By: Gigaom
January 17, 2012 at 20:15 PM EST
Free starts a wireless French Revolution
When Free.fr launched its revolutionary new wireless service last week, it put French mobile operators on notice, and they have all responded. The problem is they've come nowhere near close to matching the deep data and voice discounts Free is offering.

When Free.fr launched its revolutionary new wireless service last week, it put French mobile operators on notice, and they have all responded. Two of France’s Big 3, have already cut the prices on their budget-minded plans to compete with Free’s €20 ($25.50) monthly unlimited voice, SMS and data plans, while the third, Bouygues, plans similar price slashes this week, according to Reuters. The problem is none of those carriers have come close to matching the deep discounts on France’s normally pricey mobile services that Free is offering and they may never be able to.

As Om detailed in his in-depth profile of Free Mobile, Free isn’t operating like any typical carrier. It’s using its network of high-speed DSL connections to create a communal wireless network of sorts, splitting home Wi-Fi between public and private channels and then using that public portion to create the mother of all hotspot networks. The density of cities like Paris practically guarantee that any given mobile customer will be in range of one of these nano cells, allowing it offload mobile data very cheaply. As it incorporates femtocells into its set-top boxes, Free is doing the same for voice and SMS.

Filling in the gaps between Wi-Fi, Free has launched a 42 Mbps HSPA+ network. To prevent customers from tying up too much cellular capacity, Free has implemented a rather liberal 3 GB-per-month cap, but as long as you remain within Wi-Fi’s warm embrace, you’re data usage faces no restrictions.

Though France’s operators like many of their international peers make use of Wi-Fi, they don’t have a 5-million-access-point advantage of Free. For instance, France Telecom’s hotspot network consists of only 30,000 access points. Consequently their pricing responses haven’t even gotten close to matching Free’s plans.

France Telecom’s Orange has launched two plans for its Sosh SIM-card service (i.e. bring your own phone) that both undercut Free’s €20 plans, but neither delivers anything near unlimited. A €9.90 plan includes unlimited SMS, but only 120 voice minutes and bills data at a half-Euro per 20 minutes (though the plan will soon included unlimited Facebook and Twitter use). A €14.60 plans adds 1 GB of data usage to the plan, while a €24.90 stacks on unlimited calling. That’s essentially the same service that Free offers with only a third of the data bucket, and that’s before accounting for Free’s hotspot network, which adds a hefty data multiplier. Just for good measure, Free has also launched a basic service including 60 minutes of calling and 60 minutes of data for a mere €2 Euros a month.

Free isn’t just gunning for new customers by challenging the established carriers with aggressive pricing. Free is attempting to overturn the old order completely by offering prices the traditional carriers have no hopes of matching unless they fundamentally alter the way they build their networks and provision mobile service. Those operators seem to be treating Free as a bottom-of-the-market nuisance, and are challenging it only in the bring-your-own-SIM space that Free is currently targeting. That may be a big mistake. Not for the first time in France’s history, there’s a revolution in the making that could overturn the established order and see its effects ripple throughout the world – this one just happens to be focused on wireless.

Image of Eugene Delacroix painting courtesy of the Louvre

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