France’s infamous price war appears to be slowly reaching an end, with a new report from watchdog Arcep showing that mobile prices decreased at a far less aggressive rate in 2015 compared to previous years.
Iliad-owned Free Mobile’s arrival in the French market in 2012 sparked an aggressive price war with Orange, SFR-Numericable and Bouygues, as the new entrant began undercutting rivals.
Consolidation talk has since been high on the agenda to cut the market back to three players, but no deal has yet surfaced, despite numerous attempts.
While prices continued to decline in 2015, according to Arcep’s annual study into price changes for mobile services between 2010 to 2015, it was at a much lower rate.
There was an average cut of 5.5 per cent in 2015, accounting for both flat rate plans and prepaid cards, representing a dramatic decrease from 2013, when prices fell by as much as 26.6 per cent, and 2014, which saw a fall of 10.6 per cent.
Arcep put the decrease in the price of flat rate plans down to the “swift development of SIM only plans” without a subsidised handset, as well as the trend of increasing data allowances attached to plans, with prices remaining unchanged.
Approximately 64.7 per cent of phones were purchased without a package last year, a 7.9 percentage point increase from 2014.
It also said that price decreases were “more pronounced with the less they consume”. For heavy consumers, prices remained virtually unchanged in 2015, while light consumers saw decreases of 12.2 per cent.
Orange CEO Stephane Richard said last year it was “insane” to think that prices would continue to decline in coming years.