France Télécom
Encyclopedia
France Telecom S.A. is the main telecommunications company in France, the third-largest in Europe 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.

Nationalized service

In 1792, under the French Revolution
French Revolution
The French Revolution , sometimes distinguished as the 'Great French Revolution' , was a period of radical social and political upheaval in France and Europe. The absolute monarchy that had ruled France for centuries collapsed in three years...

, the first communication network was developed to enable the quick transporting of information in a warring and unsafe country. That was the optical telegraphy
Telegraphy
Telegraphy is the long-distance transmission of messages via some form of signalling technology. Telegraphy requires messages to be converted to a code which is known to both sender and receiver...

 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
Postes, télégraphes et téléphones (France)
Postes, télégraphes et téléphones was the French public administration of postal services and telecommunications. Formed in 1921, it was split in 1991 into La Poste and France Télécom....

. 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
Minitel
The Minitel is a Videotex online service accessible through the telephone lines, and is considered one of the world's most successful pre-World Wide Web online services. It was launched in France in 1982 by the PTT...

 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
Postes, télégraphes et téléphones (France)
Postes, télégraphes et téléphones was the French public administration of postal services and telecommunications. Formed in 1921, it was split in 1991 into La Poste and France Télécom....

. 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
Lionel Jospin
Lionel Jospin is a French politician, who served as Prime Minister of France from 1997 to 2002.Jospin was the Socialist Party candidate for President of France in the elections of 1995 and 2002. He was narrowly defeated in the final runoff election by Jacques Chirac in 1995...

's Plural Left government starting on 1 January 1998. The French government
Government of France
The government of the French Republic is a semi-presidential system determined by the French Constitution of the fifth Republic. The nation declares itself to be an "indivisible, secular, democratic, and social Republic"...

, both directly and through its holding company
Holding company
A holding company is a company or firm that owns other companies' outstanding stock. It usually refers to a company which does not produce goods or services itself; rather, its purpose is to own shares of other companies. Holding companies allow the reduction of risk for the owners and can allow...

 ERAP
ERAP
Entreprise de recherches et d'activités pétrolières is a French petroleum company created in 1965 by the merger of RAP and BRP . In 1976 ERAP merged with the oil company Société Nationale des Pétroles d’Aquitaine giving birth to Société Nationale Elf Aquitaine...

, continues to hold a stake of almost 27% in the firm. In addition, the government Conseil of Ministers names the CEO. In 1982 Telecom introduced Minitel
Minitel
The Minitel is a Videotex online service accessible through the telephone lines, and is considered one of the world's most successful pre-World Wide Web online services. It was launched in France in 1982 by the PTT...

, for its customers to for the first time to perform online ordering.
In September 1995, Michel Bon
Michel Bon
Michel Bon is a French businessman and politician born in 1943. He is a graduate of the ESSEC, of the Paris Institute of Political Studies, of the École nationale d'administration and of Stanford Business School....

 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
Dot-com bubble
The dot-com bubble was a speculative bubble covering roughly 1995–2000 during which stock markets in industrialized nations saw their equity value rise rapidly from growth in the more...

 phenomenon made the stock exchange
Stock exchange
A stock exchange is an entity that provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and...

s bullish. A second capital opening occurred in 1998.
France Telecom got behind in the internationalization launched by its international competitors such as Vodafone
Vodafone
Vodafone Group Plc is a global telecommunications company headquartered in London, United Kingdom. It is the world's largest mobile telecommunications company measured by revenues and the world's second-largest measured by subscribers , with around 341 million proportionate subscribers as of...

, thus, it started looking for targets at the highest speculation
Speculation
In finance, speculation is a financial action that does not promise safety of the initial investment along with the return on the principal sum...

 rate of the dot-com bubble. Moreover, its alliance with Deutsche Telekom
Deutsche Telekom
Deutsche Telekom AG is a telecommunications company headquartered in Bonn, Germany. It is the largest telecommunications company in Europe....

 based on a reciprocal capital contribution of 2% broke off when Deutsche Telekom announced that they were planning to do business with Telecom Italia
Telecom Italia
Telecom Italia is the largest Italian telecommunications company, also active in the media and manufacturing industries. Now a private concern listed on the Borsa Italiana, it was founded in 1994 by the merger of several state-owned telecommunications companies, the most important of which was...

 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
Freeserve
Freeserve was a British Internet Service Provider, founded in 1998. It was once a constituent of the FTSE 100 Index but merged into the Wanadoo group in 2000, itself a subsidiary of France Telecom...

, EresMas, NTL
Virgin Media
Virgin Media Inc. is a company which provides fixed and mobile telephone, television and broadband internet services to businesses and consumers in the United Kingdom...

