France Telecom gets green light on quadruple play

Mon Jun 14, 2010 5:26pm BST

Quotes

   

* French competition regulator lifts ban on cross-selling

* Restrictions date back to opening of market to competition

* France Telecom to launch quadruple play offers in August

By Leila Abboud

PARIS, June 14 (Reuters) - France Telecom FTE.PA was given a boost on Monday when competition regulators lifted a ban on the operator selling "quadruple" bundles of mobile and fixed services.

France's Autorite de la Concurrence removed restrictions placed on the former state-owned monopoly over a decade ago when the market was first being opened to competition.

France Telecom, like Vivendi's SFR unit (VIV.PA) and Bouygues Telecom (BOUY.PA), will now be able to offer quadruple play bundles of Internet, fixed and mobile calling and TV.

It will also be able to cross-market by combining client databases once kept separate by law.

France Telecom said it planned to launch five quadruple play offers in mid-August.

France Telecom has been struggling with poor performance in its broadband business since summer 2009.

In the first quarter, its share of new ADSL clients fell to a record low of 14 percent from around 40 percent a year ago.

To try to claw back market share, France Telecom also recently cut prices of its main triple play offers.

As of June 10, France Telecom lowered the cost of its bundle of fixed-line, Internet and TV services to 34.90 euros a month, including one hour of free calling to mobile phones.

France Telecom remains more expensive than its rivals Iliad (ILD.PA) and SFR, whose triple play offers hover around 30 euros a month, while Bouygues Telecom (BOUY.PA) is performing strongly withg its quadruple play that starts at 45 euros.

Stephane Beyazian, analyst from Raymond James, said the regulatory change would be a "small plus" for France Telecom, and coupled with the price cuts, should help the operator begin to solve its crisis in broadband.

"They should be able to return to a level of 35 percent of new clients in broadband per quarter," he said. "But it's too early to know whether these improvement would move the needle on their overall revenues or profits." (Additional reporting by Marie Mawad; Editing by David Cowell)

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