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Millions of French users flock to 4G mobile services

The logo of the Orange telecommunication and internet provider is seen on the facade of a store in Paris July 24, 2013. REUTERS/Christian Ha
The logo of the Orange telecommunication and internet provider is seen on the facade of a store in Paris July 24, 2013. REUTERS/Christian Ha

PARIS (Reuters) - France's three biggest mobile operators have signed up 1 million customers each to new superfast mobile services, although a hoped for boost in margins from such 4G technology looks unlikely to materialize because of a price war.

Take-up of 4G across Europe, while lagging the United States and Asia, has begun rising in the past year, driven by rocketing demand for mobile data and launches in major markets like Germany, Britain and France.

In France, Orange, Vivendi's SFR, and Bouygues Telecom said on Thursday that they had reached the million customer mark - a target each carrier had separately set for the new year when they began racing to build the new networks in early 2013.

Upstart player Iliad declined to say how many 4G customers it had attracted to its Free Mobile service.

Iliad shook up the market in December when it announced it would make 4G available for no additional cost to its customers on its main 19.99-euro ($27) monthly plan.

That prompted the three incumbent operators to react with a round of price cuts, with Bouygues going the furthest, and all adding 4G to their no-frills plans sold without a contract.

"The competitive environment remains difficult, with hectic behavior from competitors," Frederic Boulan, an analyst at Nomura, wrote in a note.

Orange once hoped that the shift to 4G would help it lift its average revenue per user (ARPU) by up to 10 euros a month, but recently its executives have said 5 euros is looking more likely.

The four French operators are still in the process of building their 4G networks with Bouygues the furthest along and Iliad far behind.

As of January 1, Bouygues had activated 5,523 mobile antennas capable of handling 4G traffic, Orange 4,244, SFR 1,294, and Iliad 824, according to France's ANFR spectrum regulator.

Britain's largest mobile operator EE on Tuesday said it had attracted 2 million 4G customers, leading average data use across its network to grow by 70 percent last year, with social media and video driving the biggest increases.

(Reporting by Gwenaelle Barzic and Leila Abboud; Editing by Pravin Char)

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