CAIRO: Didier Lombard, CEO and Chairman of France Telecom (FT) since 2005, acceded to pressure and will step down a year ahead of schedule.
In a public statement, France Telecom said, Didier Lombard, France Telecom chief executive, has decided to propose to the company s board meeting on February 24 to separate the jobs of chairman and chief executive from March 1, 2010.
According to the statement, Stephane Richard, currently the deputy chief executive, will fill Lombard’s role as chief executive. Prior to Lombard’s announcement, Richard used an interview with Reuters to call for his boss to step down as soon as March.
A flurry of coverage in both the Egyptian and French press has pointed to various factors in his expedited removal. French readers associate his name with a string of suicides that has garnered significant media attention, while the Egyptian paper Al-Masry Al-Youm declared “large-scale changes . after the failure of negotiations with Mobinil.
A former state monopoly, Europe largest broadband provider and third largest mobile subscriber, FT has been locked in a battle for control of Mobinil, Egypt’s largest mobile operator by subscribers, with minority shareholder Orascom Telecom since 2007.
The ownership dispute has migrated from an internal power-sharing tiff to an international spat played out in high definition, with Orascom Chairman Naguib Sawiris appearing on popular Egyptian television show “Al-Qahira Al-Youm to declare his intention to fight for the company he started as Egypt’s first mobile service.
Al-Masry Al-Youm cited Lombard’s his ineffectual leadership and his interaction with “rivals such as Sawiris for his removal. His tenure has seen an unsuccessful bid in 2008 for control of Nordic mobile operator TeliaSonera, as well as a ruling by the European Court of Justice requiring FT to pay $1.1 billion in anti-trust penalties, in return for state aid given from 1994 to 2002.
French paper Le Figaro detailed the highly publicized suicides that have plagued FT’s French staff over the past two years. Although 35 suicides out of 100,000 total employees falls below the national average for suicides, multiple victims left notes “blaming management decisions or stress at work, according to AFP.
Until now, Lombard has managed to hold on to control despite loud cries for his removal in September 2009, when a 51-year-old employee jumped from a bridge in the French Alps, leaving a wife, two children, and a note blaming “the atmosphere at work.
Two weeks before his death, a 32-year-old employee jumped from the fifth floor of a building in Paris after learning she might be fired, and a 48-year-old technician afraid of losing his job stabbed himself non-fatally while in a meeting.
Lombard’s appearance at the funeral of one employee was met with booing, while the Telegraph reported that France s opposition Socialist Party called for Lombard to step down. “Resignation is the only solution, a party spokesman said last September, That is the only possible outcome to this case right now.
Restructuring over the pat three years has required 10,000 FT employees to change roles. The company responded to internal discontent and public outrage by hiring 100 additional human resources staff, although Lombard acknowledged that the measure “should have been implemented two months sooner, according to Le Figaro.
Although Lombard’ name, unlike Sawiris’, was not previously attached to Egyptian coverage of the Mobinil conflict, FT was pilloried for attempting a hostile takeover of a locally (partially) owned company.
Hesham Al-Alaily, FT’s vice president for Africa, Asia and the Middle East had previously expressed surprise at the vehemence with which FT’s bid was met in Egypt.
He mused that Sawiris’ high profile contributed to the nationalism that accompanied support for Egyptian ownership Mobinil. “The chairman of Orascom Telecom is a famous person, there is a lot of emotion behind this. But this is not a personal issue; it is pure business.
Yet with the recent announcement that Lombard’s personality and poor management style is to blame for the deaths of employees, among FT’s other woes, the assertion of “pure business starts to ring false.
Even FT’s previous victory, in which an Egyptian regulator unexpectedly approved their share price bid last March appears to have more to do with politics than business. According to Financial Times columnist Paul Betts, “opinion had formed at the highest Egyptian government levels that this stand-off with one of the country s largest inward investors was becoming an embarrassment. The fact that the decision was announced at the same time as a visit to Paris by Egyptian President Hosni Mubarak may not have been coincidental.
Al-Alaily was not available for comment as to whether Lombard’s removal will affect FT’s negotiations with Orascom Telecom.
With Lombard’s suicide-tainted exit, the long running struggle for Mobinil, already compared by FT’s Al-Alaily to a custody battle for a child, seems to have reached dramatic proportions, and like a soap opera, seems ever farther from resolution.
