France Télécom targets Web 2.0

France Télécom rebrands research centers as Orange Labs and changes focus to Web 2.0 technologies

France Télécom hopes to get more out of the 15 research centers it operates around the world by bringing them together as a single structure, Orange Labs.

The name change, announced Thursday, is a further step away from France Télécom's historic name, with its strong geographic and technological connotations. The company has been following a similar strategy in other fields, pulling its Equant, Wanadoo, and Etrali business activities together under the Orange Business Services brand, and its consumer mobile telecommunications and Internet access, such as those of Spanish subsidiary Amena, under the Orange brand.

The labs network unites research centers in France, China, Japan, Poland, South Korea, the U.K. and the U.S.

The rebranding also marks a change of research and development direction for Orange Labs, which France Télécom says is turning towards a "R&D 2.0," a reference to the so-called Web 2.0 technologies on which it will focus: social networking, virtual communities, localization of services and simplicity of use. Chief Executive Officer Didier Lombard informed researchers of the name change during a visit to the company's lab in San Francisco, which has taken the lead in these areas.

France Télécom's research and development efforts allowed it to be the first former monopoly operator in the world to offer a VOIP (voice over Internet Protocol) service to its customers, and the first to offer its broadband Internet customers a combined home router and DSL (Digital Subscriber Line) modem with integrated Wi-Fi, the company said.

Some of the Orange Labs were previously known as France Télécom Research and Development.

But the company is not just distancing itself from the words "Télécom" and "France": it is also moving away from its historic core business of French fixed-line telephony.

On Thursday, the company also introduced a broadband Internet access offering with no accompanying analog telephone service, allowing it to better compete with the many alternative DSL operators that have sprung up since the French telecommunications market was opened to competition.

A key step in the deregulation of telecommunication services in France was the "unbundling" of the local loop, the copper wire between the exchange and subscribers' homes, also known as "the last mile." Unbundling enabled rival operators to use France Télécom's local loop to deliver broadband services over the wires, while France Télécom continued to deliver analog telephone service. Full unbundling allowed the rivals to take sole control of the local loop, saving customers the expense of the analog telephone service.

Full unbundling also gave rival operators a price advantage of around €10 ($12.50) or more a month over France Télécom, which continued to bundle analog telephony and broadband.

The company's new offering, called simply "net," combines high-speed Internet access, IPTV and unlimited domestic VOIP calls -- without the additional cost of an analog telephone subscription -- for €39.90 a month.