Iliad’s Free Mobile to up FY12 network spend

9 Mar 2012

French start-up Free Mobile, backed by the Iliad Group, says it will invest EUR250 million (USD336 million) in its mobile network this year, as it looks to respond to criticism from the big three cellcos over its fledgling operation. Free Mobile took the domestic market by storm when it launched its ultra-low cost services in January this year, but has faced what it calls a ‘campaign of denigration’ by Orange France, SFR and Bouygues Telecom – each of which as been forced to slash prices and warn of lower profits since its arrival. The established cellcos filed complaints to the French regulator Arcep, arguing that Free Mobile is in breach of the terms and conditions of its licence, which sets out that the newcomer must cover 27% of France with its own network. Earlier this month Arcep reaffirmed that Free Mobile is meeting its minimum coverage requirements under the terms of its licence. The regulator’s findings have been called into question, however, by frequency regulator l’Agence Nationale des Frequences (ANFR), which claims that although Free does indeed have sufficient base stations in operation to meet coverage requirements, it is not utilising these base stations fully, with too much traffic being transferred to the network of roaming partner France Telecom-Orange. ANFR’s full report is due to be published at the end of this month.

The Financial Times quotes Iliad’s CFO Thomas Reynaud as saying that whilst it is correct that about 90% of Free Mobile’s traffic was being carried by France Telecom-Orange’s network, this was only because the company is in the initial stage of its rollout. Iliad claims to have rolled out 1,700 antennas across the country, of which around 1,000 are in full service, and is looking to have a total of 2,500 antennas online by the end of this year. Iliad founder Xavier Niel concedes however, that Free Mobile only has ten antennas covering Paris and needs 300 for a good signal. Iliad refused to be drawn on how many people have signed up to its mobile service – and will only do so in May – but rivals estimate it to have garnered between 1.5 million and two million users already.

France, Free Mobile (Iliad)