Orange forms alliance to take on Vodafone. (Wireless News Review).European mobile operators Orange SA, Telecom Italia Mobile TIM (Telecom Italia Mobile) is Telecom Italia's mobile phone brand, and runs a GSM, EDGE, UMTS and HSDPA network in Italy and a GSM network with EDGE in Brazil. In Europe, TIM is part of the FreeMove alliance. TIM Peru was sold to América Móvil and rebranded Claro. (TIM TIM Timothy
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TIM Telecom Italia Mobile (Italian cellular provider) ), Telefonica Moviles and TMobile have formed an alliance aimed at taking on market leader Vodafone Group Plc by offering voice, data and mobile internet Refers to gaining access to the Internet using a lightweight, handheld device. See Mobile IP, PDA, smartphone and mobile TV. services across multiple markets.
While all have strength in their home markets, they do not have Vodafone's breadth. France Telecom subsidiary Orange SA, which has a presence in the French and UK markets, said that the new alliance will enable it to offer new and familiar services to its customers in countries where it does not have a presence. While the deal initially covers Europe, it could be extended to the US, where T-Mobile has a presence and South America where Telefonica is strong.
The alliance is the centerpiece of a new strategy outlined by Orange's new CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Sol Trujillo who said the company was on target to meet guidance of 5% revenue growth this year with earnings at the EDITDA level of 6.2bn euros ($9.1m).
The company has even more aggressive targets for the future and wants more rapid revenue growth in 2004 and 2005 with earnings at the EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become level rising between 15% and 17% from 2003 And 2005.
Orange wants to build its footprint in the Eurozone Eurozone
same as Euroland
Eurozone n → eurozona, zona euro
Eurozone n → zona euro , which includes countries joining the EU up to 2007. It wants all its national operations to be EBITDA positive this year and operating free cash flow positive by 2004. By 2005, the target is to be number one or two in each country or have a market share of more than 20%.
Trujillo claimed it was a "myth" that Orange was slowing down investment as a result of the cash requirements of debt-ridden France Telecom, which owns 87% of the mobile operator. "I wouldn't be standing here otherwise," Trujillo said. "In my opinion, Orange is the crown jewel Crown jewel
A particularly profitable or otherwise particularly valuable corporate unit or asset of a firm. Often used in risk arbitrage. The most desirable entities within a diversified corporation as measured by asset value, earning power, and business prospects; in takeover in France Telecom's assets... You feed those sort of vehicles, as opposed to starving them."
Orange's credibility will only be established when it can produce figures to show that Trujillo's strategy is working. The company, which established the "coolest" reputation amongst UK mobile operators, has recently produced an advertising campaign that has been the subject of widespread ridicule. This raised fears that a company majority owned by an incumbent telco that is itself controlled by the French government, can ever show the zest necessary to perform in a competitive free market.