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Quest Means Business

Dow Hits 14,000; Jobs Figures; Unemployment Rates; US Economy Concerns; US Stocks Advance; Google Reaches Agreement With French Government; European Stocks Rise; Investigation Into Pemex Blast; Unemployment Figures; Spanish Unemployment; Hillary Clinton's Last Day

Aired January 01, 2013 - 14:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

NINA DOS SANTOS, HOST: A market milestone. The Dow Jones Industrial Average tops 14,000 for the first time since 2007.

Stabilization or stagnation? We've got a double dose of jobs data from the United States and also from Europe.

And Mexico's oil giant Pemex says the cause of a deadly blast at its headquarters is at present still unknown.

Hello, I'm Nina Dos Santos, and this is QUEST MEANS BUSINESS.

Good evening. Well, for the first time since 2007, the Dow Jones is trading above 14,000 points. It actually struck this mark at around about 10:00 AM Eastern Time in the United States and, as you can see, it's been trading ever higher. We're currently ten points higher from that all- important mark.

Now, the important issue is that this hasn't actually been a level we've seen since all the way back before the collapse of Lehman Brothers. And let me also remind you that only four years ago, the Dow Jones Industrial Average was actually trading at around about half of this kind of amount.

Well, the markets have been responding to unemployment data from both sides of the Atlantic. The United States and the European Union released jobs numbers earlier on today, and let's take a look at them, because in the United States, what we saw was the jobless rate there, as you can see, ticking up to 7.9 percent, while in Europe it stayed put at around about 10.7 percent over there.

The US, for its part, added 157,000 jobs in the month of January. That was still fewer than expected, but on the positive side, what we did see was we got an extra 127,000 jobs coming from revisions to the two previous months.

Now, if we take a look at the unemployment level since all the way back in 2008, as you can see from this chart I'm about to show you, while the United States is following a generally downward trend, as you can see, in accordance with that red line on the map there, but the EU, as you can see here in the blue line, is still struggling to get back to pre-recession levels.

Youth unemployment is even worse in this region, standing at around about 23 percent. However, today's report did show that that number, especially when it comes to youth unemployment, on the positive side did fall for the month of December, as did the total number of people who are currently unemployed across the 27 countries in the bloc.

But this is what I also wanted to show you. Both the EU and the United States are still far behind Japan in the unemployment stakes. In Japan, the jobless rate, as you can see from this chart, has consistently stayed close to around about the 4 percent mark, so much, muck better than the kind of figures that we've seen, especially around here in Europe.

Joining me now from Berkley, California, is Robert Reich. He's the former US labor secretary. He's also the author of "Beyond Outrage: What's Gone Wrong With Our Economy and Our Democracy, and also how to fix it.

So, Robert, what do you make of these kind of unemployment figures in the Untied States, because they do show two things. On the one hand, the revisions are very positive for the last couple of months of 2012. But at t the immediate time, 157,000 really isn't great.

ROBERT REICH, FORMER US LABOR SECRETARY: No, 157,000, Nina, is actually very disappointing. And if you put that together with the fact that the labor participation rate in the United States, that is the percentage of people who either working or looking for jobs, is at almost a 30-year low, then you have some reason to be concerned.

The Commerce Department announced recently that the fourth quarter results, the United States economy actually began to contract. So, put it all together and the picture is certainly not as bleak in much of Europe, but it is -- there does seem to be a lot of room for concern.

DOS SANTOS: Well, one thing we should address, as well, is the issue of longterm unemployment in the United States, because that's not necessarily the issue that grabs the headline figures, but it is persistently troubling -- problematic.

How worried are you about longterm unemployment and people who just drop out of the jobs market because they haven't been able to find one in so long?

REICH: It's a very large problem. About 40 percent of the unemployed in the United States have been out of work for six months or longer.

Many of them are in their 50s, late 50s early 60s, they are unlikely to get a job again, their unemployment insurance, many of them have found that their unemployment insurance has run out. Congress has not extended unemployment benefits. So, they are in a very difficult position.

