Open innovation, 5G, customer relations … How Stéphane Richard wants to turn Orange around
Orange has seen its turnover drop continuously since 2010. Stéphane Richard took over as General Manager in March 2010, then Chairman and General Management a year later. In 2014, the turnover reached € 39.4 billion against 43.5 billion in 2012 and 45.5 billion in 2010. Net income fell by 42.6% between 2013 and 2014, from 2.13 to 1.2 billion euros. Restated EBITDA was 12.2 billion euros in 2014, down 3.6%.
To raise the bar, Orange has just put together a new strategic plan called “Essentials 2020”, presented this Tuesday morning.
The group wishes to strengthen its approach toopen innovation. This involves supporting more start-ups. The group will strengthen the Orange Fab system, as well as its equity investments via two investment funds: Iris Capital management (created with Publicis in 2012 and endowed with 300 million euros) and Orange Digital Ventures (20 million euros over one year). The telecommunications group also intends to invest in mobile payment and the Internet of Things.
Triple investments in fiber in France
On the other hand, it will invest 15 billion euros in its networks by 2018. Here, the ambition is to improve its infrastructures to prepare for the arrival of 5G by 2020. In Europe, Orange hopes to achieve 4G coverage exceeding 95% in the European countries where it is present. The group will also develop infrastructures in Africa and the Middle East to develop 4G there by 2018.
In France, the operator will triple its investments in fiber in order to go from 3.6 million connectable homes at the end of 2014 to 12 million in 2018 then 20 million in 2022.
Abandonment of silo operation
Regarding customer relationship management, Stéphane Richard wants to individualize and further personalize the relationship, both online, in store, on the hotline… A multi-channel offer will be favored, with the abandonment of operating in silos (physical network, commercial site, call platform). Present in 29 countries, the group had 244 million customers worldwide as of December 31, 2014, including 185 million mobile customers and 16 million fixed broadband customers.
Orange employed around 156,000 people as of December 31, 2014, including 99,400 in France. For now, many questions remain unanswered: what strategy on the cloud ? And on content (compared to Netflix and others)?
On March 17, the group announces the following financial objectives: 2018 turnover higher than that of 2014, 2018 restated EBITDA higher than that of 2014 and maintenance of the dividend of at least 60 euro cents per year over the period. 2015-2018.