It’s a balancing act. To what extent can telecom operators pass on the cost of inflation to the prices of their mobile subscriptions? Like other manufacturers, they are subject to increased energy or subcontracting costs.
The question then arises of placing the cursor in the right place between the promises of earnings promised by a higher bill and the financial consequences of termination. A significant increase and it is the termination rate that flies away for a zero or even negative financial result.
A dilemma which the French market was not particularly confronted with. Since the arrival of troublemaker Free in 2012, the four leading players have been engaged in an incessant price war. This unique competition in Europe, where the norm is a battle between two or three operators, creates volatility. Subscribers also suffering from inflation do not hesitate to change shops.
“ In a very competitive market, it is a question of moving forward on a crest line and conducting a vigilant and responsible pricing policy summed up Christel Heydemann, CEO of Orange, during the presentation of the group’s quarterly results at the end of April.
SFR loses 100,000 subscribers in the first quarter
In this lying poker game, SFR seems to be the big counterpart. In the first quarter, the Altice group subsidiary lost 100,000 mobile subscribers. And if it shows a turnover up slightly by 0.2%, it owes it to its business division (+ 4.6%) which allows it to get its head above water.
On the principle of communicating vessels, the three other operators take advantage of this decline in form. In the first three months of 2022, Orange won 3,000 new mobile subscribers and Bouygues Telecom 27,000 additional customers.
In themselves, these figures reveal a loss of momentum in the acquisition policy of the two operators. In 2022, Bouygues Telecom welcomed 449,000 new customers, including 81,000 during the fourth quarter. For its part, Orange garnered 581,000 net sales in France last year, ” achieving its best annual performance since 2017 “.
The termination rate at Orange was then “ at a historically low level “. Since then, the incumbent operator has sent a letter to its millions of French customers to warn them of an increase of 1 to 2 euros depending on the package. The churn rate has since risen to 12%.
Free Mobile has once again taken the market by storm. Unlike its competitors, the subsidiary of the Iliad group has undertaken to block its mobile plans at 2 and 19.99 euros until 2027. A visibly winning bet. In the first quarter, it posted a positive balance of 172,000 new mobile subscribers.
Free Mobile may only temporarily benefit from this general upward situation. According to the Ariase comparator barometer, the average monthly price of a mobile subscription rose to 19.17 euros in January, an increase of 20% in one year. In May, this rate fell to 16.18 euros.
The number of SIM cards in circulation is decreasing
These results more generally reflect a shrinking market. In its latest mobile market observatory, Arcep noted, for the first time in two and a half years, a decrease in the number of SIM cards in circulation. As of March 31, the number of SIM cards in service in France amounted to 82.5 million euros, a decrease of 160,000 units in one quarter.
Without making a direct link with the rise in mobile tariffs, the regulatory authority notes that the number of gross sales on the market for consumer plans fell by 13% in one year, whereas these had so far maintained at a high level since the rebound in economic activity in 2021.
French subscribers are far from being the worst off in terms of tariffs. According to statistics collected by HelloShare, France would rank, in 2022, sixth in the world among countries where the price of a GB of mobile data is the lowest (0.23 euros). Our country would position itself after Israel, Italy or India.
Still according to this comparative site which compiles data from “public and official sources”, a French subscriber would pay for his mobile data ten times less than the rest of Europe.