Competitors in the market have hit out at newcomer Iliad’s overreliance on France Telecom’s network to carry its customer’s traffic, while building its own network at the same time.
With Vivendi’s SFR and Bouygues Telecom expressing their concerns, French regulators have ruled that Iliad should not rely on the roaming pact with France Telecom past 2018, when its contract expires.
The government asked regulators in November to look at the pact, and whether the deal was distorting the market.
There could also be an audit on Iliad to ensure it was fully committed to building a functioning network by charting the investments it has made.
“The real objective is the building of a fourth network that Iliad can use to serve its customers and respect its licence obligations, and roaming can be a part of that at the beginning but not forever,” said Bruno Lassere, head of France’s competition regulator.
Iliad’s Free Mobile has significantly shaken up the French mobile market since its entrance last January, and has signed up over five million subscribers.
Under the terms of the contract, Iliad pays France Telecom €500-€700 million a year, and both companies can choose to end the pact in 2016.
The French market has struggled since the launch of a fourth operator, with ARPU falling 10% to €336 last year.
Market watchers and investors have further speculated on consolidation and network sharing to deal with increasing costs.
The regulator has also said it will attempt to evaluate network sharing deals, including what equipment is used and whether the agreements extend to rural area.