DOS SANTOS: Why are companies not hiring in America? Because obviously, if you take a look at the economic prognosis for the United States, it's much, much better than here in Europe, but they're still not putting their money where their mouth is.

REICH: Companies -- big companies are sitting on almost $2 trillion of cash. They are not expanding, they are not hiring in the United States, largely because they don't have enough customers. The reason they don't have enough customers is that the median wage in the United States continues to drop, adjusted for inflation.

And meanwhile, beginning January 1st, the new Social Security law went into effect. In a sense, the tax went up. That is, most Americans are paying instead of 4.2 percent of their wages in Social Security, they're now back to paying 6.2 percent. That means for the typical family in the United States, there has been a drop in take-home pay of about $1,000 per year.

DOS SANTOS: OK, Robert Reich, former US labor secretary, do stay with us. I want to get a few more of your views in just a second's time, but I want to use our magic wall to show you something else that we've been learning about the state of the economy in the United States as you can see here.

On Tuesday, let me remind you that we saw a much, much steeper drop in consumer confidence than analysts had been expecting. Then of course, on Wednesday, what we saw was that famous surprise drop in US GDP for the last quarter of last year, mainly due to a fall in defense spending, that was.

And then, just a day after that, we got the first statement of the year from the Federal Reserve. As you can see here, the central bank deciding to maintain its current level of money printing or quantitative easing. That could be viewed as a sign of weakness of the US economy.

And, as you remember, what we've been talking about today, we've had the jobs numbers. And this is the confusing thing. While all of this has been going on, all of these negative statistics have been coming out, as you can see here, as I've been telling you, the Dow Jones Industrial Average is at an all-time high, back to those times pre-Lehman Brothers and pre the crisis.

So, US markets are heading for another week, as we were saying of gains. Before we go to Alison Kosik, I want to come back to you, Robert Reich. Why do you think that investors are so bullish, that everybody's saying the US economy is going to grow 2 or 3 percent this year.

And yet, as I was saying before, people don't have the confidence high. Is it a confidence issue, as you said before, or is it just that these companies want to stay profitable, and what can governments due to unlock that cash?

REICH: Well, Nina, first of all, American companies are profitable. They are profitable largely because they've kept their costs down. One of their largest costs is wages, and that means that at least in the short term, they're going to do very well.

In the longer term, though, those wages are going to come back and haunt them, because workers are consumers. In the United States, consumer spending in America -- American consumers -- accounts for 70 percent of economic activity. The United States is not a net exporter.

So, if you're not paying your workers very much, in fact, if you are -- if your wages are dropping relative to what they were, then your consumers are not going to have enough money in their pockets to turn around and buy what you have to provide them.

The stock market, I think, is guilty -- and investors are guilty -- of what they've been guilty of before, that was called by Alan Greenspan irrational exuberance. I would not be surprised if there were a correction in the future.

DOS SANTOS: OK, Robert Reich, thank you so much for joining us, there, former US labor secretary. Really great to have your views, here, from Berkley, California.

As we were saying before, US markets heading for another week of gains, and not just any kind of gains. We're talking about gains that are before Lehman Brothers levels. Let's go over to Alison Kosik who, as promised, is standing by for us at the NYSE.

So, Alison, this rally really doesn't seem to be losing any kind of steam. When the Dow hit 14,000, what happened? Did everybody cheer over there?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Absolutely nothing happened, Nina. You wouldn't even know it if you didn't look up on the screen and see the 14 after the word "Dow." You can hear a pin drop, actually, in this place when it happened.

And that's why some people say that Dow 14,000 really doesn't amount to a hill of beans, that it's just a nice, round number that we like to talk about. And one economist that I've talked with said, yes, this is like a correction that's waiting to happen, because this rally isn't real, especially when you look at growth in this economy.

