New Fixed Networks research report from Business Monitor International is now available from Fast Market Research
Boston, MA -- (SBWIRE) -- 04/10/2014 -- France continues to be one of the more lucrative markets in Western Europe, but operators have had to contend with an intensification of competition since the launch of Free Mobile in Q112, adding to pressure on revenues from regulatory measures such as MTR cuts. These developments have put pressure on operator financial performance and resulted in a revision of strategies by the existing operators. Compounding the pressure on revenues from competition and regulatory changes is the shift in consumer behaviour as they increasingly adopt IP alternatives, leading to declines in the volume of voice and SMS services being consumed. Operators are making headway in the development of higher value data services, but in terms of financial performance they are not yet offsetting the decline in traditional services. Meanwhile, in the wireline market more players are entering the converged services market; the rise of triple- and quad-play packages makes it difficult for established players to continue growing. Instead, they are focusing on extracting more value from those customers they retain.
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- Adding to the squeeze on operator revenue, cuts to mobile termination rates have resulted in steep declines in ARPU. Orange, SFR and Bougyues reported declines of 12-15% year on year (y-o-y) to Q313.
- Free Mobile continued to increase its market share in 9M13 - reaching 10% of subscriptions by the end of September - as Orange, SFR and Bouygues all continued to lose share.
- One area of opportunity offsetting the squeeze on revenues is growth in machine-to-machine services, with subscriptions up 47.8% y-o-y to 6.89mn in Q413.
Key Trends And Developments
The situation surrounding the future of SFR continues to be uncertain in early 2014. In October 2013, Vivendi reportedly hired two banks to assist in getting its mobile network subsidiary SFR listed on a stock market. In February 2014, rumours of Vivendi's restructuring resurfaced in the news. Vivendi reportedly sought EUR7bn (US$9.5bn) loans to separate its telecoms unit SFR from its media businesses. However, later in February 2014, it was reported that Vivendi was in talks with cable network provider Numericable France to sell SFR for around EUR15bn (US$20.61bn). Vivendi has confirmed that it has been approached by Luxembourg-based investment fund Altice Group, which is the majority owner of French broadband operator Numericable, but no further details were released.
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