Wireless Federation

The government of France is ardent to instigate the tender process for available mobile frequencies as soon as possible, reportedly. Eric Besson, a junior minister responsible for the development of the digital economy, said, he hoped the process could be implemented ‘rapidly’, adding that it should be based on criteria which take into account ‘the value of the state’s assets, coverage of territory and competition’. Further he said that the bidding rules should also foreground improving the market for MVNOs which accounted for just 2.513 million users at 30 June 2008.  French broadband provider Iliad shows keen interest in obtaining the fourth 3G mobile licence to join the race of incumbent mobile operators Orange France, SFR and Bouygues Telecom.

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The European Union courts dismiss the Bouygues Telecom’s complaint against the French government regarding 3G licence allocation. The following opinion will be considered by a panel of top judges. The French mobile operator had complaint about the state’s descision to slash the multi-billion-euro licence fees it charged to two rival operators as unfair and constituted an illegal state subsidy to business.
France had launched a tender for four UMTS concession in 2000, priced at EUR4.95 billion (USD4.3 billion), for which it recieved only two bids, from SFR and France Telecom (Orange). For the remaining two licences regulator planned to allocate t a lower asking price of EUR619 million each including a share of profit. Bouygues came in as the lone bidder for the second auction, after which the French regulator decided that the other two licensees should pay the same amount to maintain a level.
The EU commission had cleared the way for Paris to cut the licence fees in 2004, following which Bouygues launched an appeal to overturn the decision, a case was sthen dismissed by the Court of First Instance in Luxembourg, in 2007.

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SFR, French mobile and broadband operator discloses a new logo and branding and is planning to drop the neuf Cegetel brand of it fixed line operation. Advertising campaign will be launched from 5 October with the new logo. It confirms that the new logo will be the sole brand of the enlarged group. According to SFR, SFR Business Team, is being set up to amalgamate the mobile operations of SFR with the fixed line business of neuf Cegetel, although in the short term, the neuf name will still be used to market consumer triple-play xDSL services.
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According to French Telecom Regulator, Arcep, is planning to launch a new tender for the country’s last remaining 3G high-speed mobile licence, after the failure of the earlier one. In 2007, Arcep rejected as too low an offer from broadband provider Iliad who was the only operator to bid for the license. The tender is backed by the French government which is meant to augment competition in the mobile market by allowing a new 3G operator to compete with Orange, SFR and Bouygues Telecom. The Telecom Regulator said that it would consult on the tender with market players and publish its conclusions by September 30. Therefore, we are looking at procedures that give a priority to all or part of the frequencies to a newcomer, following similar conditions that governed the previous tenders, Arcep  further said. Even Arcep has rejected the possibility of splitting up the license into different frequency packages without giving priority to a new competitor.

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SFR and Research In Motion together announce the availability of BlackBerry Bold smartphone for it’s subscribers. This GPS enabled device will be available from mid-september t SFR’s new and existing subscribers in France. BlackBerry Bold is the first BlackBerry smartphone to support tri-band HSDPA high-speed networks around the world and comes with integrated GPS and Wi-Fi.

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The mobile market is dominated by a triopoly of providers with relatively low MVNO competition. The number of mobile subscribers, in Q2′08, in France rose by 303,300 to 56.034 million at the end of June. The postpaid subscribers added 607,000, while the  prepaid base fell by 303,700. At the end of June, a decline was seen in MVNOs, as their market share went down to 4.67%. 88% of the french population owns a mobile phone now, up from 83.2%. The calling hours rose by 5.2%, to 35.419 billion minutes. The total revenues generated, by the mobile sector were of EUR 5.318 billion during the quarter, up from EUR 5.261 billion a year ago.
Orange France is making efforts in enhancing its profile in the country’s IPTV market, introducing five new free TV channels, as well as a number of additional pay-TV options.

Bouygues posted a 15% rise in first-half sales to $22.93 billion. The telco reported a 5.5% in network revenues and said its mobile subscriber base reached 9.318 million, of which 74.7% were on post-paid contacts.

Tele2 Mobile, French MVNO, reported that it is close to the 500,000 subscriber mark. In Q2′08 Tele2 Mobile posted a turnover of EUR1 billion (USD1.55 billion) and net income of EUR12 million. It is the second largest MVNO in France after Virgin  Mobile, with 465,000 registered subscribers at the end of June.

Mobile Operator                               Subscribers
* Bouygues Télécom                          9.318 million
* SFR (Vivendi and Vodafone)             18.8  million
* Orange (France Telecom)                 24.226million

Mobile Virtual Network Operators

* Darty                                               * A Mobile (Auchan Telecom)
* Télé2 mobile (Tele2)                           * Carrefour mobile (Carrefour)
* Ten                                                  * Breizh mobile
* NRJ mobile                                        * M6 mobile
* Débitel                                             * Universal Music Mobile
* Virgin mobile                                     * TF1 mobile
* Neuf mobile

Notable highlights of the France Mobile Forecast include:

• Although it is still relatively low compared to other European countries, the wireless penetration level in France is increasing. The wireless penetration levels will reach 96% in 2010. Its is forecasted that total subscribers in France will increase from 57.4 million to 60.3 million between 2008 and 2010.

• Market shares (by subscribers) of major operators will remain roughly the same over the next several years in France. In 2010, the largest operator will continue to be Orange with a forecasted 43.5% of total subscribers, followed by SFR (Vodafone) with 32.6% and Bouygues with 16.9%.