In the US, growth contracted in the fourth quarter. Job growth still isn't very robust, even though it is getting better, and this is a market says -- say many analysts, it's a market that's being propped up by the Fed.

But if you talk to bulls on this subject, they say no, no, no. This is a milestone. This shows that the stock market is really coming back from the depths of the recession. You're seeing levels that we saw before the recession started.

Remember when the Dow hit 6500 back in 2009? So, one economist tells me this could be a sign that things are really getting better and may stay that way, Nina.

DOS SANTOS: Alison, it's not just the 14,000 mark in terms of points and market value that's important, this affects certain companies, like Google and Exxon, that are just becoming so much more valuable in market capitalization today.

KOSIK: Oh, yes. And as you say that, Google shares are hitting an all- time high. They're at $774.80 -- 83. And it was funny, we forget about Google, with these high prices when we -- because we talk about Apple all the time.

Google seems to be riding on the coattails of the broader market today on hopes that the company looks like it's getting close to an antitrust settlement in Europe. Google has been the subject of a three-year EU probe into a search business there.

Also helping the rally for Google, it continues to activate a million Android devices a day, something that certainly is to Apple's ire. Nina?

DOS SANTOS: Yes, it certainly is. Thanks so much for that, Alison Kosik there, covering that momentous occasion, over 14,000 mark, the Dow Jones Industrial Averages, and she's live at the New York Stock Exchange.

Well, one of the things that she did mention there was, of course, Google. And Google -- this is one of the issues that Alison was touching on before -- have agreed a deal with the French government over payments to news sites according to the Reuters News Agency.

The French argue that Google should be paying publishers' copyright fees for listing articles in search results, and now it seems as though they've struck a deal.

Well, European stock markets finished the week with something of a flourish, surprise surprise. Green arrows were seen all around the board, as you can see there, a lot of these gains in excess of 1 percent, particularly for the Paris and London markets.

Of course, the jobs data in the United States was well-received across the continent. The gains in Frankfurt and London mean that those two markets in particular over there on the quadrangle, will be finishing the week on something of a high note, if you put together all the last five days of trading.

Well, coming up on QUEST MEANS BUSINESS here, the investigation into the cause of a major explosion at the headquarters of the oil firm Pemex in Mexico City. When we come back, we're going to be live on the scene and asking the questions.

(COMMERCIAL BREAK)

DOS SANTOS: Welcome back. Well, 32 people are known to have died in an explosion in Mexico City at the headquarters of the state oil company, Pemex, here. More than 100 others were injured as a result of this blast. CNN's Nick Parker is live at the scene for us this evening. So, Nick, presumably it's too soon to know what actually caused the blast?

NICK PARKER, CNN INTERNATIONAL CORRESPONDENT: It is, Nina, yes. All senior officials that are investigating this, from the president to the foreign minster to the director general at Pemex have all emphasized that they don't want to go anywhere near any kind of final conclusion into what exactly might have caused this blast.

There's various amounts of speculation, depending on who you speak to, from an electrical fault to a gas explosion. But I think the key thing that everybody's trying to emphasize is that they're keeping an open mind into what could have actually caused this blast.

Right now, what we have here is a scene of full-scale search and rescue, really. Some 24 hours almost after the blast, you're seeing a stead stream of marines and federal police and ambulances and sniffer dogs coming and going throughout the day, and still --

We shot some video, which I believe you have, just a few hours ago, and you can see some of the rescue workers going into the disaster area with wheelie bins, coming out with debris and plaster and paper, and then dumping it into the pool court, which gradually got more and more piled up with debris throughout the day.

So, it's really been a scene today of a search and rescue effort to try and find anybody that might still be trapped under that rubble.

Pemex held a press conference a little bit earlier today, and they did say there was a chance that there might still be people under there at the building. And they also wanted to emphasize two key things. Let's listen to what the director-general had to say.

