French MVNOs hit hard by Free Mobile launch

French MVNOs are reportedly suffering heavily following the launch of the low-cost provider Free Mobile. The French monitoring site Toosurtoo claims that 26 per cent of Free Mobile's customers have come from existing MVNOs, with Virgin Mobile being the worst hit by defections.

According to a report in the French newspaper Les Echos, Stéphane Beyazian, a telecoms analyst with French-based equity research firm RJEE, said in a note to clients: "The viability of the MVNO market is at risk and network operators will find it difficult to renegotiate contracts."

Statistics from the Toosurtoo monitoring indicate that almost 9 per cent of Free Mobile's new customers came from Virgin Mobile, while La Poste Mobile lost around 5 per cent of its users to the new entrant and LeClerc Mobile lost just under 3 per cent.

The major mobile operators have also not escaped Free Mobile's impact, with Toosurtoo stating that 16 per cent of Free's new customers came from Bouygues Telecom, 22 per cent from SFR and 30 per cent have moved from Orange France.

Free Mobile has refused to confirm customer numbers, although Toosurtoo estimates that well over 1 million subscribers have already signed-up to use the service. Free Mobile has been aggressively targeting French customers with its offer of €19.99 a month for unlimited texts and calls, 3 GB of data and unlimited Wi-Fi access.

Meanwhile, the powerful French trade unions--CGT, SUD and the CFE-CGC--have expressed their fears that the success of Free Mobile could result in lower wages and even job cuts for workers elsewhere in the mobile operator industry.

"Not only will there be little or no job creation in France from the launch of the new mobile operator, but to align their prices [with Free Mobile] while preserving their investment capacity, the other three operators will be forced to react as well," said the CFE-CGC, according to a separate report carried by Les Echos. "The arrival of Free Mobile will most likely result in a loss of at least 10,000 jobs." 

For more:
- see this Les Echos article (translated via Google translate)
- see this separate Les Echos article (translated via Google translate)

Related Articles:
Free Mobile rush overwhelms French number portability systems
Iliad's Free Mobile finally unleashes price war in France
FT Orange prepares to fight Free Mobile on price
Free Mobile preps brutal price war with French operators

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