How Free hurts France Telecom: revenue per customer down 20 percent

05 Dec, 2012

Stéphane Richard, CEO of France Telecom talked about the competition it faces from Free, the disruptive telecom operator founded by Xavier Niel. With Free’s mobile offerings starting at 2 € per month, Free is clearly hurting the incumbent telecom players in France. The impact on France Telecom is severe, as Belgian daily De Tijd reported yesterday:

“Our revenue per customer is down 20 percent on average, and cash flow will lower by one billion euros,” De Tijd reports Richard as saying.

Richard also talked about why France Télécom was not interested in acquiring Telenet in 2006, even though the Belgian cable operator that has shown to be an impressive cash cow over the last years: “Telenet’s margin in excess of 50 percent is just not sustainable. They have very smartly made use of a historical lease on the cable network, but it can’t last. Situations like these have never endured in any industry that I know of – either the regulatory authority or the competition will attack them.”

France Télécom is doing just that, by the way. It is putting pressure on the Belgian regulator to open Telenet’s cable and/or Belgacom’s VDSL infrastructure to competitors, says Richard.

Read more (Dutch) at De Tijd

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Raf Weverbergh

Editor of whiteboard. Raf Weverbergh was a magazine journalist whose work appeared in magazines like Rolling Stone, Playboy, Mail on Sunday, Publico and South China Morning Post. He is the co-founder of FINN, a corporate communications agency where he advises startups and multinationals on their PR and Mustr, the easiest media database for PR professionals. You can contact him on Twitter, Linkedin or Skype (rafweverbergh).

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