Orange is reported to have joined a price war in France’s nascent 4G market, offering the high-speed service to customers on its low-cost Sosh tariffs for no additional charge.
The move follows similar announcements by Iliad (Paris, France) and Bouygues (Paris, France), meaning Vivendi-owned SFR (Paris, France) is the only mobile network operator yet to slash fees for access to its 4G network.
But according to Dow Jones, which reported on the latest development, analysts expect SFR to follow suit in the near future.
France’s mobile incumbents had hoped 4G services would trigger an increase in customer spending and offset the decline in revenues from traditional telecoms services, but the 4G price war appears to have dashed those expectations.
Pricing developments in 4G appear to mirror what happened in the market for older mobile services following the entry into the sector of broadband upstart Iliad in early 2012.
Slashing rates for access to mobile voice, messaging and internet services, Iliad was able to grow market share quickly at the expense of its rivals, forcing Bouygues, Orange (Paris, France) and SFR to cut their own tariffs or risk further subscriber losses.
All three incumbent operators have taken an earnings hit as a result of Iliad’s pricing strategy, which was extended into the 4G market earlier this month.
According to Dow Jones, Bouygues had also announced plans to make 4G available to customers on its low-cost B&You service just a day before Orange revealed details of its Sosh 4G offer.
Nevertheless, Iliad’s strategy may be risky one – the operator’s 4G network is available across fewer towns and cities than those of its bigger rivals, and extending coverage is likely to be costly because Iliad lacks any of the 800MHz spectrum that reduces base-station requirements.