- Orange is 5G Ready, but we do not shout about it in advertisements - CEO of Orange Polska, Jean-Francois Fallacher

Przemysław Pająk, Spider's Web: You have recently been appointed for the second term of office of the President of Orange Polska. Please, indicate the greatest success of the first term.

Jean-Francois Fallacher, CEO of Orange Polska: I believe that it was what we announced by summarizing 2018, meaning breaking - for the first time in 12 years - unfavorable trends in our business. We stabilized profitability, which is a great achievement for the company and for me. This is certainly not a coincidence, but the result of the hard work of the entire Orange Polska team, which has worked hard over the past years to remodel our strategy and strengthen its market position.

What was the main task for you when you were appointed president of Orange Polska 3 years ago? Just to restore the company's profitability?

The statement "to restore the company's profitability" is not appropriate, because we have been profitable all the time. The task was to reverse the negative trends: stabilizing revenues and increasing profitability, which was decreasing. Someone might ask - what's the problem, if you still earned? However, this is not so simple, because one of the characteristics of the operator market is gigantic investments. 3G, 4G, 5G, optical fiber - technological innovations require huge investment outlays from the telecommunications business. In contrast, for example to car manufacturers, we do not have large factories that are easy to see. We have thousands of base stations with bandwidth aggregation, offering significantly better quality of the mobile network, and 3.5 million Polish households can use our fiber-optic network. That's where the money goes. In order to maintain the level of investment, we must have adequate profits. That is why it was such an important matter for Orange Polska to stop the decline in profitability.

What did you fail during your first term?

There are always failures - in business or in private life. I would not like to focus on them, because only those who do nothing are wrong. Mistakes are a natural element of action and development.

I'm not asking for a specific business line. However, you have come to Poland with a clearly delineated goal - to bring Orange Polska back to the right track of growth. Was there anything you feel is not quite successful?

I am an impatient man. Sometimes I would like things to happen faster so that we would be even more agile. We're working on it the most because we're on the market, where things happen quickly.

The word "agile" is very popular today in management, right?

In a company like ours, with over 13,000. employees, work faster, change faster, it's a huge challenge. This is one of the things we're still facing. Yes, I would like us to be able to change even faster.

You came to Poland from Romania, where you were the president of the local Orange branch for 5 years. How much is the Romanian market different from Polish?

These are two completely different worlds. Poland is definitely more developed than Romania in terms of infrastructure. Huge money has been invested here in roads and airports, not only in the capital and the surrounding area, but throughout the country, and it brings benefits. If we focus on the telecommunications market, there are also two different worlds. The Polish market is much more competitive on the side of stationary operators - there are so many of them here. The mobile part is different than in Romania. There Orange is a leader, with almost 40 percent. market share. Global brands Vodafone and T-Mobile and one local player Digi Romania are trying to fight with him. There are four operators in Poland who have similar market shares.

I understand that the Polish market is more demanding.

Definitely. And the most striking is the fact that prices of telecommunications services in Poland are at the same level as in Romania. This is not normal, especially when comparing the standard of living in both countries - in Poland by 40-50% higher. However, the prices of operator services are similar. This threatens the dynamic development of the Polish market. Telecoms must invest massive money in infrastructure development to deliver great quality services because customers want high-speed internet. But to invest, we must have what.

Our mobile networks are really great?

Yes, it is a characteristic feature of the Polish market - not only are there the lowest prices of mobile services in Europe, but also the quality of mobile infrastructure is at the forefront among the countries of the Old Continent.

How has the telecommunications market changed from the perspective of your three years of working in Poland?

Not exaggerated. Of course, the market shares of leaders changed slightly, but there were no great moves. In my opinion, this market requires consolidation. There are too many actors on it. If we look at stationary services, we'll see five large companies and hundreds of small local players. Consolidation attempts were made - UPC wanted to buy Multimedia, then Multimedia tried to connect with Vectra, but we do not know what will be the further fate of these efforts.

