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France shakes down mobile operators. Customers are safe

Orange takes it on the chin

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The French finance ministry's decision to hike license fees for GSM operators from 2006 will have no effect on consumer prices, Orange said today. Which is nice. But it also shows how much profits the mobile operators are raking in, if they can afford to take the licence hit on the chin.

Here is a rundown of the proposed levy by Ovum analyst Vincent Poulbere. "The government is proposing a levy of up to five per cent of the mobile phone revenues of Orange and SFR - meaning almost €1bn a year based on current GSM revenues. Of particular interest is that the levy would be progressive - the levy rate grows as the operators' revenues grow. Furthermore, the levy would be superimposed on top of a basic licence fee that could triple from €15 to €22m a year currently paid under the terms of the existing 15-year licences that expire at the end of March 2006."

Orange today said it would try to lower the cost of sending a text message in France, following a call from the government for mobile phone firms to cut prices. France Telecom-owned Orange has reduced SMS prices by 40 per cent in recent years.

Also today, Orange announced its effective departure from Thailand, with the disposal of most of its stake in BITCO. This is a joint venture with Thai firm Charoen Pokphand/Telecom Asia in which Orange owns 49 per cent. It will own just 10 per cent after the sale. Terms are undisclosed, but the deal is subject to approval from TA Orange's bank lenders. ®

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