Report Overview


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Launch of Free Mobile


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The launch of the fourth mobile network operator in France has so far met with dramatic success, gaining around 1.5 million subscribers in the first month, driven by rock-bottom pricing and a clever mass media PR campaign.
Its tariffs are, however, so low that it is very hard to see how they are sustainable in the longer term. In the short term, Free’s economics are boosted by asymmetric voice and text termination rates that result in other operators’ customers effectively subsidising Free subscribers by €5 to €10 a month.
This arbitrage is very likely to disappear over the next two years, but Free Mobile can increase its prices when this occurs. Its challenge will be to acquire a critical mass of subscribers before this point, and to retain them thereafter.