REGISTRATION DOCUMENT AND FINANCIAL REPORT - Iliad

4. RISK FACTORS
4.4 LEGAL RISKS
4.4.4 Risks relating to the use of open source software
The Group is developing its own software programs on the basis of open source software, and in particular
Linux. Open source software consists of programs made available to users either free of charge or for a small fee.
Based on the concepts of sharing and free use of source codes, such software is distributed under a specific type
of license (such as the GNU General Public License) generally allowing the user to modify and re-use the
software without having to obtain prior permission from the holder of the related rights. Furthermore, any
software development which uses open source software must, in turn, be freely accessible to and re-usable by
third parties under the same conditions as the integrated open source software.
Open source software allows the user to benefit from the expertise of a community of developers at a lower cost
than that charged for other commercially available software. However, it does not come with a contractual
warranty and the chain of ownership of the copyright to open source software is uncertain. Consequently, the
Group may be subject to a liability claim in the event of the failure of an open source software program, or an
infringement action by a third party claiming to be the holder of intellectual property rights relating to such a
program.
Due to the nature of open source software and the absence of a strict legal framework, claims may be initiated by
third parties.
4.4.5 Links with or dependence on other companies
In order to achieve the transmission capacity and quality levels required to respond to the increase in the number
of customers and to meet their requirements, the Group relies partly on the use of passive telecommunications
infrastructures belonging to Neuf Cégétel and other operators such as France Télécom and Completel or of
networks operated by certain local authorities.
4.4.6 Operating assets not owned by Iliad
Other than networks to which Iliad is interconnected as well as certain interconnection equipment and the dark
fibers used by its network under long-term IRU agreements (described in Section 6.1.3 of this registration
document), the Group considers that it is the owner of all the assets required for carrying out its business
operations.
At December 31, 2007, the Group had access to 33,000 kilometers of fibers, including 28,550 under IRU
agreements. The expiration date of these IRU agreements is indicated in Section 6.1.3 below.
4.4.7 Industrial and environmental risks
The sector in which Iliad operates does not represent a major source of harm to the natural environment, does not
require any significant use of natural resources, and does not have any significant impact on the quality of the
environment.
4.4.8 Risks relating to the loss of licenses and frequencies
Under the licenses granted to them, certain Group companies have undertaken to comply with particular
obligations or to make significant investments in relation to various networks in order to offer new products and
services to their customers. If the Group does not comply with its undertakings, these licenses could be
terminated, which in certain cases could render the Group liable for payment of compensation to the French
government or other parties. All of these risks could have a material adverse effect on the Group’s results or
financial position.
The main licenses held by the Group are the L.33, L.34 and BLR telecom licenses, and the Group’s related
commitments are defined in decisions issued by ARCEP. ARCEP decision 03-1294 authorizes IFW to operate
microwave frequencies in the 3.5 GHz bandwidth, provided it complies with specifications that include a number
of requirements relating to network roll-out and population coverage. The next inspection by ARCEP concerning
IFW’s compliance with its commitments is scheduled for December 31, 2008. If ARCEP finds that IFW has not
complied with the specifications, it may impose the sanctions provided for in the French Post and Electronic
Communications Code, as described in Section 6.6 below.
10 - Iliad – Registration Document 2007