Free Mobile ups ante in French mobile price war

Iliad's Free Mobile is taking the fight to the competition by enhancing its market-busting €2 monthly tariff with a doubling of call time from one to two hours, adding unlimited text messaging plus Wi-Fi access.

This latest move by Free Mobile comes after Bouygues Telecom lowered the price last month of its low-cost B&You service to €9.99 per month. SFR and FT Orange have also recently launched price plans to challenge Free Mobile with tariffs ranging from €4.99 up to €9.99 a month for bundles of voice minutes and texts.

Virgin Mobile will also enter the fray this week with its new "unlimited" plan costing €9.99 per month for unlimited calls, texts and 100 MB of data. The French MVNO claims that its pricing significantly undercuts Free Mobile's €19.99 tariff on a like-for-like basis, according to La Tribune.

However, this aggressive revamp of its €2 package has raised concerns with an unnamed analyst within the broker Raymond James. Free Mobile risks cannibalising its €19.99 package with this new offer, the broker said, adding that customers on this higher tariff that use, for example, 300 MB each month, could opt to switch to the €2 price plan and pay for the extra data charges. It could also encourage users to revert to low-cost packages and limit their mobile Internet usage, except when within Wi-Fi coverage, according to Les Echos.

Free Mobile's Wi-Fi service is available via four million community hotspots in France.

For more:
- see this La Tribune article (translated via Google Translate) 
- see this Les Echos article (translated via Google Translate) 

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Report: SFR, Free Mobile discuss possible merger
SFR results hurt by domestic price war; Vivendi ducks break-up question
Rumour Mill: SFR faces €350M more in cost cuts by 2013
Vivendi takes knife to SFR projects, plans new strategy

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