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Fixed Line Market Declines While Internet and Mobile Remain Buoyant in France

Posted on: Thursday, 9 November 2006, 06:00 CST

Research and Markets (http://www.researchandmarkets.com/reports/c44833) has announced the addition of France Telecommunications Market Intelligence Report to their offering.

Market Intelligence Reports provide an invaluable mix of vital market data and background information, including telecommunications regulation.

France's telecommunications services market was worth approximately €40,457 million in 2005, representing a year-on-year increase of 2.6%. Over the same period, investment in networks and equipment grew by 14.8% to €6,307 million as operators and service providers deployed next-generation networks and boosted interconnectivity under local loop unbundling rules that aim to spread broadband services to the bulk of the country's population with all possible speed. While the traditional fixed-line services sector is seeing a continuing downturn in demand for and use of basic telephony services, spending on mobile and Internet services remains buoyant, at 9.1% and 17.5% respectively (although the latter figure masks a 34% decrease in narrowband revenues and a 39% increase in broadband revenues).

The mature mobile sector has been revitalised by the introduction of mobile virtual network operators (MVNOs), which are able to engage in protracted price wars and develop innovative content and applications for various customer markets. At the time of writing, there were at least 10 MVNOs active in France, including Tele2 and two subsidiaries of triple play operator Neuf Cegetel. The latter is expected to ramp up its development in the next few years and has been touted as a likely purchaser of Tele2s fixed-line and MVNO operations In France.

The only cloud on the mobile horizon is the decision by the antitrust authority in December 2005 to impose a combined fine of €534 million on the country's three mobile network operators - Orange France, SFR Cegetel, and Bouygues Telecom - for allegedly sharing non-public information regarding new subscriptions, which is claimed to have been used to weaken competition.

Incumbent operator France Telecom is engaged in a massive project to roll-out broadband services to as many French citizens as possible. Previous efforts to deliver high-speed services to customers beyond the reach of broadband-enabled France Telecom switches had been focused on wireless local loop (WLL) networks developed by a number of independent operators in the early-2000s. However, WLL proved largely unsuccessful, mostly due to technical limitations, a low demand for high-speed services, and the poor financial health and ill-prepared business plans of the operators. The largest surviving player is the Iliad Group, which acquired Frances sole national 3.5GHz WLL operator, Altitude Telecom, in late-2005. Iliad, which owns the Free Internet service provider, has the clout to turn this operation into a successful business. In the summer of 2006, 3.4-3.6GHz WiMAX licences were auctioned, covering all of France plus two overseas territories. Three groups netted large numbers of licences, these being Bollore Telecom (partnering with hotspot operator Hub Telecom), HDRR (a consortium that includes Frances national broadcaster), and Maxtel (a joint venture led by the stand-alone part of the Altitude business not purchased by Iliad). Iliad itself did not secure any WiMAX licences, but could well purchase those licences sold on at a later date by the successful bidders.

Another notable development has been the emergence of Altice as Frances leading broadband cable operator. Altice has swallowed up Est Videocommunication, France Telecom Cable, NC Numericable, and, UPC France/Noos. With these cable businesses now controlled by a single entity, it seems more likely that success will be met in expanding the availability of Internet and telephony services via cable.

1. COUNTRY BACKGROUND

General Information

Economic and Social Data

Telecommunications Data

2. TELECOMMUNICATIONS REGULATION

Summary regulation

Regulatory bodies and division of responsibilities

Legislation

Licensing

Interconnection

Numbering

Other issues

3. COMMUNICATIONS MARKET INDICATORS

Comparison of Results with CMA Averages

4. MARKET OVERVIEWS

Fixed-Line Market

Mobile Communications Market

Internet Service Market

5. MAJOR OPERATORS

6. MAJOR MANUFACTURERS

7. INDUSTRY ASSOCIATIONS

Companies Mentioned:

Neuf Cegetel.

Tele2

Orange France

SFR Cegetel

Bouygues Telecom

France Telecom

Bollore Telecom

Hub Telecom

HDRR

Maxtel

Altice

Est Videocommunication

France Telecom Cable

NC Numericable

UPC France/Noos

For more information visit http://www.researchandmarkets.com/reports/c44833

Source: Business Wire

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