France Telecommunications

Telecommunications

Increase in the telecommunications market in 2009 was better than expected in France, despite the impact of the world recession on consumer spending. The market continues to expand as consumers renew their interest in emerging technologies. As a result, the majority visible signs of increase have been seen from new technologies in the market-place such as 3G services and VoIP.

Within the mobile phone industry, the market grew three % in 2009 to reach a total of approximately 61 million mobile phone subscribers. As the only market in Western Europe still below 100 % penetration, this is unsurprising given the scope for continuous expansion of services. Mobile phone companies’ marketing efforts in recent years have continued to drive brisk increase within this industry. New product bundling options and pricing structures have contributed to the abnormally high level of increase experienced by organisations such as Orange, SFR and Bouygues Telecom.

3G services are continuing to demonstrate brisk increase, with the subscriber base growing by nearly 65 % in 2009 to reach approximately 17 million users. It is expected that almost half of the French mobile market will be using 3G services by the end of 2014 due to the proliferation of smart phones and the continued improvement of supporting infrastructure. In late February 2010, the country’s three major mobile network operators, Orange (France Telecom), SFR and Bouygues Telecom signed an agreement to share 3G network installations in order to extend networks coverage across the country. The agreement will help accelerate the expansion of 3G services in France and will enable full nationwide coverage by the end of 2013.

Fixed line subscriptions in France have continued to fall as a result of the mobile phone and VoIP services in France. Fixed lines subscribers have fallen from 28.7 million in 2007 to around 23.34 million in 2010. Despite this, a slowdown has been seen in the rate of decline of fixed-line connections in 2009. VoIP has seen increasing success in France with around 30 % of fixed access lines in France based on VoIP technology in 2009, from 23 % in 2008. These figures are attributable to an estimated 21.4 million VoIP subscribers in France in 2010.

In the mobile market Orange (France Telecom) is the dominant player with 43 % market share, followed by SFR and Bouygues Telecom. France Telecom has become established in 220 nations worldwide. Ownership of telecommunications companies in France has become very complex with a larger number of mergers and acquisitions in recent years. France Telecom is the major company within the market as well holding a 100 % stake in Orange. The company itself is owned by a majority of individual shareholders. It provides local, long-distance, and international calling services, inclunding wireless phone service and data transmission.

The market share of mobile virtual network operators (MVNOs) has risen in the past year to a combined share of 5.4 %. However, these roaming network providers have from now on to really take off in France.

Other smaller companies that exist are Iliad (operating under ‘free’), Numéricâble, TPS, TFI (owned by Bouygues telecom) and Canal Satellite.

It is as well worth noting that Iliad was the first company in France to bundle ADSL Internet, pay television and unlimited phone contract offers into a combined package; a commodity that is now very popular with a great reduction in costs as a result of competition in the industry.