Vivendi chief criticises Orange/Free Mobile roaming deal

5 Mar 2012

The chief executive of French media and communications group Vivendi has criticised France Telecom-Orange’s roaming deal with the country’s newest cellular operator, Free Mobile. Jean-Bernard Levy, whose Vivendi group owns France’s second largest mobile operator, SFR, claims Orange is offering Free Mobile ‘excessively favourable conditions’ as part of their wholesale deal, the Financial Times reports. Levy is even threatening legal action, although he has refused to clarify any details. Orange has responded by saying that the terms of its roaming deal with Free are ‘confidential but were agreed on a normal commercial basis’. Vivendi has been angered by Free Mobile’s ability to enter the market offering tariffs which are well below the other players, with some services even being offered free of charge to customers of its fixed line parent company Iliad.

The arrival of low-cost operator Free Mobile in mid-January has shaken up the French wireless sector, with market leader Orange claiming 200,000 net customer losses in the weeks after its launch. Vivendi has warned of a difficult year ahead for its SFR unit due to the increasing competition and impending price war between French mobile operators, while third-placed player Bouygues Telecom has said it will be cutting costs in 2012 to help offset an expected decline in sales for the year of around 10%.