France Télécom

France Telecom S.A.

Type	Société Anonyme
Traded as	Euronext: FTE, NYSE: FTE
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	Fixed line and mobile telephony, internet, digital television, IT services
Revenue	€45.50 billion (2010)[1]
Operating income	€7.562 billion (2010)[1]
Profit	€4.880 billion (2010)[1]
Total assets	€94.28 billion (end 2010)[1]
Total equity	€31.55 billion (end 2010)[1]
Employees	161,390 (FTE, average 2010)[1]
Subsidiaries	Orange Everything Everywhere (UK) (50% Stake with Deutsche Telekom)
Website	francetelecom.com

France Telecom S.A. is the main telecommunications company in France, the third-largest in Europe^[2] and one of the largest in the world. It currently employs about 180,000 people (half outside France) and has 192.7 million customers worldwide (2010). In 2010 the group had revenue of €45.5 billion. Its head office is in Place d'Alleray in the 15th arrondissement of Paris, and the current CEO is Stéphane Richard.

History

Nationalized service

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 nationalized 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 telco 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 the company, France Telecom

Up to 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 which aimed at making competition mandatory in public services from the 1 January 1998. The 2 July 1990 Bill changed France Telecom into an operator of public law whom Marcel Roulet was the first Chairman. Since then, the company has a separate body corporate from the State and acquire a financial autonomy. It was privatized 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.^[3] In 1982 Telecom introduced Minitel, for its customers to for the first time to perform online ordering. In September 1995, Michel Bon is appointed to run France Telecom Group.

The 'Roaring Twenties'

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 Telecom 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 know the French – even if this project ended up failing. In 2000, the group bought out the majority of Orange Plc and the wholeness of the shares in 2003. Then France Télécom merged it with its mobile phone activities (Itinéris, OLA, Mobicarte) and created Orange. At that time, France Télécom also took over a lot of other firms (some of them were sold back) worldwide (GlobalOne, Equant, Internet Telecom, Freeserve, EresMas, NTL, Mobilcom...). Hence, it became the fourth global operator thanks to its size.

The 'Dark Days'

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 Telecom has to pay back between 5 and 15 billion euro of debt each year. Therefore, the share price collapsed to 6.94€ on the 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 Telecom 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 Telecom since he was appointed to be a member of the government. In March 2004, the mergers made by France Telecom 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 2000 and France Telecom sold it for 8.86€ only four years later.

The privatization step

In September 2004, the French State sold a part of its shares so that it would not be the majority shareholder any more. Hence, France Telecom became a private company. 115 years after its nationalization, the phone became again private in France. On the 27 July 2005, France Telecom announced the takeover of 80% of the mobile phone operator Amena which has 24% of market shares in Spain for 6.4 billion euro of which 3 billion correspond to a capital increase. France Telecom also informed of the NeXT scheme deployment that aimed at providing to its customers the set of telecommunications services that they need in an integrated way. According to the company Dataxis, in 2005, France Telecom was the 2nd ADSL operator worldwide after China Telecom and before SBC Communications and the first European ADSL operator. Since 1 June 2006, France Télécom tries to commercialize worldwide all its products under a single brand Orange. The France Télécom logo called ampersand has a more rounded shape and the graphic guidelines have been modified. In June 2007, the French State sold again 5% of its France Télécom shares; therefore, the public contribution (French State and ERAP) represents 27%. At the same time, France Télécom resold Orange Netherlands and bought out the Spanish Internet service provider, Ya 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. This new firm would become the first European operator, however, this operation failed. On 21 September 2010, France Télécom contributed up to 40% to the capital of Meditelecom (Méditel brand), the 2nd mobile phone operator in Morocco. When the operation was set up, Meditelecom had 10 million customers. The agreement plans France Télécom to rise up to 49% of the capital by 2015.

NeXT scheme

Objectives

The NeXT scheme (2006–2008) is the recovery plan for France Telecom which aims at among other things, reducing costs and 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 will stay under the designation France Telecom. Consequently, this led to the disappearing of numerous brands (Wanadoo, Equant,...) and thousands of people were fired (the estimated percentage was 10%).

New management methods

The NeXT scheme introduced an aggressive management style. In 2004, 4000 employees were trained during 10 days to achieve in the field the new scheme. The top priority is to reduce workforce, thus new management techniques are implemented, and they aimed at damaging working conditions to force one part of the employees to leave willingly because they can not cope more psychological strain. By enhancing this phenomenon, France Telecom was diminishing the amount of redundancy payments.

Recent acquisitions and divestitures

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

In August 2005, FT acquired a 77% ownership in the Spanish mobile phone company Amena, rebranding it Orange España.

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

In November 2007, FT 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.

France Telecom Group world activities

In June 2008, the firm abandoned a €27 billion bid for Swedish operator TeliaSonera after the two companies failed to agree terms.^[4]

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.^[5]

In September 2010, FT announced it had acquired 40% of Meditel shares, a mobile operator from Morocco.

