Sanjiv Ahuja (above), CEO of Orange, chose his modern headquarters, build alongside the splendour of some of Europe's greatest 19th century industrial heritage — Paddington railway station and canal basin in central London — to announce a radical restructuring of the strategy for the whole France Telecom group.
It had been rumoured and discussed for months. A couple of weeks earlier, at the TeleManagement World conference in Nice in the south of France, executives from France Telecom were clearly excited about the strategy and the rebranding. They couldn't say what the new brand would be, but the colour orange would feature prominently, they smiled.
As Ahuja and his colleagues from Paris outlined the conversion of France Telecom, it was clear that the conversion was more profound than most had expected. Even the phone kiosks and the engineers' trucks in France itself will be branded with the Orange square.
"It is a wonderful day for Orange," said Ahuja, who joined the company three years ago as COO, and took over as CEO in March 2004 when Sol Trujillo left. Trujillo, an American who was previously CEO of US West, is now tussling with Australia's lively politicians as CEO of Telstra. Ahuja himself is a former president of Telcordia, after a 15-year spell at IBM, including helping it move into the telecoms software industry. Before Orange he ran Comstellar, a technology incubator in California.
It was appropriate that he should be making his announcement in London: that is where Orange started, just 12 years ago, when it was set up as the UK's fourth mobile operator, controlled by Hong Kong's Hutchison group.
Mobile phones till then were seen as an expense-account luxury or a toy for those who'd made lots of money in the exploding financial markets — remember the "yuppiephone"? But Orange's innovative branding and advertising helped pushed it past its rivals so it became the biggest UK operator.
After an IPO and then a takeover, and then another takeover, Orange became part of the France Telecom group in 2000, but for a few years there appeared to be a tension between the culture at the parent's head office in Paris and Orange's headquarters in London.
The brand was adopted by France Telecom for its mobile operations — in place of Itineris and other now-forgotten names — in France and a few other territories, but it took a long time to unravel deals dating back to the early years: Hutchison's mobile businesses in Australia and Hong Kong still used the name Orange until relatively recently, and KPN had also used Orange for its mobile service in Belgium under a franchise agreement, with its shops almost indistinguishable from Orange's shops in the UK.
Meanwhile France Telecom had acquired a bunch of other brands which were desperately in need of consolidating. Its ISP was called Wanadoo, a unit that included Freeserve, originally set up in the UK by the Dixon's store group. Its enterprise arm was Equant, already a rebranding of the ill-fated Global One joint venture with Sprint and Deutsche Telekom: the name was taken over from the air transport industry's in-house networking cooperative, Sita, which is still its biggest customer.
And the world was starting to talk of triple play and quadruple play, of all-IP networks and of single billing. Operators in the US — AT&T and Verizon — were consolidating to offer fixed and mobile voice, data and video. BT is re-engineering its network to offer new services. France Telecom needed to develop its own strategy.
In the past year or two it has gradually become apparent that France Telecom has been preparing itself to adopt the Orange brand wholeheartedly for its unified services. Equant and Wanadoo people indicated that they were going to be Orange. The main doubt seemed to be over whether the brand would be adopted as thoroughly in the home market, France, as in the group's other territories.
The answer, says Ahuja and his colleagues, is yes, it will. "We are opening a new world of communications services that will transform the telecommunications landscape," he says. "Orange becomes a one-stop shop for all a customer's communications needs."
Orange is "the first operator to provide this one-stop shop" and the company plans "a truly seamless and open experience" for communication, information and entertainment. There will be what he calls a "a consistent Orange experience" every time a customer interacts with Orange — whether it is an Orange shop, the portal, a call centre, or email. "Across every single touchpoint, the same Orange experience," says Ahuja.
Orange plans to deliver all services — from pay-as-you-go mobile to a fully converged package. Indeed, according to France Telecom CIO Nicolas Ruelle, speaking at TeleManagement World in May, even in countries where Orange currently has only mobile services it will seek to provide converged services, including IPTV — see Plan for domestic network factories panel, page XX.