(BEGIN VIDEO CLIP)

EMILIO LOZOYA, GENERAL DIRECTOR, PEMEX (through translator): The search and rescue effort has continued uninterrupted and will go on. I would like to emphasize that the two priorities for the Pemex board and my colleagues is taking care of the families who have lost loved ones and supporting our fellow workers who are injured. Secondly, I would like to emphasize that Pemex today operates with no disruptions.

(END VIDEO CLIP)

PARKER: Nina, that has been a subject that has been on the mind of the business world and investors. At a time of this kind of tragedy, people have turned their attention to the Pemex's role as an oil producer. They're currently producing about 2.5 million barrels a day, and as the director-general said, that will be unaffected at this stage.

DOS SANTOS: Nick, what about the company itself? Tell us more, for those who are not based in South America and necessarily familiar with Pemex. It is a big deal?

PARKER: It's a very big deal. And it's a very, very interesting company. It's one of the largest oil producers in the world, and it supplies the United States, for instance, with the -- I think the second-largest supplier of oil to the United States, its northern neighbor.

And in terms of its importance here in Mexico, it supplies the government with about 30 percent of its tax revenues. So, it's a hugely important monolithic company here in Mexico.

But then on the other hand, you have seen a situation develop where it's been underfunded, where it's been under resource, where it's perhaps lacking some of the technology it needs to exploit some of the oil in the deep waters.

And it also has something of a checkered safety record. Last September in northern Mexico, there was a fire at gas plant, which killed some 30 people. And in 1984, this was one of the great tragic events of Mexico's modern history, in a way -- 300 people were killed when a gas plant exploded on the outskirts of Mexico City.

So, it's certainly a big, important company, but certainly has some -- problems that it's needing to work with -- work through, rather. So, I think we should probably add again that at this stage, they have not confirmed any explanation for this blast today. Nina?

DOS SANTOS: OK. Nick Parker, there, live in Mexico City following all the developments. Thanks ever so much for that.

Well, as the numbers showed us today, both Europe and the United States have job problems that aren't going away for the time being. Up next, we're going to be speaking to the president of Manpower, the recruitment company. That's after the break.

(COMMERCIAL BREAK)

DOS SANTOS: Hello and welcome back. Well, it's a rare coincidence that both in the United States and also across the European Union, unemployment data has come out on the very same day. The jobless rate in the United States, as we've been telling you, has been ticking up, whereas in the European Union, it still remains stubbornly high these days, around about 12 percent.

Joining us now live from Milwaukee, Wisconsin, is Jonas Prising. He's the president of the employment group and recruitment agency, Manpower.

It's great to have you on the show because you're at this interesting juncture or intersection, if you like, Jonas, where you need companies to be hiring to make your company profitable, but as a listed company, you can probably understand why they're not shelling out the cash these days during times of uncertainty.

JONAS PRISING, PRESIDENT, MANPOWERGROUP, INC.: That's absolutely correct. We are the -- at the intersection between employers who very good about employment and want to hire robustly, but feel that there is certain uncertainty, as in they have to have organizations that are very agile and really just adapt to a changing environment.

And that's what you can see in the employment numbers of today, continued slow but steady growth and employers are hiring on demand, not in anticipation of a recovery that is going to be any fast.

DOS SANTOS: OK, so when's that going to change?

PRISING: For real job growth to occur, it is clear that you have to have economic growth, so that demand for goods and products and services has to occur for the labor markets to return to a robust level.

And as you've seen in the US, the economic growth in 2012 has been about 2.2 percent, so employers are hiring, but they're hiring at a slow and moderate pace. In Europe --

(CROSSTALK)

DOS SANTOS: Excuse me if I stop you there, though --

PRISING: -- conversely, of course, the -- the economic --

DOS SANTOS: Excuse me as I stop you there before we get to Europe, Jonas Prising, because the United States jobless rate hasn't come down as much as the economy has been growing, and many people in Europe would say 2 to 3 percent, well, that's enviable, given the fact that we're stuck in recession. Where's the mismatch here?

