PARIS Dec 4 France's government expressed
concern on Wednesday that new mobile offers from low-cost
operator Iliad, which include superfast broadband known
as 4G without a price hike, will hurt investment and employment
in the telecom sector.
Iliad's move on Tuesday to add 4G, which offers five times
faster mobile broadband speeds than earlier technology, upped
pressure on France's leading telecoms operators, Orange
, Vivendi's SFR and Bouygues Telecom
. They had hoped their newly built 4G networks would
command higher prices and help to restore profits hit by the
emergence of Iliad, which has taken 10 percent mobile market
share since early 2012.
In a statement, two ministers warned that Iliad's claim to
offer 4G speeds despite its network not yet covering much
territory risked confusing consumers and tarnishing the image of
the new technology.
"As Iliad builds out its mobile network, the announcement of
the operator seems to be a risky and audacious bet," wrote
Arnaud Montebourg, industry minister, and Fleur Pellerin, junior
minister for telecom and digital issues.
"A low-cost strategy inevitably leads to under-investment in
infrastructure, poorer service, and the destruction of jobs."
The state owns 28.4 percent of Orange, previously France
Telecom, which is Europe's fourth-biggest telecom operator by
Iliad's announcement on Tuesday sent Orange, Vivendi and SFR
shares lower as investors digested the impact of the newcomer's
move on the leaders attempts to pass through price rises for new
At 1529 GMT on Wednesday, Orange shares were up 0.5 percent,
Vivendi was down 0.9 percent, Bouygues was 0.3 percent lower,
and Iliad was down 0.8 percent.
Iliad was not immediately available to comment.
(Reporting by Leila Abboud and Gwenaelle Barzic; Editing by