France Telecom CEO Stéphane Richard said the company's roaming deal to support Iliad's Free Mobile could now generate as much as €2 billion compared with the €1 billion originally announced.
In an interview with the French newspaper Liberation, Richard said that the value of the deal will depend upon Free Mobile's ability to develop its network and customer base.
Richard conceded that he remains pleased with the roaming agreement, which will provide a rental income for France Telecom until 2015. He added, according to La Tribune, that he was "happy to have signed this contract" describing it as "better protection for the company, its employees and its shareholders."
Commenting on the success of Free Mobile--which is now thought to have gained as many as 2.5 million subscribers--Richard said that the entry of this fourth operator had destabilised the market and would lead to a significant decline in gross margins. However, he added, "Orange has the means to absorb the shock better than its competitors" and referenced the company's presence in international markets and that the French market is only 25 per cent of the company's total business.
Taking a swipe at the French government's decision to allow a fourth mobile operator, Richard said that this move was taken without clear analysis of the industrial and social consequences for the mobile sector. He said the "ideology of competition" is "a very European dogma" that can be "harmful when it is not controlled."
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