How France’s Free will reinvent mobile
gigaom.com
gigaom.com
And they did rock. It cost 29.99€ per month for 2MB/s at the time (2003), which was 4 to 20 times the competition (my brother had a 128kb/s connection, I seem to recall - it took ages to download songs from napster. It kept on getting better, too. Within 6 months I had 8Mb/s, and a year after that 18, then 24.
The modem was huge, but it told the time in letters of green, and had its own IP adress. I lived in a tiny flat in the same building as my other brother, so we trailed a network cable across the corridor - enough bandwidth for both of us. We moved to a new flat, and they upgraded the modem, or Freebox (every modem in France is now called *box)
That was one of the most successful market disruptions I have had the opportunity to witness. I think M. Niel just did it again. He's turned the leaders of a market into followers, desperately copying his every move. Watch and you'll see. They already started, trying to undercut what they thought was Free's offer with Sosh (Orange) and Red (SFR). Too little, too late. I think the market will vote with it's wallet. Things should get interesting.
All online & phone services for ending or transferring mobile contracts are of course overloaded and currently unavailable in France. FreeMobile's registration webpage (http://mobile.free.fr) has been unavailable for the past 5 hours. Figures fly on twitter, as apparently about 1.5 million people tried to access it this morning.
Streaming figures for the live keynote amount to 80Gb/seconds over 300 servers, Online.net representative @Online_fr said on twitter. Apparently 600,000 people watched the keynote live, Online.net even claimed it's a world record. (Online.net = Iliad/Free subsidiary dedicated to hosting services)
You are indeed witnessing Market Disruption - that or a highly successful launch, maybe a bit too successful :)
I still don't own a smartphone (I use Google Voice most of the time at home/work, and a pay-as-you-go phone the rest of time), because the offers and price just don't make sense to me.
It's clearly a market that's ripe for disruption, and there are a couple interesting and promising startups in that space, although I'm not sure how likely it is to change given the huge monopoly and control the carriers have consistently had.
As a result, in 2002, Free came up with their disruptive all-in-one 30€/month DSL box. The announcement single-handedly killed AOL France which was offering 45€/month for an inferior service, like the rest of the competition. The survivors had to align their prices, and there was much pain and rejoicing.
What I saw this morning could be history repeating itself. I wouldn't be surprised to see Bouygues Telecom (the "weaker" of the three legacy Mobile Carriers) shut down within months. However you put it, Free's offer is both superior on paper and cheaper than the competition.
I'm not sure about pricing of mobile plans compared to French ones, it was actually the opposite when I did a quick survey of iPhone plans comparing France's Orange to USA's AT&T offers, I saw something like a 30% cheaper phone and a 10% cheaper plan in the US than in France with napkin maths for taxes. One thing is for sure, we've had quadruple play offers for a while now, and the very low DSL price since 2002 helped a lot with the overall family budget.
Yep, France had/has very good broadband thanks to Free, but the mobile scene is one of the worst in western Europe, pretty much every country around it provides better service at better rates. The "Big Three" (Orange, SFR and Bouygues) have basically colluded to keep prices high and offers dreadfully opaque rates (to avoid easy comparisons between providers), and so far MVNOs have not managed to dent this. French MVNOs also tend to be even worse than the big tree for data.
Free has both name recognition and a very good offer probably piggybacking on the forces it built as a broadband carrier, I fully expect the big three to get pulled kicking and screaming into finally providing descent service. Or dying. That would be nice too.
France would have been in the exact same situation as the US if Free had not been a disrupter. Free isn't the natural byproduct of the sane telecom environment that existed in France at the moment of its inception. It's rather an initiative championed by very very smart people, with very decent ethics.
So the question isn't so much, why the US (and Canada) have such gouging prices, but rather what could be done to recreate the Free experiment there.
In other parts of Europe we don't have Free, and still prices for mobile and internet (speed might be better in a lot of areas as well, especially considering the price/speed ratio) are way more convenient, AFAIK.
There is also healthy competition, most ISPs offer comparable prices, except for one ISP (XS4All) who use their reputation from their glory years to overcharge royally.
