The Chairman of ARCEP, Sébastien Soriano, returned this morning on the failure of negotiations between Bouygues Telecom and Orange. For him, a market with four operators is viable, however, provided they do not engage in a new price war.
Sébastien Soriano, President of ARCEP spoke this morning about the consequences of the failure of the acquisition of Bouygues Telecom Orange. For him, the four operators can remain on the market: “If operators keep their nerve and avoid from inconsiderate in promoting wars, the market is viable to four.” Sébastien Soriano, the problem is promotions, which were extremely numerous in recent months. “Promotions worry us. A little bit of promotion is good but too careful! “Warns the ARCEP, inviting operators” in a little restraint in the matter in the coming months. ” He added: “If prices crash in the market, operators do not have enough margin to finance investments.”
The price war has an impact on investment
Between Free and Bouygues Telecom, who each offered a package with 20 or 50 GB for less than 4 euros, SFR has launched a major campaign on his crimes at the beginning of the year or Orange that offers a bit more data in his crimes, consumers were the big winners of this competition. A competition that could, however, do more harm than good in the medium and long term.
Sébastien Soriano recalled and the telecom sector is an “infrastructure sector” representing “7 billion euros of investment every year.” “If the price crash in the market, operators do not have enough margin to finance investments,” he added. Mr. Soriano has also thus assured that ARCEP will “ensure that the sector revives investment quickly.”
Rural areas first victims of the fall in investment
A drastic fall in prices, a result of strong competition between the four operators could thus significantly reducing the quality of the French network. Especially, rural areas, the current coverage is already very open to criticism. ARCEP will “promote a smart investment” in these rural areas and encourage operators to pool their networks. “A four must share the burden if not too expensive and not profitable.”
Operators of weakened
ARCEP is very optimistic. How, indeed, can we expect to see four operators share the French market without new price war. Free Mobile and Bouygues Telecom have both interest to engage in a price war to increase their customer mass. For now, the consumer is the winner of the failed takeover of Bouygues Telecom Orange. But this morning, the stocks of all French operators were down at noon: – 15.27% for Bouygues Telecom – 14.5% Iliad, the parent of Free, – 4.22% for Orange and – 15.11% for SFR, Numericable. How long will they last?