Free Mobile has dramatically missed handset sales targets and requested that suppliers take back unsold stock, according to a report in French newspaper Les Echos.
Free Mobile is selling the iPhone 4S for €562.
Sources close to the situation told Les Echos that the operator, which only has three retail outlets, overestimated demand for handsets and is now left with "hundreds of thousands" in its warehouse. While the company is said to have sold some of its excess stock abroad, it has requested suppliers such as Huawei, ZTE, Samsung, and Research In Motion to accept back the excess inventory. Most vendors are thought to have declined to do so.
Free Mobile is said to have forecast that between 25 per cent and 30 per cent of its new subscribers would also purchase a handset. However, it is thought that no more than 10 per cent of customers used the occasion to buy a handset from the operator.
Maxime Lombardini, CEO of Iliad, the owner of Free Mobile, told Les Echos that the handset stock situation was of no concern and needed to be viewed in perspective. "We have no problem with terminals or stocks," Lombardini said. "We certainly fumbled on pricing at launch, but we can now claim the best market prices on handsets, as we can with voice and data subscriptions."
The company has also announced price cuts across a range of its available handsets, including the recently launched iPhone 4S, which at €562 is €67 cheaper than purchasing it from Apple. It is also offering the Samsung Galaxy S II at a lower price than the web-only offers available from France Telecom Orange and SFR.
Lombardini said that Free Mobile will increase its handset portfolio in the coming weeks.
- see this Les Echos article (translated by Google Translate)
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