PARIS-A trio of French wireless operators were fined more than $625 million by French regulators for alleged market collusion and fixing market share.
The French competitive authority, the Counseil de la Concurrence, said that the three operators-Orange, SFR and Bouygues Telecom-exchanged confidential information on new customer additions and churned customers for each month between 1997 and 2003. The French authority also found that the carriers fixed market share among themselves between 2000 and 2002.
“On a market where only three players operate and with a high barrier to entry, these exchanges of information damaged competition,” the French authority said in a statement.
Orange, which is a division of France Telecom and the nation’s largest wireless operator with more than 47 percent market share, suffered the biggest fine of $299.8 million. SFR, which claims nearly 36 percent market share, was hit with a $257.7 million penalty, while Bouygues, with around 17 percent market share, was fined $67.9 million.
Analysts noted the fines are significant and could impact consumers’ perceptions of the industry.
“This is really bad news for the French operators for two reasons: first, because of the record amount of the fine-from 14.6 percent to 18.3 percent of the operators’ net profit in 2004; second, because of the bad press resulting from this decision and the damage it will do to the operators’ brands and credibility,” noted Ovum senior consultant Vincent Poulbere.
France Telecom said it planned to appeal the decision.
“On account of its excessive nature, this ruling could have a serious impact on public confidence in one of the most dynamic sectors of the country’s economy and one of the main driver of the national competitiveness and attractiveness and a key source of job creations,” the company said in a statement.
