How did the Free company manage to shake up the market of the French telephony?
Deer readers,
Welcome in another article on my blog « Let’s talk business »! As I said last week we will talk today about a French company specialized in the telephony market : FREE. I hope you will learn a lot of new things in this article and I also hope that this kind of subject is interesting for you.
Next week I think I will post an article about a fail on the big social network Facebook and we will see the negative impact on the company’s marketing and economy.
So today let’s talk about Free!
Our reflexion is going to be based on the following problem: How did the Free company manage to shake up the market of the French telephony?
This company was created in 1999 by Xavier Niel (vice-president and deputy director in the strategy of Iliad, a French telecommunication group).
Xavier Niel wanted to launched this company in order to meet a need. Indeed, France Telecom was the only operator at this time and the French people wanted another possibility, with different proposition and essentially low prices. In 2002, the company launched its first Freebox, and offered always new innovations during the following years.
We are going to talk about the following years (since about 2010), when other companies were on the market too.
What was the novelty that Free proposed to compete with the big companies on the market?
The idea of this new operator was to challenge any competitors by making very attractive offers. When they wanted to launch their new packages (telephone package by entering in the mobile telephony market), Xavier Niel and his communication team left various indications about the new offer and its release. They said that their offer would change a lot of things for consumers especially at a financial level.
This created a kind of suspense and a wave of excitement for the consumers, and that permitted to offer a bigger satisfaction when the project was launched. Indeed, the consumers weren’t disappointed because the offer was worth the wait: Free proposed twice-lower prices compared to other operators, as it promised. This was their strongest argument and this marketing strategy permitted them to attract a lot of consumers. The launch of Free mobile operator was followed by many French and well diffused by mass media that participated in its promotion too. From its start, Free had a positive image in France and was a big competitive company for other operators.
How does the company evolved?
In 2012 the company was ranking first in terms of customer relationship. Only three years after its launch, the company announced that it had 2 610 000 clients. Since its beginning, the company knows how to attract and keep its customers by offering attractive prices and a good quality service. The company evolved in the same way than the competitors about data, Internet, Unlimited cell phone plans and other evolution offering always better prices adapted to the buying power of consumers. Thus when customers had enough confidence in this company, they left their former operators and took packages to Free.
Here is a comparaison of the Free prices and the other operators.
We can observe that Free offers packages that are less expensive than its competitors. A large difference is still observed today because we see an average difference of 7,5€/month. However regarding the Internet offers we can see that Free has a new important competitor which is Bouygues. Indeed this company proposes offers less expensive of 7€ /month for the smallest offer. The biggest companies, which are SFR and Orange, are more expensive if we compare.
What were the consequences on the employment?
On the other hand, the arrival of Free on the French telephony market had two main impacts on the employment market. Indeed, thanks to its success the company could have and had to constitute its own teams of consumers service by creating 500 posts of councillors in 2012. By 2020 the company plans to create 3000 jobs. However rival companies which saw their clients leave and go to Free had to delete posts of councillors or change those posts in job in web telephony.
Today Free is ranking 4th on the French telephony market. In 2017 this company had 13,7 millions clients. But today Free has a solid competitor which is Bouygues because they propose approximately the same offers.
To conclude we can say that this company known how to do and take its place in this market and it upset well this market by putting in danger the biggest companies.
I hope this subject was interesting for you all and you will be numerous still next week… Thank you for all your reading,
Ilona
