France fines top two mobile operators $239 mln

Thu Dec 13, 2012 7:33am EST

* Orange, SFR condemned for anti-competitive practices

* Bouygues Telecom says will ask for damages

* Orange says will appeal decision, SFR studying options

By Leila Abboud and Blandine HĂ©nault

PARIS, Dec 13 (Reuters) - France's two biggest mobile phone groups have been fined 183 million euros ($239 million) for distorting competition from 2005-08 with plans that allowed unlimited calls between subscribers to the same operator.

"The offers restrained competition ... they helped to lock up the market by attracting customers to the two biggest networks and keeping them in once they had made a choice," the competition authority said on Thursday.

Orange owner France Telecom was fined 117 million euros, while Vivendi's SFR must pay 66 million for offering plans that disadvantaged the smallest operator, Bouygues Telecom.

The decision stemmed from a complaint filed in October 2006 by Bouygues which was facing higher call termination costs, which operators pay each other each time a person makes a call from one network to another.

Since Bouygues had only 17 percent of the market it could not match rivals' offers because in-network calls were less frequent for its customers, the regulator found, adding Bouygues had to respond with offers that significantly raised its costs.

France Telecom said on Thursday that Bouygues had long benefited from regulatory measures, including getting higher call termination fees, as a result of its smaller size and status as the newest operator at the time.

"Orange will exercise its right to appeal in the courts," the group said, adding that the fine had been anticipated in its accounts.

A spokesman for SFR said it was considering its options.

Bouygues said: "The decision recognises the anticompetitive practices that Bouygues was a victim to for a number of years. We are reading the decision in detail and we will ask for damages for the harm".

France Telecom shares were up 0.1 percent at 8.54 euros at 1122 GMT. Vivendi was down 0.4 percent at 17.02 euros, while Bouygues was 0.1 percent lower at 21.26 euros. ($1 = 0.7669 euro) (Editing by Dan Lalor)

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