France Telecom Orange Case Study

The French telecoms company Orange is on "serious alert" after reports of a fresh spate of work-related suicides.

Since the beginning of the year, 10 of its employees have killed themselves – most for reasons "explicitly related" to their jobs, according to the company's own stress and mental health watchdog.

Orange was formerly the state-owned France Telecom, which reported a similar wave of deaths between 2008 and 2009. The number of suicides so far this year is almost as high as for the whole of last year, when 11 workers took their own lives.

Of the 10 deaths this year – three women and seven men, the youngest aged 25 – eight have been directly linked to work, according to the observatory for stress and forced mobility, which is responsible for monitoring work conditions at the company.

On Wednesday the French health minister, Marisol Touraine, called the new deaths worrying. "The company has to take the necessary measures. I know that the company and the unions are alert to this … we cannot leave the situation as it is," she told French radio.

The observatory was set up after the earlier wave of suicides caused widespread concern about working conditions and practices at the firm.

The company's former boss Didier Lombard resigned after 35 employee killed themselves between 2008 and 2009. He was lambasted and forced to apologise after suggesting suicide was a "fashion" at the company.

In 2012, Lombard was put under formal police investigation accused of installing "brutal management methods" that amounted to "moral harassment".

Le Parisien published an internal company document from 2006 in which Lombard allegedly told directors he was determined to cut 22,000 jobs, adding "I'll do it in one way or the other, by the window or by the door."

Lombard denied that his methods were the cause of the deaths. He remains under investigation.

An official report by the works inspectorate in 2010 blamed a climate of "management harassment" that it said had "psychologically weakened staff and attacked their physical and mental health".

Since then, Patrick Ackermann, delegate for the SUD union and member of the observatory, said the situation had eased, but last month the group issued a warning to management of a "dramatic worsening" of morale within the company to 2007 levels.

"For the last two years, the pressure from management has started again and working conditions have once more deteriorated," it said. Factors driving workers to depression included a reduced workforce being asked to produce better results, staff being obliged to relocate, the threat of site closures and job losses, and an atmosphere of increased competition between workers.

"Also, what we are seeing among mid-level directors is a return to old and brutal methods of management," the observatory said in a statement.

France Telecom was privatised in 2004, sparking a major restructuring and the loss of scores of jobs. The company, known since last year as Orange to match the name of its mobile phone operation, currently employs around 100,000, but has pledged further cuts to the workforce.

In a statement, Orange admitted there had been "several suicides" this year, adding: "Each of these acts is by its nature singular and stem from different contexts. But these situations remind us to be vigilant and for the need to repeatedly question the efficiency of the numerous preventative measures put in place several for the past few years."

The firm's mediator, Jean-François Colin, will meet with staff representatives on Friday to talk about "preventative measures" for those at risk.

France has a suicide rate of 14.7 per 100,000 inhabitants, well above the European average of 10.2 per 100,000 people, three times higher than in Italy and Spain and twice the rate in Britain. Of the estimated 10,000 suicides in France each year – 27 every day – at least 400 can be directly linked to stress caused by work, but employment concerns are believed to be a factor in many more deaths.

In May 2012, the left-leaning newspaper Libération published a manifesto signed by 44 French psychiatrists, sociologists and politicians calling for a national observatory to monitor suicide cases and understand the phenomenon with a view to better prevention.

This article is about the corporation formerly known as France Télécom. For the UK mobile phone operator, see Orange (UK).

Orange S.A., formerly France Télécom S.A., is a French multinational telecommunications corporation. It has 256 million customers worldwide and employs 95,000 people in France, and 59,000 elsewhere.[3] In 2015, the group had revenue of €40 billion.[4] The company's head office is located in the 15th arrondissement of Paris. The current CEO is Stéphane Richard. The company is a component of the Euro Stoxx 50stock market index.[5]

Orange has been the company's main brand for mobile, landline, internet and IPTV services since 2006. It originated in 1994 when Hutchison Whampoa acquired a controlling stake in Microtel Communications during the early 1990s and rebranded it as "Orange". It became a subsidiary of Mannesmann in 1999 and was acquired by France Télécom in 2000. The company was rebranded as Orange in July 2013.[6]

History[edit]

Nationalised service (1970s–1980s)[edit]

In 1792, under the French Revolution, the first communication network was developed to enable the rapid transmission 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 telephone, the French State created a Ministry of Posts and Telegraphs. Telephone Services were added to the ministry when they were nationalised 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 telecommunications 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 the majority of the local loop was built; that is all the cables linking the users to the operator. Moreover, with the help of French manufacturers, digital switching, the Minitel and the GSM standard were invented by engineers and CNET researchers.

