While voice and messaging continue to be very important for our business, it is quality of data connectivity that has become the key criterion in selecting a telecom service provider. This is because as the world is becoming more and more digital, customer needs are evolving and the number of smartphones and other connected devices is rapidly rising. As a consequence mobile but also fixed data consumption continues to grow very fast and that trend is expected to continue in the years ahead.

In the section above we described how our connectivity strategy will adapt to the specifics of local markets. Our commercial approach also takes this into consideration; however, there is a common denominator in all the zones, which is service convergence. Convergence we define as delivering a package of both mobile and fixed services.

• It constitutes our competitive edge, a key market differentiator that we intend to take even more advantage of in the future. On one hand cable operators do not offer mobile services on any meaningful scale. On the other hand our mobile competitors do not invest in fixed access networks. We use this advantage not only in the consumer market but also in the case of small business customers.
• It is a good customer loyalty tool. Convergent customers tend to churn a lot less than non-convergent customers.
• It allows us to win a higher share of household media and telecom budgets.

Convergence appears to have been a very effective tool for customer acquisition when it comes to fibre technology. By the end of 2016 more than 50% of our fibre customers were also using our mobile services in convergent packages.

Our strategic goal is to become the most frequently recommended telecom operator in Poland by 2020. We want to provide an effortless and friendly customer experience along the entire customer journey, for every point of contact, every customer interaction (with the quality of network, product, website, service, content, employee, message, call centre). Building trust and loyalty among our customers and giving them what they want is vital to our sustainability in an increasingly competitive industry. Differentiating our service and products is key as we want our customers to recommend us to others. More access to mobile services and better network quality, more value for money and simpler pricing structures, more convenient interactions: all of these add up to better customer experience. We listen to our customers to identify and eliminate the reasons for their dissatisfaction. We simplify our portfolios and processes. We get customers actively involved in a dialogue with us through:

• studies comparing our portfolio, products and connectivity vs. our competition;
• post-contact satisfaction surveys;
• managers’ commitment to ‘In the Front Line’ initiative;
• debates with the Management Board Members aimed to better understand the customer perspective.

Customer Experience issues are discussed on an ongoing basis. At Orange Polska we have a dedicated Customer Experience Committee within our Management Board and Executive Directors which is devoted to Customer Experience improvement. This committee meets on a monthly basis to reinforce the focus on customers. Key directors (reporting directly to Management Board or Executive Directors) meet on a weekly basis. Our Management Board includes a member responsible for Customer Care and Customer Excellence.

In Orange Polska, we have been successfully implementing a policy of corporate business responsibility in all areas of our business for several years now. Our CSR strategy accounts for the company’s business objectives and fits into their implementation. The conclusions from a dialogue with stakeholders as well as market trends and social challenges for our industry in Poland and abroad have been key elements in its development. For us, social responsibility means an organisational culture which takes account of the expectations of employees and other stakeholder groups – customers, investors, suppliers, business and social partners as well as the environment – in creating and implementing our business strategy. We believe that such an approach generates benefits for the company and its environment, leads to long-term development and contributes to the improvement of everyone’s lives. Therefore, in Orange Polska we have created a social responsibility strategy which focuses on five areas which are of key importance from the point of view of our sector and our operations on the Polish market. In 2016 we launched the new CSR strategy for 2016-2020 A strong foundation of this strategy is responsible management – our values, ethics and compliance and our dialogue with stakeholders as a tool for understanding their expectations. On this foundation are based four pillars of our CSR strategy:

• Digital inclusion- for everyone, regardless of their skills, residence, age or ability, to be able to make use of the opportunities offered by the digital world
• Safe network- for the use of the latest technologies to be easy and risk-free
• Clean environment - to pursue our business objectives with respect for ecological principles and in harmony with the environment
• Enquiring team - to create a culture of co-operation, in which all employees feel respected and can freely pursue their professional goals and life passions.

Responsible management and actions within these four pillars account for our social impact, which is analysed in 6 areas: economy, innovations, customers, environment, communities and employees.

Facing very high competition, ongoing pressure on our top line and the still significant burden of our legacy, our strategy puts a lot of emphasis on improving our efficiency on the cost and capital expenditures side. We aim to become a simpler and more focused company. The measures we take to achieve this are both short term and long term. Every year we undertake numerous actions to save operating costs in all parts of our business. For a number of years we have been delivering PLN 200-300 million of sustainable costs savings per annum and our aim is to continue this in the years ahead. The most important source of the savings is labour. We optimise employment on a continuous basis. Over the past three years we reduced our headcount by around 20%. The scale of reductions is always negotiated with our social partners (there are 17 trade unions at Orange Polska). The social plan currently in effect covers the years 2016-2017. Based on this plan we released around 1000 employees in 2016 and a roughly similar number is expected to leave in 2017. We see room for further employment optimisations and we plan to negotiate new social plans. Apart from labour, we optimise spending on IT services, network maintenance, property expenses, promotion and marketing and general expenses. As a part of the strategic review that is currently ongoing we are analysing new initiatives that are expected to boost our efficiency and make us a more efficient organisation. These initiatives will focus on better reallocation of resources to growth pillars and priority areas on one hand. On the other hand, they will prioritise the simplification of internal processes including, among others, a reduction in the number of processes and their variants, automation, digitisation and more agile IT.