Iliad's Free Mobile finally unleashes price war in France

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Free Mobile, the mobile start-up service of French broadband service provider Iliad, launched its long-awaited mobile phone services in France on Tuesday with prices that are significantly lower than those currently offered by existing operators France Telecom Orange, Bouygues Telecom and SFR.

Free Mobile will charge €19.99 a month for a plan that includes unlimited texts, multimedia messages and calls, a fair-usage policy of 3 GB of mobile data and free calls to 40 countries in Europe and North America. This compares with €49.40 for a similar offer at Orange France's new "Sosh" unit, which is targeted at a more Internet-savvy market.

"Up until now you have been cash cows," Iliad founder Xavier Niel said during a press conference, according to the Wall Street Journal. "Now you can either call your current operator and ask for the same price or join us."

Free Mobile also includes limited Wi-Fi in its monthly plan, and highlights there will be no restriction on the use of the mobile data allowance for services such as VoIP services.

According to the Financial Times, Niel also confirmed in a press conference that none of the newcomer's price plans will have a minimum contract length. The usual approach in France is to offer contracts of up to 24 months, attached to subsidised smartphones. However, the Free Mobile approach is to allow new subscribers to buy smartphones in 12 or 24-month instalments, thereby moving away from the subsidy approach.

It is not always easy to enter an already mature market as a fourth entrant, but Free has some advantages: 4.9 million subscribers to its high-speed Internet, television and fixed-phone services and a strong brand in France, to name one. Nevertheless, it is currently dependent on Orange for 70 per cent of its network coverage, and building its own network would be an expensive endeavour.

The three existing operators have been preparing themselves for the arrival of Free Mobile with price cuts and the launch of secondary brands, such as Sosh by Orange and Bouygue Telecom's "B&YOU." Both Sosh and B&YOU also offer alternative device financing options, and enable Orange and Bouygues Telecom to take different approaches to the mobile market without affecting their core brands.

For more:
- see this FT article (reg. req.)
- see this Reuters article
- see this WSJ article (sub. req.)

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