French connections

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The dashing car racing enthusiast had made £20 million since taking the company public. But he was overlooked for the top job when the firm merged with NTL to become Virgin Media.

Given the trouble Virgin Media has been in since he quit, some would say his leaving was inspired.

Alexander’s plan was to take a career break and concentrate on racing with co-driver Tiff Needell, but the break didn’t last long. In an unexpected move, he has been enticed back into the industry by France Telecom to run Orange in the UK. He will assume the chief executive role from Bernard Ghillebaert, who had held it since 2004.

Ghillebaert heads back to Paris to take a role in the executive management team of Orange’s mobile business across Europe, the Middle East and Africa.

“Over the last three years, while ensuring stability, Bernard also laid the foundations for Orange’s future as a total communications company,” said Swantee. “I look forward to seeing Tom [Alexander] build on those foundations.”

Alexander joins in December, reporting to Swantee, and taking over a business struggling to refresh its once-great brand. Orange UK has become more competitive of late but has struggled against Vodafone and O2 in a crowded market. It reported an operating profit of €712 million (£496m) in the six months to June 30, down 8.6 per cent year-on-year.

And there has been a lot of movement in the Orange boardroom too. Last month Eric Abensur, head of Orange UK’s broadband operations, left “by mutual consent”. In April, Sanjiv Ahuja stood down as head of Orange’s global mobile operations.

“They have lost their va-va-voom in the UK,” said Robert Grindle, telecoms analyst at Dresdner Kleinwort. “It’s an interesting hire. The least you can say about Virgin Mobile is it is marketing savvy.”

Alexander must be on a juicy package because running a mobile network is a tough call these days.

The UK is the most fiercely competitive market in Europe; you have to steal your rivals’ customers just to stand still.

While O2 has stormed ahead, and Vodafone is finding its way again, Orange has failed to get punters overly excited. So full marks to France Telecom for securing Alexander’s services and, in so doing, actually looking outside the group and beyond France.

Refreshing Orange’s brand will be hard, but Alexander stands a good chance if France Telecom gives him enough time and autonomy. However, if the parent company hinders his ability to inject Virgin Mobile’s entrepreneurial spirit into Orange, like some of his predecessors, he may struggle.

Still no drive at Motorola

Latest figures from Motorola show the US handset giant is still struggling to come up with a strong RAZR successor.

The company posted a small third quarter profit from continuing operations and forecast another profit for the current quarter, but revenue fell from a year ago.

It has been losing market share to Nokia and Samsung, which took its number two ranking in the second quarter.

As many employees know all too well, Motorola shares have lost almost a third of their value in the last 12 months. Little wonder when the handset business posted a quarterly operating loss of $138 million (£67m), compared with a profit of $843 million in the same quarter a year ago. Mobile phone revenue tumbled 36 per cent to $4.5 billion.

The group as a whole reported a profit from continuing operations of just $40 million, or two cents per share, compared with a profit of $727 million, or 29 cents a share, in the same quarter a year ago.

The latest quarter included charges of four cents a share from job cut and asset write-downs. Not pretty, although the group did forecast it will maintain or improve its profits in the Christmas quarter.

Trouble at Ericsson too, which has taken a share price drubbing and suffered the resignation of its finance chief after stunning investors last week with unexpectedly weak profits.

The world’s biggest maker of mobile network equipment (and 50 per cent owner of handset maker Sony Ericsson) waved goodbye to Karl-Henrik Sundstrom, who helped guide Ericsson through tough times for the whole industry.

It has turned to Hans Vestberg, head of its global services unit; a young but well-travelled executive with a finance background.

Ericsson chief executive Carl-Henric Svanberg said he felt he had the support of the board as he set about trying to restore investor confidence. Watch this space.

 

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