Despite earlier statements, both public and private, by members of the new right-leaning administration in France that they had no intention of making any immediate change in France Telecom’s status, the government told the telephone operator’s board of directors meeting last week to consider spinning off its mobile telecommunications business and opening it up to international investment. A press conference on the subject, which was scheduled for Monday, was cancelled due to the suicide of former Prime Minister Pierre Beregovoy over the weekend. The Ministry of Posts & Telecommunications referred enquiries to a report in Monday’s edition of La Tribune. Last Thursday, the paper says, Pierre-Francois Couture, the Postal Ministry’s representative on the France Telecom board, asked the operator’s managers to think about a spin-off, reminding them of the increasingly aggressive competitive telecommunications environment, pointing out that the French digital cellular market has been slow to take off. Groupe Speciale Mobile communication in France is more expensive and has achieved less penetration than in Germany, and cellular overall has much less penetration than in the UK. Germany counts approximately 300,000 GSM subscribers today, compared with less than 10,000 in France.
Not enough to satisfy
France Telecom has moved to try to improve the situation nearly a month ago, the operator reviewed its objectives and decided to offer GSM service to 90% of the French population in 1994, rather than in 1997, as it had previously planned, but that was not enough to satisfy the new government. Marcel Roulet is quoted by La Tribune as saying that he was surprised at the request. The trades unions at France Telecom were less circumspect, declaring themselves betrayed by the new minister, Gerard Longuet. The unions said the minister promised them in a private April 19 meeting that the operator’s status would not budge for two years. Couture insisted last Thursday that mobile communications will always be a business managed by France Telecom, says the La Tribune report. The article also quotes a source at the Ministry of Industry as saying that the government wants the spin-off, with corporate outside investors for the new entity, adding that, although the government is not opening up France Telecom’s capital to outside investors, nothing prohibits the privatisation of its subsidiaries. La Tribune quotes an expert at France Telecom, who says Proceeding with this will dismember France Telecom. The English attached themselves to the idea of privatising the operator in its entirety. Today, the Germans do not envisage doing it any other way either. Why should we adopt the opposite approach? In reality, the government risks turning on France Telecom, he said. – Marsha Johnston
