France's MVNOs call for mobile market consolidation

France's mobile virtual network operators (MVNOs) pleaded for a return to a market with only three mobile operators, saying this would provide better conditions for wholesale access to mobile networks.

In an interview with Les Echos this week, Jacques Bonifay, the CEO of MVNO and MVNE Transatel and president of Alternative Mobile, the association for some of France's biggest MVNOs, said despite the recent refusal by Martin Bouygues to sell Bouygues Telecom to Numericable-SFR, MVNOs are still convinced that the market will not last long with four major players.

Bonifay asserted that a reduction from four to three operators would give alternative operators--which buy minutes, texts and data on a wholesale basis from network operators--something of a breathing space, three years after Free Mobile arrived on the market and turned everything upside down.

Jérôme Birba, CEO of CIC Mobile, said consolidation on the market would reduce the wholesale supply, thereby forcing the imposition of constraints on the market to preserve healthy competition. This in turn would improve network access conditions for alternative operators.

French MVNOs have been complaining for years about the treatment they have received from Orange, SFR, Bouygues Telecom and Free, and have called for stricter price regulation of the wholesale market. According to Les Echos, they also faced a major battle with 4G; one MVNO on the Orange network told the paper it was only able to start selling the higher-speed data services to its subscribers more than a year after the launch of 4G by Orange.

MVNOs also believe consolidation will bring greater market stability, saying they have paid a heavy price in the price war triggered by Free in 2012. Indeed, following the takeover of Virgin Mobile France by Numericable-SFR, the MVNO market share has dropped to 10.5 per cent from almost 13 per cent in 2014.

In order to survive, MVNOs have been forced to specialise rather than focus on price alone.

Leading alternative operator CIC Mobile (1.4 million customers), which also operates MVNO brands NRJ Mobile and Auchan Telecom, has been able to exploit the banking network of its parent company Crédit Mutuel for its development. The same applies to La Poste Mobile (1.1 million customers), which is majority owned by the French postal service La Poste. Transatel builds dedicated services for cross-border clients, while Prixtel (200,000 customers) is a pure online player that offers "adjustable" data access according to usage.

Discussions on consolidation have led to an improvement in the MVNO situation nonetheless, with one alternative operator telling Les Echos that the government and regulators are listening to them more than before.

"We have gained visibility," said Prixtel CEO David Charles "Now we can see three to six months ahead of us, instead of three days previously."

However, MVNOs still live in fear of further price promotions from the big four operators, with one executive telling the paper that any further shocks would cause damage. The market equilibrium remains fragile.

For more:
- see this Les Echos article (in French)

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