom sold a 48% shareholding in Telecom Argentina, which it had jointly run with Telecom Italia, to the Argentinian Werthein family. Orange now holds only 2% of the firm. France Télécom also sold CTE El Salvador.

On 21 November 2003, France Télécom withdrew the 13.7% of Orange's shares traded on the Paris Stock Exchange.[8]

Privatisation (2004–2006)

In September 2004, the French government sold a part of its shareholding so that it would no longer be the majority shareholder as a result of 1997 Asian financial crisis. Hence, 115 years after the nationalization of the telephone system, France Télécom became a private company.

On 27 July 2005, France Télécom announced the takeover of 80% of the mobile phone operator Amena, which had 24% of the market share in Spain, for 6.4 billion euro, of which 3 billion corresponded to a capital increase.

NeXT scheme and rebranding to Orange (2006–present)

From 1 June 2006, France Télécom tried to commercialize all its products under a single world-wide brand, Orange. The France Télécom logo called "ampersand" was given a more rounded shape and the graphic guidelines were modified.

The NeXT scheme was the recovery plan for France Télécom which aimed at, among other things, reducing costs, especially wage costs, carrying on a converging policy for its products and services, and grouping together all the brands under a unique one (Orange), except for the activities dealing with fixed line telephone which would stay under the designation 'France Télécom'. Consequently, this led to the disappearance of numerous brands (Wanadoo, Equant) and thousands of people were made redundant (the estimated percentage was 10%).

The NeXT scheme introduced what could be deemed an aggressive management style. In 2004, 4000 employees were trained during a 10 day period for the new scheme. The top priority was to reduce the workforce, thus new management techniques were implemented.

In December 2006, France Télécom announced the acquisition of DIWAN and SILICOMP specialized on the Customer Critical Application (CCA) and Security for enterprises.

In June 2007, the French State sold 5% more of its France Télécom shares. After that, public ownership (French State and ERAP) represented 27% of the total. At the same time, France Télécom resold Orange Netherlands, and bought out Ya, the Spanish Internet unit of Deutsche Telekom AG, and the Austrian mobile phone operator, One. In March 2008, the media claimed that France Télécom wanted to take over on the Scandinavian company TeliaSonera.

In November 2007, France Télécom announced it had acquired a bid to secure 51% of Telkom Kenya's shares from the Government of Kenya, but will have to bring about 11% of shares back out onto the market three years following the deal.

In June 2008, the firm abandoned a €27 billion bid for Swedish operator TeliaSonera after the two companies failed to agree terms.[9]

On 8 September 2009, Orange and T-Mobile parent Deutsche Telekom announced they were in advanced talks to merge their UK operations to create the largest mobile operator with 37% of the market. Both T-Mobile and Orange brands will be kept due to the differences in targeted market. T-Mobile will remain the budget conscious offering and Orange the premium one although there is some overlap as of Feb. 2011.[10]

On 21 September 2010, France Télécom announced it had acquired 40% of Meditel, the second-largest mobile phone operator in Morocco. When the operation was set up, Méditel had 10 million customers. The agreement would see the holding of France Télécom rise to 49% of the capital by 2015.

On 3 February 2012, Hutchison Whampoa announced that it would buy Orange Austria for US$1.7 billion.[11] The deal closed on 3 January 2013,[12] and the Orange brand was phased out on 19 August 2013, when its operations were merged into 3.[13]

In March 2012, France Télécom bought 93.9 percent of Mobinil, an Egyptian mobile operator, from Naguib Sawiris's Orascom Telecom Media and Technology (OTMT) in an effort to double its revenue in MENA by 2015.[14]

On 28 May 2013 at the Annual Shareholders' Meeting, shareholders approved changing the name of the group to Orange S.A. This became effective on 1 July 2013.[3]

Shareholders

The major shareholders of Orange as of 24 July 2013 are Fonds stratégique d'investissement, who own 13.5%, the French state, who own 13.45%, Orange employees, who own 4.81%, and the company itself, who own 0.58%.[15]