In 1982, Telecom introduced Minitelonline ordering for its customers.[7]

Creation of France Télécom (1988–1997)[edit]

Until 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, aimed at making competition mandatory in public services from 1 January 1998. The 2 July 1990 Bill changed France Télécom into an operator of public law, with Marcel Roulet the first Chairman. Since then, the company has had a separate body corporate from the State and acquired financial autonomy. It was privatised by Lionel Jospin's Plural Left government starting on 1 January 1998. The French government, both directly and through its holding companyERAP, continues to hold a stake of almost 27% in the company. In addition, the government Conseil of Ministers names the CEO.[8] In September 1995, Michel Bon was appointed to run France Télécom Group.[9]

'Roaring Nineties' (1997–2000)[edit]

In 1997, the capital of the new public company was successfully floated whereas the dot-com bubble phenomenon made the stock exchanges bullish. A second share offering occurred in 1998. France Télécom 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 the French know – even if this project ended up failing.

Acquisition of Orange and privatization[edit]

See also: Orange (UK) § History

In July 1991, Hutchison Telecom, a UK subsidiary of the Hong Kong-based conglomerate Hutchison Whampoa, acquired a controlling stake in Microtel Communications Ltd, who by then had acquired a licence to develop a mobile network in the United Kingdom.[10][11][12] Hutchison renamed Microtel to Orange Personal Communications Services Ltd, and on 28 April 1994 the Orange brand was launched in the UK mobile phone market. A holding company structure was adopted in 1995 with the establishment of Orange plc. In April 1996, Orange went public and floated on the London Stock Exchange and NASDAQ,[13] majority owned by Hutchison (48.22%),[14][15] followed by BAe (21.1%).[13] In June 1996, it became the youngest company to enter the FTSE 100, valued at £2.4 billion.

In October 1999 the German conglomerate Mannesmann AG acquired Orange for a price equivalent to €7,900 per customer, i.e. US$33 billion.[16][17][18] Mannesmann's acquisition of Orange triggered Vodafone to make a hostile takeover bid for Mannesmann. Shortly thereafter, in February 2000, Vodafone acquired Mannesmann for US$183 billion, and decided to divest Orange because the EU regulations wouldn't allow it to hold two mobile licences.[19]

In August 2000, France Télécom bought Orange plc from Vodafone for a total estimated cost of €39.7 billion.[20][21][22] At the time, France Télécom also bought stakes in several other international firms (GlobalOne, Equant, Internet Telecom, Freeserve, EresMas, NTL, Mobilcom), of which some have since been sold back. Through this process, France Télécom became the fourth biggest global operator. The mobile telephone operations of Orange plc were merged with the majority of the mobile operations of France Télécom, forming the new group Orange SA.

On 13 February 2001, Orange SA was listed on the Euronext Paris stock exchange with an initial public offering of 95 Euros per share, with a secondary listing in London.[23] In May 2001, Orange SA was listed on the CAC 40,[24] the benchmark stock market index of the top 40 French companies in terms of market capitalisation.[25]

In June 2001 the France Telecom Mobile brands Itinéris, OLA, and Mobicarte were replaced by the Orange brand. On 21 November 2003, France Telecom withdrew the 13.7% of Orange’s shares traded on the Paris stock exchange.[26]

