Orange’s ultra-low cost mobile brand Sosh is now being extended into Free’s most profitable territory, fixed internet service. Orange announced this week that they will soon be launching a new quadruple play, non-engagement offer under the Sosh brand, including mobile, internet, TV and telephone service. The price of the offer will vary between 34.90€ – 54.90€ depending on which features the customer chooses. This pricing is very aggressive given that, as mentioned in Les Echos, Free’s mobile + triple play offer is currently around 52€ and Bouygues’ 55€. So in most cases, Orange will be able to beat both Free and Bouygues on price. Orange view this offer as the next logical step as, according to their executive director of Orange France Delphine Ernotte, “95% of customers who opted for Sosh, were also looking for an ADSL contract.”
Clearly though, this move gets Orange well beyond simply attracting new customers to Sosh. As Free redeploys the profits made on their bread and butter ADSL service into building out their future mobile network, Orange knows that going directly after their most profitable activity could be a real problem for Free. In order to keep the offer price at a minimum, Orange has made the call to launch a good, but not super modern service. So, for example, basic 3G coverage will be included but improved 3G will be at an additional cost and clients will get a basic Livebox without the most modern bells and whistles or, in some instances, a recycled premium Livebox. In addition, following Free’s lead, customer service will basically be entirely digital. However, Orange believes that this a trade-off more price sensitive customers will be willing to make for a better deal.
Of course, Orange will also be worrying about whether the new Sosh offer will cannibalize their newly launched Open quadruple play offer. However, Open which already has 3 million subscribers and is a much higher-end service offering subsidized phones and premium features, will likely appeal to a very different type of customer than Sosh. In addition, new services and features coming online such as 4G will also help to further differentiate the two.