|
|
Bouygues Telecom - Management Believes Financial Crisis Won't Hit Firm
Bouygues, the third operator in France, is a part of the Bouygues Group, a multinational with interests in television, property and construction as well as telecommunications. Management therefore believes that "L'aspect financier de la crise n'a pas de conséquence significative sur les comptes du Groupe". Let's hope they're right....
Bouygues Telecom closed the year with 9.59m customers, of which more than 75% (7.22m) were connected through contracts - the highest proportion of any major European operator, as far as we are aware, and still improving. During the year, Bouygues added 450k contract connections and lost 113k prepaid for a net gain of 338k. Of these, 267k were added in the final quarter.
One of the effects of this modest growth rate is that Bouygues has been able to maintain relatively high levels of ARPU. Prepaid spend is flat, year on year at €184, reflecting unchanged minutes of use (75 per customer per month in both years). Contract spend has dropped over the year - but only by €4, to €609, a rather smaller drop than the 21 minute reduction seen on the contract side. These are high numbers by any standards - higher than either SFR's or Orange's (€180 and €549, €163 and €517) and far higher than those on the other side of the border in Germany. While the minutes of use figures show that Bouygues' customers talk for twice as long as T- Mobile's, they pay four times as much for the privilege!
The Government of France intends to license a fourth mobile operator which, perhaps, may have an impact on these charges. However, Bouygues is confident about this too: "Bouygues Telecom now has the resources to compete against actors present in all segments, in a market where certain players enjoy higher profitability than in the mobile phone business". We aren't entirely sure what this means as SFR is Vivendi's most profitable business and Orange is FT's. Be that as it may, the real issue for incumbents is that new entrants invariably lower the overall price point, especially when penetration is still sub-100%, as it is in France.
Posted to the site on 11th March 2009
This article was extracted from The Mobile World Briefing, the weekly newsletter from The Mobile World.
To download a sample issue of the Briefing in PDF format, please click here.
For more information including full subscription pricing, please visit The Mobile World