Operations


Country Operator Ownership
 France Orange France 100%
 Armenia Orange Armenia 100%
 Belgium Mobistar 52.9%
 Botswana Orange Botswana 73.68%
 Cameroon Orange Cameroun 94.4%
 Central African Republic Orange Centrafrique 100%
 Democratic Republic of the Congo Orange RDC 100%
 Dominican Republic Orange Dominicana 100%
 Egypt Mobinil
(Egyptian Company for Mobile Services S.A.E.)
93.92%
 Equatorial Guinea Getesa 40%
 Guinea Orange Guinée
(Sonatel)
90%
 Guinea-Bissau Orange Bissau
(Sonatel)
90%
 Iraq Korek Telecom 20%
 Ivory Coast Orange Côte d'Ivoire 85%
 Jordan Orange Jordan
(Jordan Telecom Group)
51%
 Kenya Telkom Kenya
(Orange East Africa)
70%
 Luxembourg Orange Luxembourg
(Mobistar)
100%
 Madagascar Orange Madagascar 71.79%
 Mali Orange Mali
(Sonatel)
70.05%
 Mauritius Mauritius Telecom 40%
 Moldova Orange Moldova 94.31%
 Morocco Méditel 40%
 Niger Orange Niger 82.66%
 Poland Orange Polska
(Telekomunikacja Polska S.A.)
50.67%
 Romania Orange Romania 96.8%
 Senegal Sonatel 42.3%
 Slovakia Orange Slovensko 100%
 Spain Orange España
(France Telecom España)
100%
 Tunisia Orange Tunisie 49%
 Uganda Orange Uganda 65.93%
 United Kingdom EE 50%
 Vanuatu Telecom Vanuatu Limited 50%

The Orange brand name is licensed to a number of operators which Orange S.A. does not own:

Subsidiaries

Orange is a communications access provider offering customers access through multiple platforms. The four key platforms Orange operates are:

  1. fixed line telephone, mainly in France and Poland.
  2. broadband access.
  3. mobile phone telephony.
  4. most recently, IPTV, though currently only in France and Spain, with MaLigne TV, now known as Orange TV.

France Télécom merged the different internal divisions managing each platform and now all operate under the Orange brand.[16]

Orange is present in the US through its Orange Business Services division and its venture capital arm, Innovacom as well as two R&D labs: one in Boston and the other in South San Francisco, California.

OpenTransit is Orange's backbone network. It covers Europe, the United States, Japan, Hong Kong, and loops back to Paris.

GlobeCast is a provider of transmission of satellite and production services for professional broadcast, online content and enterprise multimedia. GlobeCast World TV is a division of GlobeCast. In 2012, GlobeCast also began launching a direct to home OTT IPTV service called MyGlobeTV in the United States using NetGem set top boxes.[17][18][19][20]

In 2004, France Télécom was likely to have to pay back €1 billion in alleged unlawful subsidies (in breach of state aid rules) it received from the French government, following an 18-month investigation by Mario Monti, the EC Competition Commissioner. It is understood that both France Télécom and the French government are appealing this decision.

The former CEO of France Télécom Thierry Breton was appointed in 2002 after leaving his previous company Thomson SA (formerly THOMSON Multimedia SA, owner of the legendary American brand RCA) where he served as the CEO. On 25 February 2005, he was appointed Minister of Finance and Industry and replaced as CEO by Didier Lombard, who had been head of the firm's new technologies division.[21]

Orange Labs

Orange Labs (formerly France Télécom R&D) is the research and development division of Orange.[22][23] This division was derived from different ancient entities, such as CNET (Centre national d'études des télécommunications) created in 1944, the CCETT created in 1972, as well as other entities.[24][25][26][27] In 2007, France Télécom R&D became known as Orange Labs, a global network of R&D entities.[28][29]

