Orange France Relies On 4G to Increase Profitability
Orange France has announced its plans to focus on 4G mobile services to stop the downward glide of its market share and profitability, attributed mainly to the price wars in its home market. On 24 April the company released the first-quarter financials for 2013 with a 4.1% year-on-year drop in revenues and operating cash flow plunge of 12.9% to EUR1.98 billion (USD2.58 billion).
Chief Financial Officer Gervais Pellissier stated: ‘The price war in France remains ferocious. In the coming months we will be able to test the appetite consumers have for 4G mobile services, and we hope this will allow us to recreate value.’ The company has recently announced new 4G tariffs, according to which current customers with contracts worth EUR30-EUR50 a month will pay EUR10 more to upgrade to the new technology, while subscribers spending above EUR50 will receive the service for free. France Telecom is aiming to cover 30% of the country with 4G by the end of the year; however the potential 4G payoff is far from certain, as it forecasts average revenue per user (ARPU) to fall a further 12%-13% by the end of 2013.