Orange has already launched mobile TV in France, the UK, Romania and Slovakia. "Soon customers will get television over an IP connection at home," says Ahuja. They are already available in France, and the company's LiveBox set-top terminal will be marketed in its other territories.
What does convergence mean? Practically, says Ahuja, "services like a single address book, that will store your contacts in one place, safe and secure", plus "services to manage personal content, whether it's photos, videos or music". In "the near future" Orange will provide services "to remote control your home, secure your home" and "services to monitor your health", he says. "All of these from one single provider."
France Telecom's group CEO, Didier Lombard, laid out the groundrules for this strategy, called NExT, about a year ago. NExT, which stands for "new experience in telecom services", is due to run until 2008.
"NExT has aligned every single part of our business around the needs of our customer base," says Ahuja. In the UK, Orange has fixed network activities as well as mobile, which allows him to claim it is the only operator to own both fixed and mobile assets.
It's an arguable point: BT certainly lost its mobile business years ago, when O2, now owned by Telefónica, was split off. Vodafone has a small, almost unknown, enterprise-oriented fixed network. T-Mobile is part of Deutsche Telekom, whose T-Systems is also present in the UK. But in the UK retail market, he's probably got a case.
Wanadoo, now Orange Broadband, does have unbundled fixed customers in the UK. "We can be faster and more responsive than any other operator in this market," says Ahuja. "We control the infrastructure so we can deliver a truly consistent customer experience across every interface and every transaction."
Equant — now Orange Business Services — has a literally flying start. Because of its contract with Sita, reconfirmed days after the rebranding announcement, it reaches 166 countries. Virtually everywhere with an airport has an Orange Business Services point of presence. "No other business telecoms provider can match Orange for the range and the scope of services we offer under one single brand," he says.
Ahuja doesn't give a figure for how much the France Telecom group is spending on all this. He says that the group is currently spending 1.5% of its revenue on R&D, and that this will rise to 2% by 2008. Much of this will be aimed at reducing complexity, so that "what the customer gets is a simple and seamless experience".
Bernard Ghillebaert, executive VP of Orange in the UK, says more about what the company is planning, building on what he calls "an incredible set of assets". In particular "Orange is one of the best-loved brands in the world", he says. In the UK the company already reaches 17 million customers and 8 million households, through its mobile operations and its ISP, formerly Wanadoo.
That means "we are the number two telecoms provider" to BT in the UK, he says. And the UK, he points out, is where the Orange brand began. "This is where the customers have known us longest."
So it's fairly clear that France Telecom is rebranding as Orange in most of its territories, but there was always a suspicion that national loyalty would persuade it to keep its name at home. What is the strategy?
Ahuja turns to the person who led the rebranding across the France Telecom group, Didier Quillot. He has been CEO of Orange France since 2000 and became chairman in 2003, but also has responsibility for branding and marketing for the entire group. Until France Telecom took over the Orange group, he was general manager of Itineris — so he's already been through one process of putting little Orange squares on services and products that used to be France Telecom's.
"In France Wanadoo becomes Orange, MyLigneTV, the IPTV business, becomes Orange, the business services are becoming Orange Business Services," says Quillot. "This is a huge step for France Telecom, to use the Orange brand in order to brand all products, all services — mobile, TV, internet, multi-play, voice over IP."
But there's more: "All the FT shops are becoming Orange. All the email addresses for employees are moving from francetelecom.com to orange-ft.com."
And more all the 25,000 field repair crew for the fixed line business will be working under the Orange logo, "and I'm not joking", says Quillot, recognising that it will be significant to see Orange-branded trucks rolling through Paris, Lyon and Marseille. "So, France Telecom is becoming Orange. This is what's happening in France."
And the group "is doing the same all over the world by the end of the year: Netherlands, Spain, all Middle East countries, all African countries. Spain is unusual, in that the Orange brand is not known locally: France Telecom bought 80% of mobile operator Amena for €6.4 billion in July 2005, and will rebrand it and its Spanish Wanadoo operation as Orange "by the end of the year".