, 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
Thierry Breton
Thierry Breton is a French businessman and politician who is currently the CEO of the IT firm Atos. He was the French Minister of Economy, Finance and Industry in the governments of Prime Ministers Jean-Pierre Raffarin and Dominique de Villepin, Jacques Chirac being the President de la...

 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
Wanadoo
Wanadoo is the former name of the ISP division of Orange SA, which is a subsidiary of France Télécom. It operated in France, Spain, the United Kingdom, the Netherlands, Tunisia, Algeria, Morocco, Senegal, Mauritius, Madagascar, Lebanon, and Jordan...

 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
China Telecom
China Telecom Corp. Ltd. is a Chinese state-owned telecommunication company. It is the largest fixed line service and 3rd largest mobile telecommunication provider in the People's Republic of China.-Sectors:...

 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
TeliaSonera
TeliaSonera AB is the dominant telephone company and mobile network operator in Sweden and Finland. The company has operations in other countries in Northern, Eastern Europe, Central Asia and Spain, with a total of 150 million mobile customers...

. 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
Morocco
Morocco , officially the Kingdom of Morocco , is a country located in North Africa. It has a population of more than 32 million and an area of 710,850 km², and also primarily administers the disputed region of the Western Sahara...

. 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
Wanadoo
Wanadoo is the former name of the ISP division of Orange SA, which is a subsidiary of France Télécom. It operated in France, Spain, the United Kingdom, the Netherlands, Tunisia, Algeria, Morocco, Senegal, Mauritius, Madagascar, Lebanon, and Jordan...

, Equant
Equant (France Télécom)
Orange Business Services is part of the France Télécom group. Known as Equant before June 2006, Orange Business Services is the entity within the France Télécom Group dedicated to global business telecommunications...

,...) 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
Telecom Argentina
Telecom Argentina is the major local telephone company for the northern part of Argentina, including the whole of the city of Buenos Aires...

, which it had jointly run with Telecom Italia
Telecom Italia
Telecom Italia is the largest Italian telecommunications company, also active in the media and manufacturing industries. Now a private concern listed on the Borsa Italiana, it was founded in 1994 by the merger of several state-owned telecommunications companies, the most important of which was...

, to the Argentinian Werthein
Werthein Family
The Wertheins are an important Jewish family of entrepreneurs in Argentina.The Werthein family, headed by Leon Werthein, his wife Raquel and five of their children emigrated to Argentina from Bessarabia in 1904, and settled in Riglos, Province of La Pampa....

 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.
In June 2008, the firm abandoned a €27 billion bid for Swedish operator TeliaSonera
TeliaSonera
TeliaSonera AB is the dominant telephone company and mobile network operator in Sweden and Finland. The company has operations in other countries in Northern, Eastern Europe, Central Asia and Spain, with a total of 150 million mobile customers...

 after the two companies failed to agree terms.

On 8 September 2009, Orange and T-Mobile
T-Mobile
T-Mobile International AG is a German-based holding company for Deutsche Telekom AG's various mobile communications subsidiaries outside Germany. Based in Bonn, Germany, its subsidiaries operate GSM and UMTS-based cellular networks in Europe, the United States, Puerto Rico and the US Virgin Islands...

 parent Deutsche Telekom
Deutsche Telekom
Deutsche Telekom AG is a telecommunications company headquartered in Bonn, Germany. It is the largest telecommunications company in Europe....

 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.

In September 2010, FT announced it had acquired 40% of Meditel
Méditel
Méditel is one of three licensed telecommunications operators in Morocco. Its headquarters is based in Casablanca.Méditel obtained the second license of mobile telephony in Morocco in 1999...

 shares, a mobile operator from Morocco
Morocco
Morocco , officially the Kingdom of Morocco , is a country located in North Africa. It has a population of more than 32 million and an area of 710,850 km², and also primarily administers the disputed region of the Western Sahara...

.

Staff suicides

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

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.

Subsidiaries

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
    IPTV
    Internet Protocol television is a system through which television services are delivered using the Internet protocol suite over a packet-switched network such as the Internet, instead of being delivered through traditional terrestrial, satellite signal, and cable television formats.IPTV services...

    , 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.

France Telecom is present in the US through its Equant
Equant (France Télécom)
Orange Business Services is part of the France Télécom group. Known as Equant before June 2006, Orange Business Services is the entity within the France Télécom Group dedicated to global business telecommunications...

 enterprise services and its venture capital arm, Innovacom as well as two R&D labs: one in Boston
Boston
Boston is the capital of and largest city in Massachusetts, and is one of the oldest cities in the United States. The largest city in New England, Boston is regarded as the unofficial "Capital of New England" for its economic and cultural impact on the entire New England region. The city proper had...

 and the other in South San Francisco, California
South San Francisco, California
South San Francisco is a city in San Mateo County, California, United States, located on the San Francisco Peninsula in the San Francisco Bay Area...

