France’s three mobile operators Orange France, SFR and Bouygues Telecom have reportedly rejected a radical proposal by local ISP Free to launch mobile services over their networks at “near-cost” wholesale rates. French newspaper Les Echos reports that Free Mobile, which is owned by French telecoms group Iliad, had called for the French operators to embrace a “local loop unbundling” network-sharing model common in fixed-line telecoms. It proposes paying a fixed annual fee to a host operator but paying for traffic at cost price with only a slight operator margin of less than €0.02 per minute. This is considerably less than exists in the current MVNO model in France, where MVNOs are reportedly offered only a 35-40% discount on network operator’s retail prices. Free also demanded that it is able to interconnect its own equipment with the host operator’s mobile network, especially for subscriber location functions.

Les Echos reports that Iliad’s proposal is a “fall-back solution” if it is unsuccessful in securing France’s fourth and last 3G network licence. Iliad has already had one offer for the licence turned down by the French regulator ARCEP.