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By Gwénaëlle Barzic
PARIS May 30 France Telecom plans to
slash prices for its main mobile offers by a fifth on average as
it fights for customers in a domestic price war triggered by new
low-cost mobile competitor Iliad's Free Mobile.
France Telecom's Orange, Bouygues Telecom and
Vivendi's SFR have all taken hits to sales and margins
since the launch of the fourth French mobile operator in
Average revenue per mobile client at Orange France will
likely fall almost 10 percent this year, unit head Delphine
Ernotte said at a press conference.
"On average revenue per client, clearly we have forecast
that revenue was going to fall," she said.
Ernotte said the reduction included the effect of a 20
percent price cut on its new set of mobile offers, dubbed
Origami and unveiled on Wednesday.
France Telecom had initially responded to Free by adjusting
its tariffs for its low-end Sosh mobile offer and its Open
quadruple-play offers combining mobile, TV, phone and Internet.
The company plans from next month to cut prices on its main
mobile offerings, which include phones that are subsidised in
return for customers signing up to one or two-year contracts.
The Origami range will go from 24.90 euros ($31.21) a month
for an hour of calls and unlimited SMS and MMS to 159.90 euros
with the possibility of upgrading smartphone each year.
Orange France will thus come closer to Bouygues and SFR in
terms of price, though it will remain more expensive than Free
in many cases. Orange is banking on the quality of its network
and partners such as online music service Deezer to help it woo
and keep clients despite its higher prices.
Bouygues Telecom has already cut its prices on its Eden
range of mobile offers, which include subsidised phones with
long-term contracts. SFR has so far largely focused its price
cuts only on its low-cost, no mobile offers.
France Telecom shares were unchanged even as the European
sector, was 0.2 percent lower. So far this year, France
Telecom shares have slumped 35 percent, more than double the
decline in the overall sector.
($1 = 0.7977 euros)
(Reporting by Gwenaelle Barzic; Editing by James Regan)