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September 18, 1995


By CBR Staff Writer

Although the French government finally managed to install Michel Bon as the new chief at France Telecom last Monday, the former head of the state unemployment agency network ANPE has taken over a minefield that will explode again at the slightest misstep. The terrain is already littered with the bodies of several of France’s elite class of chief executives who have been sacrificed by the government’s inability to face up to the distasteful political task of partially privatising the operator and deregulating the French telecommunications market. Both objectives must be accomplished by January 1 1998 if France is to comply with European legislation. The government is caught between its own publicly-professed, yet somewhat contradictory, commitments to preserving employment and to reforming the French economy. This is not even to mention being cowed by the operator’s trades unions’ fierce opposition to any privatisation that has been known to marshall 75% of personnel for general strikes.


The administration’s resultant schizophrenia on the subject is further exacerbated by the fact that Francois Fillon, Minister of Information Technologies & Post, is partisan to a strong state interventionist role while Prime Minister Alain Juppe is committed to reform. As a result, they have so badly mangled the affair that France Telecom is, in the words of one French columnist, poised to acquire the same ‘untouchable’ label Air France once had. First came the premature ouster of Marcel Roulet, president of the operator since 1986, who had threatened to throw in the towel if reform legislation wasn’t rapidly approved. Roulet was first said to be leaving at the end of July, when government sources also spoke of appointing Noel Forgeard of Matra Espace-Defense SA. Forgeard refused the nomination before it ever took place for reasons still unknown. The government then said Roulet would stay until the end of his term in December, a decision that was rescinded at the end of August when it appointed Francois Henrot, chief executive at Banque Paribas subsidiary Compagnie Bancaire de Paribas, and accepted Roulet’s second resignation. At Henrot’s nomination, Minister of Information Technologies and the Post Francois Fillon said the government would begin defining the future regulatory and competitive terrain for telecommunications to make it easier for France Telecom employees to understand better the inevitable statutory reform. Translation: Henrot was assured of a government that was committed to presenting to Parliament next spring a law for deregulating the telecommunications market.

By Marsha Johnston

In the meantime, the new chief would have the time to try and open a breach in the union blockade. The nominee was a good choice for France Telecom, particularly at this point in its history. He had spent 10 years with the company and was partially credited with the successful launch of the Minitel. He had experience with deregulation in banking, a sector where service is paramount, as it is rapidly becoming in telecommunications. He was also said to be personally attached to the idea of public service, which calmed the unions’ fears of his being a rabid capitalist. Henrot lasted all of a week. Upon his return from an introductory trip with Roulet to visit Deutsche Telekom AG chairman Ron Sommer, Henrot learned that Fillon had met with union re presentatives from his new company. Worse, he saw that one of those representatives told Agence France Presse that, in regard to a change in the status of France Telecom, Fillon had assured them that the deadlines are far off. As happens with most politicians when they are confronted with a hostile audience, schizophrenia had taken hold once again to ease the pain of confrontation. Henrot did what any self-respecting executive would – he rejected the push-me-pull-me pressures of the administration’s policies. Although a surprise communique issued by Fillon’s office attributed Henrot’s defection to personal reasons, Henrot later said he was

distressed by ambiguous statements made by the minister. Les Echos quoted a friend who said He determined that if he didn’t have the support of his minister, he was headed straight into a wall. Both Juppe and president Jacques Chirac tried in vain to persuade Henrot to reconsider. Henrot’s replacement Michel Bon, whose name was circulated in both July and August as a potential candidate, has been characterised in the press as Juppe’s pet. He certainly is committed to reform despite union pressures – the unions at ANPE addressed all of their condolences to France Telecom at the announcement of his nomination. For their part, France Telecom’s unions have said that their actions in the coming weeks will depend on what Michel Bon says and on the future of Francois Fillon.


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The new chief has already attempted to appease them by confirming Charles Rozmaryn in his existing post as managing director of the operator. But if he pursues the policies espoused by Juppe, the rest of the autumn could prove to be peppered with strikes. The worst part of the whole affair is that the government may well be turning a potential global telecommunications leader into an also-ran. Whatever his other virtues as a manager may be, Michel Bon knows absolutely nothing about telecommunications in general or about France Telecom in particular. Indeed, in an age when the telecommunications industry is mutating from one day to the next into a hybrid computing-multi-service-entertainment-telephony-virtual reality bazaar, it is highly disturbing to hear France Telecom’s new president declare that his top three priorities are to consolidate the Deutsche Telekom alliance, get to know the company and establish clear and effective relations with the government.

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