S+B: A number of telecom companies are seeking to expand their mobile footprint. In the past, you declared that Africa is a priority. Where do you see the greatest global opportunities today?
LOMBARD: We are currently present in western and eastern Europe, Africa, and the Middle East. Our expansion, for the time being, will be mainly in Africa, because this continent will be a big player in the new digital economy. The first wave of activity there, with the mobile telephone, is widely recognized. But there will also be a rapid second wave. As soon as you put up a 3G network, people can use the Internet. And the African population is very smart at this.
S+B: They’re ahead in mobile banking, for example.
LOMBARD: We have installed mobile banking in the Ivory Coast, Egypt, Kenya, Uganda, and many other countries — both French- and English-speaking. We will continue our expansion in Africa because the market’s growth rate is high. And we are participating in laying digital cables on both sides of the African continent. This doesn’t mean we will ignore opportunities in other parts of the world, but from an operational point of view, it’s better to have our territories near one another, because we can introduce local roaming and keep costs down.
After the Transition
S+B: There has been a great deal of consolidation in the telecom industry. Do you see more major mergers and acquisitions coming?
LOMBARD: Right now, there is not much opportunity for large-scale consolidation. And as always, big consolidation is a big challenge because the synergies must be realized in a very short term. We have been very prudent.
We have developed partnerships with other companies to share networks, develop parts of the Internet, and rationalize day-to-day operations. It’s a way to gain some of the advantages of restructuring while remaining efficient.
S+B: How do you manage the shifting partnerships and alliances?
LOMBARD: Everybody in this industry is working cooperatively, with a genuine attitude of partnership. Nobody wants to build a cathedral all alone, because if you try to do everything yourself, it will take too long.
We cooperate with many players, and we disclose all alliances. With each, sometimes we compete and sometimes we collaborate. For example, we use Google’s search engine on our network, and both companies make a lot of money from it. At the same time, we compete with some of their services.
S+B: Say something about the future of your company. Do you think that France Télécom is ready for the challenges you have described?
LOMBARD: France Télécom has already demonstrated its capability to anticipate and respond to change — for example, in facing market deregulation in France, in our precursory move to build a convergent operations model, and in anticipating the disruption of voice over the Internet. I am highly confident in the capacity of our company to respond to future challenges in the same way.
Reprint No. 11112