Staff suicides

Between the beginning of January 2008 and April 2011, more than 60 France Telecom employees committed suicide,^[6] 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.^[7][8] Faced with repeated suicides, the company promoted Stephane Richard to chief executive officer on 1 February 2010, while Didier Lombard will remain as chairman.^[9]

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.^[10]

Subsidiaries

France Telecom Marine operates cable-laying ships

France Telecom is a communications access provider offering customers access through multiple platforms. The four key platforms France Telecom 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 Telecom has already begun merging the different internal divisions managing each platform and they now almost all operate under the Orange brand.^[11]

France Telecom is present in the US through its Equant enterprise services and its venture capital arm, Innovacom as well as two R&D labs: one in Boston and the other in South San Francisco, California.

As a result of deregulation, France Télécom operates phone booth in Wellington, New Zealand.

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

GlobeCast is the world largest 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 2004, France Télécom is 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.^[12]

France Télécom R&D

Main article: Orange Labs

France Télécom R&D is the research and development division of France Télécom.^[13][14] 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.^{[15][16][17][18]} Since 2007, France Telecom R&D is also known as Orange Labs, a global network of R&D entities.^[19][20]

CCETT/France Télécom R&D contributed to various international standards, such as ISO/IEC MPEG^[21] and JPEG standards or DAB and DVB standards.^{[22][23][24][25][26][27]} 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).^[28][29][30]

Head office

Head office in Paris

Its head office is in 6, Place d'Alleray in the 15th arrondissement of Paris.^[31] The building has been the head office since 1998. Eight hundred employees work at the site.^[32]

See also

	Paris portal
	Companies portal

• Centre commun d'études de télévision et télécommunications (CCETT), now part of France Télécom R&D
• List of French companies
• Minitel
• Orange (brand)

