France this week joins the ranks of the handful of European countries whose mobile phone operators are extending the use of pre-paid phone cards to their market. Beginning March 19 France Telecom Mobiles FTM began marketing mobicartes in stores in the Paris region that already sell service contracts for its GSM Groupe Speciale Mobile service Itineris. The SIM cards are priced at 270FF, around $47, for 30 minutes of national calls. Once inserted in the handset, the user dials the service number 222 to register the phone number associated with the card. Customers have two months to recharge the SIM card before the number becomes invalid. The cards can be recharged by buying a lottery- type scratch card in one of France’s 35,000 tobacconists for 144FF or $25. The card contains a 14-digit number that the user types into the handset after calling the service number 222. That done, the phone number is valid for outgoing calls for two months and four months for incoming calls. Before launching in France, the operator tested the concept via its joint venture in Belgium with that country’s number-two operator Mobistar NV. Of our 70,000 subscribers in Belgium, 10,000 are card customers, said Benoist Cirotteau, FTM’s newly appointed sales director. Cirotteau noted that mobicartes are well-adapted to the tourism market, adding that the operator will not subsidize handsets with mobicartes. This is an offer for those who have a telephone, he said. The move is the latest innovation among mobile phone operators in western Europe to get control over their bad customer debt problem. Cirotteau said that FTM’s bad debt comprises just under 4% of its revenues.
New subscriber tariffs
The percentage of customers who dump their mobile phone subscriptions is approximately 20% per year, which he said is on a slight increase, as we move more toward the consumer market. France Telecom Mobiles also announced new subscriber tariffs that include between 1-4 hours of communication, a move that was initiated by DCS-1800 operator Bouygues Telecom SA last year. Bouygues announced a new series of packaged tariffs three weeks later. Although Cirotteau would not estimate how many of the 1 million new users that FTM hopes to add would opt for mobicarte, he said the operator expects just under half of its new subscribers to take one of the package plans. The operator also reported that its year-end total of GSM subscribers of 1.4 million surpassed its predicted 1.1million, for revenues $1.1bn. FTM’s total revenues were $1.96bn. Michel Bertinetto, FTM director, said the operator has targeted the addition of another 1m Itineris subscribers, as well as a balanced budget, by year- end. We are not far from our break-even objective, he said, adding that FTM was prevented from reaching break-even in 1996 by the strict accounting rules required for the privatization of France Telecom. The prediction comes despite the fact that handset prices are expected to rise as subsidies are reduced in the coming weeks. We want to eliminate terminal subsidies as quickly as possible; we would rather like to transform part of it into an incentive to use the telephone more, Cirotteau said, without specifying how that would be done. In other mobile sectors, France Telecom Mobiles also said that its DCS 1800 service Olla, which it launched in Toulouse in November, counted approximately 5,200 clients at the end of January. Olla users pay 150FF, the equivalent of $26, for a Nokia 1620 terminal and one hour of communication, after which their calls cost $0.26 per minute peak, and $0.13 off-peak. On the other hand, its CT2- based service BiBop is declining. BiBop subscribers are migrating to Itineris, and we are providing special offers to encourage it, said Bertinetto.