2010 REGISTRATION DOCUMENT - Iliad

6 Principal
OVERVIEW OF THE GROUP’S BUSINESS
activities
access to a virtual consultant (Eva for Free and Benjamin for Alice) and video clips featuring technical tips and advice (installations, troubleshooting,
etc.). The support site is available in nine different languages and offers a simplifi ed navigation system for the visually impaired.
The management teams of the call centers implement a strict quality policy based on respect for subscribers. As a result, Iliad – whose call centers
have obtained NF Service (AFAQ/Afnor) certifi cation – continually develops new high value-added services which not only benefi t subscribers but
also help to build the skills of its helpdesk staff. These include extending local support services (through free home visits by technicians organized
in rapid time frames), creating laboratories, frequently updating the quality manual and related guidelines, setting up on-site steering committees
and operations committees to ensure across-the-board performance and the effective implementation of action plans, carrying out analyses of
complaints with the French General Directorate for Competition Policy, Consumer Affairs and Fraud Control (DGCCRF), performing audits and setting
benchmarks, operating a national consumer department to deal with and settle any complaints or disputes, contacting subscribers through SMS text
messaging, and setting up specifi c services for outgoing calls.
On January 1, 2010 Free decided to join the independent mediation system set up for the telecommunications industry in France, with a view to further
improving its claims handling process and continuing to substantially reduce the number of disputes that arise.
The Group has also created a subscriber loyalty policy to provide information to subscribers looking to change to other offers or cancel their subscription.
6.2.1.2 Traditional Telephony segment
The Traditional Telephony segment encompasses the combined activities of the Group’s former Telephony and Other Services segments. It includes
switched landline telephony (One.Tel and Iliad Telecom), resale of airtime to operators (Kedra), directory services (mainly the ANNU reverse look-up
directory accessible by Minitel, telephone, Internet and SMS text messaging) and insurance brokerage operations (Assunet).
6.2.1.2.1 One.Tel
One.Tel is a relatively small landline telecommunications operator, but is profi table and has highly competitive prices. Following the acquisition of
One.Tel in December 2001, the Group focused on repositioning the company’s service offering by heavily promoting the use of carrier preselection,
streamlining its offering and applying an attractive pricing policy (€0.01 per minute for all local and national calls).
6.2.1.2.2 The Iliad Telecom offering
Since 2003, Iliad has proposed a carrier preselection service for companies through a straightforward and transparent offering, with no minimum
contract period, no minimum billing, no subscription, no change in telephone number, no change in the prefi x, and per-second billing as from the fi rst
second.
6.2.1.2.3 Kedra
Over the past few years, mobile operators have signifi cantly reduced termination charges for landline-to-mobile calls in France, in response to Arcep’s
study of the relevant mobile call termination market. In light of these new tariffs, the Group entered into direct interconnection agreements with
the three mobile telephony operators in France. As a result, Kedra’s business has been considerably reduced since January 1, 2007, a trend that
continued in 2011.
6.2.1.2.4 Assunet
Assunet provides insurance brokerage services, offering customers and prospects the most advantageous prices in the market for their specifi c
profi les and requirements by comparing the coverage and deductible levels proposed by the main insurance companies.
6.2.2 A NETWORK SERVICING THE GROUP’S INTERNET AND TELEPHONY OPERATIONS
In order to access the Internet, data must be routed between the user’s computer and the Internet. Such Internet access is traditionally provided by
Internet service providers using interconnect services, i.e., by connecting to the incumbent operator’s network or to that of other licensed operators.
Right from the initial formation of Free, the Group believed it was critical to have control over as many network elements used for connecting its
subscribers to the Internet as possible. This decision meant that Free could operate its own network infrastructure, which quickly resulted in an
infl ux of recurrent revenues from its “Pay-as-you-go” services and ensured the Company’s profi tability (largely as a result of reducing its spend on
interconnection charges).
The Group began its network rollout strategy in December 1999 when it obtained licenses awarded under Articles L. 33-1 and L. 34-1 of the
French Post and Telecommunications Code (Code des postes et télécommunications), which in July 2004 was renamed the Post and Electronic
Communications Code (Code des postes et des communications électroniques), authorizing Free Telecom (known at that time as Linx) to build and
operate a telecommunications network and to provide telecommunications services to the public. Free’s strategy was based on accessing and
operating optical fi bers already installed by other operators, particularly by entering into long-term Indefeasible Right of Use (IRU) agreements for dark
optical fi bers. This enabled Free to optimize its capital expenditure while guaranteeing a rapid interconnection with the incumbent operator’s network.
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- Registration document 2010