| BUSINESSWEEK ONLINE : AUGUST 2, 1999 ISSUE | ||||||||
| ||||||||
 | ||||||||
| INTERNATIONAL -- EUROPEAN BUSINESS
France Telecom's Bon: 'We Will Look for Opportunities' (int'l edition) As chief executive officer of France Telecom, Michel Bon is in the thick of the telecommunications revolution sweeping Europe. Privatization and deregulation by governments across the Continent -- occurring simultaneously with the explosive growth of the Internet and other communications technologies -- are setting off a wave of mergers, acquisitions, and partnerships. France Telecom, the region's third-largest telephone company behind Deutsche Telekom and British Telecom, is eager to be a major pan-European player. But as Bon has learned, not all these deals end happily. Last year, France Telecom and Deutsche Telekom agreed to take stakes in each other and collaborate on a wide range of projects. This April, though, Deutsche Telekom stunned its French partner by disclosing that it had been in secret talks to merge with Telecom Italia. The Italian deal fell through, but the damage to the cross-Rhine partnership now appears irreparable. The falling-out also threatens the future of Global One, a joint venture of France Telecom, Deutsche Telekom, and U.S.-based Sprint. In a recent interview with Paris-based Correspondents Stephen Baker and Carol Matlack, Bon, 56, talked about the Deutsche Telekom relationship and his company's prospects. Here are edited excerpts of their conversation: Q: What's the future of cooperation between your company and Deutsche Telekom? A: Certainly the partnership is in big trouble. What we are going to have with them will no longer be a partnership, although we may still have some business relationships. Our agreement was breached very clearly when they decided to form a partnership with Telekom Italia. It's as if you are working for a company -- you should not be trying to do business behind the back of this company with its main competitor. Q: Is Global One going to survive? A: The kind of services provided by Global One are the kind of services customers need. There is no big problem with Global One, only with the shareholders of Global One. What we have to do is fix the agreement, the partnership among the shareholders. Q: Could France Telecom and Deutsche Telekom both remain shareholders? A: If Deutsche Telekom thinks there is still a business in Global One which would be useful, why not? Q: have you talked with Deutsche Telekom CEO Ron Sommer about this? A: No, we have had no discussions. The last time I talked with him was in early June, I think. Q: Do you think Sommer has alienated so many people now that Deutsche Telekom can no longer find business partners? A: Clearly, he hasn't alienated everyone. Their [recent $11.5 billion] public offering went very well. As the manager of a listed company, I have to consider that the market is always right. Clearly, it will be more difficult for them to find partners, but they may find acquisitions. Q: If you no longer have a partnership with Deutsche Telekom, will you look for acquisitions in Germany, and if so, what kind? A: We will have to go into the German market. We will look for opportunities, that is all I can say. The German market opened up very recently, and this is different from Britain and Scandinavia, where the markets opened much earlier. In Britain, some of the positions are already taken, so to start [as we have done elsewhere in Europe] with startups wouldn't work. That is why we are interested in NTL [a British cable operator in which France Telecom has taken a stake, and with which it is cooperating in a bid to acquire Britain's No. 1 cable-TV operator, Cable & Wireless Communications]. Q: How are you trying to position France Telecom as an international player? A: We are focusing on Europe because that market is really opening up right now. There will be a consolidation of [that] market, and clearly, we have the ambition to be one of the largest in Europe. The basic idea is to try to become a global company, with Internet, with mobile, with everything, maybe even broadcasting. In France we are already doing everything. We will try to become global all around Europe. Of course we also have a good knowledge of fixed telephone networks and setting up mobile networks, so we take opportunities where we can grow profitably outside Europe. That's exactly what we've done in Argentina [where France Telecom and Telecom Italia have consolidated control of Telecom Argentina, one of the country's two monopoly telephone companies]. Q: But how well can you compete, as a former monopoly where civil servants still make up 90% of the workforce? A: France Telecom is one of the best, if not the best, of the ex-monopolies of Europe. This company has been well-managed for 10 years, so we start from a position that is good. We have redeployed many of our people in new technical areas, to improve our efficiency. We have opened our service centers at the times our customers need them, including nights and weekends. Here in France, we have a good reputation among our customers. Q: When you became CEO four years ago, did you foresee the convergence of the communications industry? A: No. In September, 1995, when I joined France Telecom, I can tell you that no one, absolutely no one, mentioned the Internet. There was the idea that computers would be connected, and we put our finger on the fact that this would be one of the big markets of the future, but the word Internet? No. In fact we started a bit late. We opened our Internet-access provider in the summer of 1996. Q: Could Europe become the leader of the digital economy in the 21st century? A: The United States is very, very good, and they are still far ahead of Europe. I do think we'll be able to catch up. I just want to make sure that my company will be in position. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
|  |
 | |
RELATED ITEMS France Telecom: Now the Hunting Begins (int'l edition) ONLINE ORIGINAL: France Telecom's Bon: ``We Will Look for Opportunities'' (int'l edition) INTERACT E-Mail to Business Week Online | |||
