Iliad aims to have 2,500 antennas in place by the end of the year, from approximately 735 which are now operational, and it plans to make an investment of €250 million on mobile this year.
The additional antennas will mean that Free is less reliant on its roaming partner, France Telecom Orange, which provides approximately 72% of its coverage presently. The antennas will also help Free reach its coverage obligation of 75% of the French population by 2015.
Free’s launch in January 2012 has stirred up what was a previously static French mobile market. The operator sparked a price war by undercutting the competition with cheaper tariff offers to customers.
Lower prices led to complaints by other French operators; France Telecom, SFR and Bouygues Telecom. Free was accused of not fulfilling its 27% coverage obligation tied to its operating licence, prompting an investigation by regulator Arcep.
Arcep found that Free’s network covered more than 28% of the French population, exceeding its obligation, consequently dismissing previous accusations that France Telecom was providing as much as 95% of Free’s coverage.
The size of Free’s customer base is so far unknown, with both France Telecom and SFR reporting customer losses of over 200,000 in the first two months of 2012. Bouygues also estimated losses of up to 159,000 customers through to February 15. Iliad has said that it will announce Free’s mobile subscriber numbers in May.
Vivendi’s CEO, Jean-Bernard Lévy, which owns French operator SFR, hit out at France Telecom earlier this month, accusing it of offering excessively favourable conditions to Free. SFR believes that the roaming agreement allowed Free to offer initial prices which would have been impossible otherwise. Lévy’s remarks followed a slashing of dividend and warning of falling profits by Vivendi.
Bouygues recently announced a predicted 10% drop in 2012 revenues, which it partly attributed to the arrival of Free Mobile. Ovum analyst Steven Hartley believes that Bouygues is likely to be most affected by Free’s arrival as it has the smallest market share, standing at 19.2% in September 2011.
