France Telecom (FT) Orange expects domestic average revenue per user to fall by 10 per cent this year due to the impact of low-cost offers from Iliad's Free Mobile.
In an effort to combat Iliad-owned Free Mobile, FT Orange has revealed plans to slash the prices by 20 percent of its new set of mobile offers, dubbed "Origami," in an attempt to stop further customer losses and regain those that have departed.
Delphine Ernotte, who heads FT's domestic mobile business, said the new offer would include subsidised handsets in return for customers signing up to one or two-year contracts, according to Reuters. However, FT is being clear about its ARPU forecast. "On average revenue per client, clearly we have forecast that revenue was going to fall," she said.
The Origami range will sell from €24.90 a month for an hour of calls and unlimited SMS and MMS, all the way up to €159.90, with the option to upgrade the smartphone each year.
This shift by FT Orange extends the company's low-cost Sosh pricing strategy up into its mid-range portfolio, and brings the company's tariffs much closer to those already marketed by rivals Bouygues Telecom and SFR.
However, FT Orange's Sosh and Origami offerings still remain significantly higher priced than Free Mobile. For €19.99 per month, Free Mobile offers unlimited voice calling, SMS and MMS and up to 3 GB of data on 3G network speeds. Orange is hoping that its network quality and breadth of services, such as its online music service Deezer, will reduce churn.
The French stock market remained unmoved by FT's announcement, but the company's shares have slumped 35 per cent this year, more than double the decline in the overall sector.
- see this Reuters article
France Telecom's Q1 squeezed by domestic price war
France Telecom exec claims Free Mobile now losing customers
France Telecom could reap €2B from Free Mobile roaming deal
FT Orange attacked by SFR owner for hosting Free Mobile
FT Orange loses 200K subscribers to Free Mobile--in 6 weeks
Free Mobile's impact-we should have seen it coming