Transcript Teligent 2005

Teligent
Best in France Case Study
January 2005
By: David Chouinard, Wei-Jyun Hoang, & Eric
Vambert
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Agenda
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Company Overview
Global Operations
Doing Business in France
Essential Advice
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Company Overview
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Company
Overview
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Global
Operations
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Doing
Business
in France
Essential
Advice
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Teligent is an international telecoms company based
in Nynäshamn (Stockholm), Sweden.
Offers network service providers (B2B) application
based solutions to increase revenue and endcustomer usage.
Clients include BT, Cingular Wireless, Telefónica,
Telia and operators within the Vodafone Group.
Founded in Sweden in 1990, the company is listed in
Stockholm
€50 million in annual sales with a goal to achieve
10x higher sales by 2010.
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Company Overview
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Company
Overview
Telecom network service providers:
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Global
Operations
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Teligent helps them improve:
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Doing
Business
in France
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Essential
Advice
Have heavily invested on infrastructure
Experience a big churn
Have some spare capacity
The revenue per user
The fidelity of users
The quality of service
By providing tools that:
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Use the spare capacity for adding value services
Improve control of network and invoicing
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Company Overview
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Company
Overview
Teligent offers innovative solutions such as:
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Global
Operations
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Doing
Business
in France
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Essential
Advice
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Voice mail
Messaging solutions (e.g.voice/fax messaging, unified
messaging)
Mobile data solutions (SMS and MMS)
Intelligent network solutions (e.g. Service Management)
Service access management
Pre-paid call management
Virtual private networking
Next generation networks (including application
interfaces and switching)
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Company Overview
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Company
Overview
Innovative applications developed from scalable proprietary
platform (Teligent P90/E middleware)
Global
Operations
Doing
Business
in France
Essential
Advice
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Company Overview
Company
Overview
Clients include:
Global
Operations
Doing
Business
in France
Essential
Advice
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Company Overview
Company
Overview
Global
Operations
Teligent International Sales by Region
Western
Europe
30%
Nordic
Countries
25%
Doing
Business
in France
Essential
Advice
Eastern
Europe
4%
Americas
12%
Africa
15%
Middle East
14%
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Company Overview
Key figures and breakdown of Sales
Company
Overview
Global
Operations
Doing
Business
in France
Essential
Advice
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Company Overview

Company
Overview
Diverse range of competitors, although no distinct
group of peer competitors
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Global
Operations
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Doing
Business
in France
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Large global suppliers of telecom equipment
Global value added specialists
Local or regional niche suppliers
Local or global system integrators
Not unusal for a company to be both a competitor
and a potentially valuable partner, such as Nokia,
Ericsson and Lucent
Essential
Advice
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Global Operations
2003, Breakthrough orders in Africa, the
Middle East and in the West Indies, 44% of
orders from outside Europe
Company
Overview
2002, Implemented globalisation
strategy to expand to continents
outside Europe and North America
Global
Operations
1997, subsidiaries
established in France,
Germany and Spain
2000
1995, first int’l order
received from Britian (IPM)
Doing
Business
in France
Essential
Advice
2004
1994, decision taken to
enter international markets
1991, first order
received from Swedish
organisation
1990,
Company
Founded
1995
1990
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Global Operations
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Company
Overview
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Global
Operations
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Teligent’s overall operational goal is to become a leading global
supplier of advanced value added services for telecom
networks
Expansion on the basis of establishing new indirect sales
channels and geographic expansion
Teligent is represented in Brazil, England, France, Germany,
Morocco, Singapore, Spain, Sweden, UAE, and the USA.
