It is a very hard blow to Orange in the midst of Christmas shopping. The competition Council decided yesterday to suspend Conservatory as the exclusivity granted by Apple to Orange for the commercialization of the iPhone in France. Result, Bouygues Telecom, SFR now have the right to offer the iPhone to their subscribers and to subsidize this terminal...
Bouygues Telecom also hoped to do so "as soon as possible", whereas LICOS is "ready to sell the iPhone as soon as a distribution agreement will be concluded with Apple". To meet the most urgent, SFR could come from the iPhone from abroad where its shareholder Vodafone sells already. By breaking the exclusivity of Orange less than three months after the complaint filed by Bouygues Telecom, the competition Council wanted to act quickly in the Outlook for sales of mobile at Christmas. They are however already well started...
Even if the measure is not suspensive, Orange immediately decided to appeal the decision of the Constable of the competition. In a virulent statement, number a French mobile judge the "serious" decision and considers that it may have "serious consequences on the functioning of the market, on the benefit of consumers and OEMs already weakened situation". The issue is all the more important for Orange that the iPhone is a true success: the operator sold more than 600,000 to date, including the three quarter since the launch of the iPhone 3 G last July.
Scale Street judges decided to put an immediate stop to this exclusive, if they consider it "is a severely, and immediate competition in the mobile market and consumers." However the Court considers that the French market did not really need this: "this exclusive rigidifie a market which already lack of competitive intensity", denounced the Council. For the record, it is already this independent authority who had sentenced in 2005 the three mobile operators to a fine of EUR 534 million for unlawful agreement.
More than the same principle of exclusivity, it is the considered extremely long duration of the which is stigmatized. Orange, which sells the iPhone since November 2007, had a five-year exclusive, even if Apple had a clause in output after three years. During these five years, Orange was supposed to be the only operator to combine the sale of a subscription with the iPhone. Certainly, it proposes a "nude", i.e. without subscription attached iPhone, but it costs a minimum of 509 euro (against 99 euros after grant) and the SIM is blocked on the Orange network. Judges have therefore found that the agreement between Apple and Orange was "an obstacle to the change of operator.
To justify this exclusivity, Orange indicated yesterday that he was "particularly invested by allowing a large number of French benefit from innovative services at attractive prices. An argument rejected by the competition Council. "In exchange for exclusivity of five years, Orange made an investment already guaranteed and specific of 16.5 million euros that appears far disproportionate on already EUR 222 million revenue with sales of three months and a half made iPhone", estimated from the street of the scale. Orange dispute and spoke of hundreds of millions of euros of investment (commercial expenses, adaptation of the network...).
Constable of the competition stayed the exclusivity in emergency because its decision on the merits will not intervene before a year. Apple introduces new models of iPhone here there, may sign an exclusivity with an operator, but this time for a maximum of three months