France Telecom's Richard: 'There will be a premium' for LTE pricing

France Telecom CEO Stephane Richard said the company's deployment of LTE is critical to being able to charge subscribers more for high-speed data services. His comments on LTE pricing come as the operators struggles to combat low-cost competition and falling profitability.

Richard told Bloomberg at the FT ETNO Summit in Brussels that France Telecom has been successful in charging extra for high speed data services, although he admitted that the price for LTE access has not yet been decided.

"There will be a premium. The model with HSPA+ has made it clear that customers will pay," said Richard. "We want to accelerate the LTE rollout in France in order to get ahead of the competition."

While France Telecom has committed to spending €1 billion over the next six to seven years to upgrade the company's networks to LTE, Richard said there are no plans to make LTE service available to Iliad's Free Mobile as part of the 3G network roaming deal it controversially struck with the new entrant earlier this year.

"It is not currently a matter of discussion, and it will not be in the short term," he said.

France telecom is currently testing LTE in Marseilles with plans to provide commercial coverage to four cities by the end of 2012 and 10 more cities a year later. However, Richard did not detail how this deployment plan might be accelerated in an effort to gain premium revenue earlier than the existing schedule allows.

The decline in France Telecom's profitability and share price--the company's stock has fallen to a 10-year low--is causing concern among financial analysts.

Andrea Tueni, a telecom market analyst at Saxo Bank, said that the entry of Free Mobile and the recent network collapse at France Telecom were troublesome, but the problems go further back in terms of the company's management style, which was partly blamed for the wave of employee suicides.

Tueni told Les Echos that a share price of €8.80 could bring to a halt any further falls. The shares are currently priced at €9.27, the lowest since October 2002.

For more:
- see this Bloomberg article
- see this MarketWatch article
- see this Les Echos article (translated via Google Translate)

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