(The following statement was released by the rating agency) LONDON, November 19 (Fitch) Fitch Ratings says the outcome of the 700 MHz mobile spectrum auction in France concluded on Tuesday is unlikely to have an immediate impact on the competitive dynamics in the market. Over the medium-to long-term, operators with higher amounts of spectrum below 1GHz could gain a network cost and flexibility advantage as capacity requirements for LTE data grow. In the near-term Fitch expects existing competitive trends to persist as challenger Iliad SA continues to gain scale in mobile and strengthen its quad-play proposition. The auction leaves Orange SA with a leading position of 31% of sub-1GHz spectrum, followed by Bouygues Telecom SA and Numericable-SFR S.A. (28% each) and Iliad SA (13%). Orange's stronger spectrum holding will provide the company with greater flexibility in deploying its network and meeting capacity demand for growth. At end-2014 Orange's and Bouygues' networks covered just above 70% of the French population, ahead of Numericable-SFR's and Iliad's that only reached 53% and 33% respectively. The auction saw Orange and Iliad secure two blocks of 5 MHz duplex each, while Bouygues Telecom and Numericable-SFR secured one block each. The total cost of the spectrum of EUR2.8bn is slightly above the reserve price of EUR2.5bn. The auction was of particular importance to Iliad due to its lack of holding in the 800MHz band and 2x5MHz holding in the 900MHz band. Spectrum holdings in the lower bands are essential to achieving cost efficiency and in building geographic coverage. By securing two blocks of 700 MHz spectrum, Iliad has reduced its dependence on its 900MHz holding. While competitive pressures are here to stay, Orange's substantial network investments secure the incumbent's operational prospects in the medium term, with a clear network advantage versus its competitors. The company's allocated 700 MHz spectrum will cost it EUR932m which is broadly in line with our expectation and has no material impact on our leverage assumptions for the company. Fitch revised Orange's Outlook from Negative to Stable in June 2015 as the company improved operational trends and cash flow generation. Contact: Anna Martinez Associate Director +44 20 3530 1560 Fitch Ratings Limited 30 North Colonnade London E14 5GN Tajesh Tailor Director +44 20 3530 1726 Media Relations: Francoise Alos, Paris, Tel: +33 1 44 29 91 22, Email: [email protected]; Peter Fitzpatrick, London, Tel: +44 20 3530 1103, Email: [email protected]. Additional information is available on www.fitchratings.com. ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.