• In 2010, SFR will be enjoying the largest EBITDA margin in France at 38.1%. On the other hand, Bouygues will have the lowest EBITDA margin at 28.4%.

• The operator with the highest ARPU in 2010 will be SFR at US$ 58.48 per month while Orange will receive the lowest ARPU of US$ 48.30 per month. The average ARPU in the country of US$ 50.12 per month in 2010 will be one of the highest in Europe.

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To introduce a number of measures designed to improve market conditions for the country’s  mobile virtual network operators (MVNOs), France Competition Council is calling telecoms operator.  MVNOs currently account for less than 5% of the total French mobile market and less than 2.4% of total revenues. The Competition Council argues the situation is a result of the difficult contract arrangements MVNOs were forced to sign with network operators SFR and Orange France when the sector was opened up to them in 2004/05.

Virtual operators were forced to accept clauses that linked prices to operators’ retail prices, as well as long exclusivity clauses and no access to network elements that allowed commercially sensitive information to get back to the network operator.  Three solutions has been proposed by the agency which says, including new contract offers from the operators, the award of the fourth 3G licence to stimulate competition and new regulations or legislation to level the playing field.

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French mobile operator SFR, backed by media and telecoms conglomerate Vivendi, has launched a formal public offer for rival French telecoms group neuf Cegetel, Dow Jones reports. SFR has reportedly submitted a filing with the country’s stock exchange watchdog AMF committing to acquiring the neuf Cegetel shares it does not already own for EUR35.90 (USD55.56) per share between 19 May and 13 June. The filing also confirmed SFR already owns 77.9% of neuf’s shares.

On 16 April SFR and parent company Vivendi announced they had received permission from the government to close the purchase of the stake held in neuf Cegetel by the Louis Dreyfus Group. SFR outlined a EUR4.4 billion deal to buy the alternative telco in December 2007. The SFR/neuf Cegetel tie-up will create France’s second largest operator and provide a credible competitor to dominant telco France Telecom.

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France’s three mobile network operators have reportedly rejected a call by French ISP Free to allow it to use their networks to offer mobile services at near-cost prices, citing a report in French paper Les Echos. Free’s latest move is being seen as a fall-back solution should it fail in its second attempt to buy the country’s unsold fourth 3G licence. The ISP is awaiting the outcome of the government’s revised tender for the award of the concession which is expected to be sold off in lots. Free parent company Iliad’s CEO, Maxime Lombardini, reportedly told the newspaper that his company does not want to be an MVNO such as Tele2 Mobile, Virgin Mobile or NRJ Mobile which enjoy ‘little financial or technological autonomy’. Instead, Free is proposing an alternative arrangement under which it would pay a fixed annual fee to its host network provider, and then pay a reduced rate for traffic volumes based on cost price plus an operator margin of less than EUR 0.02 per minute. Mirroring the company’s unbundling arrangements for fixed line broadband services, Free also proposes to be able to interconnect its own equipment with the host operator’s mobile network, especially for subscriber location functions. It is understood, however, that Orange France, SFR and Bouygues Telecom are not interested.

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Neuf Cegetel eyes Alice, strikes deal with Numericable to hasten FTTH coverage; launches in-house multiplayer online game.

Neuf Cegetel may be waiting for its principal shareholder SFR to take it over sometime between May and October this year, but not idly so.  

France’s second largest fixed operator today repeated its interest in acquiring Telecom Italia’s subscale ISP Alice, which is currently up for sale, and said it will bolster its three-year, €300 million fibre-to-the-home (FTTH) network build through a wholesale fibre access deal with French cable operator Numericable.

Initially Neuf Cegetel will lease 140,000 Numericable fibre lines in Paris and an unnamed provincial town. It will use Numericable’s fibre to reach the foot of apartment buildings, after which it will install fibre vertically within the apartment block.

“We want fibre end to end, not the coax… if it works we could [go] further,” said Jacques Veyrat, CEO of Neuf Cegetel, speaking at a press conference on Tuesday.

In addition, if the SFR-Neuf Cegetel merger goes ahead this year as planned, the new entity is likely to step up FTTH investment in a bid to compete with France Telecom’s Orange.

“One of the big endgames for SFR is to prevent Orange getting too far ahead [on fibre]. Even if Orange doesn’t say it very loudly… given what they have in the ground they can go faster than us. I hope the [merger] procedure is as short as possible… that would mean an acceleration as of early 2009, said Veyrat. “We are all aware that the game is being played now… it’s becoming serious and we mustn’t hang about.”

Like Orange, Neuf Cegetel is developing its own content to fill DSL and fibre networks and complement its existing TV and video on demand services, for which it had 750,000 customers at the end of 2007.

This month the company will launch an in-house multiplayer online game, which will be aimed at both its own customers and those of other ISPs. The game will be free to download, but subject to a monthly subscription fee of under €10, with Neuf Cegetel customers paying a lower rate than those of other ISPs.

The company, which co-developed the game with game developer F4, is in discussions to licence it to other European operators, according to Michel Paulin, COO of Neuf Cegetel.

In addition Neuf Cegetel announced it has revamped its video on demand service to offer 3,500 films to which it has acquired the distribution rights.

Residential data services made up 38% of the company’s €720 million earnings in 2007, with residential voice representing 9%, enterprise 30% and wholesale 23% of the remainder. The company’s ARPU stood at €36 at the end of the fourth quarter.

Jacques Veyrat also announced Tuesday that he intends to leave the company once the SFR takeover is completed. Michel Paulin, however, said he “hopes to have a major role in the new group.”