What will be the price of your mobile subscription in 2023?

Mainly due to inflation, the prices of subscriptions to mobile and Internet plans will increase in 2023. Bouygues Telecom, Orange and SFR are affected by this increase, unlike Free.

Barclays French Telecom Services met with several players in the French telecom market. The message remains positive regarding the competitive environment. Promotions during the Christmas season were lower than in the previous year and price increases in order books gained momentum. Overall, we expect the French consumer market to show faster revenue growth in 2023 than the +2% forecast for 2022.

Frontbook and backbook price increase

Frontbook and backbook prices are one concept very simple, but which entails many complexities. Essentially, frontbook prices are prices for services offered to new customers, and backbook prices are all prices that were previously available to existing customers. Typically, in a competitive market, one would expect frontbook prices to come down slowly over time.

Since the summer, Barclays has seen multiple price increases in France on the mobile frontbook. The most notable are in the value for money segment covered by the brands Red from SFR, Bouygue & Y from Bouygues, Sosh from Orange and Free from Iliad*. We estimate that these prices have increased by 30%. Fixed promotional prices in the ‘value for money’ segment also increased, but at a slower pace (around +10%) and with some volatility. Regarding the pricing of backbooks, Orange, SFR and Bouygues have announced price increases of between 1 and 3 euros on mobile and fixed plans. This usually doesn’t apply to the entire customer base, but could add a few percentage points to revenue. These initiatives are recent, but there is no indication of an increase in churn so far.

At Bouygyes Telecom from the end of January, depending on the offers, the increase will be between 1 and 3 euros. B&You packages at 4.99 euros will increase to 7.99 euros. At SFR, most fixed offers, Internet and mobiles (ranging from 3 to 65 euros per month) will experience an increase between 0.69 and 0.99 euros. At Orange, some 15 million customers will see the price of their package increase by 1 to 2 euros, between March and April 2023. They have already been informed and will be informed again one month before the increase in their subscription. Users of Orange, Orange Internet fiber, Sosh mobile and Sosh Internet plans, as well as Open and Orange Internet xDSL customers will be affected by the increases of 1 to 2 euros.

*Unlike the three other major operators, Free has decided not to increase prices. The brand is committed not to touch the price of these packages for the next five years!

Competition

The perennial question of potential consolidation was also raised. At this stage, there does not appear to be a seller and the companies have been skeptical that any deal would get the backing of the French authorities unless there is systemic risk to a operator, which is currently not the case. Other topics covered were:

  • Despite a deteriorating macroeconomic environment, bad debts remain low by historical standards, which could suggest that telecommunications services have become essential for most.
  • ULL tariffs: Orange is asking for an increase in regulated ULL tariffs of 3 euros from 2023. The regulator has still not taken a decision and it remains uncertain whether such an increase will be granted.

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What will be the price of your mobile subscription in 2023?


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