why package prices are rising

Gas, petrol, food … Everything increases. And telecommunications is no exception. The main French operators are revising their prices upwards. In recent days, Bouygues Telecom has delivered a message to some of its Bbox fixed internet subscribers. The news made people shudder: Martin Bouygues’ operator warned them of a price increase. That’s 4 euros a month. In return, Bouygues Telecom offers unlimited calls to mobile phones in Europe, as well as access to the TF1 Max playback service and the Majelan podcast platform. The same applies to B & You mobile subscribers. Some have been warned that their plan will increase by 3 euros a month, in exchange for more data. These price increases are automatic. Unless the subscriber specifies, within four months of notification, that they wish to maintain their current offer.

Bouygues Telecom is not the only operator to increase bills. SFR is also a fan of “paying more for more services.” Earlier this year, the Red Square operator decided to increase the price of subscriptions for its Red customers by 3 euros, compared to more storage space in the cloud. Orange, meanwhile, unveiled its new box, the Livebox 6, with improved Wi-Fi earlier this month. This is sold with much more expensive subscriptions, at 5 euros, compared to previous offers.

A fundamental trend

These increases are part of an underlying trend. Prices have been rising for just over a year. In 2021, the average bill for fixed Internet subscribers increased by 30 cents to 33.5 euros per month, according to Arcep, the telecommunications regulator. Same for mobile customers, which increased by 50 cents to 14.9 euros. These price increases periodically arouse the anger of subscribers, in a context where having a good internet connection has become essential. They arrive at a time of strong pressure on purchasing power. But remember, France still has some of the lowest prices in Europe for telecommunications.

At Orange, SFR or Bouygues Telecom this situation cannot last. “This is not reasonable and consistent with the investments, innovation and the path we must follow in the coming years”, said Arthur Dreyfuss, president of the French Telecommunications Federation (FFT) and secretary general of Altice France (SFR) last December. Like its competitors, it believes that the industry cannot continue to keep prices so low while investing heavily in networks. In 2020, Orange, SFR, Bouygues Telecom and Free spent about 11.5 billion euros on fiber, 4G and the new 5G. A record, knowing that his investments were “only” 8 billion euros in 2015.

Monetize “the explosion of digital uses”

However, the context is now favorable, in terms of operators, to rising prices. The health crisis has a lot to do with it. The Covid-19 and its confinements have allowed the rise of teleworking and a myriad of digital uses ranging from video, to online shopping, to streaming. These practices, especially bandwidth intensive, require more powerful connections. They justify, for many French people, the abandonment of the old ADSL to switch to fiber. “61% of French people say they have discovered new uses in the last two years”, said Fabienne Dulac, head of Orange France, during the presentation of the new Livebox 6 in Paris. According to her, that “use explosion” records “in time”.

He was accompanied, according to the manager, by a “performance requirement” increased … that Orange, like its competitors, aims to turn cold and hard cash. Citing an OpinionWay study commissioned by the current operator, Fabienne Dulac states that 39% of French people say that “willing to pay more” for a faster, more reliable and secure connection. So do we see that prices go up in the coming months? Many observers do not believe this, as they believe that competition with four operators is still a solid bulwark.