registration document France Telecom 2009 - Orange.com

9 ANALYSIS
analysis of the financial position and earnings
OF THE GROUP’S FINANCIAL POSITION AND EARNINGS
Command networks are also evolving towards IP technologies
and matching growth in customer numbers and usage, with
the development of “Voice over IP” controlled by the IMS (IP
Multimedia Subsystem) network and the “voice” interconnection
between operators, which is increasingly done using IP.
Development of international networks (submarine
cables)
The LION (Lower Indian Ocean Network) submarine cable
project in the Indian Ocean was inaugurated in late December
2009. This 1,400-kilometer cable links Madagascar, Reunion
Island and Mauritius. Growth in the international connectivity of
African countries via submarine cable is set to continue with the
laying of new cables. In particular, the Group is a member of
the ACE consortium. The ACE (Africa Coast to Europe) cable,
which will stretch for more than 14,000 kilometers, aims to
link up all countries lying along the coast of West Africa, from
Morocco to South Africa. It will be operational in 2011 and will
benefi t from the best technology currently in use in the fi eld of
submarine cables.
Development of the IT system, service platforms and
the associated infrastructures
The transformation of the Group’s IT system to a clientorientated
IT system (SOA, Service Oriented Architecture) will
continue over the coming years. Particular efforts are being
made on quality of service (user satisfaction and improvement
in workstations). Projects aimed at smoothing out the customer
experience are now underway.
The rollout of service platforms is continuing, with particular
use of IMS (IP Multimedia Subsystem) architecture. This IMS
architecture, which takes advantage of signifi cant progress
in standardization, allows for the progressive convergence of
fi xed-line and mobile networks, and enables services to be
rolled out faster.
IT systems and service platform applications share a technical
infrastructure, which is also currently being expanded and
reshaped. The regrouping and pooling of this infrastructure in
large data centers helps cut unit costs and minimize energy
use, thereby helping the Group reduce its environmental impact
and helping it become a leading player in the fi eld of “cloud
computing” (technologies providing access to IT resources and
applications via the Internet, as well as computing and storage
capacities located throughout the world, via a simple Web
browser).
9.1.3 Analysis by operating segment
This section provides, for the France Telecom Group, an analysis
by operating segment of the main operating data (fi nancial data
and workforce) and the main operating indicators.
Operating income before depreciation and amortization, and
impairment losses (EBITDA) and capital expenditures on tangible
and intangible assets excluding licenses (CAPEX) are not
defi ned under IFRS. For further information on the calculation of
EBITDA and CAPEX, and the reasons why the France Telecom
Group uses these aggregates, see Section 9.1.5.4 Financial
aggregates not defi ned under IFRS and the Financial glossary
appendix.
Presentation of operating segments
In order to refl ect change in its organization, under which its
integrated operator strategy and synergies are implemented
and extracted at country level, the Group modifi ed its internal
reporting procedures on January 1, 2009, moving from analysis
by business line to analysis based primarily on geography
(see Section 9.1 Analysis of the Group’s fi nancial position and
earnings ). The Group has seven operating segments:
■ the “France” operating segment houses personal (mobile
telephony) and home (fi xed-line telephony, Internet and
carrier services) communication services in France;
■ the “United Kingdom” operating segment houses personal
(mobile telephony) and home (fi xed-line telephony and Internet
services) communication services in the United Kingdom;
■ the “Spain” operating segment houses personal (mobile
telephony) and home (fi xed-line telephony and Internet
services) communication services in Spain;
■ the “Poland” operating segment houses personal (mobile
telephony) and home (fi xed-line telephony, Internet services
and carrier services) communication services in Poland ;
■ the “Rest of the World” reportable segment houses personal
(mobile telephony) and home (fi xed-line telephony, Internet
services and carrier services) communication services in
countries other than France, Poland, Spain and the United
Kingdom, i.e. mainly Belgium, Botswana, Cameroon,
Dominican Republic, Egypt, Ivory Coast, Jordan, Kenya,
Madagascar, Mali, Mauritius, Moldova, Romania, Senegal,
Slovakia and Switzerland;
■ the “Enterprise” operating segment houses business
communication solutions and services in France and
worldwide;
■ the “International Carriers & Shared Services” (hereinafter
referred to as “IC & SS”) operating segment houses i) activities
relating to the rollout of the international and long-distance
network, the laying and maintenance of submarine cables, as
well as international sales and carrier services, and ii) shared
services hosting support and cross-business functions
used by the entire Group, as well as new growth channels
(Contents, Health, On-line Advertising). Shared services are
largely charged back to the other operating segments via
brand royalties, Group services and specifi c rebilling on a
case-by-case basis.
See “Segment information” of the consolidated fi nancial
statements and Notes 1 and 2 to the consolidated fi nancial
statements.
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2009 REGISTRATION DOCUMENT / FRANCE TELECOM