On 2 October 2002, the CEO, Thierry Breton was given the task of turning the company around after the company became crippled by debt following the drop of the company's stock price. On 30 September 2002, the company's stock price was €6.94, down from €219 on 2 March 2000. France Télécom was the second most indebted company worldwide in terms of short-term liabilities. The company obtained 15 billion of debt adjustment that needed to be borne by banks and investors, another 15 billion as a capital increase from the French State since it was still the majority shareholder, and an additional 15 billion in cash from internal savings. On 25 February 2005, Thierry Breton was appointed Minister of Finance and Industry and Didier Lombard, who had been head of the firm's new technologies division, replaced him as CEO.[27]

NeXT scheme and rebranding to Orange (2006–present)[edit]

The NeXT scheme was the recovery plan for France Télécom which aimed at, among other things, reducing costs, especially wage costs, carrying on a converging policy for its products and services, and grouping together all the brands under a single brand, except for the activities dealing with fixed line telephone which would stay under the designation 'France Télécom'. Consequently, this led to the disappearance of a number of brands.

From 1 June 2006, France Télécom tried to commercialize all its products under a single worldwide brand, becoming the sole brand of the France Telecom group for Internet, television and mobile services in the majority of countries in which Orange operated. Orange Business Services became the brand for all its business services offerings worldwide, replacing the Equant brand. In June 2007, Orange and Mid Europa Partners acquire Austrian mobile network company One, re-branding it as Orange Austria. In 2012 this network is sold to Hutchison 3G and the Orange Austria brand was terminated.[28]

In November 2008, Orange launched five Orange Cinema Series channels. To do so, Orange bought the exclusive rights from Warner Bros..[29] for first runs of all new films, previously held by TPS Star (a subsidiary of the Canal+ Group), as well as all films in its catalogue and rights to the film catalogues of Gaumont, HBO[30] and MGM.[31] Orange also secured exclusive rights to broadcast Saturday evening Ligue 1 football matches from the French Football Federation.[32]SFR (a subsidiary of Canal +). Free accuses Orange of tied-selling because the Orange channels are only available to its subscribers.[33] In June 2008, the firm abandoned a €27 billion bid for Swedish operator TeliaSonera after the two companies failed to agree terms.[34]

In 2008, Orange was given permission from Apple to sell the iPhone in Austria, Belgium, the Dominican Republic, Egypt, Jordan, Poland, Portugal, Romania, Slovakia, Switzerland and Orange's African markets.[35] 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[36] 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 February 2011.[37]

On 5 April 2009, Orange won an Arbitration Court case against Orascom Telecom, forcing Orascom to transfer its stake in Mobinil to Orange at a price of E£441,658 per Mobinil share.[38] On 28 October 2009 Orange changed the name of its Luxembourgish telecommunication company VOXMobile to Orange.[39] On 5 November 2009 Orange Armenia, 100% subsidiary of France Telecom, launched telecommunication services in Armenia.[40] On 11 December 2009 Egypt's regulator approved an offer from a unit of France Telecom (Orange) to buy Mobinil.[41] In 2010 Orange changes CEO. Didier Lombard is replaced by Stéphane Richard.[42] The company is also reorganised internally, most notably with the arrival of former Culture Minister Christine Albanel as head of communications for the group.[43] In mid-April 2010 Orange UK announced that it would outsource the management of its broadband network to BT. This announcement was greeted positively by broadband commentators, who felt that the move was likely to improve Orange's broadband quality and customer services.[44]

On 2 March 2012,Didier Lombard, who remained special advisor to Stéphane Richard, left the company.[45] His departure was shadowed by controversy over his stock options: he was suspected of having stayed with the company longer to wait for the France Telecom share to recover and then exercise his stock option. The share was trading at around €16, whereas his stock options were at €23.[46] On 3 February 2012, Hutchison Whampoa announced that it would buy Orange Austria for US$1.7 billion.[47] The deal closed on 3 January 2013,[48] and the Orange brand was phased out on 19 August 2013, when its operations were merged into 3.[49] In March 2012, France Télécom bought 93.9 percent of Mobinil, an Egyptian mobile operator, from Naguib Sawiris's Orascom Telecom Media and Technology (OTMT) in an effort to double its revenue in MENA by 2015.[50] On 28 May 2013 at the Annual Shareholders' Meeting, shareholders approved changing the name of the group to Orange S.A. This became effective on 1 July 2013.[6] In September 2014, Orange agreed a deal to acquire Spanish firm Jazztel for a fee of around €3.4 billion.[51]