TPSA Poland will almost certainly be rebranded Orange, though Quillot was unwilling to say much: the France Telecom group has to get agreement from other shareholders before making an announcement.
In Belgium, where KPN Orange rebranded to Base only a few years ago, France Telecom still uses Mobistar as its mobile brand — though the home page of www.mobistar.be is now labelled "Orange group", in green, and www.orange.be is now registered to the Orange group.
This is all "a really big step for France Telecom, using Orange all over the world, all over the businesses", said Quillot.
And it's a big step for the brand, adds Ahuja. Orange started in the UK in 1994 "and we got our first million customers in 1997. Today we are over 85 million customers, almost 85 times in less than nine years and now we're taking it all round the globe."
It is critical for Orange own the infrastructure, says Ghillebaert, "to manage and master the customer experience". It has an advanced 2G network and it has installed EDGE technology in its 3G network.
"For fixed broadband our objective is to unbundle 500 exchanges by the end of 2006, and this will give us access to around 40% of the UK's population."
It will be promoting LiveBox, which the company has installed in 2.4 million customer homes, mainly in France. "LiveBox is the home gateway. This is the piece of equipment we put in the customer's premises and it is a central piece of our strategy." It will enable the company to roll out new services to residential customers.
It is upgradeable remotely. "We won't need to change anything in the LiveBox," says Ghillebaert. The company will be able to download overnight software for its OnePhone service — a fixed-mobile convergence product — "and all of a sudden all households with the LiveBox will be enabled for this new OnePhone service". Customers will still need "the right device to use it", though.
Orange has already installed, quietly and without much in the way of any publicity, LiveBox in 200,000 UK homes, before the brand changed from Wanadoo and before the converged services were announced. "We are Britain's number one voice over IP provider, with more than 150,000 users. We got to be number one by making voice over IP simple and hassle-free," says Ghillebaert.
What makes people want to switch? Exclusive content, he says, pointing to a deal with Madonna which gave customers access to her new album more than a week before it went public. "We were the first provider ever to do that with such a great artist."
The company has started to launch services such as Orange Photo — allowing people to transfer pictures from their camera phone to a website, a photoblog. "Picture by picture your photo album builds up," and users can share it with others. It's an idea that was pioneered in companies such as SK Telecom in South Korea two or three years ago.
Services are accessed via a single home page, he says — Orange mobile, broadband and business services. "Behind the scenes the portal is quite sophisticated because it will recognise who you are and whether you are a mobile customer or a broadband customer or a new prospect. Then we can better give you the pages which are most suited for your context."
Orange Business Services has grown its market share by 40% in the UK over the past four years. "We are the second biggest provider of mobile services for business in this country." Now, the former Equant will be combining with the former business unit of the mobile operation to promote remote access services for travelling business people.
"When you are at home you can use your PC and the data card will connect through the LiveBox to the local area network of your company, and you can work from where you are."
Eric Abensur, former CEO of Wanadoo, and now Orange's VP in charge of broadband, explains what LiveBox is all about: "The teams from Wanadoo and Orange have been working pretty hard over the last 15 months," he says. "We want to open the door to our customers to a world of new services. To get those services we need to have broadband. We love broadband, and that's what we want to say to our customers."
Hence Orange's new broadband slogan. "We do love broadband and we set it free," he says. He sees a world where all the devices in the home will be connected into the LiveBox. Not just the PC, but both mobile and fixed phones, "but also the TV, MP3 devices and hi-fi equipment." They will be connected to each other and to the world wide web, he says.
"Not every customer is comfortable with broadband," so Orange is starting by inviting its mobile customers "to just try broadband". Try it for a month with no commitment, he says: if users don't like it, they can cancel the deal.
Orange customers who have a mobile plan of more than £30 a month can get broadband free on a permanent basis, says Abensur. Well, an 18 month contract with no connection fee, so the company is reserving its position. But the deal appears attractive: a connection up to 8 megabits, a LiveBox, no connection fee, and free, unlimited calls via VoIP using a digital cordless phone evenings and weekends to landline numbers.
