"I was advised to invest in many businesses in Israel, but I refused because I am in one business," said Patrick Drahi at a press conference in Jaffa today. "People suggest that I should sell the business. I'm not selling; I plan to continue for a long time."
Drahi held the press conference following the €1.8 billion IPO of his company, Altice SA (Euronext Amsterdam: ATC), which owns Hot Telecommunication Systems Ltd. (TASE: HOT.B1), as well as companies in France, Belgium, Portugal, the French West Indies, and the Dominican Republic.
"The first time my picture was published in a newspaper, I think it was in "Globes", was in May 2009. During my 20-year career in France, even though I have done more there, I've never had such media coverage," said Drahi. "I was born in Morocco and lived there for 15 years. When we left in 1978, there were very few Jewish families remaining, and we moved to southern France. My parents were both math teachers. I was good at math. I didn’t have a choice."
Drahi began working in telecommunications at 20. "I wanted to be a researcher. I didn’t want to be the big boss. I began doing research on fiber optics in France and Holland at a Philips laboratory and at a company that is now Alcatel," he said.
Later, Drahi became the manager for satellite operations, and won a large customer, which is now called BSkyB, and other customers. "After two years, one of my customers asked me to join it and launch operations in France. That was a move from a big company to a small one. At some point, I decided to establish my own company in France. I started with a US partner, an American Jew who was very successful in the US cable business and agreed to invest within ten minutes."
Commenting on his strategy, Drahi said, "I won't enter a market without a cable and fixed line network. As far as I am concerned the world is Triple Play. In Israel, we are the only company offering Triple Play. We in the Quad Play market; the fourth market is ISP. The vision is to be the leader in fixed line, a focus on Quad Play, and operational excellence. If you cannot say, 'this is my price, it's too complicated,' the customer feels lost. That was the big mess in Israel, and it still needs to be simplified, but that is how it is in every country."
Commenting on Altice's numbers, Drahi said, "27% of our revenue is from Israel and 41% is from France, but the proportions are falling, because we're entering more countries. 27% of our EBITDA (earnings before interest, taxes, depreciation and amortization) is from Israel and 45% is from France. We have more than 10,000 employees. In every country, we're number 1 or 2 in television and broadband. We expect to grow in mobile. I love the Hot brand, but it is hard to use in Europe, because people hear 'Hot' and think of something other than cable."
As for regulations, Drahi said, "I was welcomed in Israel with a red carpet from the first day. I met Hot's shareholders and the communications minister in 2009. They told me, 'You have experience. Welcome.' I know that the communications minister has various problems to deal with. I don’t want to criticize. It's complicated. In Europe, we have a national regulator and a supra-national European regulator. Israel is a small country with geopolitical problems that Europe lacks. That is why the regulator is more cautious, which is good.
"I prefer to focus on what I know. Because I have experience in other countries, I know what to expect when the regulator does this or that. Obviously, there was inadequate competition in the mobile market, but the problem now is that there is too much focus on competition in the short term, and not enough investment for the long haul. It's important that the carriers will be strong enough to invest. If you destroy the telecom industry, there will be no resources for investment, and foreigners, Chinese or Americans, will come in and buy. You need balance. It's also important to simplify. I favor everyone in Israel offering Quad Play.
As for mobile consolidation, Drahi said, "It is important to have consolidation everywhere in the world. It's premature in Israel, but 2-4 years, there will be consolidation. All the mobile carriers will want to sell, except for maybe Pelephone Communications Ltd., but there will be no buyers."
Published by Globes [online], Israel business news - www.globes-online.com - on February 5, 2014
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