Google Box Helps SFR Sharpen Price Competition on TV Services

SFR is using Google Inc. technology to offer cheaper bundles of television and phone services as France’s second-largest phone operator competes for customers with Orange SA, Bouygues SA and Iliad SA.

SFR has packaged TV, wireless and Web access with a set-top box based on Google’s Android operating system under the phone company’s low-cost Red brand. The price will be about 20 percent less than a similar Red offering at present using a different box.

The new Google-focused box costs less to make than the phone company’s standard model, SFR Chief Marketing Officer Guillaume Boutin said today at a conference in Paris. That gives SFR, a Vivendi SA unit which Altice SA agreed to buy last month in a $23-billion deal, more room to cut prices.

“This offer is for a very specific segment -- generation Y customers, under 30, who are looking for a cheap price,” Boutin said. “We’ve intensified our work alongside Google since early last year. Their services fit our target clients.”

SFR teaming up with Google is the latest example of a carrier turning to an Internet company for content such as movies, music and TV shows. Vodafone Group Plc, the world’s second-largest mobile carrier and Europe’s biggest, is in talks with Netflix Inc. to offer subscribers access to streaming movies and television shows, people familiar with the discussions said last month.

Carrier Move

“These partnerships are a sign that carriers are moving away from developing their own differentiated TV services,” said Gilles Fontaine, an analyst at Montpellier, France-based researcher Digiworld. “Launching a set-top box every three years just isn’t enough to rival Google or Netflix. Some phone companies are realizing that.”

With the new box, SFR is setting Mountain View, California-based Google’s offerings against its own. To watch a movie through video-on-demand, clients will get to pick between SFR’s rental platform and Google Play, where the same content is sometimes cheaper.

SFR will start selling the new Red package on June 3 for

39.99 euros ($55) a month.

More than two years after discounter Iliad became France’s fourth network operator, resulting in price cuts and hurting profits across the industry, French carriers are seeking to merge. Orange and Bouygues are exploring a potential combination after French Economy Minister Arnaud Montebourg called for consolidation.

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