It won’t have escaped anyone that the much-awaited tie-up between Orange and Bouygues Telecom failed to go through – putting pay to any hopes of consolidation in the sector.
Some analysts saw it as the solution to the bitter price war that has erupted in France, in both the mobile phone and fixed Internet markets, following the arrival of low-cost rivals. This now looks unlikely, given the flurry of cheap plans that have flooded the market in the past several months.
But ‘low cost’ doesn’t mean that operators are willing to sacrifice quality. On the contrary, demand for high-performance networks has never been greater. France’s four main telcos face the challenge of remaining competitive while constantly investing to build, improve and maintain their own networks. So as far as telecom suppliers and installation specialists are concerned, the market remains as broad, fast-growing and fiercely competitive as ever.
Burgeoning data usage sustains market growth
Average monthly mobile data use per active SIM in France was 814 MB in the fourth quarter of 2015, a 68.6% increase over the same period in 2014. In order to sustain this rate of growth – and to continue to offer customers the best possible browsing experience – carriers must invest to enhance or upgrade their infrastructure.
A key competitiveness driver for France
As well as meeting operators’ exacting network requirements so that they in turn can satisfy their customers, high-quality Internet services are also a national priority. High-performance Internet access is to modern society what drinking water and electricity were to the nation a century ago.
In today’s competitive marketplace, if a company is deprived of high-speed Internet access, preventing it from running its day-to-day computer-based operations efficiently, its performance could be seriously jeopardized. In other words, telecoms infrastructure has become a critical element in the attractiveness and competitiveness of businesses and communities everywhere.
In this regard, public authorities have an increasingly important role to play in infrastructure deployment. While private operators tend to focus on building and strengthening networks in densely populated areas, local authorities have to step in to support roll-out in more remote and rural areas. To support these efforts, the State has launched a major investment plan to bring very high-speed fiber optic-powered Internet access to everyone in France. This represents a tremendous opportunity for the industry as a whole and more specifically for creating skilled jobs locally where infrastructure is deployed.
In addition, growth is being spurred by demand from major organizations that rely extensively on telecoms networks for their operations, such as the national rail operator SNCF, power producer EDF and private motorway operators, which in turn need to invest in order to roll out innovative new services for customers.
Furthermore, we are starting to see the deployment of smart object networks, which usher in a whole new world of opportunities for telco operators.
Increasing consolidation in the infrastructure market
To keep pace with widespread deployment and continuous upgrades to mobile and fiber-optic networks, today’s infrastructure providers will have to strengthen their capabilities, bolster their expertise and extend their geographic reach to meet the needs of both operators and local authorities. As a result, there is every likelihood that we will witness greater market consolidation.
Whatever the outcome, economic imperatives and competitive pressures mean that infrastructure suppliers must be prepared to support their customers’ development as cost-effectively as possible. The challenge is to remain proactive and develop innovative solutions for less costly infrastructure.
Infrastructure market undergoes its own digital transformation
Aware of the stakes involved, certain infrastructure providers have already begun to integrate digital technology into their production processes as part of cost-reduction strategies – a move that enables them to centralize data, streamline workflows and also adapt to the generation Y workforce. Today’s graduates all expect to work with smartphones and tablets, which have been part of the workplace for almost a decade now (following the launch of the iPhone in 2007). To attract Millennials, infrastructure firms must also bring their business up to speed.
Infrastructure providers are playing an essential role at the heart of the digital revolution sweeping France as part of the challenge to provide people everywhere with seamless high-quality connectivity. We must step up to this challenge to sustain a high level of performance for all our operator and local authority customers.
Arnaud Burban, Telecoms Infrastructure Director, Axians