Vivendi: Changes in French political environment will curb Free Mobile

Vivendi said that worries over mounting French unemployment has turned political opinion against low-cost operator Free Mobile.

Mobile operators, including Vivendi-owned SFR and Bouygues Telecom, triggered outcries from union bosses after announcing job cuts following the successful launch of Iliad's Free Mobile earlier this year.

Vivendi CFO Philippe Capron said at the Morgan Stanley Technology, Media & Telecom Conference in Barcelona there was a realisation that there were "too many players in the French market," which could mean a more helpful regulatory environment in future, according to the Financial Times.

"The good thing is that regulations that have been in favour of Iliad [Free Mobile's owner] may be more balanced in coming years," Capron said.

The French government has asked the competition authorities in France to scrutinise the mobile roaming agreement between France Telecom's Orange and Free Mobile to ensure it is reasonable. SFR and Bouygues Telecom have complained that the roaming deal has enabled Free Mobile to introduce artificially low prices.

Thomas Reynaud, Iliad's finance director, told the FT that he agreed there had been a "change in tone" in the political debate, with "more accent on employment," adding that the company remained upbeat given it was a large investor and employer in France.

Speculation in France about possible consolidation among the four major French operators is now widespread following the upheaval caused by Free Mobile and the announced job cuts, according to the FT. Many industry executives believe the domestic market will eventually return to just three providers, with gossip centred on possible joint ventures, infrastructure deals or even mergers.

SFR CEO Stephane Roussel added fuel to this debate, telling the DigiWorld Summit in Montpellier: "The number of mobile operators in France is clearly excessive, unreasonable in my opinion," he said, according to La Tribune. "How much should it be? Maybe three."

Separately, Free Mobile has announced that it attracted 805,000 net new customers in the third quarter--taking its total base to 4.4 million, representing 6.4 per cent of the French mobile market after nine months of operation. Commenting on the results, Iliad's Reynaud told Les Echos that Free Mobile will soon double its customer base from nearly five million today: "We will exceed 10 million subscribers this year."

For more:
- see this Financial Times article
- see this La Tribune article (translated via Google Translate)
- see this Les Echos article (translated via Google Translate)

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