Looking at the main players on the market, who changed the most during these three years?

I hope that it will not sound arrogant, but I think Orange Polska. 3 years ago, we had several hundred thousand houses, flats and companies within fiber range, now there are over 3.5 million. This is every fourth Polish household. Over 300,000 clients use Orange Optical Fiber. What's more, our competitors modify strategies to respond to our movements. When I came to Poland, one of the main rivals said: convergence? Never! And then he bought Netia. T-Mobile gained access to our fiber-optic network, of course on commercial terms. Our competitors are trying to follow the same path that we have chosen.

Well, this famous convergence.

I realize that this is a bit "threadbare" word, but the truth is that that's what customers expect. They want to sign a mobile contract, then buy a second one, add TV and fiber optic internet with good WiFi. And have everything on one bill. It was us who brought to the market the idea of ​​package offers of this type, combining various technologies. Orange Love, which we introduced just two years ago, already has over a million Poles. And two of our competitors are trying to introduce similar solutions to their business models.

Orange very loudly communicates its investments in optical fiber, while its rivals seem to have a stronger position, at least in the marketing approach, on 5G. Why?

When we started the fiber optic project in Poland, customers did not know what it was. We had to explain to them. Today, Poles are becoming more and more aware of technologies. Unfortunately, there have been ethically questionable marketing activities on the cable market, misleading customers and again we have to explain what a real optical fiber brought to home is. It is true that we communicate the fiber optic internet offer loudly, but we also invest in the development of the mobile network. We are preparing for 5G, which will be the basic mobile technology in the future. However, in order to actually implement 5G, we need the frequency.

Is Orange 5G Ready?

(laughs) Of course we are. It's just that we do not shout about it to everyone in the ads. We focus on the real world. Last year we conducted 5G field tests in Gliwice and Zakopane. We have more attempts to plan this year. We are encouraged by the development of devices that support this standard. In Barcelona, ​​the first smartphones were shown, also under its own brand Orange.

But today they are still useless.

True, but after the frequencies will be allocated, mobile operators will implement 5G networks quickly and efficiently. Suitable devices will be available to customers. Samsung, LG, even Xiaomi showed a 5G smartphone. I am even slightly surprised. I thought we would wait for them longer. Today I am sure that 5G will come quickly.

What do you think about the "5G Ready" marketing slogan?

We all treated him with a good tongue in cheek. In France we have a saying "la ficelle est en peu gros", which means "this trick is too cheeky for people to believe in it".

Play has always been the most aggressive player on the market when it comes to marketing and advertising.

We respect all competitors and would not like to comment on their decisions. At Orange, we have our own style, also when it comes to marketing communication. We advertise products and services that we have and we are able to implement quickly and on a sufficiently large scale. When we showed 1 Gb / s on a fiber optic cable in August last year, it was immediately available to almost 2 million households in Poland.

What are your relationships with Apple?

We're getting along. We are the first Polish operator that has implemented e-SIM support on iPhones. We are also one of the few players who have signed direct contracts. They make amazing products. Not the cheapest, it's true, but it's part of the brand's strategy.

Do not you think that e-SIM is a threat to operators? After all, this is the introduction to the "supermarket of mobile service providers" on smartphones. Operators will be forced to compete not on the market, but on the devices themselves. It can be deadly for you.

It may well be a great opportunity. There is a lot of technological innovations on the market. Each of them brings both threats and opportunities. We can not afford to stay in place. We see and understand the positive as well as the negative aspects of e-SIM technology. We invest huge amounts of money in the development of the mobile network. In the rankings based on consumer tests, we are the No. 1 network in terms of the speed of data transmission. In the segment of fixed-line internet, we have the best optical fiber on the market, great 4K decoders and Smart WiFi technology. We invest so much because we want to be sure that our customers will choose our services that best suit them. Quality has a price. That's why when the opportunity arose to bring the solution together with Apple, we did it. We have not advertised that we are e-SIM Ready. We just implemented it.

