registration document France Telecom 2009 - Orange.com

6 OVERVIEW
overview of the group’s business
OF BUSINESS
United Kingdom
According to Yankee Group , the UK mobile market for 2009
in terms of revenues declined 6.2% (3% postpaid decline and
13% prepaid decline) driven by the economic climate and
regulatory-based decline in mobile call termination rates. Data
transmission revenues are the only area to show growth, up 3%
in 2009 after a more than 7% growth in 2008. The popularity of
the smartphone has improved revenue growth, with the iPhone
in particular attracting new customers. In this area, Orange
UK broke O2’s (owned by Telefonica) exclusivity regarding the
iPhone in November 2009, as well as Tesco in December 2009
(on O2’s network) and Vodafone in January 2010.
Concerning the number of subscribers, the penetration rate of
mobile phones reached 130% of the British population by end
2009, up by 3%.
2009 has seen the prepaid offer customer market gradually
migrating to postpaid as the price and range of tariffs have
become increasingly competitive with contracts on offer from
as low as £5 per month. SIM only products have further
segmented the market for both prepaid and postpaid offers
with many operators offering many additional SIM cards.
The number of users of the 3G network has grown by twothirds
in two years, driven primarily by the types of handsets that
are offered in the UK, particularly the smartphones. Demand
for touchscreen handsets and more affordable smartphones
is a strong market trend. In addition, 3G dongles which can
be plugged into laptop computers to access Internet have
accounted for half of the 3G user growth, increasing from one
million in 2007 to fi ve million in 2009.
The level of postpaid ARPUs has continued to decline due to
the economic conditions pushing customers to manage their
expenditure more closely. The strong competition on the UK
market with various text message and voice bundles has also
reduced the level of ARPUs. Growth in the number of SMS sent
in 2008 reached 33%, and 21% in 2009, whilst voice minutes
showed a modest growth of 2% corresponding to the increase
in mobile subscriptions.
6.3.3.2 Competitive Environment
Fixed-Line Telephony and Internet
Z FIXED LINES SEGMENTATION
(in millions) 2009e 2008 2007
Total fixed lines 41 39 37
o/w consumer 33 31 28
o/w wholesale 8 9 9
Source: Yankee Group , Global Technology View, Dec. 09
Wholesale subscriptions declined by 11% in 2009 due to
increased mobile usage as well as recessionary factors.
The consumer market has grown due to growth in the VoIP
market as the Internet becomes faster and more reliable
in the UK. Multi-play bundles remained the standard in the
market, combining broadband Internet with call packages, and
depending on the operator, fi xed-line rental, TV services and/or
a mobile plan.
Z BROADBAND INTERNET MARKET SHARE
The combined market share of the six largest providers on the
Internet retail broadband market (BT Retail, TalkTalk Group/
Tiscali, Virgin Media, BSkyB, Orange and O2) was over 90%
in 2009.
BT Retail remained the largest provider by announcing that
they crossed the milestone of fi ve million broadband lines
in December 2009. BT also announced that they planned to
equip 40% of UK households with their Super fast broadband
network by 2012, just in time for the Olympics, at a cost of
1.5 billion pounds.
9.9% 8.9% 9.9%
27.2% 26.8% 27.2%
23.3% 22.6% 22.3%
16.2%
12.9%
6.6%
5.3%
15.7%
11.4%
8.9%
5.7%
16.2%
12.9%
6.6%
5.0%
2007 2008 2009e
Source: Enders Analysis, Nov. 09
Other
BT
Virgin
Carphone
Sky
Tiscali
Orange
The Carphone Warehouse (comprising TalkTalk, AOL and
Tiscali) was the second largest provider, overtaking Virgin Media
by a small margin. The TalkTalk brand has been the growth
engine within Carphone’s broadband operations, positioning
its offers at the value-end of the market. BSkyB continued to
gain broadband market share in 2009 and achieved the highest
customer net additions in the fi rst three quarters of the year.
BSkyB, which is the largest Pay-TV provider in the UK with
approximately 9 million customers, offers broadband and fi xed
telephony services at very competitive prices to its subscriber
base.
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2009 REGISTRATION DOCUMENT / FRANCE TELECOM