PARIS (01/27/2000) - France Telecom SA's takeover of Global One Communications Inc., the telecommunications alliance it shares with Deutsche Telekom AG and Sprint Corp., will expand the French carrier's international reach, company executives said here today.
The acquisition will allow France Telecom to integrate its existing network with Global One's, which in turn makes it possible to offer services on an international scale. In addition, the deal will also accelerate the growth of France Telecom's European subsidiaries which now can be integrated into Global One's units, officials said.
The French carrier yesterday announced that it will take over the Global One alliance, which for years has been a money losing venture for all three partners. [See "France Telecom Buys Global One from DT, Sprint," Jan. 26.]"We know Global One is losing money, it has shown up in our accounts after all," said Michel Bon, France Telecom's chairman and chief executive officer, speaking at a press conference here today.
Despite the losses, France Telecom plans to retain all of Global One's existing 3,800 employees, said Bon. "We have no plans for redundancies," he added.
And the losses may not necessarily be a bad thing, quipped Bon.
"In the new economy, it seems the more money you lose, the more people give you," he said. "But that's not our ambition for Global One. We belong to the old school of thought that expenses should be less than revenues."
In Germany and the U.S., France Telecom will now have to start looking at other options for the future, Bon said. "If it seems the best strategy is to buy another network then that's what we will do."
More details to follow.
France Telecom, in Paris, can be reached at +33-1-4444-22 22, or on the Web at http://www.francetelecom.fr/.