France this week gave the go-ahead for Orange and Numericable-SFR to refarm their 1800-MHz spectrum for 4G as part of a process that will see it rebalance the allocation of frequencies in that band.
The reshuffle of spectrum holdings will see the pair cede airwaves to smaller rival Free Mobile; Bougyues Telecom – whose licence was amended 18 months ago to remove the 2G-only restriction on 1800 MHz – has already handed back some 1800-MHz frequencies that were allocated to Free and will return more next year.
Essentially, the regulator plans to roughly even out spectrum holdings in the 1800 MHz band within the next year. Under a plan it outlined in 2013, Orange, SFR and Bouygues Telecom will each hold 20 MHz of 1800-MHz airwaves by 25 May 2016, while Free will have 15 MHz (see chart).
At the start of the process, Free did not hold any 1800-MHz spectrum. However, it currently holds 5 MHz, having been awarded frequencies at the start of the year that were returned by Bouygues Telecom as part of a deal struck between the latter and telco regulator Arcep.
Under the terms of the agreement, Arcep gave the green light to Bouygues to offer 4G in the 1800 MHz band from October 2013, and Bouygues agreed to an interim step in the rebalancing process that reduced its 1800-MHz holdings to 21.6 MHz from 26.6 MHz.
France’s mobile operators have been locked in battle since the launch of Free three and a half years ago, but quarterly results announcements from some of the key players this week showed early signs th at fierce competition could be abating.
Orange beat analysts’ expectations in its Q2 numbers, as its European recovery continued. It returned to revenue growth, excluding the impact of regulation, for the first time since 2011. Group turnover came in at €9.9 billion.
In its home market the telco reported a slowing mobile service revenue decline in the first half of the year, while its mobile customers grew by 2.2% over 12 months to 27.5 million at the end of June; 83% were contract customers, up from 78.8%.
Meanwhile, Numericable-SFR swung to a net profit of €79 million in the three months to the end of June, and also showed improving revenue trends. Its customer base declined, but the telco insisted it is focusing on high-value customers and ARPU growth; its average revenue per user for mobile customers crept up by 0.4% to €26.1.
Free Mobile’s parent company is due to report its first half numbers at the end of August. And if recent reports are anything to go by, it will show a growth rate that will be the envy of its larger rivals.
In Q1 the operator posted an 18.5% year-on-year increase in mobile revenues to €438 million, while its customer base expanded by 420,000 during the three months to reach 10.53 million at the end of March; it claims a market share in excess of 15%.
The additional 1800-MHz spectrum coming its way will be a boon for Free, which is under pressure to roll out more of its own network and rely less on roaming deals with its rivals. It aims to cover 90% of France’s population by January 2018.
