France Telecom aims for 50% traffic boost

France Telecom intends to build telephone traffic by nearly 50 per cent by 2000 and to outpace the competition following telecom liberalisation, according to the first public statements of its new chief executive, Michel Bon.

Speaking in Paris, Mr Bon said an emphasis on building out the company's mobile phone network, along with a greater focus on customers, would generate an additional 50 billion minutes of telephone use, rising to 170 billion within five years.

He said that the mobile network would grow to cover as many as 5 million users by the end of the decade, and a programme of investment and fresh hiring would be launched from early 1996.

He added that cost-cutting and lower basic rates could generate sales 25 per cent higher than currently, allowing the state-owned operator to expand even if it loses market share to newcomers after the market is fully deregulated in 1998.

The plans were part of a radical restructuring that would make the giant company less hierarchical and more receptive to consumer demand, he said.

Lower prices, new products and competition would force the pace of change, Mr Bon said. Daily use of telephones in France is eight minutes, compared with 20 minutes in America.

"We must reduce this gap," he said, "and this is achievable - given that our standards of living are roughly comparable."

He warned, however, that the company would have to gain greater flexibility in its pricing regime if it was to safeguard its public service mandate.

Promising a phased investment plan to upgrade the network, Mr Bon said the development of a modern computer infrastructure for telephone services was crucial to his plans. He spent three months speaking to more than 1,000 France Telecom employees, and concluded that "our technical ability and innovative sense" were the company's greatest strengths.

Mr Bon was a compromise candidate for the France Telecom post, following disagreements between his predecessors and the French government.