1. Completel Best In France Case Study K.StoknesJ.TorresM.BhandariJ.Leleu

2. Business Description Completel Europe N.V., a Dutch incorporated company Was established in January 1998 to take advantage of the opportunities in the European liberalized telecommunications market Providing of voice, data and internet related services to the business, government administration, carrier and isp markets The group is involved in the exploitation of a fiber optic communications infrastructure in western Europe and provides telecommunications and internet related services to clients such as internet service providers as well as commercial and governmental end-users

3. Geographical Distribution Until 2002 2001 Revenues Completel Europe had operations in France, Germany & United Kingdom until May 2002

4. Business Description The German and the UK ISP operation was sold on 10 May 2002 (cash savings in the €20m range ) Following the recapitalization in 2002, the company refocused its activities on the French market Thus, Completel S.A.S became its main subsidiary. In three years, Completel SAS has become a leading national infrastructure based alternative carrier in France –providing telecom services through direct fiber connection to medium and large companies, public institutions (Hospitals, Ministers, Universities), carriers and ISP.

5. Growth in Revenues CAGR = 5.7%

6. Competition As Completel begins to focuses on larger customers, it is likely to run into more direct competition. France Telecom, its main competitor, has traditionally focused on larger customers, which constitute the majority of its corporate fixed line revenue base. For these customers, France Telecom is prepared to respond more quickly and flexibly to changing customer demands and the threat of competition. Large customers are also more attractive to other competitors – for example, Cegetel, MCIWorldCom and COLT.

7. Competition Map

8. Completel’s strategy in France Completel’s objective in France is to take the leading place in the telecom service market after France Telecom To reach this goal Completel will increase their effort towards large sized companies, both public and private Their already strong presence in medium sized companies will help them grow further, together with their strategic alliances with regional and national partners.

9. Why go to France? Market Potential Available competencies Good product European directives

10. Expected problems Cultural Bureaucratic Social / Fiscal / Legal Can BP be applied in France ?

11. Organizational strategy Customers (Public/Private) Local Organisation in France is based upon regional Management teams Close to the customers Increased reactivity Better ability to offer technical support

12. Introduction Strategy : HR (1 of 2) US management recruited top French management. HRD, CFO, and TD of French origin French managers (HRD, CFO and TD) had Freedom to create their own teams Staff distribution: 78% “cadres”, mostly engineers Origin: Mainly France (Écoles Télécom, Grandes Écoles ingénieurs), Magreb, US Some US managers as technical consultants (processes and organisation)

13. Introduction Strategy : HR (2 of 2) Main recruitment procedure: “cooptation” Overall staff evaluation: 360º method Compensation: importance of variable part (bonus) US organization chart: quite flat structure, low hierarchy, high level independence Strong internal communication on company goals Focus on integrity on the job

14. Introduction Strategy : Business Objective: 15% yearly revenue growth Organisation in 9 centres of profit  9 geographical areas linked with a backbone Independence of every centre. However, monthly meetings of partners of every region Completel SAS LilleGrenobleLyonMarseilleToulouseNiceNantesAlsaceParis

15. Introduction Strategy : Networking Strong link with political activity Important network of 3 top French managers (HRD, CFO, and TD) Conference in the senate: “La dérégularisation du marché des télécommunications”  Good impression of politicians vis-à-vis de Completel

16. Actual situation All fears disappeared but it took long (35h,…) Financial results are mitigated 10% Market Share, overall Turnover: 60% public, 40% Private

17. Other European countries Germany Numerous big cities Easier Negotiations Spain (To be developed) Telefonica’s competition Harder Geography

18. Completel Mr. Richard Folliot Human Resources Direction Tel: 01.72.92.20.00