France’s competition authority, the Autorite de la Concurrence, has announced that Outremer Telecom has cancelled its recent mobile tariff hikes in the French overseas territories of Reunion and Mayotte, following the anti-trust watchdog’s decision to assess whether the January 2015 increase in subscription fees was in compliance with Numericable’s commitments to ‘preserve Outremer Telecom’s viability, market value and competitiveness until the divestiture’. However, despite Outremer’s pledge to cancel the tariff increases and refund affected customers, the regulator will continue its investigation of the case and will publish its decision ‘soon’.
As previously reported by TeleGeography’s CommsUpdate, in October 2014 the anti-trust authority granted a conditional approval to Numericable’s proposed acquisition of French telco SFR. In order to gain the regulator’s approval, the combined SFR-Numericable entity has to divest its mobile operations in Reunion and Mayotte, as the overlapping activities of SFR and Numericable in the two territories would give the enlarged entity significant market power (SMP) in the Indian Ocean (66% market share in Reunion and 90% in Mayotte).
While the sale process of Outremer Telecom (Reunion) and Outremer Telecom (Mayotte) is currently underway, in January 2015 the Autorite de la Concurrence expressed its concerns in regards to the conditions surrounding the divestiture and in particular, the increases in the ‘RIFE 2h’, ‘Trio’, ‘Jeune’, ‘Next’, ‘On’ and ‘Next2 Illimite’ mobile tariffs in the two French overseas territories. The authority pointed out that the rate increases provide affected subscribers with the right to terminate their subscriptions, and that the move was a breach of Numericable’s obligation to preserve the economic viability, marketability and competitiveness of Outremer Telecom in Reunion and Mayotte until sold.