Interview with Christel Heydemann

How would you sum up your experience since taking up your role as Chief Executive Officer in April 2022?

Christel Heydemann: Over the past 12 months, I’ve seen the commitment shown by our teams in providing essential digital services in all our operating countries. This is a major asset that enables Orange to demonstrate its resilience, ability to adapt to market changes, and resolve to deliver service continuity despite national security issues at times in Europe and Africa. I am proud of our hard work and collective engagement, as they have enabled us to meet all our financial targets. I am very pleased with the new governance structure and the productive relationship I have formed with Jacques Aschenbroich during our regular constructive discussions.

What is the market context?

C. H.: It was a difficult year for the telecoms industry, particularly as inflation was back on the rise in Europe. We are experiencing a complex and paradoxical situation where competition and regulations are putting intense pressure on the profitability of our activities at a time where investment in digital infrastructure is more crucial than ever.

The pandemic highlighted the essential role of telecoms and the importance of connectivity to individuals and businesses. Network traffic has grown considerably, and new challenges have emerged, such as infrastructure resilience, sovereignty, and security. To address these challenges, we must continue to innovate and create economic, environmental and social value for all our stakeholders, in line with our Purpose, “As a trusted partner, Orange gives everyone the keys to a responsible digital world.”.

Why are you calling on Big Tech to help fund network infrastructure?

C. H.: The five largest tech companies take up 50% to 80% of our network bandwidth at certain times of the day, and traffic is expected to continue to grow by 30% per year, requiring further network investment. However, telecom operators are the only ones currently dealing with the economic, energy and environmental costs associated with the increase in network traffic, as the five largest “traffic generators” do not include the costs they incur in their economic models. Adjustments need to be made to safeguard future network development, without undermining net neutrality.

What do you want the French regulator to do now?

C. H.: In France, like in all our operating countries, we work in close collaboration with the regulator. We expect the regulator to adopt a fair and balanced approach so that we can collaboratively build a framework to provide the best possible service to people living in France. All relevant information—including economic conditions—needs to be taken into account to ensure fair funding for infrastructure.

It’s important to remember that Orange has played a key role in ensuring France has one of largest fiber footprints in Europe. To increase fiber availability across the country, we need to continue collectively building a viable economic model. Meanwhile, we must prepare for copper decommissioning. Our copper network may have fewer users due to the migration to fiber, but it is still a vital resource used by millions of people, which raises the question of maintenance costs.

How will the new Lead the Future strategic plan you presented in early 2023 help improve the Group’s value creation potential?

C. H.: We developed Lead the Future in close collaboration with the new management team and the Board of Directors to prepare Orange for years to come. This plan plays to our many strengths, particularly our infrastructure and the connectivity services we provide to millions of customers. This will help us extract greater value from our core business. We began preparing the ground in 2022 by moving forward with plans to sell OCS, our premium content service, and consolidate our activities in Belgium and, hopefully, Spain and carrying out targeted acquisitions, including cybersecurity firms. Lead the Future will help our market positioning as a leading telecom company by driving growth and lasting value creation.

Orange’s fiber and mobile networks are a major asset to the company. Where do they fit into Lead the Future?

C. H.: Network quality is a differentiator in all our operating countries. Unlike other operators, we began investing in fiber-optic infrastructure very early on, both in France and around Europe. We know it was a wise decision, as demand for connectivity is higher than ever and our networks form a key part of the solution. We’re therefore continuing to develop and upgrade our networks while exploring the new uses they make possible. What’s more, we are optimizing the way in which our networks are managed for greater operational and environmental efficiency.

Why is Orange Business Services now called Orange Business?

C. H.: The BtoB market is a difficult environment for all the telecom operators whose main sources of income have been impacted by rapid technological change. The financial consequences are significant, which is why we are profoundly transforming our activities to restore profitable growth in this segment. This has been my priority since day one and a number of measures have already been taken. Our priority is to simplify our approach—whether that involves our offers or our ways of working—and tap into the strength of the Orange brand.

We have therefore given Orange Business Services a new name—Orange Business— that reflects our aspirations to deliver simplicity, build closer relationships with our customers and become more digitally focused. We will position ourselves as a leading provider of next-generation connectivity solutions and continue to accelerate in the cybersecurity segment, where we aim to outpace market growth.

What does the new enterprise model introduced alongside the strategic plan involve?

C. H.: As we are facing several challenges at once, our success will depend on our ability to develop a new enterprise model based on three pillars: performance, excellence, and trust. everything in our power to move toward an “ESG by design” model by strengthening all aspects of our environmental, social and governance approach. For our Purpose to resonate, our strategic plan sets out our ambitious digital inclusion and environmental objectives. For instance, we aim to reduce our scope 1, 2 and 3 CO₂ emissions by 45% by 2030 compared with 2020 levels. We will also play an active role in building a society based on trust—a growing priority as new technologies are deployed.

What talent development priorities have been identified?

C. H.: Our industry is constantly evolving, resulting in rapid and profound changes across our business lines. Talent development will be key to successfully executing our strategy. We will need to adapt our skills to our needs, and support the teams throughout these changes in a kind and truthful manner. We will also apply HR policies to ensure we can adapt to all circumstances and the growing diversity in our business lines, while continuing to pursue our objective of providing the best possible service to our customers.

How will innovation drive the Group’s development?

C. H.: Our capacity for innovation is key to enhancing connectivity services for individuals at home and on the move, as well as business and wholesale services. We are developing disruptive innovations in our core business (such as networks of the future and augmented customer experiences), supporting new global ecosystems and fostering innovation that has a positive impact on our customers and society as a whole.

What guiding principles will Orange follow in the coming year?

C. H.: As of this year, we will be guided by the three pillars of our new enterprise model—performance, excellence, and trust. We will all work together to extract as much value as possible from our core business, make changes where necessary and bolster operations in our growth areas. Serving our customers and fostering employee engagement are still priorities for us.