France Telecommunications Report Q4 2009

It seems that the mobile market in France remains relatively resistant to the economic decline. Yearly growth rates have stayed quite stable forcing BMI to upgrade forecasts to take this into account. The high proportion of postpaid subscriptions means that we still do not expect the market to reach 100% penetration by the end of our forecast period in 2013. Growth continues at its slow steady pace. However, a fourth licence may be auctioned in 2010, according to the current timetable for the spectrum auction process, and this may serve to shake up the market somewhat. However, BMI does not expect the new licence holder to make a strong impact on the market given the already developed nature of services.

The new mobile service provider will most likely concentrate efforts on developing 3G services as this is the area of most growth in the mobile market. Value-added services continue to grow in popularity and operators are pushing their mobile broadband services as they upgrade networks to offer higher download speeds. Although mobile broadband does not seem likely to seriously challenge its fixed counterpart it is an increasingly viable solution for businesses and individuals wanting broadband access on the move.

Broadband increases have slowed but remains the fastest area of growth in the telecoms market. This has been due to operators also providing greater value-added services such as VoIP and IPTV over networks that have been upgraded to allow bandwidth-hungry programs to operate. ARCEP data show that the number of VoIP-only households continues to rise and the only real evidence of the effects of the recession seems to be the slightly faster decline in traditional fixed-line connections. Overall the market seems to be unaffected but the ever greater availability of alternatives to a fixed line has put pressure on this area of the market.

France's strong telecoms market has helped bring it back up to the top of the region in our Business Environment Rankings, sharing the top spot with the UK. The two markets have several similarities, particularly in relation to their Country Structure scores which see large populations and highly urbanised consumers. However, there are some notable differences with France's continued growth rate and high ARPUs countered by the UK's highly competitive market place. ARCEP remains one of the strongest regulators in the region with its push to introduce further competition into the market seeing it hold its strong score.