PRISING: Well, that's -- no, that's absolutely true. So, you have the cyclical effect of a coming out of a deep recession, and over the last year, the unemployment rate has dropped by 40 basis points, so from 8.3 percent down to 7.9 percent, which is an improvement.

But at the same time, that job creation is not fast enough to materially impact the level of unemployment. But underneath an unemployment rate of 7.9 percent, there are clear -- clear differences between different parts of the workforce.

If you have a college degree and you're within a science -- in a science field or engineering, the unemployment rate is below 5 percent. If, on the other hand, you are young, below 25, just out of college or school, with only a high school diploma, your unemployment rate is almost 20 percent.

So, the average, whilst relevant, doesn't really talk about the movements within the labor force. And those movements are increasingly becoming structural as opposed to cyclical.

DOS SANTOS: That's an interesting point. Unfortunately, we're going to have to leave it there for time reasons, but Jonas Prising, there, the president of the employment group Manpower, thank you so much for joining us from Milwaukee this evening.

Spain is nearly at the bottom of the table when it comes to EU unemployment. We're talking about a jobless rate that's above 26 percent here, according to Eurostat, which compiles the statistics across the European Union. Only Greece failed worse in this latest set of data.

Our Madrid bureau chief, Al Goodman, now joins us from the Spanish capital this evening. So, Al, what is the government doing over there to try and get all these people back into the workforce? Trying to do something to tempt companies?

AL GOODMAN, CNN MADRID BUREAU CHIEF: Hi, Nina. Well, the government, for instance, unveiled a plan this week that would allow young entrepreneurs under 30 to have a much lower social security payment for the first six months of their new effort, their new business, whether they're working alone or a business.

One of the party officials, the government officials said today that might create thousands of jobs, but if you talk to the young people here, more than 55 percent unemployment for those under 25 years old, if you talk to the entire population, 26 percent, there really is no massive movement getting things going.

And one reason there, Nina, is that the credit is so tight. People can't get loans, and it's a vicious cycle. Nina?

DOS SANTOS: It certainly is. Spain's been caught in that vicious cycle for some time, and you've been following all the twists and turns of that. Al Goodman, thanks very much for staying up late at CNN Madrid to bring us the latest on that.

Now, let's have a look at how stock markets are faring in the United States. The Dow Jones Industrial Average, as we've been telling you, has been hitting the 14,000 mark. It did so at 10:00 AM Eastern Time today. As you can see, it's currently trading around about 14 points higher than that at the moment, as you can see there.

Now, we're going to be joining our US network -- our sister network in the United States, CNN USA, because we have the outgoing US Secretary of State, Hillary Clinton, she has submitted her resignation letter and, as you can see there, she's about to make her farewell remarks to the State Department staff in Washington.

(BEGIN CNN SIMULCAST OF STATE DEPARTMENT EVENT)

NINA DOS SANTOS, CNN HOST: You've been watching coverage there from our sister network, CNN U.S.A. of the outgoing Secretary of State Hillary Clinton, bidding goodbye to her staff at the State Department. She leaves after four years in office and visits to more than 112 countries, more than a million air miles racked up during her time.

She's one of the most widely traveled secretary of states (sic) that the United States has had so far. She's been mooted (ph) as a possible presidential candidate in the 2016 presidential elections in the United States. But she's remained coy about what she plans to do next.

But in the meantime, that's it for QUEST MEANS BUSINESS. Thanks for joining us. I'm Nina dos Santos in London. MARKETPLACE AFRICA (inaudible).

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(COMMERCIAL BREAK)

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ROBYN CURNOW, CNN HOST: This is Africa Cup of Nations. We're inside the National Stadium, surrounded by thousands of vuvuzelas and excited football fans. I'm Robyn Curnow. You're watching MARKETPLACE AFRICA. Now for this week's show, we're going to talk about the value of football and how sport, betting and gaming companies are taking advantage of tapping into Africa's hunger for the game.

