Orange France to remain dominant operator, but with lower profits, claims forecast

A study of the French mobile market has forecast that the country is undergoing an economic recovery and the wireless sector will expand faster than predicted previously.

According to IE Market Research (IEMR), Orange France will retain its leadership position with 44.1 per cent of the overall subscriber base, which will increase from 57.4 million in 2008 to 65.9 million--up from the firm's previous estimate of 61.8 million--in 2013. "Orange will continue to be the largest operator, and we expect that its subscriber base will increase from 25.2 million in 2008 to 29.1 million--up from our previous forecast of 25.7 million, in 2013," said Nizar Assanie, VP of IEMR.

However, Assanie believes that, in terms of EBITDA margins, the profitability at Orange and SFR (part owned by Vodafone) will decline over the next five years. "Our model predicts that Orange's EBITDA margin will fall from 37.3 per cent to 33.1 per cent and SFR's margin will fall from 38.9 per cent to 33.6 per cent over the forecast period, 2008-2013. On the other hand, we forecast that Bouygues Telecom's EBITDA margin will improve from 28.5 per cent in 2008 to 31.2 per cent in 2013," said Assanie.

On a positive note, the IEMR study forecast that, despite the decline in ARPUs in the majority of mobile markets around the world, France should be stable over the next several years. "Our model forecasts that Orange's monthly ARPU will increase slightly from €33.19 in 2008 to €34.04 in 2013 while monthly ARPU at SFR declines from €36.04 in 2008 to €33.89 in 2013. Bouygues Telecom's ARPU level continues to be higher than the other operators' ARPU levels, with monthly ARPU at approximately €41.88 from 2009 to 2013.

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