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4G off to a roaring start in France

Eirwen WilliamsEirwen WilliamsNovember 18, 2013 at 10:15 AM0
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1.5 million.  That’s the number of mobile customers that have jumped to 4G in just a little over a month. After struggling for some time to respond to Free’s shakeup of the mobile market just under two years ago, France’s established telco giants are responding more adeptly as of late. While they all moved to (finally) offer more competitively priced and flexible mobile plans, building-out and launching their 4G networks have been fundamental to their current and future strategies, particularly for #3 player Bouygues who has arguably been most adversely affected by the changing mobile landscape.

How does the 1.5 million split across the big 3?  Well, SFR is currently the 4G leader and off to an impressive start with 600k 4G clients. However, the roll-out of their 4G network will be measured as, similar to Orange, SFR will only cover 40% of the population by end 2013. As for Orange, they have 350k 4G clients whih they anticipate will quickly grow to 1 million by year’s end. Their Head of France  Delphine Ernotte also indicated that 4G is actually generating “50% additional mobile usage, which is principally video and cloud (-based services)”.

Although SFR and Orange both look to be off to a strong start, it’s Bouygues that’s actually posting the most encouraging results. Last week Bouygues announced that they now have 500k clients on 4G. As pointed out in Les Echos, this result is particularly surprising as they launched their 4G effort later than Orange and SFR. However, their success is most likely due to the fact that their coverage, which stands at 63%, is much higher than that of their two biggest rivals.  Afer having finally received the go ahead from Arcep to convert their 2G network to 4G, they were able to get their 4G network running more quickly and at a lower cost than their rivals.  In addition, Bouygues management credits their high-volume data plans and competitively priced range of smartphones with 4G access for their strong start. The question is now whether Bouygues can keep up the momentum in a space that will undoubtedly become even more competitive in the months to come.  In perhaps a smart move to capitalize on their early success and keep the momentum going, they announced today their ‘satisfied or reimbursed’ offer. Following on their earlier promotion giving mobile users 1-month free 4G access, their ‘satisfied or reimbursed’ offer, which will run through January 5th, will give all new customers a 4G contract with mobile phone and one month free service.  If they are not satisfied within this month, they can cancel their contract without charge and be reimbursed for the mobile phone as well.

Meanwhile Free, who now have 11% of the French mobile market, continues to steadily build-out their mobile network. According to Maxime Lombardi, the head of their parent company Iliad, they want to ensure the widest coverage possible (goal:  75% by January 1st) before rolling out their offer so as to not “disappoint the customer”.  However, this is a very risky strategy for them. As mobile customers are acutely aware, 3G is painfully slow. This realization is only likely to grow in the near-term as mobile users continue to consume even larger amounts of data and look to access more cloud-based services. Add to that the fact that the big three and now Virgin with their upcoming 20€ 4G offer will be offering attractively priced and, likely, flexible 4G options, Free will need to move very fast and even more aggressively once their 4G network is ‘ready’ in order to avoid falling behind.

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