Pleading Poverty in France

Comparison Reveals SFR Tariff More Expensive than UK Rivals

A recent comment by the CEO of French operator SFR took me by surprise. Stephane Roussel said that mobile tariffs in France were becoming “dangerously low”. He claimed that employment and investment in the country were threatened by recent trends.

There’s no doubt that the French market has become significantly more competitive since the launch of fourth operator Free Mobile, just over a year ago. The newcomer has had a huge impact, capturing 7 percent market share in less than nine months. Its presence has seen rivals scurrying to reduce prices in efforts to persuade customers to stay.

But how tough has the French market really become and are Mr Roussel’s comments fair?

I’d thought I’d do a simple comparison of SFR’s recently refreshed 2GB Carré tariff with similar offers from UK operators. I used the popular Samsung Galaxy S III smartphone to work out the full contract value.

The results showed SFR to be higher than three UK network operators. With a €40 monthly fee and a hefty €230 upfront payment for the device, SFR is asking subscribers for €1,190 over 24 months.

In the UK, 3’s popular One Plan tariff, with unlimited data and generous voice and text bundles, comes out almost €300 cheaper over the same period. O2 On&On, a tariff almost identical to SFR’s, is over €200 less. Only EE’s 4G plan, which includes 50 percent more data, is substantially more than the French operator’s tariff.

The UK isn’t even the most competitive market in Europe. Mr Roussel should cast his eye toward Austria. Last year, Orange offered a SIM-only deal for just €7.50 a month with 1,000 minutes of calls, 1,000 SMS and 1GB of data. Rival 3 has been offering 10GB of data for just €9.

In fact, data from our Operator and Market Review reveals that in 2012 operators in France made more revenue per customer than operators in almost every other European market. At nearly €30 a month, it was twice as high as the amount in Germany and significantly more than the figures in Italy, Spain and the UK.

Of course, these are only comparisons of the amount paid, and don’t reflect the differences between networks and the services they offer. But I think we’re a long way from seeing the collapse of the French mobile sector.

In my view, French operators should fight the new entrant by focusing more on network and technology leadership, particularly in 4G services. A swifter roll-out and the introduction of innovative services would enable them to set themselves apart as high-quality providers.

Comparison of SFR tariff with UK operator plans

Operator	Plan	Data	Minutes	SMS	Monthly fee	Galaxy S III upfront	Total 24 months
SFR	Carré 2 Go	2GB	Unlimited	Unlimited	€40	€230	€1,190
3	One Plan	Unlimited	7,000	5,000	€36	€34	€898
O2	On & On	2GB	Unlimited	Unlimited	€36	€117	€981
T-Mobile	Full Monty	Unlimited	Unlimited	Unlimited	€48	€35	€1,187
Vodafone		2GB	Unlimited	Unlimited	€49	€22	€1,198
EE	4GEE	3GB	Unlimited	Unlimited	€54	€35	€1,331