Thursday 23 July 2020

France is Eagerly Waiting for 5G to Arrive

France has the third largest telecoms market in Europe, worth approximately €31 billion annually. The incumbent telco Orange Group is one of the world’s major players operating in markets across Europe, the Middle East and Africa. The company is embarked on a multi-year investment program with an emphasis on fibre-based broadband and mobile infrastructure based on 5G.

The mobile phone market, worth about €13 billion annually, is dominated by Orange, SFR Group (owned by Altice Group), Bouygues Telecom and Free Mobile. Services(by Iliad) based on LTE have near universal coverage, while operators have undertaken extensive 5G trials and are looking to launch commercial services in the second half of 2020. This timing is being supported by the auction of spectrum in a range of bands.

Regarding spectrum 2G (= GSM, GPRS, EDGE) is on 900 and 1800 MHz, 3G (= UMTS, HSPA, HSPA+ and DC-HSPA+) is on 900 and 2100 MHz. The 4 MNOs have rolled out their 4G/LTE nationwide. 800 MHz (B20) mostly in the countryside, 1800 MHz (B3) and 2600 MHz (B7) in the cities are used. 700 MHz (B28) is progressively being added after digital TV has left. From 2017 the 2100 MHz band (B1) is also used for LTE.

Competition among the MNOs and a large number of MVNOs caused mobile services revenue to fall steadily until 2017, since when growth has been low but steady. Pressure on revenue has encouraged operators to look to convergence and bundled services, and so expand their offerings beyond mobile voice and data.

France also has one of the largest broadband subscriber bases in Europe. Growth in recent years has been bolstered by demand for high bandwidth services, which has prompted considerable investment in fibre infrastructure among telcos and regional governments. DSL still dominates the broadband market in terms of access lines, though the number of DSL lines is falling as customers are migrated to fibre infrastructure. Fibre deployments have grown substantially in recent years, with all of the major ISPs concentrating their investments in the platform with a view to promoting 1Gb/s services. There efforts have been encouraged by the regulator which is keen to see effective competition in fibre access.

Orange S.A., formerly France Télécom S.A., is a French multinational telecommunications corporation. Previously France Télécom was the French public operator. Nowadays it is still the market leader with the best coverage (94% of population in 4G/LTE as of October 2017) and the most subscribers, including extensive coverage of tourist areas (beaches / ski resorts) and transport corridors (high speed train lines, motorways). 4G/LTE is accessible for all prepaid plans. (See also Open Signal report findings below).

Orange has recently pushed its multi-service operator strategy after striking a deal with insurance player Groupama to create Protectline, a new home surveillance company for the French market. It  has also launched a mobile banking offer, through Orange Bank, and developed its own smart speaker as it looks at ways to diversify beyond traditional telecoms services

Orange have selected vendors Nokia and Ericsson to deploy its 5G network in home market France, as Huawei continued to face scrutiny about the security of its equipment in Europe. Orange explained it had chosen the vendors after months of testing, with both contracted to provide a package of products and services to enable deployment of 5G across France. However this has been delayed due to the Covid-19 pandemic.

SFR is historically the second network in France and one of the biggest rivals of Orange. It used to belong to Vivendi, but has been sold to the company Altice. It has good coverage nationwide in 2G, 3G, and 4G/LTE coverage is slightly less than Orange (see Basics). SFR is the local partner of Vodafone in France, but there is still no international data roaming on any SFR prepaid products.

Bouygues Télécom is the 3rd largest network operator in France in term of subscribers. Unlike the other players, its 4G/LTE is mainly on 1800 MHz (and to a lesser extent 2600 MHz and 800 MHz) open for all prepaid users (coverage map). In October 2017 they cover 94% of population by LTE.

Free Mobile shook the French market when it arrived on the scene in 2012 with very low prices and new marketing methods. Over the years Free Mobile kept adding more content to their main package "Forfait Free", such as large allowances of data, or included roaming agreements. With more than 65 destinations included worldwide, they may offer good options for travellers. But be aware of the SIM card can only be bought and activated in France and can't be paused.

Regarding performance and coverage Orange managed to scoop all there Open signal awards in their recent report for these measures of the mobile experience — Video Experience, Games Experience, Voice App Experience — along with three other awards: Download Speed Experience, Upload Speed Experience and 4G Coverage Experience. The only one of the awards that it failed to win was 4G Availability, where SFR and Bouygues tied for first place.

French mobile subscribers seeking a big leap in the quality of their experience will need to be patient, given the impact of the COVID-19 pandemic. The French spectrum regulator, ARCEP, announced back in April that it has postponed the auction of 5G spectrum in the valuable 3.4-3.8 GHz band, due to the crisis. Given the after shock of Free Mobile’s disruptive market entry in early 2012 with extremely low pricing, it will be interesting to see how French operators embrace 5G. Will they seek to differentiate on network quality? Or will France’s operators use 5G’s arrival to herald a new price war that hinders network investment and damages users’ mobile experience as a result? Once the 5G spectrum auction happens, we will see early signs of how this will develop.

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