Xavier Niel helps French consumers reduce mobile bills:
If you have not heard of Free yet, you will do, especially if you are French.
When you are hailed as the French equivalent to Steve Jobs you know you have to be doing something that people take note of. And while I can see that Mr Niel is indeed a self starter and a champion of the people and free market economy, I personally put him down as more of a slightly sleazy Richard Branson than Steve Jobs, but hey who worries about splitting hairs between two well respected pillars of the business world.
In a bid to shake the stagnant and over priced French mobile sector and in typical French style Mr Niel talks of “liberation” of the mobile sector using his Free telecommunication company as the focus.
Jail bird set free:
And with a background in adult chat services I am sure he knows his way around liberal quarters already. Mr Xavier actually got fined some 250,000 Euros and spent two years in jail for laundering money via sex shops.
Mr Niel is not one of the well healed from established universities in the country, he is more your grass roots, at the coal face kind of guy.
Indeed in 2002 he started what was called Freeview, a set-top-box which was offering combined Internet, TV and calls, this concept of bundling was brought to the French market with full intention of bringing down prices all round, which it did.
Talking about his new adventure into shaking up a nascent mobile market that is seen to be ripping off the French public, he states:
“We are sick and tired of being ripped off with the highest prices in Europe,”
Speaking of the plans, Jessica Ekholm an analyst from Gartner said:
“This is some much-needed competition coming in to the French market…. They’re obviously trying to shake things up,”
Mobile phones the target now:
So with a pedigree of aggressively entering established markets and bringing in new pricing models and packages, Mr Neil now wants to enter the French mobile sector to help bring prices in line with the rest if Europe.
French mobile users pay high price for services:
French mobile networks currently charge the most for their mobile services and sees pricing set at much higher levels than European neighbours in per capita average costs.
The package that Mr Xavier currently wants to offer consumers in France looks like this:
- Unlimited calls, messaging and up to three gigabytes of data for €19.99 euros ($26) per month.
- 60 minutes of calls and 60 text messages for €2 euros per month.
After this announcement, the Free website was said to have crashed with the deluge of interest.
At an Apple inspired launch event Mr Xavier went on to proclaim:
“Free believes that up until now you have been used as cash cows. We will give the [other operators] a lesson.”
But with Free not expected to have full network coverage until 2018, and already aggressively stepping on bottom lines of the very networks they need to rent from to provide the service free is offering, this move may not be without some pain to the rather shrewd businessman who sold his reverse directory service on France’s Minitel back in 2000 for 40 million euros.
Mr Xavier has now also been found to have jointly bought the French newspaper La Monde, despite President Sarkozy putting in his opposition, he has also paid for 50% of the rights to the song “My Way”, which may well point to his own perception of self in this maddening world!
So while this all sounds fantastic for consumers in France, time will tell where the devil in the detail lies and how long Free can sustain such cut price deals when they do not really have the kind of power in the market when still reliant on rental relationships from competitors to ensure service levels are met.Anthony Munns