CCETT/France Télécom R&D contributed to various international standards, such as ISO/IEC MPEG[30] and JPEG standards or DAB and DVB standards.[31][32][33][34][35][36] CCETT, IRT and Philips developed a digital audio two-channel compression system known as Musicam or MPEG Audio Layer II (Emmy Award in Engineering 2000).[37][38][39]

In 2010 Orange devoted 1.9% of its revenue, or €845 million, to research and development. Since January 2007 Orange has unified its research laboratories and technocentres in the Orange Labs network. As of 31 December 2010 Orange held a portfolio of 7,892 patents, 327 which were filed in 2010.[40] Orange employs 3,700 people in research and development per year throughout the organisation,[41] including more than 200 doctoral candidates and post-doctorates.[42] Orange's research and development is based on partnerships with industry, suppliers and operators, universities and schools, academic institutes and research programs such as the following:

Partner Type
China Telecom Supplier and operator
Deutsche Telekom Supplier and operator
Bibliothèque nationale de France Academic institute
CNRS Academic institute
INRIA Academic institute
Supélec University/School
Télécom Bretagne University/School
École Normale Supérieure University/School
ESSEC - Chaire Media & Entertainment University/School
École Normale Supérieure - chaire de cryptologie University/School
Paris Descartes University - chaire pluridisciplinaire University/School
École polytechnique - chaire Innovation et Régulation University/School
Massachusetts Institute of Technology University/School
Beijing University of Post and Telecom University/School
Imperial College London University/School
Agence Nationale de la Recherche Research program

Two types of infrastructure coexist in Orange's research and development: the research laboratories and the technocentres. The latter are responsible for Orange innovations[43] and consist of multidisciplinary teams of researchers, engineers, and marketing and sales personnel.

Type City Country
Technocentre Chatillon France
Technocentre London United Kingdom
Technocentre Warsaw Poland
Technocentre Amman Jordan
R&D - Spain
R&D San Francisco United States
R&D Beijing China
R&D Cairo Egypt
R&D Tokyo Japan
R&D Issy les Moulineaux France
R&D Caen France
R&D Grenoble France
R&D Rennes France
R&D Lannion France
R&D Sophia Antipolis France
R&D La Turbie France
R&D Belfort France

Controversy

Staff suicides

Between the beginning of January 2008 and April 2011, more than 60 France Télécom employees committed suicide,[44] some leaving notes blaming stress and misery at work. In October 2009, the wave of suicides led former Deputy CEO Louis-Pierre Wenes to resign under trade union pressure, to be replaced by Stephane Richard.[45][46] Faced with repeated suicides, the company promoted Stephane Richard to chief executive officer on 1 February 2010, while Didier Lombard remained as chairman.[47]

The suicide rate among France Télécom's 102,000 domestic employees is 15.3 per year, compared with an average of 14.7 suicides per 100,000 in the French population as a whole,[48] which shows a slight fluctuation in statistics for suicide.

Following an investigation, the Inspection du travail (Labour Inspection) told the labour union Sud-PTT that the work organisation at France Télécom "was conducive to generating suffering at work" and "health risks" for employees.[49] An investigation was conducted by the audit firm Technologia at the request of France Télécom's management. Of the 102,843 employees in the group’s parent company, 80,080 responded, i.e. a response rate of 77.9%. The fact-finding report revealed a "very poor general feeling", "strained physical and mental health", and a "tense and even violent working environment" for some categories of personnel. Working conditions were deemed difficult, mainly for personnel in charge of sales and "customer interventions". Given heavy media coverage, these findings were the source of major contention about working conditions.

Access to some sites limited

In 2011, following complaints by Internet users, Megaupload accused Orange of not providing sufficient connectivity to its site, thus severely limiting throughput from France, an allegation Orange denied.[50]

Accusations of false advertising in France

In November 2009, three users lodged a complaint against Orange for false advertising concerning its “Unlimited 3G Key” service.[51] These customers criticised the operator for the misleading way in which this service is presented, since it isn't in fact unlimited. While it is true that there is no time limit, the user cannot download more than 1 gigabyte per month, thus limiting browsing. Unaware of this, the three plaintiffs browsed beyond plan limits and had to pay additional fees as a result.

