Cegetel

» see cegetel.fr as it lived, on the wayback machine

~ the last words ~

France opened its telephone market on 1 January 1998, and Cegetel had been built for that date specifically. Compagnie Générale des Eaux registered the company in Paris on 18 October 1996, though Cegetel's own press material dates itself to that September, and announced it would be ready when the rules changed. Around the water company sat three foreign operators. British Telecom took 25 percent for a reported £1.1 billion plus its existing French operations. SBC went to 15 percent and Mannesmann to 10, which left the water company holding half. AT&T had been lined up for the role BT ended up with and lost it.

Underneath the holding company was the thing that actually made money, which was SFR, the mobile network. At the start of 1998 Cegetel counted two and a half million customers and almost all of them were mobile ones: two million on SFR and half a million on a prepaid product called TAMTAM. Revenue had gone from 5.8 billion francs in 1996 to more than 10 billion in 1997, and headcount had nearly doubled in a year to over four thousand.

SFR is a name anybody who has changed planes in France knows, because it is still on the shops. Cegetel is not a name I ever had reason to learn, and those two facts together are the grave in miniature. The subsidiary lasted. The group that assembled it got deleted.

~ the record ~

~ the number seven ~

On 26 November 1997 Cegetel showed the press what it would sell to households, under the brand Le 7. The mechanism was as simple as it sounds. To route a call over Cegetel instead of France Télécom you dialed 7 as the first digit instead of 0, changing nothing about your handset, your wiring or your own number. The subscription was 10 francs a month including tax, and the call tariffs ran between 10 and more than 60 percent below the public rates.

It did not start on liberalization day. Cegetel's own announcement explains why with unusual frankness: it had found it impossible to test interconnection with the incumbent's network under satisfactory conditions before 1 January, so it would open commercially on 1 February instead, in three regions covering about 40 percent of French telephone subscribers, and reach the rest of the country by the end of May at the latest. The Lyon launch happened on Friday 30 January 1998 with around 150,000 France Télécom subscribers signed up to try it. Roughly a fifth of them had to wait anyway, because France Télécom had not yet replaced the old switches on their exchanges.

~ shareholders in order ~

By 1999 the register had been rearranged into Vivendi 44 percent, BT 26, with Mannesmann and SBC holding the rest. That arrangement held until October 2002, when Vodafone offered to buy out BT and SBC and then bid about $6.6 billion for Vivendi's own stake. Accepting that offer meant handing Vodafone control of the group. Vivendi was deep in a debt crisis at the time and its options were narrow, and it chose the expensive one: on 3 December 2002 the board voted to exercise its pre-emption rights, and in January 2003 it paid BT €4 billion for 26 percent.

Having spent that, Vivendi then dismantled the thing it had defended. On 18 December 2003 the shareholders of Cegetel Groupe approved a merger that folded SFR into the holding company and renamed the result SFR, so the group stopped being called Cegetel before any customer noticed. Thirteen days later the fixed-line business was reorganized into Cegetel SAS, owned 65 percent by SFR and 35 by the railway. 2003 was also the peak year by every measure that got published, at €7,574 million of revenue and 18.4 million customers. SFR held 35.3 percent of French mobile that year against Orange's 48.8.

~ the name goes ~

The fixed-line half was the loss-making half. Its revenue fell 9 percent in 2003 to €841 million and it still lost €30 million at the operating line, against nearly two billion of operating income from mobile. So SFR traded it away: the combination of Cegetel SAS with Neuf Telecom was announced on 11 May 2005 and completed on 22 August, leaving SFR with 28.2 percent of a company now called Neuf Cegetel. Vivendi's accounts record the transaction plainly as a divestiture of 71.8 percent of SFR's interest in Cegetel.

What followed was a managed starving of one of the two brands. From 1 June 2006 Cegetel customers were offered a free move to Neuf services with €25 for their trouble. The group's chief executive described the policy as a gentle migration whenever a Cegetel subscriber asked for anything extra, and the French trade press noticed that every new product the group launched carried the Neuf name. Cegetel SAS was struck from the companies register on 30 June 2006.

On 26 October 2006 an industry site ran the headline that Cegetel was dead and Neuf was taking over, reporting that nobody could sign up for a Cegetel ADSL offer any longer and that the green site had been rebuilt in somebody else's colors. The archived captures agree to within a month: cegetel.fr serves about 9,500 bytes of Cegetel's own shop on 4 October 2006 and about 3,900 bytes of a Neuf Cegetel holding page on 3 November. The address still resolves today, renewed by SFR until 2027, pointed at nothing.

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