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Iliad steps up epic campaign for mobile licence

20 марта 2009

Iliad, France’s second-largest high-speed internet provider, has stepped up its campaign to obtain a mobile phone licence promising strong growth in free cash flow to fund its competitive challenge to France Telecom.

Iliad, parent group of internet brand Free, said it would generate €300m ($411m) in free cash flow in 2009, up from €210m last year, giving it the financial “strike force” to invest in a mobile operations and the costly roll-out of a fibre optic network.

The company is the only declared candidate to buy France’s fourth mobile phone licence, to be put out to tender in April.

France is the only large European mobile market to have just three operators, and this includes the very large presence of France Telecom. A fourth licence will go some way to addressing the lack of competition.

Iliad this month joined Vivendi in lodging a complaint with the European Commission about France Telecom’s allegedly anti-competitive practices.

Xavier Niel, founder and majority owner of Iliad, escalated the war of words with the incumbent operator, accusing France Telecom of being a “repeat offender” in attempting to block competition. He said the former monopoly’s “last innovation was probably the Minitel” a crude forerunner of the internet that was launched in 1982.

Iliad acquired its image as the entrepreneurial upstart of the French telecommunications industry when in 2002, it launched an innovative package of broadband internet, television and internet telephone services for less than €30 a month, a product its much larger rivals all subsequently copied. The company is promising to do the same for the mobile market.

The company defended its plan to invest €1bn in a new fibre network over the next three years while paying for a new mobile infrastructure, assuming it wins the licence. Fibre was key to reducing its costly dependence on France Telecom’s infrastructure.

Iliad recorded a 33 per cent drop in net profit to €100m in 2008 after taking over Alice, a loss-making internet service provider, from Telecom Italia.

Thomas Reynaud, finance director, disclosed that Alice at one point was losing €1m a day but said it would break even in terms of earnings before tax, depreciation and amortisation by the second quarter of 2009.

Incorporating Alice, Free had 4.3m subscribers last year, making it the second- largest broadband provider behind France Telecom, but ahead of Vivendi’s SFR.

Источник: Financial Times

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