Just recently the future hasn’t been at all bright for Orange. It’s looked dull, corporate and monochrome: all the things the brand said it would never stand for when it set up.
How could such an iconic (for once, a justified adjective) brand arrive at such a low ebb that it is now comically known as “Vodaclone”? The short answer is, of course, France Telecom, which acquired Orange for £25bn in 2000. Many mergers and acquisitions end in failure: the acquirer unintentionally “destroys value”, as the City would say, through misunderstanding the culture of what it has acquired. This seems to be a classic case in point.
FT clearly saw the advantages of wrapping what is still essentially a Gallo-centric state bureaucracy in the colour of an exciting Anglo-Saxon entrepreneurial brand. A fact clearly demonstrated when, in 2005, it announced it was rebranding all its consumer businesses, from fixed-line telephony to internet service provider Wanadoo, as Orange. On the way, though, FT lost first the innovative personalities (primarily Hans Snook) and then the innovative brand persona that had made Orange an outstanding success in the 1990s.
The results, so far as the core mobile telephony operation is concerned, are there for all to see. From chasing UK market leadership, Orange is eluding relegation to fourth place (indeed, if you add Virgin’s virtual network to T-Mobile’s customer share, it is in fourth place).
You might attempt to defend this position by pointing out that the pioneering, innovative qualities appropriate to exploiting the UK’s “land grab” market during the 1990s are not necessarily those of most value in managing a mature market. And, further, that Orange as a brand now has a much more important corporate role to play outside the mobile area.
You might: but you would be on weak ground, because even the French don’t really believe it. How else explain why they have broken with managerial tradition and hired a conspicuously successful British entrepreneur to head its UK operation? Step forward Tom Alexander, founder of Virgin Mobile, who will become Orange’s UK chief executive on January 1.
It seems a reasonable conjecture that money (of which there is no doubt a bundle awaiting him) is not Alexander’s primary motivation. He is, after all, reputed to have walked away with nearly £20m after the sale of Virgin Mobile to NTL (now Virgin Media). But while Alexander may relish the challenge (as Snook did before him) and while he is – as the France Telecom job description specifies – a man thoroughly immersed in the community where he will be operating unlike the French satraps who have preceded him there’s still a major caveat.
To succeed in restoring Orange’s lustre, he needs FT to back his judgements to the hilt. That won’t be easy for a company that is neither in itself entrepreneurial, nor particularly UK focused.
Stuart Smith, Editor