News regarding the prospects of sustainable tariffs fo 4G mobile service providers in France have been quite puzzling recently, at a time when overall revenues per mobile subscriber continue to decline and the difference with the US becomes always bigger: in its 3Q2013 results Orange states that monthly postpay revenue per subscriptionhave declined to € 32,25 while AT&T is still growing (in USD) this quarter to € 49, thanks to 4G take-up.
Even the landscape provided at EU level does not cheer up the industry: the European telecom operators lobbying association, Etno, recently forecasted an accelerated fall of EU telecommunication operators revenues pointing out difficulties for mobile operators to sustain high bandwidth services investments as return is difficult to foresee, thus asking for more flexible regulation.
Focusing on 4G take off, current mobile operators strategies in France seemed to try to migrate3G customers, offering early promotions -similar tariff or +1€ compared to 3G- in 2013, at least for frontrunner Bouygues, Orange and SFR who have commercial 4G services too. The speech was that early promotions will be scraped at the end of the year and 4G monthly tariffs will be raised at least € 5-10 above 3G tariffs.
However, a recent article in French business daily LaTribune explained that the raise of 4G tariffs early 2014 by mobile operators may be questionable. Orange already extended its “promotional 4G “ tariffs from end 2013 to February 2014.
And the climate in the French society may become sourer, as the main French consumer association UFC-Que choisir accuses MNOs to downgrade the quality of 3G network to force customers to migrate to a better quality 4G offer. Mobile operators have denied any wrongdoings, but the posture of UFC-Que Choisir may definitely affect consumers’ confidence and make them more suspicious.
Last but not least, the president of Free Mobile, the newest French mobile operator, who has not yet launched its 4G offering, said in a widely mediatized interview on French national TV channel France Television, that Free Mobile will halve existing 4G tariffs when it will launch commercially 4G services. This indeed will definitely affect consumers, who may wait for Free Mobile to enter the market before switching to 4G: with the experience of Free Mobile market entry in 2012 slashing 3G prices, the French market may expect now a similar price war for 4G that would affect all mobile providers tariffs.
Maybe the difficulty of raising 4G subscription tariffs in the short to medium term may lead mobile operators to rethink completely the value proposition presented by 4G services, that cannot be simply limited to quicker speed as currently described in the advertising. 4G provides much more, a new business paradigm that I tried to show in an earlier post several months ago ( see ghbernard.byethost18.com/the-revolution-brought-by-4g)
The entire contents placed on the www.MVNO-Global.com site is the exclusive property of Georges-Harald Bernard. All rights of reproduction or representation of these are reserved.