NKEPILE MABUSE, CNN CORRESPONDENT (voice-over): In the stadium, you hear the sound of the vuvuzelas, see colorful African flags and experience the excitement of fanatic football fans. If there's one sport for Africa, it's football.

UNIDENTIFIED MALE: I like in African football, because you know what, I believe in Africans because I used to say you're a nice (inaudible). From here to Cairo, (inaudible). (Inaudible) because we can go to Nigeria, Ghana, (inaudible). They are our brothers as South Africans. (Inaudible). I like South African football, because they are my brothers from Africa.

MABUSE (voice-over): But apart from supporting his fellow Africans and the game of football, (inaudible) watching his team on television in South Africa is hoping to win some money.

Sports betting in South Africa is increasingly popular, an industry projected to be worth slightly more than $88 million U.S. by 2014. That's according to Ladbrokes (ph), a global sports betting company. And after regular business hours, Kundane Nehwutalu (ph), a training manager at Hollywood Sports Book, experiences the hype.

KUNDANE NEHWUTALU (PH), TRAINING MANAGER, HOLLYWOOD SPORTS BOOK: Wow, you can believe it. If you come at 5 o'clock here, most of people are coming from work. They just like to come past here, just to take care of bets. We pass so many times you will not find of the day (inaudible) got lots of customers in (inaudible).

MABUSE (voice-over): Hollywood Sports Book is a registered South African bookmaker.

DERMOT O'CONNELL, HOLLYWOOD SPORTS BOOK: A bookmaker is a man who facilitates betting on various sports. And initially it was -- it was confined to horse racing in South Africa. But sports betting has taken off recently.

MABUSE (voice-over): Sports betting, through regulated bookmakers, is legal in South Africa. But compared to the rest of the world, it's still in its infancy.

O'CONNELL: If you look at the big European bookmakers or even the English bookmakers, those guys have got 250 shops on, you know, on the land and in England. And so we've got a long way to go. We've definitely got potential to grow the business.

MABUSE (voice-over): Helping the business to grow at big football tournaments, the 2010 FIFA World Cup was a tremendous boost for the sports betting outlet. And a more (inaudible) tournament, the Africa Cup of Nations, currently underway, is also good for business.

NEHWUTALU (PH): We've got lots of regulars but we see more faces coming to support and check a bet on our (ph), because it's one of the events that we saw beating Africa. And we just like each winning jump in the bid because it (inaudible) more customers into our business.

MABUSE (voice-over): And it's not only South African businesses that are benefiting from this tournament. Fans also flock together to support their national teams in Kenya.

UNIDENTIFIED MALE: (Inaudible) nations. You see, (inaudible) even because (inaudible) they come in early here. They sit. They place their bets and they watch the game.

MABUSE (voice-over): But Africans don't just watch African football.

EVANS OBUYA, GAMING INTERNATIONAL, KENYA: (Inaudible) and I bet a lot on football, mainly the (inaudible) English, the English (inaudible). I'm a fan of Manchester.

MABUSE (voice-over): The business prospects are promising.

OBUYA: Sports betting in Africa will become bigger and bigger and bigger because I've seen it happen in the country I come from, (inaudible). I've seen it was one house. Now there are like 10 sportsmen houses, different companies are coming in, because of the love for sports, because of the client that is there and because of the (inaudible) increase.

MABUSE (voice-over): With an emerging middle class, a mobile revolution and football lovers, the odds seem to be in your favor if you're a South African online sports betting platform expanding into the continent. But Daniel Kostelsky (ph) of Volsbets (ph) says you have to play your cards right.

DANIEL KOSTELSKY (PH), VOLSBETS (PH): It's one thing to see massive opportunities and it's another thing to be able to come up with, you know, a business strategy and an implementation and a technology platform that's able to reach that opportunity. You can't just take a solution that you know works in one country and just, you know, mimic it in another country. It doesn't work that way in Africa.

And it certainly will not work that way in sports betting across the territories that we've been looking at.