[1] In practice I usually get speeds between 120 and 130 MBit downstream.
Let's not go there! Niel, founder of Free, did it all "for the lulz". His favourite passtime as an engineer founder is to take a market, build a 100% better product, vastly undercut the competition and watch the competition rage, killing businesses in the process. He did exactly this with all his former businesses, starting with Porn services on the Minitel, and was even sentenced to deferred jail time for misuse of company asset.
This is clearly not "decent ethics"!
Biography in English
http://www.economist.com/node/14402214?story_id=14402214
There's more available on French-speaking web - here are a couple links about his porn debuts and his jail time for misuse of company asset.
http://www.liberation.fr/societe/010160359-le-x-versant-obsc... http://www.lexpress.fr/actualite/politique/prison-avec-sursi...
The part about him doing it "for the lulz" was never officially acknowledged. With that said, French media have nicknamed him "le Trublion" which means roughly "the troublemaker", and he clearly likes it.
An example of pure trolling from Niel: as a justification for why he invested money in a newspaper in financial trouble, he said "You're asking me if I have 35 million euros? Don't take this the wrong way, but this amount is roughly equal to the daily variation of my fortune on the stock market" - "Si je dispose de 35 millions d’euros ? Je ne voudrais vexer personne, mais cette somme correspond à la variation quotidienne de mon patrimoine en Bourse."
http://www.capital.fr/enquetes/hommes-et-affaires/xavier-nie...
Now I agree that businessmen should be judged on their actions. He is smart, he is good, and I like his way of dealing with things. But he was always and will always be a Troll at heart, a well-intentioned one maybe, but "very decent ethics" clearly does not accurately describe him.
- sorry for the mix-up I messed up my reply earlier.
Your definition of trolling isn't how most people think of it. Trolls tell lies, make personal attacks, and make outrageous & false claims solely to upset other people and waste their time.
Your quote from Niel (about investing in a newspaper) shows ego, but is he lying? And even if he's exaggerating, who does that upset?
Personally, I don't like the porn history, but he gets many extra points for "causing trouble" in corporate France. I've wasted many hours of my life dealing with France Telecom/Wanadoo/Orange, SFR, and Bouygues (been through them all), and know monopolistic abuses when I see them (how about the whole concept of customer support phone calls that are more expensive than a normal call?), and I really, really do not feel sorry for them being forced to actually compete a little.
If you have better examples of "trolling", that'd help perhaps...
Likewise, comparative advertising is illegal in France. You can't be the French Coca-Cola and feature the French Pepsi in your ads.
Anyway, let's drop the troll word. I have more quotes to provide though, maybe these will better carry the reputation of "Troublemaker".
Couple recent quotes from Niel (taken from LeWeb 2011) http://www.techrevolutions.fr/free-mobile-le-troll-de-xavier...
"The thing that surprises me is that our concurrents have done nothing yet. They micro-reduced their prices by a few percents, this isn't reasonable! They have to get at it for real, they have to lower the prices for real! Start to cut right now, before we arrive! (...) Ready your communication, build some aggressive marketing plans, then maybe you have a chance to keep on existing! Right now it's a joke, you didn't lower your prices! This isn't serious!"
"I invite you to go and visit their work places, their desks, their lifestyle, look at the leaders of these companies all with their car with driver. As for me I have my cab waiting for me outside! When they no longer have all that, management in these companies will begin to improve!"
2010, from http://frenchweb.fr/xavier-niel-il-etait-une-fois-la-revolut... "We're so far ahead of the rest that they should be ashamed."
Around 7:12-7:45 in the linked video: "This struck me as a lack of courage, I had hoped they would, at last, offer unlimited phone calls from their box. [smiles ironically] But you see, we have to deal with copycats who don't go all the way with their copying philosophy. And that's it... actors who are bad, and who even when they copy become bad because they stop copying as soon as there's something good, I personally find it very disappointing. I believe that we're in a market that has always copied us, so companies need to be brave and copy us all the way."
