FT Orange inks €1bn roaming deal with rival Iliad

Having complained loudly after the French government let Iliad's Free Mobile brand acquire a 3G licence in December 2009 for only €240 million, France Telecom Orange has now announced a deal with its competitor to provide it with 2G and 3G roaming across France.

The deal, which took several months to negotiate, removes a major hurdle for the country's fourth mobile operator in meeting its licence obligation of providing 3G coverage to 90 per cent of the population by 2018. However, FT Orange is expected to generate €1 billion in revenues for FT Orange over the six year term of the agreement, spokesman Tom Wright told Bloomberg.

Iliad, which has a reputation of being an aggressive competitor on price, had previously been rebuffed by FT Orange, SFR and Bouygues Telecom over roaming agreements following announcements that it planned to offer low-cost phone tariffs. The CEO of SFR, Jean-Bernard Levy, reportedly said late last year that he saw no reason to deal with Iliad on 3G.

Iliad's CFO Thomas Reynaud responded to this by predicting that the promise of a strong revenue stream would persuade one or more of the country's operators to conclude a deal. The roaming agreement with FT Orange will only come into effect once Free Mobile's own 3G network provides coverage for 25 per cent of the country's population.

For more:
- see this Bloomberg article
- see this Reuters article
- see this WSJ article (sub. req.)

Related Articles:
Iliad threatens legal action over lack of 3G roaming agreement
French 3G newcomer confident of roaming deal, incumbents less sure
Free Mobile blocked from French 3G network-sharing talks
One bid doesn't make an auction - the fourth French 3G licence