France Telecom faces increased competition
France’s biggest phone company, France Telecom SA has announced that it faced a drop in profit margins this year as it prepares for a new mobile-phone rival in its home market in 2012.
The company has reported profits which were slightly better than analyst expectations. The company stated that it sees a 1% point slide in 2011 margins for earnings before interest, taxes, depreciation and amortization.
According to telecommunications sales specialist, the risk profile in both fixed and mobile is increasing in the French market.
Chief Executive Officer, Stephane Richard. is looking to guard market share and margins at home, where Iliad SA will start offering mobile services next year. France accounted for more than 51% of revenue for the former state-owned monopoly last year.
According to the Chief Financial Officer, Gervais Pellissier, the preparations for the fourth entrant will put some pressure on mobile prices in France in 2011.
According to the company, in 2010, EBITDA declined to US$21.5 billion from 21.21 billion a year earlier.
France Telecom, Deutsche Telekom plan to expand tech partnership
Deutsche Telekom AG and France Telecom SA are planning to explore potential areas of co-operation in several fields of technology.
The possible partnerships could include radio access network sharing in Europe, improving wireless internet while roaming, equipment standardization and cross-border services.
A France Telecom spokesman stated that this does not include any share swaps.
The two groups already own British mobile operator Everything Everywhere jointly, which has nearly 28 million customers.
Kenya Mobile Users increase by 9.5%
The Communications Commission of Kenya has stated that Kenya’s mobile-phone users rose at the fastest pace in at least four quarters in the three months through September as tariffs in the East African nation fell.
According to data compiled by the commission, the number of users increased 9.5% to 22 million in the third quarter of 2010. In the three months through June, user numbers increased 1%, and rose to 2.6% and 8.4% in the two preceding quarters respectively.
Kenya’s telecommunications regulator in August ordered mobile-phone operators to halve the rates they charge each other to transmit calls across networks. That triggered a round of reductions in call costs by companies to as low as one cent per minute.
The commission added that mobile tariffs reduced significantly over the quarter registering an average of $0.03 for on-network calls per minute from US$0.05 per minute in the previous period. During the quarter, Airtel Kenya Ltd., the domestic unit of Delhi-based Bharti Airtel Ltd., grew its market share to 13.5% (1.14 million) users, from 9.1% in the previous three months. Telkom Kenya Ltd., a unit of France Telecom SA, expanded its market share to 4%, (323,298 users) from 2.7%.
SFR, France Telecom change price hike plans (France)
France Telecom SA and Vivendi SA SFR have stated that they won’t raise mobile prices for their existing customers following a tax hike in the country, changing their initial plans in an effort to retain them.
According to SFR’s statement, it has decided not to raise mobile prices for existing clients as customers complained that they were confused about the planned price hikes announced earlier this year. The company has decided to clarify things by not implementing the project to raise prices for mobile clients.
France Telecom has also announced a U-turn, stating that it has to adapt to the new conditions on the French market. France Telecom clients that signed up for a contract before Feb. 1 will, hence, keep paying the same prices.
Amidst the recent hike in value added tax, operators face a higher risk of losing their clients as the customers in France have the option to change their service contracts and move to another operator during the four months following a tariff change while keeping their handsets.
Orange, Bouygues, SFR set up online payment venture (France)
France Telecom SA’s Orange unit, Bouygues Telecom, Vivendi SA’s SFR unit and Atos Origin SA have reportedly created a company to provide online payment services.
According to reports citing Buyster Chief Executive Officer Eric Gontier, the company, called Buyster, aims to compete with PayPal Inc., Google Inc. and Apple Inc. in providing payment systems in France for users of mobile phones, tablets and computers. The company will be operational from this summer.
Egypt withdraws access to the Internet Following Street Protest
Egypt, following days of anti- government protests, withdrew the Internet after Egyptian authorities shut connections to the outside world.
According to reports, Internet traffic in and out of the country slumped shortly after midnight Cairo time. Mobile-phone services run by local units of Vodafone Group Plc and France Telecom SA were also halted.
According to sources, rather abruptly, in a coordinated fashion, the entire major Internet providers that have traffic in and out of Egypt basically withdrew from the Internet.
National authorities shut the connections after demonstrators took to the streets, inspired by an uprising that ousted Tunisian President Zine El Abidine Ben Ali on Jan. 14. Egypt has one of the most advanced telecommunications markets in the Middle East and Africa.
Facebook Inc., owner of the world’s biggest social- networking site, is seeing only minimal traffic from Egypt. Google Inc., the largest search engine, stated people in Egypt are unable to access Google and its YouTube video service, or at best are having real difficulty doing so.
France Telecom won’t bid for Telekom Srbija stake
France Telecom SA spokesperson has revealed that the company has decided not to take part in the privatization of Serbian telecom operator, Telekom Srbija, as it considered the asset too expensive.
According to the company’s spokesperson, they have studied the tender offer but decided not to take part in the bidding process notably because they considered the asking price too high.
A series of companies including VimpelCom Ltd., Weather Investments SpA, Telekom Austria AG, America Movil SAB, Turkcell and Deutsche Telekom AG have applied to take part in the tender.
Final bids are expected at the end of March.
France Telecom inks 5-Year $8.2 bln Credit Line
France Telecom SA has signed a five-year US$8.22 billion syndicated revolving credit facility with 28 international banks to refinance the existing facility.
Aligned with the group’s prudent management of liquidity, this transaction allows extending the maturity of the main existing undrawn credit line from June 2012 to January 2016 while obtaining competitive conditions, including an initial margin of 0.40% per year.
The amount of this credit line has been reduced compared to the one signed in 2005 for US$10.96 billion in order to reflect the deleveraging of the group over the last few years. The self-arranged transaction has been largely oversubscribed.
