France Telecom

Type:	Public Limited
Industry:	Telecommunications
Founded:	1988
Headquarters:	15th arrondissement, Paris
Country:	France
Employees:	161,390
Revenue:	€45.50 billion AS OF 2010
Website:	www.francetelecom.com
Facebook:	Orange
Twitter:	@orange
Key People
Stéphane Richard, Chairman & CEO

France Telecom is the primary telecommunications operator in France, with 221 million customers as of 2011. The company's corporate brand is Orange, the main mobile communications and Internet Provider in Europe. France Telecom trades in Paris and New York Stock Exchanges under the ticker symbol FTE. It operates in Asia Pacific, Europe, France, Latin America, Middle East & Africa, North America, Russia, Spain, Switzerland and United Kingdom. France Telecom employs 169,000 million workers worldwide.

Background

France Telecom was established as Direction Générale des Télécommunications in 1889 as part of the French Ministry of Posts and Telecommunications, which it remained as until 1988. After the invention of telegraphy and telephony, the French government monopolized the country's telecommunications services, but in 1987, the European Commission initiated the liberalization of the telecommunications market in European countries, publishing the “Green Paper on the Development of the Common Market for Telecommunications Services and Equipment.” On July 2, 1990, the French law no. 90-568 was enacted, which formed France Telecom as a “société anonyme” (French Corporation), a public service provider governed by corporate law in accordance with the French Postal and Telecommunication Code. In 1991, French Telecom became an independent operator under public law, still under the control of the government. In 1995, the Direction Général des Postes et Télécommunications (DGPT) issued a public consultation document to open competition in the telecommunications industry. In 1996, the French Parliament enacted the Experimental Licensing Bill and eventually, on December 31, 1996, French Telecom was incorporated, and then privatized in 1997. The following year, the telecommunications industry in France became open to competition.

Business Portfolio

Orange Business Services Brand

In 2000, France Telecom purchased Orange, a mobile phone operator owned by Vodafone AirTouch and based in the United Kingdom, for 40.3 billion dollars. The transaction allowed the company to combine its cellular business with Orange to create the second-largest mobile phone company in Europe. In 2001, France Telecom formed the Orange Telecom Plc., selling 15% of its shares during the Initial Public Public Offering. In 2003, the company bought back the 13 percent minority shares, which had been worth $7.8 billion dollars. This decision was prompted by a bill passed by the French government granting France Telecom the option to buy out the minority shareholders of Orange and Wanadoo, the company's internet business division. At present, Orange has more than 144 million customers. In 2007, Milward Brown Optimor ranked the company as one of the world's most powerful brands.

Wanadoo/Orange Broadband

In 1996, France Telecom entered the internet business by launching Wanadoo, a wholly-owned subsidiary, to serve as Internet Service Provider (ISP). The company also managed PagesJaunes, an online yellow pages. In 1997, the company partnered with Microsoft's MSN to compete with AOL in France. When MSN decided to exit the French market in 1998, Wanadoo absorbed its subscribers. This made the company the leading internet service provider in France. The following year, the company purchased Alapage.com, an online retail store selling books, videos, and music. The company then expanded into Spain, Netherlands and Belgium. In 2000, the company was listed on the Euronext Paris Stock Exchange. During the same year, the company also acquired Marcopoly, a home appliance and electronics company. The following year, the company acquired Freeserve, an ISP based in the United Kingdom. Freeserve was relaunched as Wanadoo, UK. This was succeeded by its acquisition of EresMas, an ISP and portal in Spain. In 2003, the company sold its Belgian ISP subsidiary to Tiscali, Pan-European ISP for 6.5 million euro. In 2004, France Telecom decided to buy out the minority shares of Wanadoo's investors to gain full control of the company. The French Stock Exchange approved France Telecom's plan, and subsequently French Telecom regained full control of its ISP subsidiary. In 2006, France Telecom re-branded Wanadoo as Orange Broadband.

Services

France Telecom's business is focused on providing the following services:

• Local and international telephony
• Wireless
• Internet
• Multimedia
• Data
• Broadcast and cable TV service

Subsidiaries

A complete list of France Telecom's subsidiary companies under its' business segments is available here.

End of French Gov't Majority Control

In 2004, the French government decided to end its majority control over France Telecom and sold as many as 299 million shares, reducing its stake in the company by 10.85 percent, making it hold 42.25 percent. The sale was initiated by then-Finance Minister Nicolas Sarkozy in order to cut the public debt of France and bring it within the standard limitation (60% of gross domestic product) set by the European Union. In reducing the government's holdings in the company, Sarkozy's hope was to increase room to maneuvering room for adapting to future developments in the telecommunications market. In 2005, the French government again offered $5.5 billion worth of its shares in the company to reduce its holding to less than 33 percent. The sale was initiated by then-Prime Minister Dominique de Villepin. In 2007, when Nicolas Sarkozy became Prime Minister of France, the French government once again sold at least 5 percent of its holdings in the company to yet again reduce the country's debt. At present, the French government owns 27 percent stakes in France Telecom.

Orange Foundation

In 1987, France Telecom established the Orange Foundations to carry out the company's philanthropic activities. The foundation is focused on providing services in the areas of health and disability, particularly to those individuals suffering from autism, and vision and hearing impairments; education to fight illiteracy by providing access to basic knowledge, training, educational materials; and education for young girls in developing countries. Orange Foundation's initiatives are conducted in 30 countries within Europe, Asia, Middle East and Africa. As of 2009, 410 projects were supported by the foundation.

ICANN Involvement

Prior to the establishment of the Internet Corporation for Assigned Names and Numbers in 1998, France Telecom was actively involved with the consensus-building process for the creation of the organization, particularly in the International Forum on the White Paper (IFWP). The company also provided its comments regarding the fourth draft of the Articles and Bylaws of the IANA. The company recommended the inclusion of appropriate application of international laws and a balance international representation in the Board of the new corporation.

On April 21, 1999, France Telecom/Oléane was one of the five companies (along with America Online (AOL), CORE, Melbourne IT and Register.com) selected by the ICANN Board to become part of the initial testbed phase of the new competitive Shared Registry System for the .com, .net, and .org top-level domain names (TLD)s. France Telecom's Group Executive Vice-President of the Development Division Jean-Jacques Damlamian said, "France Telecom has played an active role in the worldwide consensus-building effort that led to the creation of ICANN." In addition, Damlamian said that the company was proud to be a testbed participant and he emphasized that having been selected in the process is an acknowledgment of France Telecom's capacity as a partner in developing the Internet at the international level. He said that being a participant strengthened the company's position as a leader in the Internet business.

In 2004, during the ICANN Board meeting in Rome, Jean-Jacques Damlamian was appointed Chair of the Nominating Committee. At the time of his appointment, he served as Special Advisor to the CEO of France Telecom.

Since the inception of ICANN, France Telecom has been active in the different activities and meetings of the internet governing body through its representatives. The company is a member of the ISP Constituency. Its representative to the constituency is Olivier Muron, France Telecom's Vice-President of R&D Governance.

Internet Service Provider