3 Q11 France Mobile Operator Forecast   Executive Summary
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3 Q11 France Mobile Operator Forecast Executive Summary

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This FreeSight report contains an executive summary of our 3Q11 France Mobile Operator Forecast, 2011 - 2015. ...

This FreeSight report contains an executive summary of our 3Q11 France Mobile Operator Forecast, 2011 - 2015.



IEMR’s Mobile Operator Forecast on France provides over 50 operational and financial metrics for the French wireless market and is one of the best forecasts in the industry. We provide five-year forecasts at the operator level going out to 2015. We also provide quarterly historical and forecast data starting in 1Q2003 and ending in 2Q2013. Mobile network operators covered for France include Orange (France Telecom S.A.), SFR (Vodafone Group Plc), Bouygues Telecom, Virgin Mobile France, and Metropole Television S.A. Our Mobile Operator Forecasts are updated quarterly and are available for one-time delivery or through regular updates.



Notable highlights of the 3Q11 France Mobile Operator Forecast include:



· Stable subscriber growth continues in France. The operator-wide average subscriber growth (YoY) was at 5.6% in 2Q.2011, the same as in 2Q.2010. The largest operator, Orange, saw its subscriber growth (YoY) decline from 5.5% in 2Q.2010 to 4.2% in 2Q.2011. Subscriber growth (YoY) at Bouygues Telecom declined from 6.6% in 2Q.2010 to 56.1% in 2Q.2011.



· The industry average monthly ARPU was US$ 42.92 in 2Q.2011, up +4.7% YoY. At the operator level, Orange’s monthly ARPU declined by -2.0% (YoY) to reach US$ 43.72 in 2Q.2011. SFR continues to have negative ARPU growth at -4.6% in 2Q.2011 (down from -3.4% in 2Q.2010). ARPU growth at Bouygues Telecom continues to increase, but it still remains negative at -6.3% in 2Q.2011 (down from -3.6% in 2Q.2010).

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3 Q11 France Mobile Operator Forecast   Executive Summary 3 Q11 France Mobile Operator Forecast Executive Summary Presentation Transcript

