France is the third largest telecom market in Europe, in terms of market penetration and customer base. This market has four major players, namely, Orange (News - Alert), Bouygues Telecom, SFR and Illiad SA. Out of these four, Orange is the oldest player in the French market, and it is also one of the major telecom and VoIP service companies in the world. It caters to not just France, but also francophone Africa. However, the entry of new companies such as SFR and Illiad has intensified competition, and has cut the market share of Orange. Today, all the four players are locked in an intense fight for market share.
The winner of this intense competition is the customer. To stay ahead of competition, each of these companies is engaging in an aggressive pricing strategy, so the prices of mobile phones are lower when compared to other industrialized countries. Such a trend is expected to continue until 2018, according to a report released by Market Research Reports. This report further states that the revenue split between mobile and fixed line will remain unchanged until 2018 because of the aggressive pricing strategies of these service providers.
However, this is not good news for the French companies, and for the telecom industry as a whole. At the same time, it has also been difficult for companies to acquire each other to reduce competition because of the inability of companies to find common ground. This is bad for the French economy because lower levels of income means higher job cuts in the future. This is why the French government has been pushing for mergers and takeovers, but still the companies are unable to come to a consensus.
It will be interesting to see how the competition plays out over the next few years.
Edited by Alisen Downey