Arcep: French operators could cut 10,000 jobs due to rising competition

The turmoil caused by the launch of Free Mobile within the French market could lead to mobile operators reducing their workforce by as many as 10,000, says the country's telecoms regulator Arcep.


"If operators' sales and margins continue to decrease, they will have to cut spending," Arcep President Jean-Ludovic Silicani told Bloomberg at a meeting in Paris on Friday. "There could be between 5,000 and 10,000 jobs cut," out of a total 130,000 in France, he said.

The job cuts don't "necessarily mean they'll fire these people," Silicani said, adding that posts may be shed by not replacing for two years employees who retire, for example.

Arcep estimates that Free Mobile may have attracted as many as two million subscribers in the first two months of operation, and Silicani believes that France Telecom's Orange, SFR and Bouygues Telecom will now need to adjust both their spending and cost base.

Free Mobile owner, Iliad, has refused to reveal subscriber numbers until it provides a formal progress update in May.

However, MorningStar analysis Allan Nichols  claims that Free Mobile will not be as successful as Iliad management expects. "We continue to believe that as a fourth entrant this late in the game, Iliad will be less successful than it predicts and will not reach the penetration rates the market expects," he wrote.

For more:
- see this Bloomberg article
- see this SeekingAlpha article

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