), which operates under the Orange brand, has recently unveiled a
smartphone application called Libon, which will allow its users
to make free national and international calls within France
Telecom's network. This latest application from Orange will put
it in direct competition with other similar services like Skype,
WhatsApp and Viber.
Libon keeps record of all the recent conversations, messages,
calls and voicemails of its users. The application will be
available as an iphone application and will also be available for
other smartphones running on
) Android software from the first quarter of 2013.
Libon allows its users to communicate free of cost, thus
enabling them to utilize less of their paid services. This could
turn out to be a threat for the operators whose bottom line could
get hit if Libon gets mass acceptance. However, some premium
features like visual voicemail, voicemail transcripts and email
copies of voicemails are chargeable.
Over the past few years, the telecom operators have suffered a
lot due to the proliferation of free calling and texting
services. The Spanish giant
) had already launched a similar application called TU ME in May
while BOBSLED was initiated by Deutsche Telecom AG. Armed
with the huge popularity of
) iphone and other Android-based devices, applications like Libon
will only gain in popularity in the future.
Various operators across the telecom industry has been
developing a technology called Rich Communication service (RCS),
which necessarily updates mobile calls by providing instant
messaging, live video sharing and file transfers across multiple
devices. France Telecom is preparing to launch its own RCS
services in June 2013, which will help the company to compete
better with this free calling and texting applications.
France Telecom recently reported its third-quarter 2012
results where revenue slipped 3.5% year over year to $13.9%. We
believe the French giant needs to bring in RCS as quickly as
possible in order to stop the customers from sifting to these
free calling applications like Libon and thus halt the revenue
We currently maintain a long-term Neutral recommendation on
RadioShack. However, it holds a Zacks #4 Rank, implying a
short-term Sell rating.
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