July 5, 2010 / 6:29 AM / 9 years ago

UPDATE 2-France Telecom targets 300 mln clients by 2015

* Five-year strategic plan focused on boosting worker morale

* Growth in customers to come from emerging market deals

* New measures after suicide crisis to cost 900 mln euros

* New content strategy to favour partnerships over rights

* Shares up 1.2 percent

(Adds CEO, news conference, content strategy)

By Leila Abboud and Marie Mawad

PARIS, July 5 (Reuters) - France Telecom FTE.PA aims to increase its client base worldwide by 50 percent through 2015 and will alter its content strategy as part of strategic plan to spur growth and restore worker morale after a suicide crisis.

With the five-year plan announced on Monday, new CEO Stephane Richard aims to puts his mark on Europe’s third-largest telecom operator. [ID:nLDE6601C5]

The plan charts a bold target of increasing worldwide customers to 300 million in the next five years, mostly via acquisitions in emerging markets.

“The plan is much more than a response to the crisis that we have undergone during recent months, it’s a response to 10 years of profound change tied to the opening up of the industry to competition, regulatory pressure and the digital revolution and the arrival of new players such as Google Inc (GOOG.O) and Apple Inc (AAPL.O),” Richard told a news conference.

Richard did not put a price tag on his five-year plan, which contained a mix of new goals such as boosting the client base worldwide and old ones like investing 2 billion euros ($2.7 billion) in high-speed fibre networks. He said more details on financial aspects of the plan would be provided this autumn.

He did however say he would spend 900 million euros through 2012 on a series of measures known as the “new social contract”, taken to improve worker morale after more than 30 suicides by company employees, a spate of deaths which is being probed by an investigating magistrate. [ID:nLDE63818U]

The strategic plan does not alter any of France Telecom’s financial targets through end 2011, notably the 8 billion euro free cash flow target and dividend. It calls for about 10,000 new staffers to be hired in the next two years, but the overall headcount will remain roughly stable as many take retirement.

CONTENT STRATEGY

The plan also put an end to months of speculation and debate over how Richard might alter his predecessor’s strategy of investing roughly 400 million euros a year to acquire content such as broadcast rights for France’s football league, movies and TV series.

Instead of this go-it-alone approach, Richard wants to invest more in partnerships around content, sometimes taking minority stakes in companies where appropriate.

For example, France Telecom wanted partners for its Orange Cinema and Orange Sport channels, which are now marketed to its ADSL broadband customers only. The channels, which have signed up 800,000 clients since 2006, aimed to boost recruitment to triple-play offers by offering exclusive sports and content.

In an interview with Reuters, Richard said France Telecom was in advanced talks with a potential partner on its TV activities and a deal may be announced in coming weeks.

But the new approach does not mean France Telecom will reduce its budget devoted to content, although the money will be spent differently.

“We are likely to spend less on TV broadcast rights, but other areas of spending could increase,” he said. “What is important is to broaden the kinds of content we invest in.”

Asked for examples of possible partnerships, Richard cited recent deals signed in online gambling with horse betting outfit PMU and an aborted attempt to invest in France’s leading newspaper Le Monde to develop its online presence. [ID:nLDE65R0FW] [ID:nLDE65G1T9] [ID:nLDE6591MO]

He added France Telecom was in advanced talks with French music streaming start-up Deezer that could involve the group taking a stake in Deezer and launching a common website.

France Telecom shares ended up 1.2 percent at 14.37 euros while the European sector .SXKP was up 0.3 percent. (Editing by Simon Jessop and David Holmes) ($1=.7453 Euro)

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