DG d’Orange : Une offre pour SFR importante pour la puissance des télécommunications européennes
Maintenir les prix de consommation bas n'est pas la seule priorité lorsque les entreprises doivent se développer pour rester compétitives, a déclaré la DG d'Orange Christel Heydemann.
00:00The traffic continues to grow 10% to 30% every year on our networks, but revenues are not increasing.
00:07It's a complex transaction because many millions of customers that are at stake.
00:17Welcome to The Big Question, the series from Euronews where we sit down with some of the biggest names in industry.
00:25I'm Eleanor Butler and today I'm joined by Crystal Hedeman, CEO at Orange.
00:32Crystal, thank you so much for being here with us.
00:35Orange has been ranked for the 14th time the number one mobile phone network provider in France.
00:42What is the key to your success?
00:45We've been investing, investing and investing to please customers who make sure we would meet both coverage targets,
00:52but as well keep the increase of traffic that we continue to see in our networks and then covering railways, covering roads, covering remote areas.
01:02It's a lot of detailed work that our customers don't notice in the end.
01:05You just see whether on or off you get the right network and you get the quality of calls, videos, streaming and everything.
01:12You recently became the first European operators to surpass 10 million fiber customers.
01:18That was in France. Why are people choosing Orange?
01:22Well, we've been investing in fiber for already more than 15 years and we are indeed the first operator to reach that 10 million milestone in one country.
01:33That's in France.
01:33And it's true that today in France we have 93% of homes connectable through fiber thanks to our investments, not just us.
01:40Others have invested as well.
01:42And fiber is something that has huge potential to continue to be upgraded.
01:48Telecoms is quite a saturated industry. Is that something that worries you?
01:56The telecom industry, because of demography, because of saturation, because of equipment, is now a slow growth market in volume.
02:06And then the ability to keep on increasing value depends on our ability to innovate, to provide more services to our customers.
02:14And it's true that if we compare to other continents, we don't have the growth that we used to have.
02:20But despite that, we need to continue to invest massively on infrastructure because the traffic continues to grow 10 to 30 percent every year on our networks.
02:29People consume more videos, artificial intelligence.
02:32It starts to grow in our networks as well.
02:35But revenues are not increasing and the cost of maintaining our networks because of cybersecurity, because of resilience to extreme events, keeps on increasing.
02:45And that's why we believe that consolidation is a must in that environment.
02:50You recently made a joint bid with Brieg and Free for SFR.
02:56SFR quite quickly rejected that bid. Why do you think that was?
03:00We're talking about multi-billion. I mean, the non-binding offer was 17 billion.
03:06It's still preliminary. That means we're talking about a lot of money.
03:09So you can expect a lot of discussion to happen.
03:12And it's a complex transaction because many millions of customers that are at stake.
03:16France is our first country for Orange, so this transaction is very important for us.
03:22This type of transaction is not something that can last forever in terms of negotiation because the value at stake is important and the dynamic is important.
03:31So that's why it's something that we are clearly engaged in trying to conclude.
03:37But there's no guarantee that this non-binding offer will go to an end.
03:40Critics would say that less competition in the French market could mean that prices will go up and that services will deteriorate.
03:48Do you think that is a fair criticism?
03:51The reality that we concluded a transaction in Spain two years ago, combining Orange and MassMovil to create a leader in Spain.
03:59And we went through the exact same questions from antitrust authorities, from the DG competition in Brussels.
04:05We explained that, first of all, the market dynamic is very different from what it was five to ten years ago because 4G has been rolled out.
04:13People, consumers are equipped.
04:14And the reality is that three players competing in a flat to small positive market is probably as competitive, if not more, than four players or five players competing in a market where there's three, four, five percent growth.
04:29There's been a call from many companies to revise merger guidelines.
04:33Competition is good for innovation.
04:35Competition is good for consumers.
04:37But the reality is that we've probably reached the limit of just looking at price for consumers.
04:42We really need to take into account the ability for companies to invest in a world that's moving very fast.
04:49And where, in our markets, we have to deal with big companies.
04:53The European Commission is working on the Digital Networks Act.
04:57Could you give us a brief resume and tell us your thoughts on the proposal so far?
05:01Today, we have a very heavy regulation for telecom.
05:04That is somehow dated from the time when we had monopoly in every country and we decided to open the telecom industry to competition.
05:14And so we need to update the regulation to take into account the fact that we're talking now about fiber networks.
05:21We're talking about 5G networks.
05:23So the Digital Networks Act, it's really about modernizing, it's an analysis from the Commission,
05:29that the investment in telecom infrastructure is not at the level required to provide 5G and fiber to all European citizens by 2030.
05:38We estimate that the gap of investment, given the market structure today, is 200 billion euros of investment
05:45that is not going to come from telecom operators unless we provide safer and more incentives to invest in infrastructure.
05:53Also, there has been resistance to the DNA from certain member states who argue that consolidation isn't necessarily the best way forward
06:01and they're clearly resisting greater intervention from Brussels.
06:05What would be your message to these governments?
06:08There's one thing for sure is that the reality of the markets in every country in Europe, there's huge difference.
06:16I mean, that being said, the need to modernize regulation, to adapt to a new framework, this is something that's true across countries.
06:23So I think we need to find the right balance.
06:25And we're not saying that it's going to be one size fits all.
06:28What we're saying is that it's OK to regulate and to fix things when they don't work.
06:33And you've suggested that greater telecoms consolidation is required so that Europe can compete with the U.S. and China.
06:41Can you explain that a little bit more for me?
06:43In the U.S., you have three national mobile operators.
06:47With the size of the U.S., that means they have on average more than 100 million customers themselves.
06:53In China, they also have three operators.
06:56And the largest operator in China has one billion customers.
06:59In average, in Europe, a single operator has five million customers.
07:05We have 27 markets in Europe.
07:07And the single market, even though it's Germany or France, the largest, or Spain, largest economy in Europe,
07:14they're still much smaller than the U.S. or China.
07:16The fixed cost to maintain a network, to upgrade, is such that the more mobile customers you have, the lower the cost per customer is.
07:25That's why we see a lot of network sharing, also this ability to continue to cope,
07:29to make sure that not only we can provide the coverage and the next generation connectivity that's required for European citizens,
07:38but it's also making sure we can cope with the needs to protect and secure those infrastructures.
07:44I think that's a good point to leave it there.
07:46Thank you so much, Crystal, for sharing your insights on the big question.
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