New Orange, new optimism

Orange has outlined bullish plans for the next few years that it says will see it being number one or two in a market - or get out.

The strategy revolves on growing non-voice services and includes an alliance with Motorola for handsets and fellow European operators T-Mobile, Telefonica Moviles and TIM for coverage.

Recently appointed CEO Sol Trujillo, formerly the head of Baby Bell US West, admitted at a press conference in London that recent years had been "a little bit of a flat spot" for the operator, which is these days majority owned by France Telecom.

However, Orange is intending to grow - in both footprint, mainly in central Europe, and in terms of traffic and revenue - the CEO insisted.

"We have the latitude to live up to the brand," Trujillo said.

As such, and echoing politicians, Trujillo spoke about 'New Orange' and a series of executives finished presentations with a twist on the famous tag line, saying: "The future's brighter than ever and more Orange than ever."

Despite claiming to be global, teaming up with the leading operators from Germany, Spain and Italy will better enable Orange to compete with Vodafone, which is in over 20 countries.

Trujillo pre-empted questions about Orange's operations in Denmark and the Netherlands, which he described as "not adequate market positions". He said that where Orange wouldn't be number one or two or have more than 20 per cent market share it would look to sell its ownership - but that "because we are not forced to sell [we] have the luxury of time... We will be very rational about it."

Over 30 per cent of revenue for the Orange group of operators is derived from the UK and despite growth over the past 12 months profits were wiped out by a strengthening euro, said CFO Wilfried Verstraete.

However, the company is counting on data services, advanced phones and an educated user base to continue to grow its market.

Citing the success of Vodafone Live!, the company said it already has a cumulative total of over four million 'Active Portal' users, and said SMS volumes continue to rise.

Its aim is to derive 25 per cent of all its revenues from data by the end of 2005, which it claims to be on target to do. Figures out this week from QNB Intelligence suggest one in five European companies are already planning to spend over 30 per cent of their mobile budgets on data services.

New COO Sanjiv Ahuja, an ex-supplier of Trujillo's when he was at equipment company Telcordia, said the company is consolidating numerous OSS, billing and CRM systems to single platforms across the group. The idea is to cut operating expenditure.

The company is also creating development centres in Europe, North America and Asia and not rushing into 3G, which Ahuja described as "not yet ready" in terms of both network and handset technology as well as services. Orange confirmed roll out for the UK of 40 per cent by the end of 2004 and 60 per cent for France by the end of 2006.

Among those to endorse the Orange strategy were the top executives from Microsoft and Motorola. At the announcement Motorola chairman and CEO Chris Galvin pledged his company's support while Microsoft CEO Steve Ballmer said: "The artificial walls that are between the computing and wireless worlds are coming down."

Orange was the first company to roll out a phone, the SPV, that uses the Microsoft Smartphone 2002 OS.