October 28, 2009 / 11:06 AM / 10 years ago

UPDATE 1-Iliad applies for 4th French mobile licence

* Iliad (ILD.PA) likely to be the sole bidder

* Licence costs 240 million euro ($356 million)

* Existing operators opposed to entry of fourth player

* Iliad shares down 1.8 pct in weak Paris market (Adds background, shares)

By Leila Abboud

PARIS, Oct 28 (Reuters) - Communications company Iliad has applied for France’s fourth mobile licence to add to its packages of TV, Internet and fixed-phone services, and looks likely to be the only bidder.

Several other firms, like French cable operator Numericable YPSOFN.UL and Egypt’s Orascom ORTEq.L, had considered bidding but pulled out with concerns over the cost and delays of building a national mobile network. [ID:nLM698391][ID:nLC361815]

Applications are due to ARCEP, the French telecoms regulator, by noon on Oct. 29.

Iliad shares were down 1.8 percent in line with a falling Paris market, while the DJ Stoxx index of technology stocks .SX8P was down 3.2 percent.

Chief Financial Officer Thomas Reynaud said in mid-October it made strategic sense for Iliad, which sells triple-play packages of TV, Internet and fixed-phone services under the brand name Free, to expand into mobile.

It would help Iliad stop rivals taking market share by offering quadruple-play packages. Bouygues Telecom (BOUY.PA) recently launched its Ideo offer, which has mobile and fixed calls, TV, and Internet for about 45 euros a month.

The entry of a fourth operator into France’s 28 billion euro mobile market has been hotly debated, and is opposed by the existing three operators France Telecom FTE.PA, SFR (VIV.PA), and Bouygues Telecom. [ID:nLK374445] [ID:nLG310334]

The operators have filed complaints to European Union authorities and France’s highest administrative court, the Conseil d’Etat, arguing that the terms and price offered to the fourth entrant are unfair. [ID:nLL684469]

Critics says a fourth operator will disrupt the market, drag down prices and discourage investment in telecom infrastructure.

Supporters say France’s mobile prices are too high, and more competition would benefit consumers.

Top telecom regulator Jean-Ludovic Silicani told French newspaper le Monde on Tuesday that ARCEP could make a decision on the fourth licence by Christmas if there was only one application, and by early next year if there were more.

For more on France’s long road to a fourth mobile operator, click on [ID:nLK374445] and [ID:nLG310334]]

Reporting by Leila Abboud, editing by Will Waterman $1=.6740 Euro

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