registration document France Telecom 2009 - Orange.com

overview of the group’s business
6
OVERVIEW OF BUSINESS
France
Conversely, call volume from mobiles was down for the fi rst
time, by 0.5% over one year. This decline, especially sharp
with regard to mobile-to-mobile traffi c in the same network,
is routing traffi c to third-party mobile networks, further to the
development of abundance offers.
In the third quarter of 2009, revenues from mobile telephony in
the retail market were up 2.5% over the last twelve months. The
major portion of revenues were still from voice transmission, but
growth was already coming from data transfer (including SMS
and MMS), which totaled 19% of mobile services revenues at
end September 2009. Indeed, while call revenues continued
to decline by 1.5% over 12 months at end September 2009,
mobile Internet and SMS revenues were up 25% in relation with
growth of nearly 65% in active 3G customers.
Growth in non-voice revenues is the result of different factors:
■ widespread unlimited Internet and SMS offers, resulting in a
94.6% increase in the number of SMS in the fi rst half of 2009
compared to the fi rst half of 2008 (Source: Arcep);
■ growth in Internet -only SMS cards (3G keys) providing
Internet access via mobile networks;
■ growth in smartphones, led by the iPhone.
■ Average return per user (ARPU) was 34.5 euros in the second
quarter of 2009, compared with 35.3 euros in the second
quarter of 2008 (S ource: Arcep). This decline is the result of:
■ the increasing importance of 3G keys in the overall mobile
market, with unit revenues that are lower than traditional
postpaid ;
■ the growth in plans, which pair a growing share of data
transfer services and a proportionally smaller share of
communication services.
6.3.1.2 Competitive Environment
Fixed-Line telephony and Internet
Z BROADBAND INTERNET MARKET SHARE
6.2%
4.8%
23.4%
18.7%
46.9%
Source: Orange estimates
2.2%
5.1%
21.9%
23.8%
47.0%
2.7%
5.4%
22.5%
23.2%
46.2%
2007 2008 2009
Other
Numericable
SFR /Neuf
Free
Orange
Market consolidation, which began in 2007, continued in 2008
with the purchase of Alice by Iliad (Free) and the takeover of
Neuf Cegetel by SFR. However, two new service providers
appeared in 2008 - DartyBox and Bouygues Te le com, further
to Bouygues’ takeover of Neuf Cegetel’s mobile network
structures.
Finally, since the purchase of Noos by Numericable in 2006,
only one cable operator is left in the French market. At the
end of 2009, France Telecom’s main competitors in the
consumer fi xed-line market were: SFR-Neuf Cegetel, Free and
Numericable.
Triple Play offers (voice, Internet , and television) for about
thirty euros remain a market standard. Nonetheless, with
the French broadband market becoming more and more
competitive, we are seeing the emergence of entry-level Triple
Play offers launched under the Alice or Numericable trade mark
(with reduced television channel content) for less than 20 euros
per month, VAT included.
Thus quadruple Play, with the Ideo offer from Bouygues
Telecom, and, more generally, fi xed/mobile convergence offers,
are growing through partnerships between fi xed and mobile
providers:
■ In 2010, Auchan Telecom is expected to market multi Play
offers under its own brand, relying on the Numericable
network;
■ Bouygues Telecom has also signed an agreement with
Numericable to use the FTTB (Fiber To The Building)
fi ber optic network – rolled out by Bouygues - completely
independently.
Very High Bandwidth
The number of very high bandwidth subscriptions was estimated
at 290 ,000 at end September 2009, of which 7 0,000 fi ber to
the home (FTTH) or bottom-fl oor connections, and 220 ,000
fi ber optic connections with coaxial termination (S ource: Arcep).
The total number of buildings with fi ber to the home and
connected to at least one operator was more than 33 ,000 -
an increase of 61 % between end December 2008 and end
June 2009.
In December 2008, the major operators rolling out fi ber optic
(Orange, SFR, Free, and Numericable) undertook to work
together to standardize technical solutions for pooling the
terminating segment of fi ber optic networks. The decisions
and recommendations of Arcep on the terminating segment
of fi ber optic networks were published in the offi cial journal on
January 17, 2010 (see Section 6.3.1.3 Regulatory Environment).
From now on, operators rolling out very high bandwidth
networks must use multifi ber technology and place one fi ber
per competitor.
6
2009 REGISTRATION DOCUMENT / FRANCE TELECOM
37