French cellco Bouygues Telecom won’t raise its mobile prices to account for a local tax hike, but will apply extra charges to some fixed-broadband services.
The telco hopes the mobile price freeze will differentiate it from the competition, predicting that a rise in VAT on triple-play services applied on January 1 will see overall prices “increase significantly,” from current levels.
However Bouygues DSL customers will see prices rise by almost €2 from their current level of €29.99 per month to cover the VAT rise, though the firm will hold fiber prices at €39.99.
Bouygues decision on mobile customers isn’t as philanthropic as it may seem. French law dictates that subscribers are freed from existing contracts if prices are changed, so by freezing its tariffs the carrier effectively locks-in its current mobile users.
French economic minister Francois Baroin revealed plans to increase the VAT applied to triple-play services in August, claiming the move was necessary to bring the country in-line with European Union rules.
The change means the tax added to bundled services has risen from 5.5% to 19.6%.
Rival operators France Telecom, SFR and Numericable have each announced they will raise prices, though SFR will continue to offer unlimited fixed-to-mobile calls, Fox Business reports.