PARIS -(Dow Jones)- France's Bouygues Telecom said Wednesday that it still believes in the future of its mobile phone business despite a letter to the European Commission citing problems at its mobile unit and pleading its case for a favorable regulation.
"Bouygues believes in the future of Bouygues Telecom and the future of the mobile phone market," a spokeswoman said.
French newspaper Les Echos reported Wednesday that the company sent a letter to the commission pleading its case for favorable regulation because the company's revenues were insufficient, it lacked critical size and its presence in the market was too weak to guarantee a long-term presence.
Commission spokesman Martin Selmayr said that regulators hadn't yet received the Bouygues letter, but that many companies have been writing to weigh in on the review of telecommunications regulations taking place this year.
"There is a big lobbying campaign going on," said Selmayr. "We are consulting with companies and there is a heavy fight between new entrants and incumbents."
A spokeswoman for Bouygues said the document emanated from a debate organized by the commission on Jan. 31, 2006 on the future of the mobile phone market.
The commission is conducting a review of the rules this year to see whether there is enough competition to warrant ending the regulation of incumbents. It plans to release results of its consultations in June and make legislative proposals by the end of the year, E.U.'s Selmayr said.
Under E.U telecom rules, most telephone incumbents remain regulated. They are required to give access to their lines and services to new market entrants.
Bouygues added that it was in favor of asymmetrical regulation noting that its two competitors, France Telecom's Orange and Vivendi Universal's unit SFR have market advantage.
The company declined to further clarify what protection it sought from Brussels.
An analyst report released by CM-CIC Securities Wednesday says that Bouygues is specifically looking for relief from the plethora of new virtual mobile phone operators that recently entered the market.
Because they don't have to maintain an expensive network and simply use either Bouygues, SFR's or France Telecom's networks, these virtual mobile operators can often compete on price.
"We don't believe that Bouygues Telecom could stay independent in the long term," the report reads, adding that Bouygues also faces new technological challenges in the mobile market.
-By William Echikson in Brussels; 32-2-741-1480; william.echikson@dowjones.com and Nina Sovich and Audrey Siourd in Paris; +33 (0)1 40 17 17 55; nina.sovich(r)dowjones.com
(END) Dow Jones Newswires "
Posted to the site on 12th April 2006
Posted to: www.cellular-news.com/story/16950.php