There were rumblings last week. There were grumblings the week before. This week, Free Mobile’s patience finally snapped, as it struck out against what it claims is an organised smear campaign against it. For a rundown of the claims and counter-claims involved, and some specific accusations that have been put to Mobile Europe, head on over to our story on the whole business.
For what it’s worth, from the briefings I have had I think it’s more of a disorganised smear campaign, although the leaking of a report critical of ARCEP’s methodologies this week was a little…suspicious.
But whatever the truth, the fight is getting bitter, and many in France feel it didn’t need to be this way.
French mobile operators are privately bemused by Free’s approach. It’s not just that Free Mobile came in cheap in its pricing, they knew that was going to happen. It’s that fact that it shot so very, very low. In the view of the incumbents, Free is destroying value in an entirely unnecessary way. One operator told me that they cannot work out the sums in any other way as to make Free’s model completely unsustainable, as a standalone business.
If Free had bought in to the generally cosy “plenty of room for all” mentality then things would have been just about bearable. But in its determination to utterly detonate the market, it is threatening everyone.
It’s not as if there aren’t other markets with four players, but even where one of them is very aggressive in it pricing, things have been sustainable. Take Spain, where three major carriers are represented in Telefonica, Orange and Vodafone, and Yoigo is fulfilling the role of the low cost outsider.
MWC12 on video. Custom content from Barcelona
Or take the UK, where again Three has taken the role of the bundle-happy fifth, and now fourth, operator. In both those cases there is a sort of toleration of the fourth placed player, an understanding that in the end, massive scale will not suit the operational capability of the underdog.
The other aspect of the Free row is that it is not all-the-rest versus Free. The incumbents are squabbling amongst themselves too, over the wholesale deal that Orange cut Free. Orange insists that it offered normal rates, and is not the cause of Free’s ability to offer such low rates. Such lack of unity is likely to cause them to race lower in their own pricing, in an effort to win customers from each other, to replace those heading to Free.
Meanwhile Free gives every impression of loving the disruption it is causing amongst its bigger cousins. This week, for example, it innocently let slip that those very operators (SFR, Bouygues) that are criticising Orange for facilitating its market entry themselves offered Free far more competitive terms than Orange.
Not only does this call the other operators out as hypocrites, but it has the added insult of letting them know that Free chose Orange because it thought it had the best network.
It’s not all doom and gloom in France though. This week representatives of all three, er, four operators assembled to praise their initiative in bringing mobile coverage to the Channel Tunnel. Naturally, the French side of the Tunnel would get coverage first, on kit provided by a French (sort-of) company (Alcatel-Lucent). The slow old Rosbifs won’t get around to equipping their side of the tunnel until after the Olympics. This successful example of French endeavour was signed into being in the presence of Trade Minister Besson, to complete matters.
There was no mention, though, that the company providing the bulk of the actual in-tunnel systems is, whisper it, English. Vive La Difference.
Keith Dyer
Editor
Mobile Europe