Shareholders[edit]

The major shareholders of Orange as of 31 December 2015 are the state of France through Agence des participations de l'État[52] and Banque publique d'investissement (replacing Fonds stratégique d'investissement) for 23.04%.[53] As in mid-2013, Orange employees, who own 4.81%, and the company itself, who own 0.58%.[54]

Operations[edit]

Mobile[edit]

Orange is the sole brand used in the marketing of the company's mobile offers; the Itineris, Ola and Mobicarte brands have been combined since 2001, and Mobicarte became a special prepaid calling offer. As of 31 December 2010, Orange has 150 million mobile customers worldwide, 17.9% of whom are in France. Orange France is the leading mobile telecommunications operator in France, with a market share of 45.38% as of 2 November 2009.[55]

The Orange brand name was licensed to a number of operators which Orange S.A. did not own, these include:

Landline and Internet[edit]

See also: Livebox

Orange took over the landline and Internet businesses of France Telecom and Wanadoo in 2006. Since then, Orange is the sole brand of France Telecom for landline and Internet services worldwide, with a few exceptions, such as Mobistar in Belgium and TPSA in Poland. Orange’s triple-play broadband Internet offers are supplied through the Livebox. As of 31 December 2010, Orange has 13.7 million broadband ADSL customers worldwide, 67% of whom are in France40.

The Livebox is the ADSL modem supplied to Orange’s ADSL and FTTH customers in France, the United Kingdom, the Netherlands, Switzerland, Spain and Tunisia, and to WiMAX customers in Cameroon. It serves as a bridge between the Internet access and the home network through several communication interfaces (Bluetooth, Ethernet, Wi-Fi). The Livebox has evolved over time. The Livebox 1.0 was replaced by version 1.1, the Mini Livebox, followed by the Livebox 2.0. The newest version was scheduled to be rolled out 2012 41. The Livebox is offered on a monthly contract for €3 per month or for purchase for €59. Number of Liveboxes rented in 2008: 7.3 million, a 12.3% increase in one year.[60]

Broadcasting[edit]

Beginning in 2003, Orange’s strategy has centred on the acquisition, creation and diffusion of content. This starts with the creation of MaLigne.tv in 2003, later renamed Orange TV, an ADSL television access service and a video on demand service. In 2004, Orange organises a television access service for mobile phones. In 2007, Orange creates Studio 37 (fr) and, in 2008, enters into a partnership with France Televisions to broadcast pre-recorded programming from the public national television and to roll out theme channels for sports, cinema and television series. Dubbed Content Everywhere in 2008, the content access strategy is announced simultaneously with the launch of the Orange cinema series television channels,[61] and aims to offer customers access to all of the company's content, anywhere and from any device.

Orange Cinema series[edit]

Orange Cinema Series is launched 13 November 2008, along with Orange Sport; it comprises five channels devoted to movies (Orange Ciné Max, Ciné Happy, Ciné Choc, Ciné Novo, Ciné Géant). The channels primarily show films from the Warner Bros. and HBO catalogues. Orange installs additional VOD services on its channels, allowing viewers to watch programmes broadcast in the previous 30 days whenever they like, as well as supplementary programmes from the previous month.

Orange Sport[edit]

Orange Sport is launched 13 November 2008. Orange secures the broadcast rights for the Saturday evening lineup of Ligue 1 matches from season 2008/2009 to season 2011/2012, and the rights to home matches of eight Serie A clubs (U.C. Sampdoria, Atalanta B.C., A.C. ChievoVerona, Reggina, A.C. Siena, U.S. Città di Palermo, Udinese Calcio and S.S.C. Napoli). The acquisition of these rights marks the start of competition for sports programs with the Canal+ group.

Video on demand[edit]

Main article: Video on demand

Orange offers services for video on demand access using the Orange decoder, a computer or a mobile phone. Orange offers free programming from the catalogues of available works of France Television,[63] M6[64] and TF1[65] for one week after their initial broadcast.

