Xavier Niel and the mobile telephony revolution

By Alfred Bouchaud

Xavier Niel is a French businessman founder of Iliad, a French provider of telecommunication services which owns subsidiaries such as Free, Iliad Italia and Eir. He is also the co-owner of the French newspaper Le Monde and owner of Monaco Telecom, the main telecommunications provider in the Principality of Monaco. In 2012, he created Free Mobile, which enabled to slash prices and thus revolutionized the mobile telephony market in France. Though his carreer has been successful, he was involved in judiciary issues in 2004 and 2006 for misuse of company assets.

Over the past few years, the French millionaire has been faced with a new challenge as in 2017 Free lost a substantial number of subscribers while Bouygues, Orange and SFR got more. Thomas Reynaud, Xavier Niel’s managing director, explained that Free might have underestimated the impact of special offers proposed by its competitors. In late 2018, in reaction to its company poor results, Xavier Niel launched two new versions of the Freebox : Freebox One and Freebox Delta, with the hope that they would represent a new vehicle for growth. Indeed, subscribing to these upmarket innovations includes access to Netflix and to Devialet sound. Xavier Niel’s strategy does not consist in attracting new customers but in improving Free customer’s satisfaction by proposing them a top-of-the-range service.

However, these products were subjected to criticisms especially because of the high extra costs related to the putting into service as well as the changing of contract. Thus, Xavier Niel decided to suppress the putting into service costs but by way of compensation, he also charged customers for the security pack (composed of a surveillance camera and a motion sensor) which used to be covered in the initial price of the box.

During an interview in December 2018, the French businessman said Free was working to implement a new model in the mobile industry. Is a new revolution underway ? Watch this space !

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