Q&A with CEO Liudmila Climoc

Polish telecom sector is highly competitive, fragmented on the fixed services side but attractive with promising growth prospects. Despite the market’s maturity, ongoing fiberization efforts and further development of 5G technology present numerous opportunities for market participants. Convergent strategies have become a key focus for all major market players, a model that Orange Polska embraced several years ago.

I believe that telecom sector will continue to prioritize value, with competition centered around infrastructure quality, service excellence, and customer experience. This is especially important taking into account the fact that telecom service prices in Poland are highly competitive compared to other European countries, making Poland a benchmark for offering high-quality services at reasonable prices despite ongoing cost inflation.

Recent years have tested Orange Polska’s ability to execute its strategy and achieve growth.

We are delivering on our goals despite the fact that we designed .Grow strategy in a completely different macro environment. Despite all external and macro-economic challenges we are growing every year. 2023 was the 6th consecutive year of EBITDA growth. Importantly this performance is attributed to profitable revenue expansion, combined with transformational initiatives aimed at optimizing our cost structure.

This illustrates that strategy is well executed, our business is resilient to macro headwinds and we have the ability to adapt to rapidly changing environment. Our strengths lie in our robust core business, superior networks and a wide range of high quality services. We are using assets that we have built – our extended mobile network and strong fiber footprint, that we are monetizing both on retail but also on wholesale part.

Furthermore, our people are a major asset of Orange, demonstrating strong commitment and professionalism. I could feel from day one since arrived the dedication of our teams to achieving results and meeting our business goals.

So there is a lot of opportunities and, of cause, many challenges ahead of us. I am an optimist and I see a strong potential of our company that we will further explore.

Orange Polska is making solid progress in achieving the goals outlined in its Grow strategy. However, there are areas where we can further enhance our performance, releasing the potential. Efficiency is a key area of focus where improvements can yield significant benefits. We need to continually seek opportunities for optimization, particularly in our use of digital tools. While we’ve made progress in this area, there’s still room for improvement, especially in our customer interactions. By leveraging digital channels, we can reduce costs and improve our responsiveness to customer needs. Implementing machine learning and AI models in managing customer interactions will enable us to offer better personalization and quicker service, ultimately leading to increased sales and customer loyalty. We’re also working on AI-driven tools to optimize network maintenance costs, with major projects underway.

While we’ve made notable progress in certain areas, there is still significant potential to explore in implementing services based on 5G technology, such as IoT solutions, enhanced connectivity, and big data analytics or private campus networks. There’s progress to celebrate, particularly in IoT solutions such as Smart City services, business area that has doubled its size both in 2022 and 2023. Inflation, especially of energy prices, drives demand from local governments for solutions like intelligent metering or water management. This helps them to optimize costs and decarbonize.

However, monetization in the area of big data analytics is still ahead of us. One of the reasons is the delay of allocation of the dedicated 5G spectrum, which we have expected to become available much sooner.

Finally, another significant aspect of our strategy is #OrangeGoesGreen with our focus to reduce CO₂ emissions. While we’ve exceeded expectations in reducing Scopes 1 and 2 emissions, achieving a 79% reduction by 2023 compared to 2015 (2025 goal met with two years in advance), there’s still work to be done in addressing Scope 3 emissions.

However, these emissions are largely not in our hands, involving our entire value chain, and accordingly present a more complex challenge. Our focus areas include reducing energy consumption by customers to power home and mobile devices, investments in technical

2024 marks the final year of our .Grow strategy. While our focus is currently on executing this year’s goals, we are also working on a new strategic plan set to be announced in the first half of next year. Given the success of the .Grow strategy, there’s no need to deviate from its main directions. Our emphasis remains on our core business, aiming to be a modern telecom that generates predictable streams of revenues, profits, and cash, benefiting both us and our shareholders. We don’t intend to diversify into other activities.

However, this doesn’t mean there won’t be new elements. We will certainly add new dimensions to some of our existing activities to stay aligned with the rapidly evolving world and the changing preferences of our customers. One clear direction is the development of services based on 5G technology. We just obtained a license for C-band spectrum and by the time of new strategy we expect allocation of 700MHz. Another important dimension is the greater exploration of the benefits of artificial intelligence, both in offering solutions to our customers and in enhancing our own efficiency. I do not want to be more specific at this point as works on the new plan have only started but I am convinced that it will be a platform for us to further increase shareholder value.