Editor’s note: This article was first published in January 2012. This news piece was written when Free launched its mobile offers in France; the plans, prices and market positions it describes have since changed.
Xavier Niel, owner of Free, France’s fourth mobile operator, has shaken up the sector, leaving the other phone operators with two options: cut their prices or simply lose their customers. Free has slashed phone prices with the launch of its long-awaited offers, which are aimed at a population whose purchasing power is shrinking.
One of its offers is a flat rate of 19.90 euros a month that gives users unlimited calls, SMS and MMS and 3 GB of mobile data, with no minimum contract period. The other is called the “social” rate, because it’s aimed at the hardest-hit part of the population: people living on a single benefit of 400 euros. They will get a 2-euro-a-month plan with one hour of calls and 60 text messages. Beyond the plan, calls will cost 5 cents and messages 1 cent.
Customers who already have a contract with the company will get an additional discount on the first plan, and the “social” rate will be free for them. A real revolution in the market, and that’s not all: Niel has announced a deal with Apple under which people without the means will be able to get an iPhone 4 for one euro through credit.
It was a masterful speech by this entrepreneur, who urged mobile users to teach their operators a lesson by asking them to match these prices:
“Teach your operator a lesson. Tell them today that you’ve understood. Call them and join us, or demand that they give you the same rate. We’ll let you choose your weapons.”
A clear, direct message, a carefully crafted strategy, a potential market deeply let down by the phone companies, and a product that helps consumers save: Free could go from being France’s fourth operator to the leading one in Europe if the other companies don’t get the message.
Featured image: leweb3 (Kmeron), CC BY 2.0, via Wikimedia Commons.