Corruption in Tunisia

In March 2011, the information website OWNI uncovered a questionable financial deal that enabled the Orange group to acquire a 3G license.[52]

Anticompetitive practices in French overseas departments

On 28 July 2011, the Competition Authority fined France Télécom €27.6 million for having improperly impeded the development of new competing operators in the French overseas departments (primarily Réunion).[53]

France Télécom used its dominant position, resulting in particular from its former monopoly, to take unfair advantage of its competitors.

The practices identified by the Authority were:

  • excessive rate levels
  • As operators of the quasi-totality of the telecommunication infrastructure local loops, making use of the data which they have access to, France Télécom has targeted former subscribers who had switched to a competitor, in order to win them back, offering them specific deals.
  • margin squeeze on broadband Internet offers
  • maintaining call barring services inconsistent with the prior selection of an alternative operator

SMS and MMS propagation of 1 January 2011 in France

On 1 January 2011, Orange users’ SMS and MMS were sent and billed multiple times. The operator agreed to reimburse the excess costs to consumers, explaining that the error came from a "third party operator"[54] (which turned out to be Bouygues Telecom),[55] said not to have sent acknowledgements, which caused the messages to be resent. A computer problem at the Bouygues platform was blamed.[56] During the night of 31 December 2010 to 1 January 2011, more than 930 million text messages were exchanged in France (for the three operators combined), setting a new record compared with the peaks of the previous years.[57]

Controversies in UK regarding the quality of service

On 21 March 2007 Watchdog, a television series by the BBC focusing on consumer protection, published the results from a broadband survey they held. According to the survey Orange is the worst ISP in the UK. 68% of Orange customers that took part in the survey said they were unsatisfied with Orange's Customer Service, it was voted as the most unreliable broadband provider, and it had the highest number of dissatisfied customers. Two thirds of Orange customers experienced problems cancelling their Orange broadband.[58]

In response to the problems with Orange UK broadband and 3G broadband during March 2009 and April 2009 the 3G data network has been upgraded to 3.5G and increased signal coverage. This new network can be seen in action on many mobile phones which display network for instance the Nokia N95, when the phone detects the higher speed. The Orange UK mobile broadband USB adapter works with the new network. The 3G networks for all telecommunication suppliers still struggle to get the throughput that was originally advertised when these networks were announced. The UK Telecoms Regulator[59] has reported on the challenges for all suppliers.

A consumer organisation forum web site known as OrangeProblems.co.uk focuses on the poor level of service provided by Orange Broadband in the UK. Initially set up as WanadooProblems.co.uk, the site focuses on the infamous Orange local loop unbundling and poor customer service but covers a wider range of Orange operations such as lost email, significantly delayed SMTP and outages, suspicions of eavesdropping, et al.

Orange Mobile has been criticised during a Channel 4 News investigation for a lack of security which potentially exposed customer records to fraud.[60]

In August 2007 Orange was criticised for summarily deleting email accounts tied to old Freeserve and Wanadoo 'pay as you go' dial-up accounts with no warning.[61]

In August 2008, after well publicised problems with iPhone 3G performances, customers compared their download speed and discovered that Orange in France was capping 3G download bandwidth. Orange admitted capping to 384kbit/s, well below the theoretical 7.2Mbit/s provided by the iPhone.[62][63] This issue was addressed by Orange with the complete uncapping of the 3G and 3G+ by Mid-September 2008.[64]

Head office

Orange's head office, since 2012, is based at 78, Rue Olivier de Serres in the 15th arrondissement of Paris.[65]

The company's former head office was based at 6, Place d'Alleray in the 15th arrondissement of Paris.[66] The building was the head office from 1998 until 2012. Eight hundred employees worked at the site.[67]

See also

Paris portal
Companies portal

References

External links

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