  • 3Q.2011 France Mobile OperatorForecastFrance to have 83 million mobile subscriber connections in 2015 with Orange taking44% market shareOctober 2011
  • Stable subscriber growth continues in France 5.6% industry average subscriber growth in 2Q.2011INDUSTRY AVERAGE Chart 1: Subscriber Growth (4Q08 – 2Q11), %SUBSCRIBER GROWTH INFRANCE’S WIRELESS MARKET 15%REMAINS STABLE The operator-wide averagesubscriber growth (YoY) was at 5.6%in 2Q.2011, the same as in 2Q.2010. 10% The largest operator, Orange, sawits subscriber growth (YoY) declinefrom 5.5% in 2Q.2010 to 4.2% in2Q.2011. 5% Subscriber growth (YoY) atBouygues Telecom declined from6.6% in 2Q.2010 to 56.1% in2Q.2011. 0% On the other hand, SFR’s 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11subscriber growth (YoY) increasedfrom 2.0% in 2Q.2010 to 5.8% in Orange SFR Bouygues Telecom Industry Total2Q.2011. Source: IEMR© 2011 IE Market Research Corp.All rights reserved. 2
  • ARPU level is stabilizing in the French wireless market +4.7% industry average ARPU growth in 2Q.2011THE AVERAGE ARPU IN FRANCE Chart 2: ARPU Growth (4Q08 – 2Q11), %CONTINUES TO DECLINE 6% The industry average monthly ARPUwas US$ 42.92 in 2Q.2011, up +4.7% 4%YoY. At the operator level, Orange’s 2%monthly ARPU declined by -2.0%(YoY) to reach US$ 43.72 in 2Q.2011. 0% SFR continues to have negative -2%ARPU growth at -4.6% in 2Q.2011(down from -3.4% in 2Q.2010). -4% ARPU growth at Bouygues Telecom -6%continues to increase, but it stillremains negative at -6.3% in 2Q.2011 -8%(down from -3.6% in 2Q.2010). 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 Orange SFR Bouygues Telecom Industry Total Source: IEMR© 2011 IE Market Research Corp.All rights reserved. 3 View slide
  • Minutes of Use per Subscriber is increasing Industry average MOU/Sub is 252 minutes per month The operator-wide average Minute of Chart 3: MOU/Sub Growth (4Q08 – 2Q11), % Use (MOU) per subscriber was 252 10% minutes per month in 2Q.2011, up +7.3% YoY. 8% MOU/Sub growth at Orange 6% increased from -3.0% in 2Q.2010 to - 4% 0.5% in 2Q.2011. 2% MOU/Sub at SFR continues to be higher than MOU/Sub at Orange and 0% Bouygues Telecom. -2% MOU per subscriber at SFR, Orange -4% and Bouygues Telecom was 319 minutes, 190 minutes and 282 minutes -6% respectively in 2Q.2011. -8% 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 Orange SFR Bouygues Telecom Industry Total Source: IEMR© 2011 IE Market Research Corp.All rights reserved. 4 View slide
  • Negative EBITDA growth at all of Orange, SFR and Bouygues Telecom in 2Q.2011 -5.9% INDUSTRY-AVERAGE EBITDA Chart 4: EBITDA Growth (4Q08 – 2Q11), % GROWTH IN 2Q.2011 • The industry average EBITDA growth rate (YoY) in 2Q.2011 was -5.9%, 20% down from -3.0% in 2Q.2010. • All of the major wireless carriers 10% suffered from negative EBITDA growth in the latest quarter. SFR’s EBITDA growth (YoY) was -5.1% in 2Q.2011 0% (down from -1.5% in 2Q.2010). • EBITDA growth rate (YoY) at Orange -10% was -7.3% in 2Q.2011 (down from - 5.3% in 2Q.2010). Also, Bouygues Telecom’s EBITDA growth was -3.4% -20% 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 in 2Q.2011 (down from 0.6% in 2Q.2010). Orange SFR Bouygues Telecom Industry Total Source: IEMR© 2011 IE Market Research Corp.All rights reserved. 5
  • So what is IEMR’s Forecast? Total mobile subscriber connections in France to reach 83.3 million in 2015 We forecast that the number of total Chart 5: Subscribers by operator (CY09 – CY15F) wireless subscriber connections in France will increase from 65.8 million 40,000 in the end of 2010 to 83.3 million in 35,000 the end of 2015. Given the latest quarter numbers, 30,000 our model predicts that Orange will subscribers (000s) have approximately 36.6 million 25,000 mobile subscriber connections in 2015. 20,000 In our view, Orange will continue to 15,000 hold a dominant position as the largest mobile operator in France with 10,000 a 44.0% market share in 2015. 5,000 On the other hand, we forecast that SFR will have 27.5 million wireless 0 subscribers in 2015 (33.1% market CY09 CY10 CY11F CY12F CY13F CY14F CY15F share). Orange SFR Bouygues Telecom Source: IEMR© 2011 IE Market Research Corp.All rights reserved. 6
  • So what is IEMR’s Forecast? ARPU levels in France to decline WE EXPECT THE OPERATOR-WIDE Chart 6: Average Revenue per User (ARPU) AVERAGE ARPU LEVEL TO per month (CY09 – CY13F), EUR DECLINE TO ABOUT EUR 32.60 IN 2013 45 We expect that ARPUs in France will 40 be declining over the next two years. 35 Our forecasting model predicts that 30 the industry average ARPU will be about EUR 32.60 per month in 2013. 25 We expect that Bouygues Telecom’s 20 ARPU level will continue to be higher than those of Orange and SFR over 15 the next two years. 10 5 0 CY09 CY10 CY11F CY12F CY13F Orange SFR Bouygues Telecom Average Source: IEMR© 2011 IE Market Research Corp.All rights reserved. 7
