France's two largest operators, France Telecom's Orange and SFR, have done a sudden about-face and said tariffs will stay the same after they had announced earlier that existing subscribers would be charged more for their mobile calls.
The two operators had earlier stated that they would increase charges after the French government implemented a rise in VAT on triple-play bundles. The country's No. 3 operator, Bouygues Telecom, had indicated a few weeks prior that it would not pass on to its subscribers any tariff increases following the VAT hike that took place at the start of the year. However, it admitted that its triple-play subscribers would see a small rise in their monthly ADSL connection fee.
These abrupt decisions by Orange and SFR not to raise their prices is said to indicate that the French mobile market is fast becoming more price sensitive. According to Dow Jones Newswires, Orange said that it "has to adapt to the new conditions of the French market," while SFR, in response to customers complaining of being confused, added, "We decided to clarify things by not implementing the project to raise prices for mobile clients."
French mobile subscribers have the option to break their service contracts and sign up to another operator during the four months following a tariff change while retaining their handsets.
In a report carried by Telecompaper, SFR's director of consumer services, Frank Cadoret, told the French newspaper Le Monde that SFR's call centres had been overwhelmed by subscribers looking to change to other operators from the beginning of February, with 20,000 more cancellation requests than normal.
Le Monde speculated that not imposing the VAT increase would cost SFR around €100 million this year.
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