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VAT debacle allows 790,000 to switch

VAT debacle allows 790,000 to switch mobile phone firms

NEARLY 800,000 people took advantage of a rise in VAT on their mobile phone contracts at the start of the year to switch operators.

Figures from telecoms watchdog Arcep showed that more than half a million people moved from the traditional network operators of Orange, SFR and Bouygues, towards virtual operators such as Virgin, E.Leclerc and NRJ.

Virtual operators, who offer services by leasing the networks of the main companies, have seen their market share rise to 8% with around 5.2 million clients.

Orange and SFR announced in December last year that they would increase the prices of mobile phone contracts along with increasing VAT from the start of 2011. However, that was followed by a publicity campaign from Arcep highlighting the fact that this rise constituted a change in contract terms which legally allowed users to switch operators without cancellation fees in the four months following the rise.

Faced with an exodus of clients, and the fact that rival Bouygues kept their prices the same, both SFR and Orange climbed down and reduced their prices in February.

However, the latest figures from Arcep show the debacle has caused a considerable shift in the mobile market with 791,000 numbers “ported” (that is, a client keeping their number but changing operator). A spokesman for the largest virtual mobile operator, Virgin, said the first four months of the year were “exceptional and impressive” with an influx of 160,000 clients.

SFR and Orange have played down losses to around 85,000 clients each, but Bouygues said it had received at least 210,000 new customers.

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