BMI's Executive Summary

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The Sector At A Glance

Key Insights On The Telecomunications Sector of France

In the third quarter of 2007, the number of customers subscribing to the services of France's three mobile operators increased by 0.69% to reach 50.536mn; this gave the country a mobile penetration rate of 83.3%. However, when the customers of mobile virtual network operators (MVNOs) are included, the total number of French mobile subscribers grew by 1.3% in Q307 and by 3% in the 12 months ending September 2007. MVNOs continued to have a growing presence in the French mobile market during 2007, with MVNOs signing up a much larger share of new mobile customers than the three network operators. BMI believes that this trend will continue during 2008 and 2009, reflecting the fact that mobile penetration is still relatively low in France and that the market, consequently, still has room for further growth. We estimate that there were 54.253mn mobile subscribers in France at the end of 2007, giving the country a penetration rate equivalent to 89.4%. In this latest update on the French telecoms sector, we have extended our growth forecasts to cover the period ending 2012. We now believe that the 100% penetration threshold will be crossed sometime in 2009. By 2012, we anticipate a market of some 67.2mn mobile customers, and a penetration rate of 108.4%. It is important to remember however, that these figures contain a certain number of inactive prepaid users.

In October 2007, it was reported that France's telecoms regulator ARCEP had rejected a bid by broadband operator Iliad for France's fourth 3G licence. At the close of bidding in July 2007, it was revealed that Iliad's mobile unit, Free Mobile, had been the sole bidder for the country's fourth UMTS concession. At the time of submitting its bid, Iliad had set a condition on its application, which said it believed the success of the fourth mobile operator to be dependent on the winner being allowed to make a deferred annual payment of the licence fee instead of an up front one-off payment of EUR619mn. This condition is understood to have been unacceptable to the regulator.

Meanwhile, steady growth continues in the French broadband sector, with strong growth potential being reflected in the wave of investment activity (and consolidation) which has swept the sector in recent months. France's ADSL sector saw the arrival of a new competitor in September 2007, after it was reported that Bouygues Telecom had signed a wholesale ADSL agreement with neuf Cegetel to support Bouygues' residential offering. For its part, neuf Cegetel has continued to invest in the development of alternative broadband technologies such as fibre-to-the-home (FTTH). In September 2007, it was reported that neuf Cegetel had launched a new Wi-Fi service while in July 2007 it was revealed that neuf was cooperating with mobile operator SFR to deploy a commercial WiMAX network in France.

France sits in second place in our business environment rankings for Western Europe. Among other things, France benefits from having some of the highest fixed-line and broadband penetration rates in Western Europe. However, the country is let down by its mobile penetration score, which, even including the customers of MVNOs, is still by far the lowest in Western Europe.

Contents

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Chapter 1 - Executive Summary

Chapter 2 - Business Environment

West Europe Markets

France

Table: Western Europe Business Environment Ranking

Chapter 3 - Industry Forecast Scenario

Fixed-line

Table: France Telecoms Sector – Fixed-lines – Historical Data & Forecasts

Internet

Table: France Telecoms Sector – Internet – Historical Data & Forecasts

Mobile

Table: France Telecoms Sector – Mobiles – Historical Data & Forecasts

Chapter 4 - Macroeconomic Scenario

Consumption, Exports Lead Moderate Recovery

Table: France - Macroeconomic Forecasts

Chapter 5 - Country Snapshot: France Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Table: Wages per year

Chapter 6 - Competitive Landscape

Market Overview

Table: Key Players: France Telecoms Sector

Table: Selected Operators Financial Indicators

Fixed-Line

Table: Regional Fixed-Line Penetration Overview

Internet

Table: Regional Broadband Penetration Overview

Mobile

Table: Regional Mobile Penetration Overview

Market Data

Fixed-Line

Table: French Fixed-Line Market 2004-05

Internet

Mobile

Table: French Mobile Market Q306

Table: French Mobile Market Net Additions Q306

Table: French Mobile Market Subscriber Mix Q306

Table: French Mobile Market Blended ARPU, 2005-2006

Industry Developments

Chapter 7 - Company Monitor

Regional Case Study: Nokia

Table: Key European Contracts

Selected Profiles - Operators

France Telecom

Orange SA

Chapter 8 - BMI Forecast Modelling

How we generate our industry forecasts

Telecommunications Industry

Sources

Chapter 9 - Appendix: Regional Demographic Data

Wages (ave labour force per annum), US$ PPP

Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Competitive Landscape for Europe Telecommunications Reports: Sample of Companies Ranked

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Commentary on key operators highlighting ownership structures, latest available revenue figures, market share analysis and ARPU counts. BMI forecasts for all headline macroeconomic indicators, including real GDP growth, inflation, fiscal balance, trade balance, current account and external debt. Company SWOTS Covering all leading telecommunications operators and manufacturers operating in each market, including competitive intelligence on geographic presence and competitive positioning against local companies; local market share; leading products, services and technologies; foreign direct investments, projects, merger and acquisition strategies.

Network of European Telecommunications Sources

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BMI's European Telecommunications Reports are based on an extensive network of multilateral organisations, government departments, telecommunications industry associations, chambers of commerce and company reports. Information sources include:.