* 63 pct of population covered by Oct 1 launch
* French telcos bet on 4G to counter low-cost Iliad
* Orange, SFR aim for 40 pct of population by year-end
By Leila Abboud and Gwénaëlle Barzic
PARIS, Sept 25 Bouygues Telecom said
the roll-out of its new superfast mobile network was ahead of
schedule and would cover 63 percent of the French population by
the Oct. 1 launch.
Like third-largest operator Bouygues, France's leading
telcos Orange and Vivendi's SFR are racing to
build fourth-generation mobile networks and sign up customers to
new offers featuring five times faster mobile Internet speeds.
They also see it as a way to blunt competition from low-cost
player Iliad, which has taken 10 percent market share
since January 2012. Iliad's Free Mobile service sparked a price
war that drove down French mobile prices by 11 percent in 2012,
according to telecoms regulator ARCEP.
The stakes are particularly high for Bouygues because its
smaller size has made it vulnerable since Free's mobile launch.
Now Bouygues is seeking to capitalise on the headstart it
has in 4G because of the authorisation it obtained from the
French government in March to re-use old spectrum once used for
voice for mobile data.
As a result, Bouygues will have broader coverage than rivals
more quickly, and will also be the only operator able to offer
Apple Inc's iPhone users 4G speeds as of October.
SFR and Orange are aiming to cover 40 percent of the
population by the end of the year. Both have said they aim for
at least 1 million 4G customers by the end of the year. Bouygues
has not given a customer target.
Orange has filed a court challenge to the government's
decision to allow Bouygues to get a headstart in 4G, arguing
that the move was unfair.
But Orange Chief Executive Stephane Richard said on Monday
that Bouygues's advantage in 4G would not last forever: "Maybe
Bouygues will temporarily have better coverage of the population
but this advantage will fade."
In a bid to recruit customers quickly, Bouygues will give
away one month of 4G usage for free through mid-November. The
offer will be open to customers from rival operators.
"With the launch, we are offering the opportunity to 40
million French people to discover 4G for free and with no
obligation," Bouygues Telecom Chief Executive Olivier Roussat
said in a statement.
With its existing 4G offers starting at 29.99 euros a month,
Bouygues also added a high-end plan with a generous mobile data
allotment of 16 gigabytes for 59.99 euros without a smartphone
contract. High-end offers from Orange typically include 6
gigabytes of mobile data or 9 gigabytes at SFR.
Bouygues, France Telecom, SFR and Iliad bought 4G licences
in late 2011, bringing 3.6 billion euros to state coffers.
Construction of the new networks began a year ago but picked up
in earnest once Bouygues had its authorisation to re-use its
spectrum to launch earlier than rivals.
Unlike rivals who are marketing 4G heavily, Iliad has
remained quiet on its plans beyond saying that it will offer the
service. Iliad owns a bloc of 4G spectrum, although it is
smaller than competitors' holdings so it remains to be seen if
it can offer national 4G coverage.
Analysts at MacQuarie Equities Research believe Iliad will
not be able to match the 4G offers and service of rivals,
opening the door for Bouygues, Orange and SFR to recruit more
customers at higher prices.
"We believe Iliad's lack of spectrum, limited network and
the difficulties of implementing a roaming agreement will
prevent it from providing an effective 4G offering," wrote the
"The competitive pressures could be lessened for a
significant proportion of the French mobile market."