France Tel 'Competes' With Free By Raising Rates
Tightens The Noose After Free Pricing Disrupts Market
Last month we noted how French ISP Iliad was shaking up the French wireless market
with some creative pricing, which included an introductory basic free tier of service (an idea that's taking root in the States now
). With the offering clearly popular among users tired of paying an arm and a leg to France's uncompetitive incumbents, France Telecom is now claiming the new service is straining their network
, so they'll of course have to renegotiate the deal they made with Free (read: raise rates so Free's business model becomes untenable):
France Telecom said its network was being stressed by a rapid growth in traffic brought on by its hosting of new mobile entrant Iliad and vowed to protect its clients from service interruptions, its CEO told magazine Le Point...Iliad's Free Mobile service upended the French telecom market in January when it launched its main offer at 19.99 euros per month for unlimited calls to France and most of Europe and the United States, unlimited texts, and 3 gigabytes of mobile data.
This is the same France Telecom that absolutely refused to compete on price
when Free entered the market, claiming their competitive pricing would be "bad for network quality and innovation." According to the incumbent CEO, they didn't need to compete on price because "we offer security, reliability and innovation." Just not on pricing. France Telecom negotiated a contract and did their homework, but with Free succeeding more than they expected -- it's time to change the terms and raise rates.
Whether it's AT&T claiming congestion to justify DSL caps and $10 wireless overages
, or Canadian ISPs claiming congestion to justify predatory usage-based pricing
, you do start to notice a trend wherein congestion is used by incumbents as a bogeyman to justify everything from massive overages to anti-competitive behavior. The best part about the congestion bogeyman
is that telcos never have to provide actual data evidence of congestion -- and the press never bothers to ask for any.