About Orange: "We have a relationship of tenderness with Orange." (I'm not sure it translates the right way: he implies a relationship that's akin to a kid and his grandmother)
Illustration of his audacity & engineering background, and, well, ethics: in 1996, he launches a minitel service that would become extremely profitable (while not being related to porn): a Reverse Phone Number Lookup directory. At that time France Telecom provided a phone directory to everyone, with the first 3 minutes of connection being free. He simply wired a hundred minitels and browsed the service 3minutes at a time until he had every single person in France on his own database. There was a public outrage. There was a trial, which ended in 1998. Iliad lost and had to pay 100,000,000 Francs in fines (roughly 15 million euros, which was a lot those days) to France Telecom.
link to the legal report for that case: http://www.legalis.net/spip.php?page=breves-article&id_a...
The rest of my knowledge about Xavier Niel's character comes second-hand and is private, so I won't have much more to add here.
Don't take all this the wrong way though, I like this entrepreneur a lot. He is one of my role models.
"Ethics" is about right and wrong -- what actions harm people on the whole, and what actions help them, why and how.
It's not directly related to obeying the law, or following rules. Making decisions that greatly help the general public at the expense of a massive corporation, especially if those actions carry risk (like the risks that come with breaking laws)... that's easily interpreted as highly ethical. I certainly don't know enough about Niel to make any judgements about his ethics either way, but your examples here don't show unethical behavior.
It's actually more ethical if he lowers his own image (by breaking strong taboos) to talk about things that need to be talked about (I'm thinking of his comments about executive lifestyles...).
As a counter-example -- think about the ethics of being a corporate industry leader, and always acting perfectly refined, but still actively screwing your customers as much as you can -- charging far more than your costs, tricking them with hidden & confusing charges, making it extremely difficult for them to get customer support or even to end their contract... is that ethical?
So, you can thanks the ARCEP and FT.
In Germany this was not the case and the quality over the country varies a lot. If you are lucky you have as good or better than in France, if not you have a 1 Mbps connection.
Initially coming from Europe, I started with a ISDN line at 128kbit/s about 14 years ago and 9k6 mobile connection through a cheap gsm phone with internal modem (it accepted AT commands and I built a simple adapter to connect to my laptop).
Later on I migrated to cable at roughly twice the speed and for the past ten years had increase in speed and same or price reductions due to competition (3g, dsl, fiber).
Now for the same monthly payments I have here in the US, over there I have 3 times the bandwidth over cable, and this service also allows me to purchase a cheap USB dongle to use the same subscriber account for 3G mobile data access.
Not only that, the increase in speed has been mostly non-existent for the years I've been in the US, although living in a large and densely populated city...
There is no nation monopoly in the US, but many local monopolies. I used to leave in an apartment complex were the only choice for broadband was Comcast (we could not get DSL). Even in the silicon valley, we have very few options for broadband.
Unlimited phone calls into 40 countries, unilimited SMS and MMS, unrestricted internet access up to 3GB : 19.99€/months or 15.99€/months for ADSL Free subscribers.
60min and 60sms : 2€ or 0€ for ADSL Free subscribers.
Phones are not include but can be bought with independent 12, 24, 36 months credit plan. ie. iPhone 4Gs is provided with 1€ entry and 19.99€/months over 36 months.
: they lower the speed after.
> Phones are not include but can be bought with independent 12, 24, 36 months credit plan
and 0% interest.
And free if you're already a broadband customer...
He's a fantastic engineer though. Trying to stream more and will edit after.
edit: having a really hard time to stream. Words that come back a lot in the first 10 minutes: "ras le bol" ("discontent" in a familiar way). He's insulting a lot the 3 other operators, give numbers and the source! (I like). It's actually very catchy to watch eventhough I think it's pretty brutal for an official show supposed to launch the 4th big operator in France.
edit2: apparently SFR one of their big competition is doing really bad in stocks these few minutes[2] and the first trend is indeed #freemobile[3] on twitter.
edit3: found a better link for the show[4]. Just finished it. Brilliant. The show was simple, as simple as the offer (only 2 plans). Brutal, easy to watch, beautiful. As he said at the end of the video, there will be a before and an after january 10th in France (something you cannot really grasp if you're not from there).
