Increasing efficiency

Orange Love convergent offers allowed us to distinguish ourselves from the competition and reach our commercial goals more efficiently. We have significantly reduced handset subsidies and optimised our distribution channel mix, which allowed us to improve direct profitability. To facilitate higher value-generation we have simplified and aligned our commercial offers, both convergent and mono, around a ‘more for more’ approach, cutting down on value-dilutive offers and introducing charges for every additional service.

Such a strategy was supported by more benign competitive environment, especially on the mobile market, where the competition has largely shifted from one based on price to one based on quality of the offer and customer service.

These processes are usually complex, which is partly attributed to the incumbent operator status of Orange Polska. Within the framework of Orange.one implementation we have introduced a comprehensive transformation program to simplify, and where possible to automate and digitalise these processes. As a result, we have realised very significant savings in operating costs and capital expenditures.

We continued to do this under the Orange.one strategy. The savings came from the above-mentioned process improvements, which freed up resources, as well as from volume optimisations and simplification. We were more focused and more selective in resource consumption. We tackled all cost categories presented in the chart below. As one of our Orange.one financial ambitions we committed to a 12-15% reduction of this cost pool (which amounts to around PLN 4 billion) between 2016 and 2020. This figure was net of potential increases related to inflation, pressure on labour costs and costs related to new business development. We reached this target two years in advance: in 2018 our indirect costs were 14% lower compared to 2016. By the end of 2020 we delivered additional savings that bring the total level of reductions to 20%.