2012 France - Telecoms, IP Networks, Digital Media and Forecasts

MNOs prepare for LTE launches following extensive trials

BuddeComm’s annual publication, France - Telecoms, IP Networks, Digital Media and Forecasts, provides a comprehensive overview of the trends and developments in the telecommunications and digital media markets in one of Europe’s key markets for telecom services and innovation. The report includes the regulator’s market data to the end of 2011, as well as telcos’ operation and financial data to end-2011 and market developments into early 2012.

Economic background

France has the third largest telecom market in Europe, representing about 2.3% of GDP. Public finances have placed the country in a poor position in the international financial market: by early 2012 its debt was above 80% of GDP while the budget deficit had reached some 5.7% of GDP. The exposure of French banks to Greek debts prompted the government to introduce a variety of tax measures worth €12 billion for 2011-2012 in a bid to reduce the deficit to 4.5% of GDP in 2012 and to 3% in 2013. The loss of the coveted AAA status has exacerbated long-term economic concerns, which are unlikely to be addressed in the short term following the 2012 elections. The investment climate remains poor, though it has recovered from the dip in 2009, while pressure on revenue will lead to further slight falls to 2013 at least.

Broadband sector

Though the FttH sector has developed rapidly in recent years, the total number of connections remains small and is far outweighed by the number of connected households. Relatively few households have FttH delivered through network sharing agreements, though this if growing steadily. Although the government has encouraged telcos to roll out fibre, developing a sympathetic regulatory regime and injecting substantial public funds, in recent years they have scaled back on many of their projects, citing the high deployment cost and a long timeline for a return on investment.

Mobile sector

Competition resulting from Free Mobile’s market entry led to reduced tariffs among all operators. By March 2012 Free Mobile had attracted at least 2.2 million subscribers. The operator has become a serious contender in the competitive quad-play market. The MVNO sector may secure 17% market share of subscribers by the end of 2012, resulting from far higher growth than that for MNOs.

Key telecom parameters – 2010; 2013

(Source: BuddeComm)

Market Highlights

• The market entry of Free Mobile led to an extraordinary number of portings to the new player. The licensee is required to cover at least 90% of the population by 2018.
• LTE in the 800MHz and 2.6GHz spectrum bands are not expected from Orange until mid-2012 and from Bouygues Telecom and SFR until early 2013.
• The low number of FttH subscribers, compared to the number of passed homes, remains relatively low though this will change in coming years as new services emerge requiting FttH connectivity.
• The market share of MVNOs is gaining ground steadily, largely on the back of regulatory measures to ensure than spectrum licensees host these players.

This report is essential reading for those needing high level strategic information and objective analysis on the telecom sector in France. It provides further information on:

• Market liberalisation and regulatory issues;
• The impact of the global economic crisis;
• Telecoms operators – privatisation, acquisitions, new licences;
• Mobile data market developments in coming years in light of spectrum auctions and new license awards;
• 3G developments, regulatory issues and technologies including HSPA and LTE;
• Broadband migration to an FttH architecture;
• Historical and current subscriber statistics and forecasts;
• ARPU statistics and forecasts.

Data in this report is the latest available at the time of preparation and may not be for the current year.