Orange shakes up UK business
France Telecom is shaking up the management at its Orange mobile phone business in the UK after seeing its profitability decline.
Bernard Ghillebaert, chief executive of Orange UK, is leaving the post, and is expected to be replaced by a Briton from outside the France Telecom group.
France Telecom declined to comment on Sunday night. Mr Ghillebaert could not be reached.
Mr Ghillebaert's move follows a review of Orange UK by Olaf Swantee, who joined France Telecom as head of mobile operations for Europe and the Middle East in August.
Mr Ghillebaert suggested in the summer that Orange, once the cutting-edge mobile brand in the UK, had lost its "sparkle". He said it was because rivals had copied its tactics.
He became chief executive of what is France Telecom's second largest mobile business by revenue in 2004, and is expected to move to another post in the French group.
Mr Swantee, who joined France Telecom from Hewlett Packard, has been reviewing all the mobile operations he is responsible for.
Orange UK has reported falling profitability because of the cut- throat competition with arch rivals O2, Vodafone and T-Mobile, and pressure from regulators for price cuts.
As the third largest UK operator, with 15.2m mobile customers, Orange reported operating profit of €712m in the six months to June 30, down 8.6 per cent against the same period last year.
Operating profit was €1.4bn in 2006, down 17.1 per cent, and France Telecom took an impairment charge of €2.4bn against Orange UK because of the intense competition.
At 23.4 per cent, Orange UK had the worst operating margin of France Telecom's four major wireless businesses in 2006.
There was a 0.2 percentage point improvement in Orange UK's margin in the first half of this year, taking it above that of France Telecom's Spanish mobile operations.
The UK operations of O2 and Vodafone have seen their margins fall because of the intense battle for mobile customers, but they remain above Orange. Orange UK's broadband operations are also under pressure because of fierce competition.
Orange has 1.1m fixed-line broadband customers, but it risks becoming a sub-scale player compared to BT, Virgin Media and Carphone Warehouse. British Sky Broadcasting is mounting an intense drive for broadband customers.
Last month Eric Abensur, head of Orange UK's broadband operations, left "by mutual consent". In March a BBC survey by the consumer programme Watchdog found Orange provided the worst service to broadband customers. ( FT )