[2] http://bourse.sfr.fr/actions/cours/vivendi-FR0000127771,FR.h...
[3] https://twitter.com/#!/search/%23FreeMobile
[4] http://www.dailymotion.com/video/xmsvx2_free-lancement-de-l-...
Could you clarify what you mean by "fraud"?
Free has been leading VOIP and unlimited calls from set-top boxes so I'm guessing they understand the dynamics of it.
On the other hand I would like to point out the user's perspective. Recently I've read about a case where a blind person calls a lot. Really a lot. Like from the evening to the morning, many days a week, domestic and international calls. It's his form of communication, since he rarely travels abroad or meets with friends in person. So to reduce his monthly bill, he went to a provider that promised unlimited calls. Needless to say, after a few months they've disconnected his number and billed him for premature end of contract (it is customary to sign 2-year contract), citing small print which mentions fair-use.
Even better, it appears that Free will propose actual internet connexions with their data plan. Quoting http://www.forfaitfree.com/ (translated from French):
> 9h16 : According to Free, the Internet is e-mail, the web, newsgroups, P2P, etc. So, an actual, unrestricted internet.
I just hope they do mean to give you a public IP (I'd be content with a /64v6, and delighted if it was a static one.)
This is aggressive, very aggressive disruption.
(Feel free to correct me if they have changed their stance)
Here's the press release from FSF France (in French): http://fsffrance.org/news/article2011-09-14.fr.html
The show was a blast nevertheless!
That's obviously a gross reduction of what Job's Way was, but it is Job's most enduring legacy to the corporate communication world.
Besides, being "rude, aggressive, partisan, almost violent" sounds hardly un-jobsy, although he tamed it down during keynotes.
– the Terms and Conditions sheet will only be "one page long" and "understandable by anyone", compared to the multiple pages of legalese of the current operators;
– they only have 2 offers (with a variant for current clients), compared to hundreds from the competition.
We all know the value of simplicity when making purchasing decisions (explained in The Paradox of Choice by Barry Schwartz).
Well done Free.
Someone, maybe Free, needs to deal with pan-Europe roaming with the same disruptive vigour Free is dealing with the domestic French market.
No you don't:
http://ec.europa.eu/information_society/activities/roaming/r...
"As of July 2011:
Prices for mobile roaming calls are reduced further with a maximum tariff of €0.35 per minute for calls made and €0.11 per minute for calls received.
The maximum wholesale prices for data roaming fall from €0.80 to €0.50 per MB."
Still not cheap, but certainly not multiples of Euros per MB.
"For example, Free.fr used the set-top box for automatically sharing a portion of one’s broadband connection via Wi-Fi with other Free.fr customers."
But yes, it's a great idea. As the owner of the set-top box, you're allowed to configure it to disable that, but virtually no one does -- because the usage from outside is always fairly minimal (but when you're traveling it can really come in handy).
This Free.Fr free Wi-Fi network is going to play a pivotal role in the soon-to-be-launched service, which will be using 42 Mbps HSPA+ technology. The company has built a network of 15,000 macrocells, but those 5 million “nano cells” are going to be the key difference maker, Niel points out.
Free.fr’s newer set-top boxes will have built-in femtocells.
I live in a rural part of France, and my village sits in a mobile signal dead zone. My mobile phone only gets reception up in the attic of my house (0 bars, otherwise, usually), or I can go outside and walk a half km to make a (poor quality) call.
I do have DSL, though... is this (above) finally going to give me mobile reception, through a set-top box?
(Please please please?)
Distance-wise, we're talking about 1km for max throughput (0.6m), 2m gives a maximum of ~8Mb/s on ADSL2+ (may be above with very good lines providing little attenuation). At 1.5Mb, either you're on 1.5Mb ADSL to start with, or you have fairly crummy lines between you and your DSLAM. You should check the attenuation.
Free owns more of the infrastructure; they're not ripping off Republic, just doing what Republic is doing better.