France Telecom-Orange’s new growth strategies

Telecom Lead Europe: France Telecom-Orange’s new strategies are aimed at achieving operating cash flow target of more than 7 billion euros.

As part of its 2013 strategies, France Telecom will aim at reducing the cost base this year. It will look at generating 10 percent revenue growth from mobile data services.

In France, the target is to stabilize market share in the mobile segment at a level above 35 percent and reach 4G coverage of 30 percent of the population by the end of 2013. In the fixed segment, it will aim at least 50 percent of all broadband sales, and doubling the optical fibre customer base.

In Europe (excluding France), it will launch at least six mobile network sharing programs across the zone, while increasing the Net Promoter Score in all countries.

(source: .romania-insider.com )

In Africa and the Middle East, France-Telecom wants to reach 8 million Orange Money customers and 12 million devices compatible with data services (+70 percent) by the end of the year and reduce the churn rate for mobile offers by 20 percent.

Orange wants to generate more than 30 percent growth in cloud computing over the course of the year. It aims at double digit revenue growth in emerging countries.

The Group, which had 230.7 million customers at 31 December 2012, an increase of 3 percent year on year (+6.8 million net additions), will pursue a policy of selective acquisition, focusing on possible consolidation operations in markets where the Group already operates.

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Meanwhile, France Telecom-Orange’s full-year net income fell to 820 million euros on the impairment of assets, compared with 3.9 billion euros a year earlier, and sales fell 3.9 percent to 43.5 billion euros.

In France where the entry of Iliad’s Free Mobile has triggered intense price competition, revenues have fallen by 5 percent on a comparable basis. This matters a lot as France Telecom makes about half of its revenues from its home market.

“Spain offers some hope to the group. There, France Telecom grew its revenues at a time when its peers in the market are struggling. It attributes this to increases in mobile internet usage and take up of triple play bundles,” said Emeka Obiodu, principal analyst at Ovum.

Can France Telecom recreate its Spanish success in France?

Ovum analyst says today’s results will rekindle calls for acquisitions or asset disposals. But any target that can sufficiently reduce the group’s reliance on France will not come cheap. On the disposal front, the stake in Portugal’s Sonaecom looks set to go, and the IPO of EE becomes more likely.

Its Capital expenditure (5.818 billion euros) rose 1.7 percent compared to 2011 on a comparable basis, led by investment in very high speed fixed (FTTH) and mobile (4G) broadband, which is accelerating, notably in France. The ratio of Capex to revenues was 13.4 percent.

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