Four of Europe’s leading mobile phone operators – Orange, T-Mobile, Telefónica Móviles and Telecom Italia Mobile (TIM) – have formed a new cross-border strategic alliance called FreeMove to challenge the growing threat of Europe’s leading cellco by revenue, Vodafone. The FreeMove initiative will give nearly 170 million managed customers in 21 European countries and around 230 million customers worldwide, access to seamless services and tariffs when travelling abroad, throwing down the gauntlet to Vodafone, which itself boasts around 90 million subscribers in Europe alone, interests in 26 countries and partner networks in a further ten. The four operators have also agreed to jointly purchase six million handsets in 2004, realising a cost saving of around 10%, and to this end have signed preferential supplier agreements with Siemens and Motorola. In addition, the alliance plans to expand the range of its joint technical and procurement projects to bring new models to market more quickly, harmonise technical requirements and deliver anticipated annualised savings of up to 10%. As a result of the tie-up, the members expect roaming traffic volumes to increase by 10% per annum over the next three years from the current figure of around 900 million minutes.
In the first phase FreeMove will focus on the GBP2.6 billion multinational corporate market in Europe, introducing seamless access to voicemail, caller ID and picture messaging across five countries – the UK, France, Italy, Spain and Germany. According to Richard Brennan, head of marketing at Orange, the reduced tariff plans will allow customers to ‘roam like home’ in each partners’ country, and will be expanded to non-business customers over the summer; specific prices are set to be unveiled in the next six weeks. Marco de Benedetti, CEO of TIM and current chairman of FreeMove, increased the pressure on Vodafone saying that the alliance was ‘a long-term objective’ and that the group ‘was open to new members’. Although the initial focus is on Europe, Benedetti said that the longer-term plan was to expand into the US and Latin America and then to other markets in which the four constituent members are present.
FreeMove has been broadly welcomed by the analyst community, despite initial concerns that it would have little impact on overall industry growth. Their fears stem in part from the previous failure of high-profile alliances between BT and AT&T (Concert) and the collapse of KPNQwest. However, it appears that the time is right to resurrect such strategies: on 23 February a rival partnership comprising O2 (UK), Wind (Italy), Amena (Spain), O2 (Germany), One (Austria), sunrise (Switzerland), O2 (Ireland), Telenor Mobil (Norway) and Pannon GSM (Hungary) unveiled their Starmap Mobile Alliance brand, which is designed to provide seamless international voice and data services including picture messaging and flat-rate roaming tariffs.