SFR Denies Existence Of Mobile Phone Price-Fixing

PARIS -(Dow Jones)- French mobile phone operator SFR denied a press report on Wednesday that it and other French operators had colluded to fix prices.

In a statement, SFR said it "vigorously contests the existence of any cartel or any 'control' of the mobile phone market in France."

According to an unsourced report in the satirical weekly "Le Canard Enchaine," French antitrust authorities may rule before year end in a price-fixing case involving the country's three main mobile-phone operators.

The newspaper said the Conseil de la Concurrence sent a list of charges to France Telecom (FTE), Bouygues Telecom (12050.FR) and SFR in December 2004 after a probe had found the three companies had entered into illegal price-fixing deals.

On Wednesday, Les Echos followed up the report, saying that executives from the three operators met monthly between 1997 and 2003 to discuss commercial strategy and the market.

Moreover, Les Echos reported that antitrust authorities have found evidence that the chief executive of France Telecom unit Orange France spoke of a "Yalta on market shares" - an effort to carve up the market among the three operators to set prices - to his executive committee in the presence of former France Telecom CEO and current Finance Minister Thierry Breton.

A France Telecom spokesman, meanwhile, said Wednesday that at no time had Orange's executive committee been informed of a "Yalta" among the three operators to set pricing.

Bouygues Telecom, for its part, said it's "absurd" to allege that it was part of a cartel that would have had the effect of limiting its market share at the current 17% - well below that of other comparable operators in Europe.

Bouygues said it "has always fought against the Orange-SFR duopoly that controls 87% of the (French) market and moreover has filed a complaint with the Conseil de Concurrence denouncing its existence and its practices."

The operator said it contests the alleged conclusions of the competition agency investigator that a cartel existed, adding that the document Canard Enchaine refers to doesn't represent in any way the authority's decision.

SFR, the mobile phone unit of Vivendi Universal (V), said the case that the newspaper is referring to is covered by legal secrecy rules, and noted that no decision has been handed down so far.

SFR also said the information cited by the article has been taken out of context, and that it contests the newspaper's interpretation.

SFR said assertions that mobile phone operators held secret monthly meetings to agree on minimum tariffs are "pure fantasy," and have no relation to the investigation by the antitrust authority.

In its statement, SFR said that 8 million of the 45.4 million mobile phone subscribers in France cancel their subscriptions every year. It also noted that the operators rely heavily on third-party retail outlets, notably supermarkets that add to the competitive pressure in the market.

It went on to say that the prices of phones and air time have fallen steadily in France since 1998 and that tariffs in France are consistently below those of the main European countries.

A spokeswoman for SFR confirmed that SFR has received documentation on the case from the antitrust authority.

-By David Pearson and Brian Lagrotteria, Dow Jones Newswires; +33140171740; david.pearson@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 24th August 2005