Doing
Business
in France
Essential
Advice
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Doing Business in France
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Company
Overview
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Global
Operations
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France is around the fifth largest economy in the world with an
annual GDP of about 1.9 trillion (1/5 of the US)
2nd largest economy in Europe
Population of 60 million with a high disposable income of USD
29,000 per capita
Ensuring foreign direct investment is of high priority for the
French government to ensure growth and jobs
Doing
Business
in France
Essential
Advice
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Doing Business in France
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Many foreign investors are attracted by:
 Financial incentives
 Skilled and productive labour force
 Central location in Europe
 Quality of life
 Free movement of people, services, capital and goods
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However, investors continue to be concerned about:
 Government economic regulation and taxation
 High social costs
 Complex labour environment
 Employee rights and benefits can make exit costs high for
investors seeking to leave France
Company
Overview
Global
Operations
Doing
Business
in France
Essential
Advice
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Doing Business in France
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Company
Overview
Global
Operations
Doing
Business
in France
Essential
Advice
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Teligent came to France to be near potential customers and
‘conquer the French market’
Other key benefits include:
 Highly skilled labor, strong concentration of engineers
 Able to ensure high product quality and innovation
 High productivity (e.g. revenue & profit per French
employee)
 Location benefits, such as transport, time zone, and quality
of life for employees
 Market Potential (i.e. growth potential, customer demands
for cultural adaptation of product(s), launch platform for
other European countries)
 Less taxes than Sweden and cheaper than the UK
 Paris offered an ideal central location with a large
population and good industry links
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Doing Business in France
Company
Overview
Global
Operations
Doing
Business
in France
Essential
Advice
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However, Teligent has had to adapt its strategy in response to
several challenges posed by the French market
 Economic downturn in 2000
 Cancelled contract with France Telecom
 Difficult for small companies such as Teligent to do
business with the small number of large service providers
 Companies such as France Telecom demand reliability
from more well-known, established companies such as
Ericsson and Alcatel
 France still considered a long-term growth potential
 North America and outside of Europe offer the best growth
prospects though
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Doing Business in France
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Other constraints mentioned include:
 Cumbersome French bureaucracy
 Relatively unfriendly business/enterprise environment
 Auditing laws
 Labor laws
 Intense pressure to reduce prices and high competition
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Key costs cited for locating operations in France:
 Employee compensation
 Potential exiting costs (employee severance packages)
 Corporate tax
Company
Overview
Global
Operations
Doing
Business
in France
Essential
Advice
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Doing Business in France
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Company
Overview
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Global
Operations
Doing
Business
in France
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Essential
Advice
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Teligent has successfully adapted its business model and plans
to remain in France
French operations are used as the platform to reach other
Francophone countries such as those in Africa, including:
 Morocco
 Ivory Coast
 Niger
 Togo
 Tunisia
Teligent has avoided establishing a local office in Africa, which
would be difficult as there are no obvious hubs (highly
differentiated markets in Africa with large economic and political
differences between countries)
Nonetheless, the company tries not to be too French in order to
avoid perception as the ‘old colonial power’
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Doing Business in France
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Company
Overview
Global
Operations
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Doing
Business
in France
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Essential
Advice
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Teligent enjoyed initial success in Morocco through an
agreement with Maroc Telecom
Followed up this success with a deal from Atlantique Telecom,
one of West Africa’s largest carriers; based in the Cote d’Ivoire
Involved installations in four markets:
 Burkina Faso
 Gabon
 Niger
 Togo
Further growth predicted for Africa
Support office for North Africa established in Morocco to help
French subsidiary in this region
Africa accounted for 15% of Total Sales in 2003 (only 10
employees in Teligent’s French operations)
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Doing Business in France
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Company
Overview
Global
Operations
Doing
Business
in France
Being a small company has also enhanced the company’s
ability to adapt in France relative to large companies
 Closer relationship with employees
 Employees are more willing to work long hours than those
in large companies
 No Union involvement, flat matrix organization structure
 Strong commitment and loyalty from employees
 Can provide special rewards to employees that are more
meaningful and cost effective
Essential
Advice
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Doing Business in France
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Company
Overview
Global
Operations
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Doing
Business
in France
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Essential
Advice
Recruitment:
 Ads in Figaro for engineers
 APEC
 Head hunters for salespersons
 Diverse workforce composed of French and international
employees
Compensation
 Fix for engineers
 Percentage of sales for salespersons
Appraisal
 Twice a year but flexible since only ten employees
 Problems highlighted quickly
 Needs for training identified easily
 Expectations are known by all employees
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Essential Advice
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Company
Overview
France is a large, important market and can be
profitable
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Global
Operations
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Doing
Business
in France
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Being French is the best way to do business in France
Think globally but act locally and adapt to customs
Hire French staff and legal support
Hire French sales people and propose business in a French
way
French knowledge and language can be profitable for
reaching markets outside of France
Essential
Advice
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We Thank
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Mr. Hällerstam: Managing Director Teligent France and Africa
[email protected]
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Mr. Melin: Project Manager
[email protected]
Teligent SAS
14 Boulevard Montmatre
75009 Paris
Tel: +33 (0) 1 48 00 18 18
Fax: +33 (0) 1 48 00 18 19
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Our Team
David Chouinard
[email protected]
Résidence Expansiel
Chambre n°17
1, rue de la Libération
78350 Jouy en Josas
01 39 67 88 31
Wei-Jyun Hoang
[email protected]
15 rue Léon Bertault,
91120 Palaiseau
06 33 63 13 00
Eric Vambert
[email protected]
104 rue Cambronne
75015 Paris
06 81 45 54 49
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Bibliography
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Teligent Annual Report 2003
Teligent Quarterly Report, September 2004
United States Department of Commerce, ‘Doing Business in
France’, http://www.buyusa.gov/france/en/111.html
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