Bouygues Telecom tries an offensive in the fiber by slashing prices
The operator, party later in the fixed launching its first commercial optical fiber 26 euros. But it only addresses one million eligible households, Paris and a few large cities. This aggressive marketing is also a signal to the competition in full restructuring of the market.
War fixed, Act II. After breaking prices in ADSL in March with a subscription to 20 euros, 10 euros cheaper than the market, Bouygues Telecom continued its offensive by attacking the fiber. The operator, which has 2 million subscribers in broadband where it came late, two to three times less than SFR and Free, five times less than Orange launches its first commercial fiber optic June 30 to 25.99 euros. "And this is not a promotion of 2 or 12 months. Bouygues Telecom wishes to change the reference price of the fiber, which is more than 40 or 49 euros in the minds of French "argued Roussat Olivier, CEO of Bouygues Telecom, at a press conference Thursday.
"The criterion on price has become quite decisive in the sets. We noticed it when we dropped the price of ADSL, which has allowed us to be a leader in winning customers in the first quarter and achieve very good sales in the second quarter, "said CEO of Bouygues Telecom.
Impose a new standard?
The subsidiary of construction group will she impose a new standard price as Free has in the mobile? Subscription rates to fiber to the home (FTTH) actually start at 33 euros and 37 euros at SFR, Orange (excluding promotions bringing to 23 euros from 28 euros and one in the other 12 months ) and operators already increasing discounts (free month discount to their mobile subscribers). Free offers the same price as ADSL (32 euros with TV, 38 euros with calls to mobiles included), but if the race started early deployment, announcing an investment of one billion euros in the fiber in September 2006, it is actually just a commercial presence for the moment on the segment of the fiber: tens of thousands of customers over 5.7 million broadband subscribers. Orange is the leader with more than 320,000 clients in SFR (220,000). Fiber is especially become a weapon of (re) gaining market share, especially in Paris and in major cities on a rather high target range of CSP +.
"We want to release the fixed market. There is no objective economic reason, no cost justifying sell the fiber to 38 euros, "said Olivier Roussat.
The CEO of Bouygues Telecom ensures that offers 26 euros will be "profitable enough", since it no longer has to pay 9 euros unbundling mandatory for Orange ADSL uses the copper telephone network of incumbent. In view of customer behavior to its triple-play offer to 20 euros, the operator believes that its aggressive price emerges for households' leeway to subscribe to a package of channels Pay an envelope equivalent price "thus resulting in additional revenue.
Only 1 million households concerned
Industry experts believe that consumers do not see the need to subscribe to the fiber if it is more expensive and they already have a good ADSL. The argument price Bouygues can play. But the market for fiber to the home in France remains modest: 640,000 subscribers at the end of March, 19% of more than 3 million of eligible housing according to ARCEP, the telecoms regulator. Problem: the new offer of Bouygues Telecom is addressed yet only one million eligible households, in Paris, Lyon, Marseille, Toulouse, Bordeaux and Nice, compared to 23 million French households subscribe to the ADSL. This is clearly a limit to the scope of this offensive, the offer is not national, as its low-cost 16 euros in Box B & You only available in areas it has unbundled, or about 12 million households . However, Bouygues has put the turbo and extend its offer fiber to 1.4 million taken by the end of the year, and 3 million within two years.
So far, Bouygues proposed very high speed white label on the network Numericable (there are more than 370,000 subscribers), renovated in fiber to the foot of the building network, the last part remaining coaxial cable (technology called FTTLA). But the subsidiary of construction group wants to eliminate this partner victorious rival in the battle for the purchase of SFR.
"The fiber is not the technology of tomorrow, but of today," said the CEO of Bouygues Telecom, touting its advantages over technology "cable operator does not allow the same flow rates in the uplink. "
The operator would have 20,000 customers to the fiber under test, said to have invested € 300 million since 2010 as part of its agreement to co-investment in FTTH with SFR in the "dense areas" (understand the key cities). It has also accelerate the unbundling by installing its equipment in 1,500 telephone exchanges (three times more than today) by the end of 2015 to cover 6 million homes over ADSL. The operator will also market in October a more powerful Box, Android, at less than 30 euros per month price.
A call for consolidation to move Free or Orange?
And the new fiber supply was primarily a signal to the competition? As Free prevented its competitors to sell more expensive than 3G at no extra cost by including in its plans in December 4G, Bouygues Telecom, which is less sensitive to lower prices in the fixed and in mobile, clearly wants force other operators to align and touch the portfolio, especially Free, using its cash flow to fund the fixed deployment in the mobile and Orange.
"The price war in the fixed may impede investment in very high speed. It will transform us into quasi utilities, which is complicated in a very competitive market, "pointed out the number two Orange, Gervais Pellissier, there two weeks.
Tariff movements and their effects on the market are watched very closely in the incumbent. "We will not let Bouygues flinguer the fixed market as a suicide bomber," warns an Orange frame, even if the group would prefer to decide to buy Free Bouygues Telecom ... At the subsidiary of construction group, some predict that this new burst will not be without consequences "after a moment, Orange crack. And it can happen very quickly "bet close to management.