Imagine a mobile phone plan, such as the one from Free in France, with unlimited talk, unlimited SMS and MMS messages, tethering and, even more important, unlimited data with a speed reduction after 3 GB. Usually for that plan in the U.S., you would pay more than $100 for limited data with a two-year contract. In France, it costs $25 per month (€19.99, sales tax included) and there is no contract.
Yet, it is something radically new for French consumers who used to pay between $57 and $82 per month (€45 and €65) for a smartphone plan with only a couple of hours of talk time. The French telecom company Free disrupted the mobile landscape by using very clever technology, marketing and financial tricks. As a company with a hacker culture, Free is a good example of how to execute against well-established competitors.
When the market consolidated, only a few Internet service providers remained. The three major companies Orange, SFR and Bouygues Telecom were all integrated telcos that could easily bundle a triple play offer with a mobile phone plan.
In 2009, the French regulatory agency ARCEP decided that three mobile phone providers were not healthy for competition and sold a fourth 3G spectrum license to Free for $302 million (€240 million). Free’s CEO Xavier Niel started hyping French consumers up about how they will revolutionize the mobile phone landscape with truly unlimited offers for a fraction of the price.
Another unexpected advantage was that Free had the largest hotspot network in the world, according to them. Every triple-play modem was in fact a hotpost. Thanks to the EAP-SIM protocol, smartphones could connect seamlessly to those hotspots.