Free Mobile, France’s newest operator, has drawn criticism from French politicians concerned it will harm investment and employment in the telecom sector due to its low cost.
Iliad-owned Free added 4G at no extra cost to customers on Tuesday, providing faster speeds than existing 3G services. LTE, of course, is designed to lower the cost per user by enabling more people to use the same tower.
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.
Free in France offers unlimited talk, unlimited SMS and MMS messages, tethering and unlimited data with a speed reduction after 3 GB. In the U.S., that plan might cost $100 for limited data with a two-year contract. In France, Free charges only $25 per month and there is no contract.
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.
By contrast, UK operator 3, the smallest operator in England, failed to attract any criticism when it launched its LTE service at no extra cost earlier this week.
Three launched LTE services in December 2013 in London, Birmingham and Manchester and will expand to a further 50 locations by the end of 2014. In February, some 1.5 million customers who have 4G devices will be able to access 4G. Three expects to cover 98% of the UK population with LTE by the end of 2015.
Currently, all four of the major UK mobile operators offer LTE, including Everything Everywhere, Telefónica UK (O2), Vodafone UK and Hutchison 3G (3). Only Three says it will provide 4G without any extra costs, making it the cheapest price for 4G in the UK and the only unlimited 4G service in the UK.
UK regulator Ofcom announced 4G auction winners in February of this year, for its spectrum auction in the 800 MHz and 2.6 GHz bands. After more than 50 rounds of bidding, the winners were: EE, Hutchison 3G (Three), BT subsidiary Niche Spectrum Ventures, Telefonica (O2) and Vodafone.
Ofcom said the auction only brought in £2.4 billion pounds, less than the £3.5 billion it had anticipated. Telecom companies MLL Telecom and HKT, which qualified for the bidding, came up empty. Interestingly, Vodafone — headed by CEO Vittorio Colao who famously suggested only “technofreaks” were into 4G speed — spent the most, notes Engadget.
Everything Everywhere had a head start offering LTE service in the U.K. using their refarmed 1800 MHz band. Competing mobile operators Telefónica UK (O2), Vodafone UK and 3 can now start playing catch-up with rival Everything Everywhere.
Mobile operators in the UK have a total of 80 million subscribers, with a 130.55% penetration rate.
In other news, Verizon has won FCC approval for its $130 billion takeover of Vodafone’s share of its wireless network. Verizon Wireless, will buy back the 45-percent stake Vodafone has owned since 1999. Vodafone shareholders will also get Verizon stock as part of the exchange.
With the commission’s blessing, Verizon will then have complete control of its wireless communications business when the purchase closes in Q1 2014.
Related Dailywireless articles include; UK Auction Winners Announced, UK Begins 800/2.6GHz Auction Process, Joint LTE Network in UK Planned by Vodafone and Telefónica, Ofcom: LTE This Year for Everything, Everywhere, Joint LTE Network in UK Planned by Vodafone and Telefónica,