Bouygues Telecom is seeking damages of €2.29 billion from the French government for losses caused by Free Mobile’s entry to the mobile market in 2012, it emerged this week.
In a letter sent to prime minister Manuel Valls that was seen by Les Echos, Bouygues CEO Olivier Roussat claimed it was wrong of regulator Arcep to not intervene when Free Mobile established its roaming agreement with Orange.
The roaming deal, established in 2011, gives Free Mobile access to Orange’s 2G network until the end of 2016, and access to its 3G network until the end of 2018.
Arcep has maintained that it was a pri vate contract between two companies and therefore did not fall within its jurisdiction. However, Bouygues has argued otherwise, and France’s highest court, the Conseil d’Etat, or State Council, in October sided with the operator, ruling that it was wrong of Arcep not to examine the deal.
By not establishing the conditions of Free’s and Orange’s roaming agreement, "Arcep has enabled the development of a competitive situation seriously imbalanced in favour of Free Mobile and to the detriment mainly of Bouygues Telecom," said Roussat’s letter, according to Les Echos.
Bouygues Telecom said its €2.29 billion claim is comprised mainly of €1.67 billion of lost income stemming from Free Mobile’s launch. It expects to attribute a further €527 million of related losses beyond 2015. Bouygues alleged that without the roaming agreement, the price war sparked by Free Mobile would not have been as intense.
The claim also includes €206 million due to what Bouygues calls an "abnormal" loss of customers caused by Free’s launch; Bouygues is also claiming back restructuring costs of €309 million due to the redundancy programme it claims it was forced to initiate.
Finally, Bouygues’ claim also includes €20 million in increased customer acquisition costs; €33 million related to the rising cost of debt that it attributed to the price war; and €24 million related to the damage caused to the company’s brand.