References

1. ^ ^{a b c d e f} "Annual Results 2010". France Telecom. http://www.orange.com/en_EN/finance/invest-analysts/cons-results/att00018547/consolidatedfinancialstatements2010Francetelecom.pdf. Retrieved 24 February 2011. 
2. ^ Mekay, Emad (5 April 2008). "France Telecom Wins Controlling Stake in MobiNil". Bloomberg. http://www.bloomberg.com/apps/news?pid=20601085&sid=aHWRv7uy7gJc&refer=europe. Retrieved 6 April 2009. 
3. ^ "Shareholding structure". France Telecom. http://www.francetelecom.com/en_EN/finance/stock/shareholder-structure/index.html. Retrieved 6 April 2009. 
4. ^ Gow, David (1 July 2008). "TeliaSonera: France Telecom hangs up on Swedish operator". The Guardian (UK). http://www.guardian.co.uk/business/2008/jul/01/telecomindustry. Retrieved 6 April 2009. 
5. ^ "T-Mobile and Orange in UK merger". BBC News. 8 September 2009. http://news.bbc.co.uk/1/hi/business/8243226.stm. Retrieved 2 May 2010. 
6. ^ "Selbstmordserie: France Telecom Mitarbeiter verbrennt sich". Der Spiegel. 27 April 2011. http://www.spiegel.de/wirtschaft/unternehmen/0,1518,759124,00.html. 
7. ^ "France Telecom talks with unions on suicide spate". Reuters. 7 October 2009. http://www.reuters.com/article/managementIssues/idUSL711729320091007?pageNumber=1&virtualBrandChannel=11604. 
8. ^ Chrisafis, Angelique (9 September 2009). "Wave of staff suicides at France Telecom". The Guardian (London). http://www.guardian.co.uk/world/2009/sep/09/france-telecom-staff-suicides-phone. Retrieved 2 May 2010. 
9. ^ Matthew Campbell (1 February 2010). News: "France Telecom Names Richard CEO; Lombard to Remain Chairman". Business Week. http://www.businessweek.com/news/2010-02-01/france-telecom-names-richard-ceo-lombard-to-remain-chairman.html News:. 
10. ^ Sage, Adam (23 September 2009). "Why are France Télécom employees committing suicide?". The Times (UK). http://www.timesonline.co.uk/tol/life_and_style/health/mental_health/article6844809.ece. Retrieved 6 October 2009. 
11. ^ "Wanadoo is to make way for Orange". BBC News. 29 June 2005. http://news.bbc.co.uk/1/hi/business/4635097.stm. Retrieved 6 April 2009. 
12. ^ Ruitenberg, Rudy (27 February 2005). "France Telecom Names Lombard Chief Executive, Replacing Breton". Bloomberg. http://www.bloomberg.com/apps/news?pid=10000085&sid=aWQM6cGZu.Uw&refer=europe. Retrieved 6 April 2009. 
13. ^ "Bienvenue au CNET – centre de R&D de France Télécom (archived website)". 1996. Archived from the original on 22 December 1996. http://web.archive.org/web/19961222130140/http://www.cnet.fr/. Retrieved 3 August 2010. 
14. ^ C. Schwartz, D.Frossard (1997) (PDF), R&D management, TDF Customer- and product-oriented expertise, http://www.ebu.ch/en/technical/trev/trev_273-tdf.pdf, retrieved 1 August 2010 
15. ^ "CNET – a half century of innovation (archived website)". 2008. Archived from the original on 12 June 2008. http://web.archive.org/web/20080612081852/http://www.cnet.fr/accueil_a.html. Retrieved 3 August 2010. 
16. ^ "Expanding the offer of France Telecom and TDF (archived website)". 20 April 2001. Archived from the original on 20 April 2001. http://web.archive.org/web/20010420003358/http://www.ccett.fr/eng/01a.htm. Retrieved 1 August 2010. 
17. ^ "CCETT – Joint Reseach Center for Broadcast and Telecommunications (archived website)". 1997. Archived from the original on 3 July 1997. http://web.archive.org/web/19970703215943/http://www.ccett.fr/welcome.htm. Retrieved 1 August 2010. 
18. ^ "EBU Technical Review – Digital Audio Broadcasting (DAB)". 2001. http://www.ebu.ch/fr/technical/trev/trev_287-bookshelf.html. Retrieved 1 August 2010. 
19. ^ (PDF) SVC – a highly-scalable version of H.264/AVC, 2008, http://www.ebu.ch/fr/technical/trev/trev_2008-Q2_svc-kouadio.pdf, retrieved 1 August 2010 
20. ^ Olivier Corredo (19 January 2007). "France Telecom R&D devient Orange Labs". http://www.lemondeinformatique.fr/actualites/lire-france-telecom-retd-devient-orange-labs-21870.html. Retrieved 1 August 2010. 
21. ^ "CCETT – Welcome to the CCETT's MPEG Audio Web Site (archived website)". 1997. Archived from the original on 14 April 1997. http://web.archive.org/web/19970414035829/http://www.ccett.fr/audio/c7_audio.htm. Retrieved 1 August 2010. 
22. ^ (PDF) Des élaborations collectives – Le pôle de compétitivité – Images & Réseaux, 2006, http://www.annales.org/ri/2006/fevrier/rannou.pdf, retrieved 1 August 2010 
23. ^ Leonardo Chiariglione (8 March 2005). "Riding the Media Bits – MPEG's third steps". http://ride.chiariglione.org/faultline.htm. Retrieved 1 August 2010. 
24. ^ Leonardo Chiariglione (17 March 2005). "VADIS FINAL PROJECT REPORT". http://leonardo.chiariglione.org/projects/vadis/index.htm. Retrieved 1 August 2010. 
25. ^ Wolfgang Hoeg, Thomas Lauterbach, Digital audio broadcasting: principles and applications of DAB, DAB+ and DMB, http://books.google.com/books?id=T0KSa6w3qH4C&lpg=PA6&ots=qLweQ81lc-&dq=ccett%20dab&pg=PA6#v=onepage&q=ccett%20dab&f=false, retrieved 1 August 2010 
26. ^ "STERNE: the CCETT proposal for digital television broadcasting". 1992. http://ieeexplore.ieee.org/Xplore/login.jsp?url=http://ieeexplore.ieee.org/iel3/1195/4203/00160472.pdf%3Farnumber%3D160472&authDecision=-203. Retrieved 1 August 2010. 
27. ^ "DVB Project – List of Members – TDF". http://www.dvb.org/membership/list_of_members/50237/index.xml?id=. Retrieved 1 August 2010. 
28. ^ (PDF) National Academey of Television Arts and Sciences, Outstanding Achievement in Technical/Engineering Development Awards, http://www.emmyonline.tv/tech/applications/engineering_award_winners_rev3.pdf, retrieved 1 August 2010 
29. ^ [experiments aimed at mobile receivers were first carried out by France's Centre Commun d'Etudes de Teledif-fusion et Telecommunications (CCETT) in 1984. "Monitoring research 11 September 97 – Analysis; What's new on the DAB front?"]. BBC Monitoring. 11 September 1997. experiments aimed at mobile receivers were first carried out by France's Centre Commun d'Etudes de Teledif-fusion et Telecommunications (CCETT) in 1984.. Retrieved 3 August 2010. "experiments aimed at mobile receivers were first carried out by France's Centre Commun d'Etudes de Telediffusion et Telecommunications (CCETT) in 1984." 
30. ^ "CCETT – DAB : Digital Audio Broadcasting (archived website)". 11 February 2001. Archived from the original on 11 February 2001. http://web.archive.org/web/20010211120613/http://www.ccett.fr/eng/03b2.htm. Retrieved 1 August 2010. 
31. ^ "legal matters." France Télécom. Retrieved on 6 October 2009.
32. ^ "France Télécom : un legs de l'administration". Le Journal du Net. http://www.journaldunet.com/economie/reportage/les-sieges-sociaux-des-entreprises-du-cac-40/france-telecom-un-legs-de-l-administration.shtml. Retrieved 8 July 2010. 

External links

• Official website