REGISTRATION DOCUMENT AND FINANCIAL REPORT - Iliad

6. OVERVIEW OF THE GROUP’S BUSINESS
6.1 PRINCIPAL ACTIVITIES
Since the first half of 2003, in addition to One.Tel’s service offering, the Group has provided a telephony service
to small and medium-sized companies under the name Iliad Telecom.
6.1.4.2.2 Kedra
Over the past few years, mobile operators have significantly reduced termination charges for fixed-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 and as a result, Kedra has lost a significant part of its business since January 1, 2007.
6.1.4.2.3 ANNU
The Minitel-based reverse look-up directory, ANNU, was launched by Iliad in 1996. This service, which is
widely known in the consumer market, allows users to find a name and address associated with a telephone or
fax number, via Minitel, telephone, Internet or SMS text messaging.
Based on an easy-to-use electronic data transmission solution, the ANNU service uses the directory database
established and maintained by France Télécom in return for the payment of an annual charge to the incumbent
operator. In 2002, France Télécom invoiced €3.35 million in respect of this charge. In 2003, following decisions
issued by the French competition authorities (Conseil de la Concurrence) and ARCEP, Iliad obtained a
significant reduction in this charge, which was fixed at €180,000 per year. Iliad has applied for the
reimbursement of the charge billed for fiscal year 2002 and previous years, while France Télécom has filed a
series of counterclaims.
ANNU uses the standard pricing model for Minitel services (payment of €0.84 per minute of usage) or Audiotel
services (payment of the equivalent of a local call charge from a fixed-line telephone).
In spite of efforts to promote new ways of using the reverse look-up directory (SMS text messaging, mobile
telephones or the Internet), the Group considers that the decline in the use of Minitel in France is irreversible and,
in the medium term is likely to result in a significant decrease in revenue from this business.
Furthermore, the Group’s reverse look-up directory is faced with strong competition from France Télécom,
which has launched its own reverse look-up directory service (3617 QuiDonc). The combined effect on Iliad’s
earnings of this increase in competition and the decline in the use of Minitel in France since end-2001 has been
significant.
Despite the fall in revenue from Minitel services and increased competition from various operators following the
deregulation of directory enquiry services (numbers with the 118 prefix), the Group plans to continue this
profitable activity as long as possible, as it requires little in the way of human resources or capital expenditure,
although the foreseeable reduction in revenues from its reverse look-up directory service will be taken account in
any business forecasts.
In this respect, the Group has entered into an agreement with France Télécom for access to the incumbent
operator’s subscriber lists pursuant to ARCEP Decision no. 2006-0639 approved by the Minister Delegate for
Industry in an order dated March 8, 2007.
6.1.4.2.4 Assunet
Assunet is a web-based insurance broker which provides an online quotation search engine service allowing its
customers to obtain quotes from fifteen major insurance companies. The customer enters his or her request on the
Assunet site (www.assunet.com), free of charge, and Assunet immediately responds with the three most
attractive quotes based on the coverage and deductible levels in accordance with the customer’s profile and
requirements.
38 - Iliad – Registration Document 2007