France Telecom
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By Noor Said Telecommunications Industry: An Industry of the future, always looking to the future
description
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.
Transcript of France Telecom
ByNoor Said
Telecommunications Industry:
An Industry of the future, always looking to the future
Industry Perspective
Industry Profile
Two Market Segments Fixed line
communications Wireless
communications
Geographic Market Segments Americas Europe Asia-Pacific Middle East/Africa
Market ShareFixed versus Wireless
Wireless Services in 2007
Asia-Pacific, 33
Americas, 31.6
Europe, 35.4
Fixed Line in 2007
Americas, 33.1
Asia-Pacific, 33.2
Europe, 33.7
Keeping in Mind About the Telecommunications Industry… All seasoned telecom companies have both fixed line and wireless segments. Africa and the Middle East are considered fairly new “break through” markets, and
are not reflected in global market shares. Both Fixed Line and Wireless Services require infrastructure building.
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
Executive Summary Industry Comparison -
Fixed Line versus Wireless(in 2007)Fixed
Market grew by 0.2% and reached a value of $490.1 billion.
By 2012 – Forecasted to grow to a value of $522.3 billion: 6.6% increase.
Volume grew to 1040.6 million fixed line phones: 1.2% increase.
By 2012 – Forecasted to grow to a volume of 1115.7 million fixed phones: 7.2% increase.
Wireless Market grew by 8.9% and
reached a value of $557.3 billion.
By 2012 – Forecasted to grow to a value of $733.1 billion: 31.5% increase.
Volume grew to 2 billion subscribers: 10.9% increase.
By 2012 – Forecasted to grow to a volume of 3.1 billion subscribers: 53% increase.
Industry Leaders
Fixed Line Global Leaders
9.8%
7.0%
6.7%
4.3%
72.2%
NTT Corp
AT&T
Verizon/Vodafone
FranceTelecom
Other
Fixed Line European Leaders
12.7%
12.2%
9.1%
8.8%
57.2%
FranceTelecom
DeutschTelekom
British Telecom
Telecom Italia
Other
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
Wireless Superstars#1 – China Mobile Limited
As of April 2008 – about 399.5 million subscribers In 2007 – $46,862.2 million in revenue, 24.4% profit margin. GSM roaming services cover 231 countries, GPRS roaming covers 161
countries.#2 – China Unicom
In 2007 – around 146.9 million wireless subscribers 260 operators in 170 countries and regions. Also is a fixed line competitor. In 2007 - $13,067.7 million revenue, liabilities are very low, profit
margin of 9.3%#3 – Vodafone Group PLC
In 2007 – about 206 million consumers Owns 45% of Verizon Wireless (Verizon Communications owns 55%) Also is a fixed line competitor. In 2007 - $62,224.2 million revenue, negative 17% profit margin.
Where does France Telecom fit into the industry?
Company Comparisons:Vodafone, France Telecom, Deutsche
Telekom, Royal KPN21
9,29
1.00 13
8,45
1.30
165,
156.
90
33,9
30.4
0
ASSETS inmillions
Vodafone
France Telecom
Deutsche Telekom
Royal KPN
62,2
24.2
0
72,4
65.2
0
85,5
20.4
0
17,0
50.7
0
REVENUEin millions
Vodafone
France Telecom
Deutsche Telekom
Royal KPN
-10,
596.
80
9,33
0.60
821.
00
3,62
8.80
NET INCOMEin millions
Vodafone
France Telecom
Deutsche Telekom
Royal KPN
84,6
70.0
0
91,4
83.5
0
103,
308.
60
27,7
86.6
0
LIABILITIESin millions
Vodafone
France Telecom
Deutsche Telekom
Royal KPN
FINDINGS2003 to 2007
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:
Reduced liabilities by approximately 24% Reduced employees/labor by approximately 16% Increased revenue by approximately 13% Approximate average annual profit margin was
9.82%
ECONOMIC FINDINGSContinued
France Telecomasset examination
◦ Strong Cash Flows◦ Uses cash to build more
infrastructure◦ Infrastructure is assets
Royal KPN’s acquisitions: effects on Global 500
ranking
◦ Purchased Telfort in 2005 & ranking was 418.
◦ Years without acquisitions, rankings were low.
◦ Recently acquired Dutch MVNO company, interesting to see what their ranking will be for this next year.
THE NEXT STEP FOR TELECOMS
Move into unsaturated Markets in developed nations, North America and Europe are saturated
Focusing on untapped markets◦ Poor, rural areas, and areas of aging populations,
e.g. France Telecom E-healthcare, Indian farmers Cell phones linked to increasing economic
status, focus in improving social status in developing nations
Infrastructure being invested in developing nations as “point of entry” in difficult markets.
France Telecom’s“ORANGE” Brand
Number 50
A Very Clever Plan
1. Partnerships in Competitive Markets2. Unsaturated/Low Penetration3. Underdeveloped4. Rural5. Poor6. Globally Viewed as “Politically Unstable”7. Acquisitions8. Investment in Infrastructure
saturated
saturated
unsaturated
saturated
unsaturated
unsaturated
saturated
unsaturated
Local Market Environment Sample KENYA
Penetrating Kenya Market Telkom Kenya was entirely public, owned by
government, then negotiated shares with FT for partial privatization.
In 2007, FT acquired bid securing 51% of Telkom Kenya's shares from the government of Kenya.
In 2010, FT would have to bring about 11% of shares back out onto the market as part of the deal.
Thank You
