REGISTRATION DOCUMENT AND FINANCIAL REPORT - Iliad

Considering acquisition opportunities which could contribute to Group growth
6. OVERVIEW OF THE GROUP’S BUSINESS
6.1 PRINCIPAL ACTIVITIES
Although it continues to focus on internal growth as the core of its strategy, the Group will pursue a policy of
external expansion if targeted opportunities arise in areas that strongly complement its existing business or would
result in improved use of the Group’s network.
6.1.2 Competitive advantages
The Group benefits from a number of competitive advantages which should enable it to sustain its profitable
growth and maintain its position as a leading provider of broadband Internet access in France. The Group
believes it is well-placed to take full advantage of the growth potential in the Internet and telecommunications
sectors thanks to the strengths described below.
Free – a long-established Internet service provider with a well-known brand in France
As a result of the success of its consumer market services, Free has positioned itself as a major player in the
Internet access market in France since its creation in 1999. Free’s successive launch of its dial-up
“Pay-as-you-go” and “50-hour plan” offerings and its €29.99 per month broadband service have firmly
established the credibility and recognition of the brand. It is clearly associated with the concepts of freedom,
cutting-edge technology and value-for-money.
Technically sophisticated and attractively priced service offerings
The Group’s network enables it to design sustainable service offerings that are at once easy to understand,
technically sophisticated and attractively priced. The broadband and high speed broadband Internet access
offerings at €29.99 a month are among the most competitively priced on the market in their respective segments
while providing a high quality of service. This positioning is a central factor in the Group’s strategy and aims to
create the right environment for lasting and profitable growth of its business.
A high-performance national network supporting both Internet service provider and fixed telephony
operations for the consumer market
In order to be able to offer high-performance and innovative services to its customers and to guarantee the
profitability of its business operations, in 1999 the Group decided to establish its own telecommunications
network, which would allow it to control the technical aspects and pricing of its services for the routing of both
data (Internet) and voice (over IP or circuit-switched). Since early in the second half of 2001, the Group has been
rolling out and operating its own optical fiber network. The skills and experience acquired by the Group’s
network teams now mean that it is able to use its own resources to operate and maintain a nationwide network
and guarantee its Internet customers a level of quality and connection speeds which are each recognized as
among the best on the market. The specific technical features of the network and its high density are key factors
for the success and profitability of the Group’s service offerings in both Internet access and telephony. The size,
design and scalable architecture of the Group’s network make it capable of serving all potential customers
simultaneously using the Group’s telephony, broadband and audiovisual services in areas where unbundling of
the local loop has taken place.
A leading player in local loop unbundling
The Group considers that the unbundling of the local loop is at the heart of its ability to offer original, sustainable
and profitable broadband Internet access services. Currently the Group has 2,366,000 unbundled lines thanks to
the installation of approximately 3,418 Freebox DSLAMs in 1,504 facilities located in or alongside France
Télécom exchanges. The Group intends to capitalize on its experience in unbundling the local loop to expand the
areas in which it can offer differentiated services to its customers.
Targeted research and development focusing on the consumer market
The Group’s investment in research and development of hardware and software products has enabled it to
position itself as a frontrunner in the implementation of innovative technological solutions on the consumer
market. The success of this policy is based largely on management’s commitment to providing high-quality
technical equipment and retaining flexibility in its choice of hardware. This in turn has resulted in the design of
Iliad – Registration Document 2007 - 21