France Telecom-Orange has revealed that it expects average revenue per user (ARPU) to fall by 10% at its domestic mobile unit Orange France this year, as operators engage in a price war following the entry of new low-cost operator, Iliad Group’s Free Mobile, in January. Delphine Ernotte, head of Orange France, said the reduction included the effect of a 20% cut in tariffs that Orange has just unveiled and which will be implemented next month. Its new so-called Origami tariff range offers plans starting at EUR24.90 (USD31) a month for one hour of calls and unlimited messaging, Reuters reports.
Orange France has already dropped pricing at its low-end operation Sosh and has introduced new packages of bundled voice, internet, TV and mobile services as it attempts to face Iliad head on. Iliad’s Free Mobile hit the market with two cut-price tariffs, one of which offers existing Iliad broadband subscribers 60 minutes of mobile calls each month at no extra cost, while new customers get the service for just EUR2.00 per month. Free Mobile’s unlimited monthly option, meanwhile, is priced at EUR15.99 for current Iliad subscribers. Free Mobile acquired 2.61 million subscribers between mid-January and the end of March, while Orange France saw its own customer base decline from 27.09 million at end-2011 to 26.48 million three months later.