E-sim, however, shifts the border. It gives smartphone manufacturers control over your services. There will be a price war for services every day, and customers will be able to choose: today Orange, tomorrow Plus.

The telecommunications market looks like it looks. We all sign timely contracts, usually for 24 months. What you describe is, however, inevitable. The market is developing in this direction. We see it and understand it. When I look at how long customers are with us - and I assure you that in most cases it is much more than 24 months - I am optimistic. The quality of services is a decisive factor when making a purchasing decision. We also invest huge amounts of money in customer service. We strive to ensure that our clients are satisfied with the fact that they are Orange customers. That's why when there is such an innovation as e-SIM, we are the first to invest in it.

Apple invests heavily in services. He recently showed a number of new subscription services: VOD, games, and the press. You also offer a range of subscription entertainment services. This is another segment of the market where you will compete with Apple.

I do not consider Apple a competitor in this area. Our basic business is the sale of access to mobile and stationary telecommunications services. I agree that today is a powerful market appetite for good digital entertainment. Orange's strategy is clear - our clients must have access to the best content on the market, which they will consume through the best network on the market. We see ourselves as an aggregator, giving access to the widest and most interesting content offer. We do not produce our own movies or TV series like Polsat, Netflix or HBO. We get along with them so that their productions are available in our network. They also need us at a time when the consumption of video content in the OTT system is increasing. What would Netflix be without a great fiber-optic and mobile network?

However, you compete in the field of smart home services and products. For 4 years I have been going to your annual Orange Hello conferences in Paris and I can see how much you focus on smart home equipment signed with the Orange brand.

Smart home starts from scratch - in our case from FunBox and wifi. Today, we have even dozens of internet-connected devices in apartments. We could probably take cheap routers and stick the Orange label on them. Probably suited to basic things, and it would cost us 90 percent. less. However, for us investment in modems is a gateway to many services. We are proud of the Smart Wifi technology we have just introduced. I use it and see the difference in the quality of the wifi signal. Thanks to this, I can connect dozens of different devices to the home network - from alarms, temperature control system, through intelligent lights and cameras, to the widedomofon and electric lock. It can be perversely stated that we enable the development of the smart home sector. We serve hundreds of equipment suppliers, together we create complete smart home systems. We are also a great sales network for smart home appliances.

Let's talk for a moment about Huawei. How problematic is cooperation with this Chinese company today?

Orange Polska has been cooperating with Huawei for over 10 years, including 3 years of my presidency. In the vast majority of cases it was seamless cooperation.

So there is no problem with network security?

The issue of network security is crucial. We run a special cybersecurity center that protects clients from threats. Over 100 specialists work in it. And I would like to emphasize - we have never had any incidents related to Huawei. Of course, we will respect every decision of the Polish authorities. However, if the government decides to exclude Huawei from the 5G market in Poland, it will have its consequences for the entire market, not only for Orange Polska. First of all, we will stay with just two European players - Ericsson and Nokia and maybe one Korean, which is almost unknown in Europe. Second, the launch of 5G will be more extended over time. Thirdly - and this applies to every situation of restricting competition - it will certainly be more expensive.

One of your employees was arrested for spying for China. Has this situation changed your relationship with Huawei?

No, in any case. This case was completely unrelated to Orange and our business relations.

What percentage of Orange base stations are equipped with Huawei equipment?

Two-thirds of our base stations use equipment from Huawei, the rest work on systems from Nokia.

What will Orange do when Huawei is excluded from the Polish mobile infrastructure market?

The theme is not to exclude Huawei from the market, but to use their equipment in the 5G network. If this happens, we will have no choice but to adapt.

- Orange is 5G Ready, but we do not shout about it in advertisements - Orange Polska CEO, Jean-Francois Fallacher