Orange has presented its ‘Essential2020’ 5-year plan, focused on customers, ranging from those who value price above all else to those who have "a particularly high level of service expectation, as well as business customers of every type, from SOHOs to multinationals." The operator aims to provide each of its customers "an unmatched service experience, wherever they are." It will leverage five main drivers to meet its objective: offering richer connectivity, reinventing the customer relationship, building a people-oriented and digital employer model, accompanying the transformation of enterprise customers and diversifying by capitalising on its assets.
Orange will offer richer connectivity in each market where it is active, and plans to invest EUR 15 billion in its networks between 2015 and 2018. It aims to triple average fixed and mobile data speeds by the end of 2018, compared to 2014. It will deploy a customer experience management tool, and its My Network app will allow customers to report problems they encounter. In France, Orange will triple its investment in fibre by 2020, and boost the number of fibre connected homes to 12 million in 2018 and 20 million in 2022, versus 3.6 million at the end of 2014. It will launch voice over Wi-Fi this year as well as the "ma ville sans coupure" project to virtually eliminate dropped calls in urban areas. Orange intends to cover over 95 percent of the population in its European markets by 2018, as well as 4G coverage on all TGV train lines and 3G or 4G in all metro stations and the main motorways.
In Spain, the group will continue to grow its fibre network and TV offering with a target of doubling convergent revenue by 2018. Its acquisition of Jazztel will enable Orange to accelerate its strategy of having 10 million connectable homes by the end of 2016. Orange also announced it would launch a mobile bank in France and Spain by 2018. It will continue to rollout fibre in Poland to reinforce its position as the incumbent operator and will launch a cable TV service in Belgium later this year. Orange aims to have over 95 percent 4G coverage across its European footprint in 2018.
The operator will continue to invest in territorial coverage in Africa and the Middle East, focusing on broadband networks. It will launch 4G in seven countries this year and in most of its MEA footprint by 2018. A richer multi-screen experience will be possible through such innovations as the group’s new TV interface, Polaris, and its HDMI stick, recently launched in Romania and soon to be introduced in France.
Customer interaction will improve with the introduction of a single Orange customer service number in France next year. Orange aims for half of all customer interactions across Europe to be via digital channels by 2018. Furthermore, 20 percent of Orange shops in France and Europe are due to be "Smart Stores" by 2018, including 40 more sophisticated "mega stores" in France, offering a dedicated area for product and service testing. A premium customer service experience will be offered with the First service in France, Europe and Senegal in 2016.
As a people-oriented digital employer, Orange aims for 90 percent of its employees to recommend it as an employer by 2018. It also intends to transfer its enterprise model towards IT services, raising the share of IT services in Orange Business Services’ revenue mix by 10 points by 2020. Orange also aims for connected objects and mobile finance services to account for over EUR 1 billion of revenue in 2018.
The group intends to report a higher restated EBITDA and revenue in 2018 than in 2014, with its restated EBITDA reaching a low point of EUR 11.9 billion to EUR 12.1 billion in 2015, in line with its previously stated objective. The company's 2014 revenue was EUR 39.4 billion. Orange expects its restated net debt to EBITDA ratio to be at 2x over the medium term. The group will maintain a minimum EUR 0.60 per year dividend between 2015 and 2018.
Orange will keep its Chrysalid cost-cutting programme in place to make EUR 3 billion of savings during 2015-2018, on top of EUR 700 million in 2014 and EUR 900 million in 2013. Roles will be eliminated as 25,000 employees take their retirement by 2020, out of a total payroll of 100,000 people. Orange will continue to recruit at a pace of 1,900 this year and the same again in 2016. Middle-management jobs will be streamlined.
