France’s Carrefour is talking to Orange and SFR about becoming a mobile virtual network operator.
French newspaper La Tribune today reported that supermarket group Carrefour is in negotiations with France’s leading mobile operators, Orange and SFR, over becoming a mobile virtual network operator (MVNO).
The MVNO model is becoming increasingly popular, as firms with strong brand recognition seek to enter the market without building their own infrastructure or bidding for costly 3G licenses. Instead, an MVNO rents capacity from an existing operator and resells it to customers under its own name.
In some ways, Carrefour is in a good position. Like pioneering MVNO Virgin, it has a trusted brand name. And since mobile penetration rates in France are low at around 50%, encouraging ordinary people to use mobiles could definitely pay off.
Carrefour would also gain an advantage in mCommerce. Current WAP devices are difficult to use and configure, so users generally stick to the services that come with their handset – those run by their mobile operator. In France, Orange has its own mPortal and SFR uses Vizzavi, run by its co-owners Vivendi and Vodafone. An MVNO would ensure plenty of visitors for Carrefour’s mPortal.
The mPortal also fits with Carrefour’s online strategy. It has a multi-access portal for eCommerce, content and services (including finance and travel) from which it expects E150 million in revenues for 2001, compared with the largest eGrocer Tesco and its anticipated E350 million.
A problem could be that Orange and SFR are the only operators to have secured 3G licenses, as well as being the market leaders. They will resist anything that reduces their margins and market share – so Carrefour may well find capacity more expensive than MVNOs in other markets.
However, third operator Bouygues has a much smaller customer base and weaker financial resources, making it likely to agree a cheaper deal. While it doesn’t currently have a 3G license, this may not matter for the consumer-focused services Carrefour wants to provide, in the short term at least. The smaller firm could well prove the best ally for the supermarket giant.
