Saturday, January 19, 2019

Xavier Niel attacks the overwhelming domination of Orange


In recent years, Xavier Niel has several times told the press or financial analysts that he is thinking of getting into the professional telecom market. It's done now. This Friday, its group Iliad, parent company of Free, announced the acquisition of 75% of the capital of Jaguar Network, a French operator specializing in telecoms for businesses, and the provision of cloud services (cloud computing) . In a statement, Iliad said that this investment represents a little less than 100 million euros.

Founder and boss of Jaguar Network, which claims 1,200 customers, Kevin Polizzi, "remains a director and shareholder of the company up to 25% of the capital"says Xavier Niel's group in a statement. he "[témoigne] and its confidence and willingness to support the company in the development of its new ambitions ", says Iliad.

A market dominated by Orange

The "telecom troublemaker", as the press calls it, is gaining foothold in a very particular market. Unlike telecoms for the general public, it is still arch-dominated by Orange. The incumbent operator now has control of about 70% of this market, which is close to 10 billion euros. It is followed by SFR (20%), Bouygues Telecom (just over 5%), and by a multitude of small alternative operators.

This market is in turmoil. In recent years, Arcep, the telecom regulator, has stepped up actions to open it up further to competition, and end the monopoly of Orange. Sebastien Soriano, its president, seeks in particular that VSEs and SMEs can access cheap fiber offerings. While the prices currently offered are sometimes much too high for their means. To achieve this, Arcep has done its best to promote the arrival of Kosc, a wholesale operator, on the market.

For some time now, another player has been particularly active in the corporate market. This is Bouygues Telecom, old rival of Free in the consumer market. After buying the business operator Keyyo, it has entered, there is little, exclusive negotiations to swallow Nerim, also specialized in professional telecom.

Last November, Pascal Rialland, the general manager of Bouygues Telecom's "Enterprise" activity, justified the Group's acceleration in this segment to take a lead over Free, whose arrival he foresaw. It is in particular to face this threat that the manager puts for months the double bites in the digital, to allow, in the long term, his customers to order and manage a maximum of online services.

"If Free comes, it's likely that he opts for a differentiating offer by betting heavily on the Web, given that they have few commercial, and no shops," he explained to La Tribune.

By entering the professional telecom market, Iliad is obviously looking to acquire a new growth driver, while Free is currently struggling in France, losing subscribers in the fixed Internet as in the mobile. This promises, anyway, big fights in this market.





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