Free landline calls
For an extra £6 a month landline calls are free at any time, plus unlimited calls to any Orange mobile customer — 15 million of them in the UK. "In terms of size and scale this is absolutely unique," says Abensur.
"This is a journey," he adds — unconsciously using a cliché also favoured by Paul Reynolds, CEO of BT Wholesale, the man in charge of the rival 21CN project. "We want to bring over the next 12 months more products and more services to our customers. We want to bring them the world of home networking."
Ghillebaert has already mentioned OnePhone, without much in the way of explanation. Abensur fills in the details. "We will be launching OnePhone in the next few months. The trial has started in France. We are in the process of selecting the first customers who will test the new service."
The OnePhone works with the LiveBox. "We are going to call each LiveBox customer over the next few months to let them know they can have this new service. We already have the LiveBox in place, with more over the next few months. Only LiveBox owners will receive the OnePhone promotion."
When the OnePhone customer is at home, or within range of his or her own LiveBox, calls will automatically route through the home network, giving cheaper outgoing calls using VoIP. Fixed phones can be connected within the house.
"The box that is installed in our customers' homes will provide the service," says Abensur. "We don't need to change the customer premises equipment."
According to Ahuja the OnePhone service is "very different from what you see from our competitors" — services such as BT's Fusion in the UK, with a specially supplied Bluetooth phone that connects to a wifi hub, or the Zuhause service that Vodafone offers in Germany, offering low rates for calls made from the cellsite that covers the customer's home.
"This is one telephone number. This is not Bluetooth based, that can't get through a typical wall in the UK. It is a wifi-based technology. It is a very simple, easy-to-use service," says Ahuja. "You have a device that works at home. You're in the middle of a call, and you continue using that when you are on the move, and you continue using the service when you're at work. It's one voicemail, one phone number, one device, and consistent experience."
Trials will start "in a few weeks", he says. "A critical part is to make sure the customer experience is right. Not two telephone numbers — one telephone number, one bill, one voicemail." After trials it will be launched commercially: "initial places are France and the UK, in the next few months".
Orange already offers IPTV in France, with more than 200,000 customers. It is controlled via a set-top box which is also connected to the LiveBox.
Orange — still operating as Wanadoo — launched IPTV in Spain in May. "The third country that will be offering this product will be the UK in the next few months. We will be using the same technology, the same platform, a platform that works."
The LiveBox can already be connected to a PC or a gaming station. PDAs with wifi can connect. "We are working with manufacturers to ensure that when they have a wifi connection that will work as closely as possible with the LiveBox. We are working with Nokia, for instance." It is developing a tablet "that you can use in your home. It will be available in the next few months and will work with the LiveBox."
What's going on at home?
The system will work with wifi-enabled cameras and "we are developing a website so that wherever you are in any part of the world you will be able to see what's happening in your home". Orange is "not willing to be a security company", says Abensur, but "we will probably be working in partnership with a security company to deliver a full set of services".
There are few details so far about how Orange will roll out IPTV services. There will be HDTV, says Ahuja. There will be "video on demand and we are already discussing with all the content owners", says Abensur. Negotiations are taking place at group level "with all the major companies across the world in order to provide content".
He doesn't see that Orange "will compete immediately and directly" with Sky in the UK when it starts IPTV. But it wants "to give back control to customers".
There will also be a strong element of self-generated content, suggests Abensur. "The point of IPTV is that I want to give the ability to my customers to create their own content, and to put that content on a specific channel that they can share with their friends, their relatives, their community. That's the point of IPTV. If IPTV was just broadcast TV it would be a major failure in the industry." GTB
Plan for domestic network factories to launch multi-service operations
France Telecom is to set up "domestic network" factories with one consolidated IT system to deliver integrated services in each country where it operates. This strategy was outlined in May at the opening session of TeleManagement World by CIO Nicolas Ruelle (pictured above).