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French Quad play rivalry gets tense

By PETER WHITE

Published: 18 May, 2012

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France is unlike any other telco market in that it has a single, rather weak cable operator, and four major telcos which offer full quad play of services, including cellular. That last cellular hop has been difficult for some players, such as Free, to achieve, but now they have it, they want to offer individual and bundled packages which are truly disruptive.

Which is why the French mobile market has been shaken up by the entry of Free Mobile as a low cost 3G operator, and partly as a result, major change looms at the country's second cellco, SFR. Its parent, media conglomerate Vivendi, which also owns CanaSat, warned this week of "drastic and structural changes" at the unit, as competition and regulatory pressure mounts.

The cellco lost 274,000 mobile customers during Q1 2012, as it felt the impact of the Free Mobile launch by quad play group Iliad. The new service has hit all the main mobile carriers, with market leader Orange losing 615,000 wireless users in the quarter.

"We have been designing plans to adapt SFR to the new competitive environment," said CFO Philippe Capron on an earnings call, which is being interpreted as the company reaching to sell major assets.

Meanwhile, Free Mobile said it signed up 2.6 million subscribers in the 80 days between its launch and the end of Q1. This equates to about 4% of the French mobile market. Since the user base is close to saturation, most of Free's gains have come from rivals - in the quarter, the total number of mobile connections rose by just 854,000.

Free has leveraged existing fiber and WiFi infrastructure to price its new mobile services at a low level and push quad play bundles. It sells two no-contract plans at €2 a month for 60 minutes of voice calls, and €19.99 for unlimited voice, SMS, MMS and internet access.

The carrier added in its statement: "With its commercial and price innovations, Free Mobile has liberated conventions and galvanized a market that had been at a standstill for many long years.

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