.
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
GlobeCast World TV
GlobeCast World TV is a direct-to-home provider of free-to-air and Nagravision-encrypted ethnic television and audio channels via the Galaxy 19 satellite received in North America...

 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
European Commission
The European Commission is the executive body of the European Union. The body is responsible for proposing legislation, implementing decisions, upholding the Union's treaties and the general day-to-day running of the Union....

 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
Thierry Breton
Thierry Breton is a French businessman and politician who is currently the CEO of the IT firm Atos. He was the French Minister of Economy, Finance and Industry in the governments of Prime Ministers Jean-Pierre Raffarin and Dominique de Villepin, Jacques Chirac being the President de la...

 was appointed in 2002 after leaving his previous company Thomson SA
Thomson SA
Technicolor SA , formerly Thomson SA and Thomson Multimedia, is a French international provider of solutions for the creation, management, post-production, delivery and access of video, for the Communication, Media and Entertainment industries. Technicolor’s headquarters are located in Issy les...

 (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
Didier Lombard
Didier Lombard is a French businessman. Between February 2005 and March 2010 he was Chairman and CEO of France Télécom. In 2010 he resigned as CEO, retaining the chairmanship....

, who had been head of the firm's new technologies division.

France Télécom R&D

France Télécom R&D is the research and development division of France Télécom. This division was derived from different ancient entities, such as CNET (Centre national d'études des télécommunications
Centre national d'études des télécommunications
CNET or Centre national d'études des télécommunications was a French national research centre in telecommunications....

) created in 1944, the CCETT
Centre commun d'études de télévision et télécommunications
CCETT or Centre commun d'études de télévision et télécommunications was a research centre created in Rennes in 1972 jointly by the Office de Radiodiffusion Télévision Française and Centre National...

 created in 1972, as well as other entities. Since 2007, France Telecom R&D is also known as Orange Labs, a global network of R&D entities.

CCETT/France Télécom R&D contributed to various international standards, such as ISO
International Organization for Standardization
The International Organization for Standardization , widely known as ISO, is an international standard-setting body composed of representatives from various national standards organizations. Founded on February 23, 1947, the organization promulgates worldwide proprietary, industrial and commercial...

/IEC
International Electrotechnical Commission
The International Electrotechnical Commission is a non-profit, non-governmental international standards organization that prepares and publishes International Standards for all electrical, electronic and related technologies – collectively known as "electrotechnology"...

 MPEG
Moving Picture Experts Group
The Moving Picture Experts Group is a working group of experts that was formed by ISO and IEC to set standards for audio and video compression and transmission. It was established in 1988 by the initiative of Hiroshi Yasuda and Leonardo Chiariglione, who has been from the beginning the Chairman...

 and JPEG
Joint Photographic Experts Group
The Joint Photographic Experts Group is the joint committee between ISO/IEC JTC1 and ITU-T that created the JPEG, JPEG 2000, and JPEG XR standards. It is one of two sub-groups of ISO/IEC Joint Technical Committee 1, Subcommittee 29, Working Group 1 - titled as Coding of still pictures...

 standards or DAB
Digital audio broadcasting
Digital Audio Broadcasting is a digital radio technology for broadcasting radio stations, used in several countries, particularly in Europe. As of 2006, approximately 1,000 stations worldwide broadcast in the DAB format....

 and DVB standards. CCETT, IRT
Institut für Rundfunktechnik
The Institut für Rundfunktechnik GmbH is the research centre of the German broadcasters , Austria's broadcaster and the Swiss public broadcaster . It is located in Munich and is responsible for the research and standardisation of broadcasting technology...

 and Philips
Philips
Koninklijke Philips Electronics N.V. , more commonly known as Philips, is a multinational Dutch electronics company....

 developed a digital audio two-channel compression system known as Musicam or MPEG Audio Layer II (Emmy Award
Emmy Award
An Emmy Award, often referred to simply as the Emmy, is a television production award, similar in nature to the Peabody Awards but more focused on entertainment, and is considered the television equivalent to the Academy Awards and the Grammy Awards .A majority of Emmys are presented in various...

 in Engineering 2000).

Head office

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

See also

  • Centre commun d'études de télévision et télécommunications
    Centre commun d'études de télévision et télécommunications
    CCETT or Centre commun d'études de télévision et télécommunications was a research centre created in Rennes in 1972 jointly by the Office de Radiodiffusion Télévision Française and Centre National...

     (CCETT), now part of France Télécom R&D
  • List of French companies
  • Minitel
    Minitel
    The Minitel is a Videotex online service accessible through the telephone lines, and is considered one of the world's most successful pre-World Wide Web online services. It was launched in France in 1982 by the PTT...

  • Orange (brand)

External links

The source of this article is wikipedia, the free encyclopedia.  The text of this article is licensed under the GFDL.
 
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