Transcript Magdalene Telecom

Magdalene Telecom – in France
Best in France Case Study
Jan. 2004 - May 2004
Vaughan Chandler
Michel Le Bars
Atsushi Masai
Boris Polivka
Kurt Weber
Contents
1 Executive Overview
2 Magdalene Telecom
3 Starting a business in France
4 Constraints & Benefits
5 Essential Advice
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Why did we choose Magdalene?


Nicolas Grante

Entrepreneur experiences in Netherlands, UK, Poland

Owns several individual companies in France

Has worked in Denmark, Eastern Europe, Switzerland,
Nigeria…
Start-up

Initiated in December 2003

Provides a different perspective on HR issues from the
established corporate perspective
2
Executive Overview

Magdalene Telecom is a British company that provides
outsourced technical support to telecommunication providers

Reasons for locating in France:

To address the opportunity of a large tender

To support France and French speaking markets

It was easy to replicate from the UK business model

There are no significant benefits of being located in France,
besides access to the market

There are many small issues about being located in France –
none of which are ‘showstoppers’
3
Introduction to Magdalene Telecom
It’s Our People That Make The Difference
4
Company Overview – Magdalene Telecom
 Established in UK in 1996 to provide high quality infrastructure
support to telecommunications providers
 Focussed on products seen as ‘non-core’ by Telco providers
(e.g. GSM networks)
 Opened office in France in 2003 – A start-up
 Over 210 employees Globally
 10 Employees in France
 5 on secondment from the British office
 1 for sales & Marketing, 9 service engineers
 Heavy reliance on Nokia (currently 70% of business)
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Activities & Structure
Nokia TETRA
VAR
GSM 2.5 / 3G
Nokia Mobile
Phones
Reseller
Cellular
Support
Services
Nokia Care
Partner
Marconi Care
Partner
Network
Management
Systems
Active
Subsidiaries
Netherlands
Africa
France
Italy
Finland
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Current Clients Base
Key Product
Suppliers:
Nokia
Marconi
Harris
Lucent
Nortel
TS Comms
Savox
Aircom
Operators:
Private Networks:
Orange UK
Orange France
T-Mobile
C&W
Global Crossing
H3G
Moratel, Morocco
NEOS
O2
Opal
Your Comms
Cegetel
Band X
O2 Airwave
Anadarko, Algeria
BBC
Dolphin France
Highways Agency
Irish Rail
Network Rail
Scottish Ambulance
WS Atkins
Sussex Police
Cheshire Police
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Turnover worldwide
18
16
Turnover MGBP
14
12
10
8
6
4
2
0
96/97
97/98
98/99
99/00
00/01
Financial Years
01/02
02/03
Est.
minimum
03/04
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Why Magdalene came to France
 Magdalene’s first purpose was following a large tender in the French market
 This tender was not successful
 The French market was also a desirable target market
 Large enough to support a full office
 Provides access to other French speaking markets:
–
Belgium
–
Switzerland
–
Northern Africa
 The market allowed the best duplication of the UK business model
 The other large market, Germany, operated in a different manner
 This would have meant significant changes to Magdalene’s business model
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Benefits of being located in France
 Access to a large and developed market
 Better access and service to French speaking markets (Europe and North
Africa)
 Relevant education for desired workforce
 Provides a European identity
 European mobility
 Others???
10
Constraints in France
In establishing small-business in France
 Rules and regulation
 Not transparent
 Can be incorporated in 2-3 days at a bare minimum
 Must advertise creation of company – perceived as useless and a waste of money
 Process & procedures
 Guidebook (became available recently)
 Has improved process, but there is still a way to go
 Public administration
 Public administration will not adopt a business related focus
 Dealing with public sectors for licenses
 Many small and convoluted taxes mean it is difficult to generate accurate forecasts
 Establishing Office space Expenses
 Required upfront payment of 1 year
Key Takeout: France is not conducive to setting up a new business
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Constraints in France
In operating small-business in France
 Employment contract
 35 hour work week
– Manageable, but does result in some loss of competitive advantages
 Public administration
 Public administration will not adopt a business related focus
 Dealing with public sectors for licenses
 Many small and convoluted taxes mean it is difficult to generate accurate forecasts
Key Takeout: France does not provide a competitive edge
12
Differences in employment
 French prefer salaried approach, even with significantly lower salary
 e.g. Annual Salary of 36,000 Euro chosen over 350 Euro per day on a contract
basis
 Termination of contract requires 1 month notice
 The UK encourages a “mercenary approach”
 40-50 self-employed in the UK (on contracts)
 Encourages a “mercenary approach”
 Profit Sharing by all employees: 20% of total Global profit
 Training
 5000 Euro per person
 2 week Training program in UK for new employees
 “No competition clause”: exist, but they are difficult to enforce
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Adaptation to France

The main adaptations from the UK model were all caused by the fact that UK was
established and France was a start-up
 Recruitment needing to understand utilisation restraints and a short pipeline of sold work

Recruitment was set at market rates
 UK staff remain on the UK package for 6 months

Recruitment of contractors is done through a third party rather than direct
 Moves contractual obligations in France one layer further away

Little change was perceived in other areas including
 Management Development
 Workforce Planning
 Performance Appraisal
 Motivation
 Job Design, Job Assignment
 Communication Policies
 Training
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Essential Advice
What advice do you offer to other companies in this sector concerning use of
France as a location?
 Before coming to France
 Find a great accountant
 Adaptation while in France
 Get to know your great accountant
 Future investments in Europe
 Creating a subsidiary is a big investment (than one could expect.)
 Things are improving, but are still not transparent
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We Thank
Mr. Nicolas Grante:
Directeur Ventes et Operations/Head of Sales and Operation
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Our Team
Vaughan Chandler:
[email protected]
Michel Le Bars
[email protected]
Atsushi (Andy) Masai
[email protected]
Boris Polivka
[email protected]
Kurt Weber
[email protected]
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