Orange chief executive, Stephane Richard, hinted the company's board would be taking a huge risk by replacing him, despite concerns about his involvement in a government payout to settle arbitration in 2008.
Orange CEO, Stephane Richard
The Orange board is due to meet on Wednesday, March 26, to decide whether to renew Richard's tenure. The CEO's potential involvement in the payout to Bernard Tapie while Richard held a senior finance ministry position in 2008 is a possible stumbling block to his reappointment, as are recent fresh headlines about staff suicides at Orange, in which the French government owns a 27 per cent stake.
Richard told Les Echos the Tapie incident is a thorn in his side, but questioned the logic of destabilising the operator over a matter that is not its concern, at a time when competition in the telecoms sector--particularly in Orange's domestic market--is fierce.
The CEO said Orange is in better shape than when he took the helm in March 2007, telling Les Echos staff morale is now higher, and pointing to his record of stable financial performance amid a tough operating environment in Europe.
Chief financial officer Gervais Pellissier recently said the group had returned to levels of commercial activity not seen since 2009, particularly in France. The company predicts earnings before interest, depreciation, and amortisation (EBITDA) will be in the range of €12.1 billion ($16.6 billion) and €12.6 billion in 2014.
Orange generated EBITDA of €12.6 billion in 2013, and recorded a marginal 1 percentage point decline in EBITDA margin during the year.
If his role at the top is renewed, Richard will maintain Orange's focus on deploying LTE networks, and take the company towards 5G and all-IP networks, he told Les Echos. He also noted operators are now beefing up services including mobile banking, healthcare, and entertainment in a bid to compete with companies including Facebook and Google.
While Richard noted Orange is likely to seek acquisitions in markets where it currently operates only mobile services, he reiterated that a deal with Deutsche Telekom is unlikely in the near term due to imbalances between the two companies.
Domestically, moves by rivals to acquire French mobile operator SFR would be good news for Orange, Richard said, pointing to the success of markets where three mobile operators exist today. The CEO also noted Orange would be a stable option in uncertain times while regulators assess any SFR deal.
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