Online entertainment[edit]

In 1997 France Telecom created Goa, an online entertainment subsidiary. The site is launched as a platform for players of massively multiplayer online games. In 2002 Goa acquires the operating license for Dark Age of Camelot. In 2007 Goa ceases to be a subsidiary and is merged into Orange. In 2009 Orange refocuses Goa.com on online entertainment and gradually ceases to operate massively multiplayer online games. In August 2010 goa.com disappears to become the Orange Jeux portal.[66]

Music[edit]

Liveradio (fr): Created by Orange in 2008, Liveradio is a free, live, on-demand IP radio streaming service. Users gain access through this service to more than 10,000 FM and web radio stations and 11,000 podcasts from 100 different countries.

Subsidiaries, joint ventures and holdings[edit]

Orange is a communications access provider offering customers access through multiple platforms. The four key platforms Orange 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 Télécom merged the different internal divisions managing each platform and now all operate under the Orange brand.[67]

Orange Business Services[edit]

Main article: Orange Business Services

Orange is present in the US through its Orange Business Services division and its venture capital historical partner Innovacom as well as two R&D labs: one in Boston and the other in South San Francisco, California.

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

BT Group[edit]

Main article: BT Group

Orange and Deutsche Telekom merged their UK businesses in 2010 to form a joint venture branded as EE.[68] In December 2014 Orange were in talks with BT Group regarding the acquisition of EE for an estimated £12.5bn.[69] On 5 February 2015 it was announced that BT would be acquiring EE in a £12.5bn deal, in which Orange S.A would take a 4% stake in the BT Group.[70] The acquisition of EE was completed 29 January 2016.

Globecast[edit]

Globecast is a 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 2012, Globecast also began launching a direct to home OTT IPTV service called MyGlobeTV in the United States using NetGem set top boxes.[71][72] The MyGlobeTV service was discontinued In December 2013.[73]

Viaccess Orca[edit]

Viaccess Orca is a provider of IPTV and OTT TV middleware and security solutions.

Orange Labs[edit]

Orange Labs (formerly France Télécom R&D) is the research and development division of Orange.[74][75] This division was derived from different previous entities, such as CNET (Centre national d'études des télécommunications) created in 1944, the CCETT created in 1972, as well as other entities.[76][77][78][79] In 2007, France Télécom R&D became known as Orange Labs, a global network of R&D entities.[80][81]

CCETT/France Télécom R&D contributed to various international standards, such as ISO/IECMPEG[82] and JPEG standards or DAB and DVB standards.[83][84][85][86][87][88] 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).[89][90][91]

In 2010, Orange devoted 1.9% of its revenue, or €845 million, to research and development. Since January 2007 Orange has unified its research laboratories and technocentres in the Orange Labs network. As of 31 December 2010 Orange held a portfolio of 7,892 patents, 327 which were filed in 2010.[92] Orange employs 3,700 people in research and development per year throughout the organisation,[93] including more than 200 doctoral candidates and post-doctorates.[94] Orange's research and development is based on partnerships with industry, suppliers and operators, universities and schools, academic institutes and research programs such as the following:

Two types of infrastructure coexist in Orange's research and development: the research laboratories and the technocentres. The latter are responsible for Orange innovations[95] and consist of multidisciplinary teams of researchers, engineers, and marketing and sales personnel.

TypeCityCountry
TechnocentreChatillonFrance
TechnocentreLondonUnited Kingdom
TechnocentreWarsawPoland
TechnocentreAmmanJordan
R&D-Spain
R&DSan FranciscoUnited States
R&DBeijingChina
R&DCairoEgypt
R&DTokyoJapan
R&DIssy les MoulineauxFrance
R&DCaenFrance
R&DGrenobleFrance
R&DRennesFrance
R&DLannionFrance
R&DSophia AntipolisFrance
R&DLa TurbieFrance
R&DBelfortFrance

Dailymotion[edit]

Logo of France Télécom from 2006 until 2013.
Business locations in Europe.
France, Romania and Slovakia: leading mobile telephone business.
Belgium, Poland: ranked 2nd in mobile telephony.
Spain: ranked 3rd in mobile telephony.
As a result of deregulation, Orange operates phone booth in Wellington, New Zealand.

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