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22 Carphone Warehouse Group plc Annual Report 2011
BUSINESS REVIEW
VIRGIN MOBILE FRANCE: OVERVIEW AND MARKETPLACE
BACKGROUND
• The largest MVNO in France with
1.9m customers.
• It was launched in 2006, building on
Carphone Warehouse’s commercial
relationships and Virgin’s experience
as one of the leading MVNO operators
worldwide.
• The acquisition of Tele2 France in 2009
transformed the business, giving it a
significant step-up in scale, which
improved its strategic standing and
financial performance.
• It has a strong distribution network,
with over 2,500 third party handset
sales points, some 53,000 distribution
points for prepay vouchers, a small
portfolio of Virgin branded stores, and
a well established online platform.
• The Virgin brand is well recognised
in France and the business enjoys
a reputation for high quality
customer service.
MARKETPLACE
Competitive landscape
France’s mobile market is one of the
largest in Western Europe, with
approximately 63m subscribers.
The French market has historically been
one of the less competitive mobile phone
markets in Europe, with only three
network operators. In recent years, none
of these networks has engaged in an
aggressive expansion strategy, providing
an opportunity for Virgin Mobile France.
Support for MVNOs
In order to stimulate greater competition
in the French market, the French
government and the local telecoms
regulator, ARCEP, have encouraged the
development of MVNOs. Virgin Mobile
France has been the chief beneficiary of
this drive, as a clear leader in the French
MVNO market.
Entry of a fourth network
In December 2009, ARCEP announced that
a fourth 3G mobile network licence was
being awarded to Free Mobile, a part of the
Iliad group.
The introduction of this fourth network is
likely to increase the level of competition
within the market.
The incumbent networks have sought to
strengthen their positions through ‘Quad
Play’ offerings (i.e. television, fixed line
telephone, broadband internet and mobile
telephone).
Virgin Mobile France continues to develop
its range of products and services to
ensure that it is well placed to meet this
new competition.
Increasing data
As in other European markets, a
combination of competition and regulatory
intervention has reduced voice revenues
over recent years.
However, the proliferation of internet
usage on smartphones and other portable
communication devices has provided an
opportunity to mitigate this through
growing data revenues.
We anticipate continued significant
growth in network usage, providing
further opportunities to try to monetise
this activity.
Through its innovative propositions, high quality
customer service and its network relationships,
Virgin Mobile France has been able to capitalise
on the opportunities in the French marketplace
to become the clear number one MVNO.
Well established brand
The brand enjoys prompted
awareness and customer
satisfaction ratings of
over 85%.
Award-winning service
Virgin Mobile France’s high
quality customer service
was recognised through
the élu Service Client award
of 2011 in the mobile phone
operator category.