I remember when I got to university (Nantes, France). On my very first day, another guy said to me: "By the way if you are shopping around an internet connection, go with Free, they rock!". No other user has ever said that to me about a telecoms company. Not once.
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.
Official press releases from competitor Orange says (paraphrasing): "Dear customers, we will let Free celebrate their D-Day, but stay assured we will make sure to come back to you later."
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 :)
The introduction of Free on the provider market was a huge disruption. We used to had crappy prices with crappy services before free came around. Actually the big one was France Télécome (Wanadoo/Orange) who is also one of the big one (or was?) in the mobile market.
I'm French, and moved to the US a couple years ago. The high price and awkwardness of internet and mobile phone offers here compared to France is one of the biggest tech differences that struck me, as I always had imagined that the US would be far ahead.
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.
Well, your question includes the answer itself. The US is not the anomaly, France is and for a very specific reason: Free.
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.
No, US is the anomaly, since other countries in Europe have better/cheaper offers both for mobile and fixed connections (dsl,cable,fiber). I agree with the poster above, the US mobile and broadband offers are a joke and for that reason I also use a cheap prepaid and make most of my calls through voip.
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...
Do not forget that France Telecom had at the time of opening the market the best network in Europe with a totally homogeneous DSLAM setup and incredibly good backbone. With the rules to force FT to open its systems to the other players, it was possible for them to piggy back on the best network, offer an incredibly good quality of service for very cheap while at the same time build their own network.
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.
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.
France is still one of the cheapest country for landline internet (the standard price is ~30 EUR/month for 20+ Mb/s, with unlimited landline calls and tv).
In The Netherlands an all-inclusive package starts at 37.50 Euro per month (20MBit DSL-only subscriptions are around 20 Euro per month). Extra bandwidth is also relatively cheap, I am on a 120/10 MBit [1] cable connection (with TV and telephone) for 67 Euro per month.
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.
France from what I hear is ahead, but the UK, Italy, Germany and Ireland that I know of are nowhere near as backwards as the US in respect of mobile access.
> It's rather an initiative championed by very very smart people, with very decent ethics.
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.
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."
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.
I skimmed the first couple of articles, but other than his beginnings in porn (not a business I'd want to go into, but to be sure there are more and less ethical people there!), he doesn't strike me as someone who's either a troll or very unethical.
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...
The thing is, you need to remember that in France, you can't talk about personal fortune/money without raising public outrage. We have an extremely special relationship with money, it is absolutely taboo to talk about how much money you make or have, and not only in public, in private too, one has to make amends when they reveal that they earn more than the minimal or (god forbids!) average wage.
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".
"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!"
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.
I understand your points, I think -- you're talking far more about taste than about ethics.
"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?
What made Free, and the other competitors, possible was the French FTC forcing France Telecom to open to the competition at a fair price. Once real cometition could happened, prices went down fast while speed went up.
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.
DSL Internet speed can be explained, according to my brother who lives in the US, with the way that local carriers segmented the broadband network by area. ISPs in the US, maybe in Canada too?, apparently benefit from a quasi-monopoly per location, whereas in France network access is national and guaranteed, meaning that wherever you are in the territory, you can subscribe to any DSL offer from any ISP as a form of public service.
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.
> 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.
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.
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.
I thought they couldn't pull a small sized contract, but they did it. 2 euros for 60min/60sms is almost a social advance.. ~5 times less than the average 60min contract, and 7 times personnally.
Actually there exists a mandatory (by law) social service in France, which has been mocked by Free as a fraud (40min and 40sms for 10€, available only under certain income criterias)
Trying to watch the conference[1]. Some people compared that guy to Steve Jobs, I personally think he's not a good orator but is trying to be. His first lines were "we are dumbasses, but now you guys are the dumbasses not me because I already joined free mobile". Pretty aggressive.
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).
I'd be very careful to jump on the 'unlimited calls' bandwagon. Voip is especially sensitive to fraud, it happens all the time to practically every voip provider that I know of. That's also why 'unlimited' in marketing is often counterbalanced with fair-use and/or minutes cap in small print.
Niel specifically included all protocols, NNTP, P2P, VoIP etc. when he presented the "unlimited" data plan, to contrast with the kind of data plans the other carriers provide.
On one hand I mean classic stuff from provider's perspective, like malevolent user setting up a premium number in some remote country (Afganistan, Nigeria, etc.) with insane rates (5$/minute and more), which he is calling for long periods. This is often completely automated with multiple simultaneous calls on multiple premium numbers and callee is actually an IVR. And you can't touch the user, because you've promised him unlimited calls. Such schemes can be even more elaborate with many 'proxy' providers in between, so you don't even know, what is the real cost of the call until after the fact (you receive a giant bill from some remote provider). I've seen examples of voip providers losing thousands of dollars a day and in one case even going under, just because they were unable to respond quickly to fraud.
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.
This sounds great. Can't wait to see the detailed terms.
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.)
Free still has great usenet (including binaries) servers, while most other ISP dropped it. Free provides only static IP addresses, and was among the firsts to provide complete IPv6. Free is very hacker friendly; as a matter of fact, all the "Free guys" I know are real, bearded hackers :)
So, unlimited data & calls for 19.99 €, with a reduced price of 15.99 € for customers of the broadband plan. And a specially priced 2 €/month plan (60min calls / 60sms.)
The first "2€" mobile plan is completely free if you are a broadband customer. This puts the family budget down to something very, very manageable. None of the plans include any sort of 12/24month lockout. Devices payment over up to 36months no additional charges.
Subscription for 1h voice + 60 SMS per month is free (as in free beer) for broadband customers. My kids will immediately get SIM cards! Prices available at http://mobile.free.fr
Is this the same company that "reinvented" the GPL by claiming that as you "rent" your modem (chock-full of GPL software) from them, they are not distributing anything and they do not have to abide by the GPL?
(Feel free to correct me if they have changed their stance)
A great demonstration of a market disruption by pricing. Xavier Niel's show was a mix of Jobs (staging, rhythm, ...) and Bezos (pricing, competition, ...). Wow !
– 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).
The comparison with Jobs is very far-fetched in my opinion. Niel was rude, aggressive, partisan, almost violent with his words, and was all around not a good orator.
These days, as soon as a CEO goes on stage to present his disruptive product, and does it in a customer-oriented rather than shareholder-oriented way (casual vocabulary, no tie), he's deemed Jobsian.
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.
He had no Jobsness, but the talk structure is Applian all the way. Taking the 'State of the Art' (sic) , breaking it down to expose flaws, then giving more.
Key word here is "wholesale". For the most part, it simply limits the amount of funny-money transactions between subsidiaries, as far as I can tell. Consumers, including the many people trying to do business in Europe, still get fleeced at Euros per MB.
Also, the directive above only applies to EU nations, not all of Europe.
That's not "new", anymore -- SFR and Orange do the same as well now.
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?
I'd be curious to see the level of quality in their service. They probably have an advantage of the box being connected directly to their network. However It has been my experience that femtocells are bad at switching from the micronetwork to the macronetwork. Though my best guess is that is related to latency..
It's "up to" 28Mb. But technically it's called G.992.5, colloquially known as "ADSL2+"[0]. You need a capable DSLAM and to be close to it, and you need good-quality phone lines.
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.
Republicwireless is beholden to Sprint for the cellular side, and handles the Wifi/termination with Amazon AWS and their Bandwidth.com hardware (Republic/Bandwidth are the same org).
Free owns more of the infrastructure; they're not ripping off Republic, just doing what Republic is doing better.
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.