France Telecom

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Telecommunications is a highly competitive industry that is always looking to the future. History matters little in a market where competitive advantage has everything to do with technology, execution, and presentation. France Telecom is a leader in this industry. Their Orange brand in paving the way into new markets. Learn briefly about how they are doing in relation to their competitors, the industry, and what other telecoms can learn from their Orange brand.

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France Telecom

  1. 1. <ul><li>By </li></ul><ul><li>Noor Said </li></ul>Telecommunications Industry: An Industry of the future, always looking to the future
  2. 2. Industry Perspective
  3. 3. Industry Profile <ul><li>Two Market Segments </li></ul><ul><li>Fixed line communications </li></ul><ul><li>Wireless communications </li></ul><ul><li>Geographic Market Segments </li></ul><ul><li>Americas </li></ul><ul><li>Europe </li></ul><ul><li>Asia-Pacific </li></ul><ul><li>Middle East/Africa </li></ul>
  4. 4. Market Share Fixed versus Wireless <ul><li>Keeping in Mind About the Telecommunications Industry… </li></ul><ul><ul><ul><li>All seasoned telecom companies have both fixed line and wireless segments. </li></ul></ul></ul><ul><ul><ul><li>Africa and the Middle East are considered fairly new “break through” markets, and are not reflected in global market shares. </li></ul></ul></ul><ul><ul><ul><li>Both Fixed Line and Wireless Services require infrastructure building. </li></ul></ul></ul><ul><ul><li>Datamonitor© (Comp.). (2008, August). Fixed Line Telecoms and Wireless Telecoms – Industry Analysis . Retrieved February 26, 2009, from Business Source Complete Database Web site: http://web.ebscohost.com </li></ul></ul>
  5. 5. Executive Summary Industry Comparison - Fixed Line versus Wireless (in 2007) <ul><li>Fixed </li></ul><ul><li>Market grew by 0.2% and reached a value of $490.1 billion. </li></ul><ul><li>By 2012 – Forecasted to grow to a value of $522.3 billion: 6.6% increase. </li></ul><ul><li>Volume grew to 1040.6 million fixed line phones: 1.2% increase. </li></ul><ul><li>By 2012 – Forecasted to grow to a volume of 1115.7 million fixed phones: 7.2% increase. </li></ul><ul><li>Wireless </li></ul><ul><li>Market grew by 8.9% and reached a value of $557.3 billion. </li></ul><ul><li>By 2012 – Forecasted to grow to a value of $733.1 billion: 31.5% increase. </li></ul><ul><li>Volume grew to 2 billion subscribers: 10.9% increase. </li></ul><ul><li>By 2012 – Forecasted to grow to a volume of 3.1 billion subscribers: 53% increase. </li></ul>
  6. 6. Industry Leaders Datamonitor© (Comp.). (2008, August). Fixed Line Telecoms and Wireless Telecoms – Industry Analysis . Retrieved February 26, 2009, from Business Source Complete Database Web site: http://web.ebscohost.com
  7. 7. Wireless Superstars <ul><li>#1 – China Mobile Limited </li></ul><ul><ul><ul><li>As of April 2008 – about 399.5 million subscribers </li></ul></ul></ul><ul><ul><ul><li>In 2007 – $46,862.2 million in revenue, 24.4% profit margin. </li></ul></ul></ul><ul><ul><ul><li>GSM roaming services cover 231 countries, GPRS roaming covers 161 countries. </li></ul></ul></ul><ul><li>#2 – China Unicom </li></ul><ul><ul><ul><li>In 2007 – around 146.9 million wireless subscribers </li></ul></ul></ul><ul><ul><ul><li>260 operators in 170 countries and regions. </li></ul></ul></ul><ul><ul><ul><li>Also is a fixed line competitor. </li></ul></ul></ul><ul><ul><ul><li>In 2007 - $13,067.7 million revenue, liabilities are very low, profit margin of 9.3% </li></ul></ul></ul><ul><li>#3 – Vodafone Group PLC </li></ul><ul><ul><ul><li>In 2007 – about 206 million consumers </li></ul></ul></ul><ul><ul><ul><li>Owns 45% of Verizon Wireless (Verizon Communications owns 55%) </li></ul></ul></ul><ul><ul><ul><li>Also is a fixed line competitor. </li></ul></ul></ul><ul><ul><ul><li>In 2007 - $62,224.2 million revenue, negative 17% profit margin. </li></ul></ul></ul>
  8. 8. Where does France Telecom fit into the industry?
  9. 9. Company Comparisons: Vodafone, France Telecom, Deutsche Telekom, Royal KPN
  10. 10. FINDINGS 2003 to 2007 <ul><li>Out of All Global & European leader telecoms, France Telecom was the only company able to reduce its employees and liabilities, simultaneously, for five years consecutively. Over five years they: </li></ul><ul><li>Reduced liabilities by approximately 24% </li></ul><ul><li>Reduced employees/labor by approximately 16% </li></ul><ul><li>Increased revenue by approximately 13% </li></ul><ul><li>Approximate average annual profit margin was 9.82% </li></ul>
  11. 11. ECONOMIC FINDINGS Continued <ul><li>France Telecom </li></ul><ul><li>asset examination </li></ul><ul><ul><li>Strong Cash Flows </li></ul></ul><ul><ul><li>Uses cash to build more infrastructure </li></ul></ul><ul><ul><li>Infrastructure is assets </li></ul></ul><ul><li>Royal KPN’s acquisitions: effects on Global 500 ranking </li></ul><ul><ul><li>Purchased Telfort in 2005 & ranking was 418. </li></ul></ul><ul><ul><li>Years without acquisitions, rankings were low. </li></ul></ul><ul><ul><li>Recently acquired Dutch MVNO company, interesting to see what their ranking will be for this next year. </li></ul></ul>
  12. 12. THE NEXT STEP FOR TELECOMS <ul><li>Move into unsaturated Markets in developed nations, North America and Europe are saturated </li></ul><ul><li>Focusing on untapped markets </li></ul><ul><ul><li>Poor, rural areas, and areas of aging populations, e.g. France Telecom E-healthcare, Indian farmers </li></ul></ul><ul><li>Cell phones linked to increasing economic status, focus in improving social status in developing nations </li></ul><ul><li>Infrastructure being invested in developing nations as “point of entry” in difficult markets. </li></ul>
  13. 13. France Telecom’s “ORANGE” Brand
  14. 14. Number 50
  15. 15. A Very Clever Plan <ul><ul><ul><ul><ul><li>Partnerships in Competitive Markets </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Unsaturated/Low Penetration </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Underdeveloped </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Rural </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Poor </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Globally Viewed as “Politically Unstable” </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Acquisitions </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Investment in Infrastructure </li></ul></ul></ul></ul></ul>saturated saturated unsaturated saturated unsaturated unsaturated saturated unsaturated
  16. 16. Local Market Environment Sample KENYA
  17. 17. Penetrating Kenya Market <ul><li>Telkom Kenya was entirely public, owned by government, then negotiated shares with FT for partial privatization. </li></ul><ul><li>In 2007, FT acquired bid securing 51% of Telkom Kenya's shares from the government of Kenya. </li></ul><ul><li>In 2010, FT would have to bring about 11% of shares back out onto the market as part of the deal. </li></ul>
  18. 18. <ul><li>Thank You </li></ul>

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