MABUSE (voice-over): Although Africa's regarded tough to rein (ph) when it comes to business, on this sports-mad continent, there's money to be won or lost on your favorite team -- Nkepile Mabuse, CNN, Johannesburg.

(END VIDEO CLIP)

CURNOW: Some betting on the game do investing in the game. After the break, we speak to the official sponsor of the Africa Cup of Nations.

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(COMMERCIAL BREAK)

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CURNOW: One of the world's leading telecommunications companies (inaudible) currently operating in (inaudible) and it's entering into South Africa. Now Orange is also the official sponsor of (inaudible), the Pan- African football competition we're currently at.

CURNOW (voice-over): We recently caught up with Sebastian Crozier from Orange and found out what they get from the deal.

(MUSIC PLAYING)

SEBASTIAN CROZIER, MANAGING DIRECTOR, ORANGE: By investing in football, we can improve the experience of the brand and we are in -- we are probably the largest mobile (inaudible) Africa. So it's very useful for us.

CURNOW: Well, you type the congress of African football into Google, corruption comes up as well. There is a -- there's a sense that sometimes people are disappointed with the way football is run in the -- in the continent.

Is that a good connection for your brand?

CROZIER: We are very involved in football. So what we do is to support teams, local teams and, of course, we need to be very careful about what -- where we invest. But I think the tournament (ph) is a great success. And so we enjoyed to be a sponsor of this kind of event.

CURNOW: Because in the end, I suppose, it's about somebody with their mobile phone and their football and are you trying to bypass the broader organizational processes and just talk to the ordinary person on the street who has the ball?

CROZIER: Yes. Also, we organize, for example, in South Africa, a contest where you can win some place (inaudible). So we try to be very close to the people and to for them (inaudible) to come with Orange to see matches all over the country.

CURNOW: The shift of this tournament from Libya to South Africa, obviously, dramatically changed plans. What did it mean for you as a sponsor, obviously planning ahead that this would be in Libya, then suddenly at the last minute, it was changed to South Africa? Was it a good thing? Was it difficult?

CROZIER: Of course, it was the change between Libya and South Africa was unexpected. But in fact, it was a real opportunity because we have decided to settle Orange brand into the South African market by launching the -- on a language (inaudible) and also content.

And so we took that as an opportunity to forward our launch. So we have (inaudible), of course. But it was a real opportunity. So we have decided to be -- to launch South Africa in -- at first here.

CURNOW: Beyond South Africa, how important is Africa, particularly when it comes to mobile phones?

CROZIER: For Orange, Africa is a very important market because Orange is in Europe, also in Africa, we have 18 mobile separators (ph) through Africa.

CURNOW: What is the mobile phone revolution meant to Orange? I mean, is there still a lot of opportunity on the continent, many markets are quite saturated? What do you see as the future of mobile in Africa?

CROZIER: The mobile is very important for the end customers because most the time, you don't have fixed (ph) line. So you can (inaudible) today, people are using just for voice. And what we see is the increase of the data use. And people can have access to Internet and all the services around Internet. And that's a real opportunity.

CURNOW: Besides the mobile revolution, or even part of this, is the story of the emerging middle class here in Africa. How different is this providing services for them to somebody, say, sitting in Paris?

CROZIER: Yes, there is, of course, a difference between the emerging market and the European market. But it can be surprise you but we learn a lot about the emerging market. For example, we have services here we don't have in Europe because we didn't think about it. Orange money (ph), you can transfer your money from one mobile phone to the other one.

We didn't create it in Europe. But we created it in Africa. And now we are seeing -- we are thinking about to (inaudible) Europe. So here you have to be, of course, more creative. But it's very interesting and sometimes the products are different. But sometimes they're quite same or Africa is a continent where we can expand into new products and we bring these services to Europe.

CURNOW: OK. That's it for me, Robyn Curnow, (inaudible) all these fans blowing vuvuzelas here in the National Stadium. See you again next week (inaudible).

END