The low-price 4G tariff introduced by Free Mobile, France’s newest operator, has drawn criticism from politicians concerned it will harm investment and employment in the telecom sector.
Iliad-owned Free added 4G at no extra cost to customers on Tuesday, despite the technology offering superior broadband speeds compared to existing 3G services.
The move ramps up the pressure on France’s incumbent operators Orange, SFR and Bouygues Telecom, who were hoping to charge higher prices for 4G services to recoup some of the profits hit by the arrival of Free.
Arnaud Montebourg, industry minister, and Fleur Pellerin, junior minister for telecom and digital issues, criticised Free’s move in a statement, warning that “a new price war would weaken the ability of operators to maintain significant levels of investment in telecommunications infrastructure”.
They described Free’s move as “bold and risky”, adding that under-investment in infrastructure caused by the low-cost strategy will lead to poorer quality service and job losses.
Since its launch at the beginning of 2012, Free has secured a 10 per cent mobile share, and triggered a price war between the other operators in France.
The concern the incumbent operators have about Free in France contrasts with the UK, where 3 UK, the smallest operator, failed to attract any criticism when it launched its LTE service at no extra cost earlier this week.