Blunt Bon gearing up for good fight for a good fight
Monday 09 October 1995
Yet despite the disruptions, for France Telecom it may be third time lucky: for the man in place at the end of the day was Michel Bon, 52, a former banker and retailer with public and private sector experience. That mix will be crucial as the company moves toward commercial status, and the task of pleasing political masters, powerful public-sector unions and demanding Brussels regulators.
Over dinner in Geneva last week, Mr Bon, only a month into the job, belied his reputation in the French press as the bland and ineffectual lackey of the powerful post and telecommunications ministry. He was blunt on the key issues facing France Telecom management: the company's commercial status; Atlas, its link with Deutsche Telekom; and the highly competitive telecommunications environment in which he intends to be a key player.
"If I were a investor with some money, I would certainly consider investing in a technology company," he said. ''But I wouldn't want to invest in a heavily regulated industry. I prefer to see companies in open competition."
And for that to happen, the status of France Telecom must change. Mr Bon said he had received assurances from the French government that the monopoly, which had revenues last year of FF142.6bn (pounds 17bn), will be transformed into a commercial company.
When? Mr Bon conceded that the timing is up to the government. "It all depends on the regulatory environment," he said. "But if it were up to me, it would be tomorrow."
His comments are eerily reminiscent of one of his predecessors, Marcel Roulet, ousted at the end of August after a month of tense dealings with the telecoms minister, Francois Fillon. The government of Alain Juppe believed Mr Roulet was moving too quickly, and risked upsetting the public- sector unions at France Telecom.
So how will Mr Bon, equally committed to a private-sector future for his company, manage to hang on to his job and his principles? "In my experience," he said, "you never do badly if you play to the intelligence of people." He believes the unions will understand the need for change, provided it is discussed openly and with passion.
Nor does he expect huge layoffs as a result of commercialisation, claiming that France Telecom is already more productive than either of the two other large European telecommunications companies, BT or Deutsche Telekom.
In the emerging global market for telecommunications, he intends to remain a serious contender. Already France Telecom has moved into multimedia businesses such as cable, pay-per-view television, on-line services and the like. It launched its own mini-information highway, the Minitel, in the 1980s, well ahead of the competition. It now has a fully digitised switching network, 5.7 million cable customers and 6.5 million minitel terminals in French homes and offices.
"No sector develops to maturity without having a handful of global players, and we intend to be among them," Mr Bon said, adding: "Only through alliances can this be done."
Alliances are indeed all the rage in the telecommunications industry. BT, the only leading European telecommunications company operating in a liberalised home market, was first off the mark with its Concert joint venture with MCI. France Telecom has been attempting to confirm its Atlas link with Deutsche Telekom, for months, and is deep in negotiations with the competition authorities in Brussels.
Atlas, along with partner Sprint in the US, aims to provide multinational clients with global telecoms services - what Mr Bon calls the "single window" for business. It will be a direct competitor of BT's Concert and Uniworld, another US-European alliance offering business services.
The European Commission is concerned that the two continental telecommunications companies will use their dominant positions in their domestic markets to keep out competitors. It is seeking assurances that the two countries will have liberalised regimes for telecommunications, and wants guarantees that alternative suppliers of telecommunications services - including utilities and cable companies - will be able to interconnect with the main telephone network.
BT echoes his view, and has complained to the Commission about the lack of competition in continental markets.
"These are questions that must be dealt with by governments," Mr Bon says. "They are basically political and not commercial issues. All we can say is that we want Atlas badly enough that the competition can come earlier rather than later."
He concedes, the Germans may be moving more slowly than the French. Brussels has asked that "alternative infrastructures" be liberalised by 1 January, two years before the deadline for full telecommunications deregulation. The Germans prefer a much later date, but may settle for July 1996 as a compromise. Further meetings are scheduled for this week.
"This is the last chance for Europe to play among the giants," Mr Bon said. BT has the advantage of being first in the market. But he warns them against complacency. "It's good that BT thinks they have an advantage," he said. "For my part, I worry about all competitors."
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