The NExT plan’s success confirms the effectiveness of the Group’s strategy

Marzec 20, 2009 w Uncategorized
Tagi: effectiveness of the Group’s, Group’s strategy, The NExT plan’s success confirms the effectiveness of the Group’s strategy

The NExT plan’s success confirms the effectiveness of the Group’s strategy

The achievement of the 2006-2008 NExT plan (New Experience in Telecoms) confirms the success of France Telecom-Orange’s profound business transformation. Despite the rapidly changing environment, this has produced stronger growth, steady operating profitability and has demonstrated the Group’s ability to reduce costs while respecting its values and without any reduction in its dynamism.

Over the period the Group exceeded its targets for organic cash flow generation achieving 8 billion euros in 2008. Debt has been reduced from 48 billion euros at the end of 2005 to less than 36 billion euros at the end of 2008. At 1.85, the Group’s debt-to-equity ratio is amongst the lowest in the sector today; during the same period its dividend has increased by 39%.

These achievements bear witness to the success of the strategy announced in 2005 by Didier Lombard, based on:
- the convergence of networks and services;
- migration to the Internet and associated services (such as VoIP and IPTV);
- the increased contribution of new growth activities (such as content, online advertising, e-health); and
- the internationalisation of the Group under the Orange brand (123 million customers at the end of 2008 out of a total of 182 million).

Today, France-Telecom Orange operates in a rapidly changing ecosystem, anticipated in large part and addressed by the NExT strategy. The Group must also take steps to adapt to a deteriorating macroeconomic environment, even if telecoms services are so far demonstrating a good level of resilience.

In this context, Orange 2012 will build upon the success of the Group’s strategy and will apply new action plans in order to achieve an ambitious objective for organic cash flow generation.

New Action Plans: simplicity, agility, sustainable performance

The Orange 2012 initiatives are focused around three priorities:
- Simplifying the customer experience;
- Enhancing the agility with which the Group carries out its business;
- Ensuring performance that is durable over time.

Simplicity: To help customers address the profusion of technologies and provide accessible services to as many as possible, Group innovation will concentrate on simplicity, ergonomics and design, as well as quality of service both in terms of products and services and the “customer experience”. In this way, France Telecom-Orange will open a new era of “pacified” or trouble-free technology for its customers.

The initiatives in this field include a particular focus on patents aimed at simplifying product usage, the creation of a dedicated, integrated design and ergonomics team, generalising usage tests, improving call centre procedures, launching customer care and backup products, etc.

Agility: against a backdrop of extremely rapid change, the Group will rationalise its offers so as to accelerate its time to market and seize new opportunities. This move to increase flexibility in the business will also entail initiatives to drive further the Group’s transformation and optimise its cost structures.

Similarly, in light of the technological infrastructure developments (fibre optics, HSDPA and eventually LTE) expected to occur in the coming years the Group will pursue a deployment strategy taking into account the regulatory environment and the speed of adoption in the market.

Sustainable performance: Orange 2012 also aims to capitalise further on synergies available across the Group’s geographic footprint and to complete the roll-out of the integrated operator model: this will include further sharing of networks, information systems and platforms, the extension of innovative initiatives to the greatest possible number of markets and the extension of the Orange brand.

 

http://en.sgsm.info/2009/03/19/the-next-plans-success-confirms-the-effectiveness-of-the-group%e2%80%99s-strategy/