  • So what is IEMR’s Forecast? Stable profitability at Orange, SFR, and Bouygues Telecom We forecast that EBITDA margins at Chart 7: EBITDA margins (CY09 – CY13F), % the largest three operators will continue to decline over the next two 45% years. 40% We expect that SFR’s EBITDA 35% margin will be highest among France’s mobile operators in 2013 30% Bouygues Telecom’s EBITDA 25% margin will remain lower than those of its competitors at about 23% from 20% 2012 to 2013, according to our model. 15% 10% 5% 0% CY09 CY10 CY11F CY12F CY13F Orange SFR Bouygues Telecom Average Source: IEMR© 2011 IE Market Research Corp.All rights reserved. 8
  • IE Market Research What do we do? We Drive Enterprise Strategy in the telecoms domain by: Producing the BEST and most COMPREHENSIVE strategy coverage of the vendor and operator space in the world With over 800+ operators and 50+ vendors, we cover the strategies of more telecom operators, vendors, and markets than ALL of our competitors© 2011 IE Market Research Corp.All rights reserved. 9
  • About IEMR Blue Chip client base of over 100 customers across core telco value chain . . . Operators OEMs / ODMs Network Infrastructure Vendors© 2011 IE Market Research Corp.All rights reserved. 10
  • About IEMR And over 200 consulting and financial services institutions are IEMR customers© 2011 IE Market Research Corp.All rights reserved. 11
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  • IE Market Research Disclaimers and DisclosuresThe opinions expressed in this report are the true opinions of the analyst(s) and IE Market Research Corp. (IEMR) about the firm(s) and/or industry appearing inthis report. Any “forward looking statements” are the best estimates and opinions of the analyst(s) and IEMR based upon information that is publicly availableand that the analyst(s) and IEMR believes to be correct. There is no guarantee that forecasts appearing in this report will materialize.The analyst(s) responsible for preparing this research report received compensation that is based upon various factors, including total revenues of IEMR, aportion of which are or have been generated by consulting and contract research activities undertaken by IEMR for firm(s) appearing in this report. Theanalyst(s) and/or IEMR does not own any shares of the firm(s) appearing in this report, does not make or offer for sale shares of the firm(s) appearing in thisreport, and does not have any investment banking business with firm(s) appearing in this report. IEMR may have been contracted by firm(s) appearing in thisreport to undertake competitive intelligence, business strategy, market research, branding research, and/or public opinion research activities. No part of thecompensation of the responsible analyst(s) named herein is, or will be, directly or indirectly, related to the specific recommendations or views expressed by theresponsible analyst(s) in this report.Forward Looking StatementsThis report contains forward looking statements. Forward looking statements regarding firm(s) inherently involve risks and uncertainties that could cause actualresults to differ from such forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, continuedacceptance of the firm(s)’ products/services in the marketplace; acceptance in the marketplace of the firm(s)’ new products/services; competitive factors; newproducts/services introductions by others; technological changes; dependence on suppliers; mergers and acquisitions; systematic risks and other risksdiscussed in the firm(s)’ periodic report filings, including interim reports, annual reports, and annual information forms filed with the appropriate securitiesregulators. By making these forward looking statements, the analyst(s) and IEMR undertake no obligation to update these statements for revisions or changesafter the date of this report.WarrantiesThe information contained in this report has been compiled by IEMR from sources believed to be reliable, but no representation or warranty, express or implied,is made by IEMR or any other person as to its accuracy, completeness or correctness. IEMR does not make any warranties, expressed or implied, as to resultsto be obtained from using this information and makes no express or implied warranties or fitness for a particular use. Clients using this report assume fullresponsibility for whatever results they obtain from whatever use the information was put to. To the full extent permitted by law neither IEMR nor any otherperson accept any liability whatsoever for any direct or consequential loss arising from any use of this report or the information contained herein.© 2011 IE Market Research Corp.All rights reserved. 14
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