Orange’s CEO, Christel Heydemann, has started to unveil the outlines of Orange’s new strategy, which is expected to be officially announced in February 2023. From the first indications, it seems that this new strategy is structured around a central idea: refocusing on Orange’s core business, ie telecommunications. In this perspective, two substantial developments are envisaged. First the sale of the OCS platform. Then the possible sale of Orange Bank, a project that initially raised Orange’s hopes for the development of online banking, and which has not, at this stage, yielded the expected results, even though an attempt to merger with BNP Paribas ultimately failed.
There is no question here of passing judgment on this strategy, which is not unusual when it comes to a company focusing on what it does best (“core business”). , i.e. telecommunications services to individuals and businesses. It remains to be confirmed. Above all, as always, the real difficulty will be in the execution.
The interesting part is probably elsewhere. Because this strategic refocusing does not occur at a trivial moment. It takes place at a time when an important debate is taking place both at national and European level on the issue of sharing the financial cost of modernizing telecommunications infrastructures. Telecommunications operators are thus pushing hard for content providers to be involved. Orange’s current strategic situation calls for some reflection in this respect.
The risk of a kind of financial tumble
First of all, it should be noted, even if it is always easy to see after the fact that such and such an error has been made, that many operators have conducted a policy of diversification in recent years which has not met Success. Orange Bank has thus accumulated substantial losses since its launch in 2017, and it is because such losses go beyond what an initially unprofitable investment (ramp-up) justifies that the sale seems envisaged. . Beyond Orange, many telephone operators have faced setbacks when they diversified. There is nothing infamous about this: taking risks, we forget it in these times of crisis which see public power everywhere interfering, is to wish for success but also to accept failure. Nevertheless: part of these unfortunate investments could have been made in the modernization of the infrastructures that the operators are asking for.
Then, if we look to the future and if we extend the reasoning, what guarantee do we have that the funds allocated to the telecommunications operators would go to the modernization of the infrastructures? Basically, no more than the public sector, the private sector escapes the rule of non-assignment which prevents financing from being earmarked a priori towards such and such an investment. The risk would ultimately be quite great that the digital toll for which some incumbent operators in Europe are advocating would not have the expected effect of strengthening the networks, but that it could ultimately constitute a kitty from which to draw to finance such and such an investment. of another kind. If we also consider that content providers will inevitably be tempted to pass on the cost they bear to the end customer, in terms of financing the networks, consumers would finance something else altogether.
Don’t get us wrong: this is not about disputing the need to modernize the networks. No more than reproaching – it’s fair game – to such and such an actor or group of actors for pleading for such and such a solution. This is to make no mistake. Because behind the appearance of an opposition to know “who pays what”, there is a great risk of setting up a kind of financial somersault in which, in the end, the financing envisaged for the improvement of the networks – which is the interest of all – end up in the pockets of certain shareholders rather than in the improvement of telecommunications services for businesses and individuals.
*Anonymous group of senior officials, professors, essayists and entrepreneurs.