JupiterResearch:The future of Bouygues Telecom

Thomas Husson at JupiterResearch comments about Bouygues Telecom, the third French mobile operator, complaining about regulation issues, which it believes are not allowing it to reach "the critical mass in France (the company's market share never passed the 20% mark) to generate enough revenues and that its long-term presence is under question."

Bouygues, which competes with SFR and Orange in France, has complained about the French regulatory environment in the past and as Husson points out the company appealed the "Conseil de la Concurrence"' collusion decision. He notes Bouygues Telecom released a white paper in June 2004 claiming for a "fair competition for the benefits of consumers", and stated the following facts:

• no roaming with incumbent telcos : it was allowed for many new entrants in Europe
• no clear separation between fixe and mobile retail networks (France Telecom was allowed to sell Itineris and OLA mobile offerings through its fixed retail stores whereas Oftel, the name of the UK regulatory body at that time, asked Cellnet (now O2) not to use BT's parent company networks)
• no clear separation between the role of the State as shareholder (owning FT), regulator and lawmaker.

Husson believes that:

Bouygues did not manage so far to impact significantly regualtory decisions, except for the 3G license (whose price was drastically reduced thanks to a very clever approach). So the aim of this lobbying letter is again to ask for a differentiated treatment. The company even acknowledged that it may eventually have to sell its share to a first entrant. No doubt speculation will start again after o2, Amena, TDC, Meteor, Wind, Telering and current rumors on KPN. Telefonica could be interested but has to digest o2 for the moment.

In closing Husson adds that "Bouygues Telecom has launched NEO, a new unlimited offer, really attractive on the French market and so far very successful. A good way to gain market share before the Number Portability is reduced to 10 days in 2007...and to raise the profile for a potential investor..."