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France Telecommunications Report Q3 2011
Business Monitor International, June 2011, Pages: 112
Business Monitor International's France Telecommunications Report provides industry professionals and strategists, corporate analysts, telecommunication associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on France's telecommunications industry.
The French telecommunications services market continues to grow at a steady pace and within BMI's expectations. That said, the mobile market was buoyed considerably during 2010/early 2011 by mobile virtual network operators (MVNOs) finding considerable success in addressing niche and low-cost markets traditionally passed over by network operators. The MVNOs' success helped the mobile market grow much faster in 2010 than had been expected, and the network operators' decision to focus on mobile broadband meant that the 3G and broadband sectors also grew faster than expected, though not by much. The fixed-line sector, by contrast, continued its downward trend.
There were 64.192mn mobile subscribers in France at the end of Q111, a modest quarterly increase as the considerable customer gains made by Bouygues Telecom and the MVNOs were partially offset by shrinkage at market leader Orange and its close rival SFR. The latter two companies continue to shed inactive customers while migrating some prepaid customers to higher-value postpaid offerings, frequently using their quad-play service packages and heavily subsidised devices such as smartphones as lures. As newcomer Free Mobile is unlikely to launch this year, BMI posits nominal growth for 2011, picking up slightly from 2012 before easing off towards the end of our five-year forecast period. By then, the country's first 4G services ought to have been launched.
The auction of 800MHz and 2.6GHz spectrum that can be used to offer 4G services using LTE-based networks will begin in the summer of 2011, with initial bids due by September 2011 and the first allocations of 2.6GHz spectrum expected to be made in October 2011. Fourteen parcels of 800MHz spectrum are to be offered, and these will be hotly contested. The French government wants to raise as much as EUR2.5bn from the spectrum sale. While Orange and SFR can afford to bid high and fast for the spectrum, Bouygues and Free Mobile cannot and therefore risk being sidelined unless the government imposes more stringent spectrum ownership caps than it has been prepared to commit to so far. The outcome of the spectrum auction may even decide whether or not Free Mobile launches at all.
More than 2.4mn mobile broadband subscribers were active in France as of Q410, part of the larger community of 3G subscribers, which numbered 22.474mn at that time. The mobile operators all note that non-voice services are accounting for a growing proportion of their service revenues and data ARPUs are growing accordingly. BMI therefore thinks the 3G and 4G markets offer good long-term growth prospects for established players but that new entrants will struggle to establish themselves in this fastdeveloping market. We forecast nearly 37.9mn 3G subscribers by 2015, which would represent almost 54% of the overall mobile market.
Growing usage of broadband voice and cable telephony services has served to slow the rate of decline for voice connections as a whole, but the slump in traditional line usage means that YE10 figures were lower than BMI had been expecting and our forecasts for the subsequent five-year period have been adjusted downwards to take this into account. We now expect that, by 2015, there will be 18.82mn traditional voice lines in service in France, a penetration rate of 29.5%.
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