Q: 2018 was the first full year of your strategy Orange.one
strategy. How is it going?
Let me start with a brief reminder of the key pillars of our strategy.
On the consumer market, our goal is to win the highest share
of households’ media and telecom bills by offering convergent
packages. We see big potential here, the majority of households
still buy their services from different operators. Consolidation
brings both convenience and financial benefits.
On the business market, the key trend we see across practically
all industries is digitalisation. Enterprises are both digitalising
their internal environments, and enabling digital experiences for
their customers. We want to be their partner in this revolution. To
do that we are developing our competencies, mainly in the ICT
area, which includes cloud solutions, security and software &
applications.
A successful strategy in these two markets would not be possible
without the rollout of our fibre network. Fibre is our long-term
competitive advantage, which makes us confident about our success in convergence. We already reach almost 3.5 million Polish
households and by the end of 2020 this number will exceed
5 million.
The final pillar of our strategy rests on rapid efficiency increases.
We have introduced a comprehensive transformation programme
to simplify and, where possible, to automate and digitise our
business processes.
Results for 2018 were better than expected, and this is because
we implemented our strategy effectively despite the environment,
which remains challenging. On behalf of the executive team of
Orange Polska, I would like to thank and congratulate the entire
organisation for the huge effort that was necessary to reach
these outstanding results.
Q: You call convergence the bedrock of your strategy. Aren’t
you afraid of increasing competition in convergence, when
more market players start to pursue this strategy?
First of all we are not surprised that other operators are starting
to pursue a similar household strategy. We were pioneers, we
showed the way, others follow us, which means that the strategy
we adopted several years ago was right.
Secondly, the Polish market has always been very competitive
so we are used to doing business in such an environment.
A third point: convergence still has relatively high growth potential
in Poland. So if more players choose this strategy, the demand for
such solutions on the market is likely to increase which should be
beneficial for us as well. Operators with a mobile - only strategy
will be under higher pressure. Please also note that one of our
competitors will be using our fibre network to offer convergent
products, so we will benefit from this on the wholesale side.
Saying all of this does not mean that we underestimate the competition. We take it very seriously. We modified and strengthened
our Orange Love offer in March this year. Our goal is to compete
on the quality of the offer and customer service, not on price.
We strongly believe that our convergent offer and fibre to the
home network (by far the largest in the country) put us in a unique
position to meet all the needs of Polish customers.
Q: What are the key priorities for 2019?
We are in the middle of the implementation period for the strategy
we announced in September 2017. We are satisfied with the results
so far. This year we will continue our path towards turnaround.
We are confident that we will be able to sustain the growth.
In 2019 we plan not only to grow our EBITDA but also revenues,
for the first time in many years. In pursuit of this goal we will stick to
our strategic priorities. We will stay customer-centric and focused
on value generation. We will also continue to simplify our processes and increase efficiency.
Poland’s macroeconomic situation remains very favourable with
very low unemployment, growing disposable income and consumers being very open to new technologies. We want to take
advantage of these trends. Please note that prices of telecom
services in Poland are very low and we are one of the only sectors
where they have been declining over the past few years, despite
a growing economy and increasing purchasing power.
In 2018 we initiated our programme of cultural change at Orange
Polska. Empowering employees and more direct and straightforward communication are the key elements of this change.
I believe this cultural change is an important factor to achieve
our business goals and we want to continue that.
Q: 5G technology becomes the key topic for the telecom
industry for the coming years. How will your customers be
able to benefit from it?
To begin with, 5G technology will further improve speed and latency
for broadband users on mobile devices. It is an answer to the
needs of new areas of the economy: growing digitisation, more
video content, the need to be constantly online, automation of
industrial processes, cloud solutions, electronic management of
complex ecosystems (e.g. so-called Smart Cities), and the Internet of Things. In the future this technology will enable fast data
transmission in many new services, some of which do not even
exist today.
5G has become an important element of Orange Polska’s development. In 2018 we did first commercial trials and installed the
first 5G base station in Poland. We are preparing for further tests
in 2019. For 5G network deployment the industry needs new frequencies, decisions on which are in the hands of government
institutions. We are actively supporting the Polish authorities’ 5G
strategy development.
Q: Orange Polska is one of the leaders of corporate social
responsibility in Poland. Are economic and social goals
compatible?
A company such as ours, that offers services that are the basis
for the development of communication and digital transformation,
that supports millions of individual and business clients, that
employs thousands of people in Poland and cooperates with
thousands of suppliers, has a significant social impact. Such
a company, first of all, should be aware of its influence. Secondly,
it should manage this influence in such a way as to maximize the
positive and minimize the negative. Orange Polska aims at running
its business in a balanced and responsible manner.
The strategy of corporate social responsibility is key part of our
business strategy, and it is based on a continuous dialogue with
employees and customers, as well as cooperation with our business partners, social organizations and public institutions. With
this approach and in cooperation with others, we are can positively influence the socio-economic development of the country
and local communities, and build our competitive advantage
Q: How do you see the Polish telecom market and Orange
Polska a few years down the road?
As I already mentioned, I have great hopes that the Polish market
is heading towards some repair. This industry destroyed a lot of
value in the prior years because of competition based solely on
price. We believe the prices have finally stopped declining and
the customer experience will be improved mainly based on infrastructure quality and excellence of service. The Polish telecom
market is quite fragmented and consolidation processes are rather
slow. I continue to believe that it will eventually consolidate and
there will be fewer players, but more integrated and convergent.
By implementing our current strategy at Orange Polska, we
believe we are building a company that is a better structural fit
for future market opportunities and the competitive environment.
We are focusing on convergence and fibre, two competitive
advantages that are mutually reinforcing and they will fuel
our resilient leadership in the market. We are investing in the
future-proof infrastructure that will serve us for the next 20-30
years, and that we will be able to monetize both in retail and
wholesale operations. We are intensively transforming ourselves
from a legacy telco to a much lighter and more agile organization
that will be appreciated by customers and employees, and valued
by investors.