Free Mobile turns 10 but has yet to hit market share target

Free Mobile is celebrating its tenth birthday, but while it has undoubtedly changed the face of the French mobile sector in the past decade, it has yet to hit its core market share target.

Understandably, the telco is making a lot of noise about its achievements since it hit the market on 10 January 2012, disrupting a long-standing three-player set-up. Its low-cost, simple plans saw it rack up millions of subscribers in its first few months in operation, taking a 5.4% market share in six months and leaving Orange, SFR, and Bouygues Telecom to deal with a price war that would have an impact on the sector for years.

From the outset the telco said its long-term goal was to capture a 25% market share in both mobile and broadband, on the consumer side, a target it has repeated many times since. And having set a blistering pace early on, that seemed like an attainable target…even factoring in the company’s reluctance ever to share what “long-term” actually meant.

On Monday parent company Iliad shared a raft of statistics to show that its market ethos has not changed – various of its plans are still in place, for example – but that its business has: amongst other things, it has built up a customer base of 13.5 million and now claims 21,600 mobile sites, up from just 700 at launch (see chart). And prices are down across the board.

In the telco’s own words, the launch of Free Mobile “immediately drove up purchasing power for subscribers in France,” which is probably a more polite way of putting it than the three established players would have chosen, but the data shows that the market needed it…albeit perhaps not to the extent that it happened. Iliad cites French national statistics office INSEE data as showing that mobile telephony costs in the country dropped by 9.5% in the first nine months of 2012. Meanwhile, it notes that the average monthly mobile bill in France has fallen to €14.30 from €27.30 10 years ago, according to telecoms regulator Arcep.

It goes without saying that Free’s bigger rivals hit back against its low-cost mobile plans, hence the price fall, the upshot being that the upward trajectory of Free’s rocketing market share started to flatten.

Thus it has yet to hit its long-term target.

Or so it is safe to presume. Once upon a time Iliad used to boast of its mobile unit’s burgeoning share in its results announcements, but it no longer does that.

There were 78 million active SIM cards in France in mid-2021, according to Arcep. That puts Free’s market share at around 17%, although it is likely higher when taking only the B2C market into consideration. But we can be pretty sure that if Free Mobile had hit the magic 15% mark it would have mentioned it. Repeatedly. And loudly.

All of that said, let’s not take anything away from Free. Few telcos can claim to have had as major an impact on any market, and it’s worth noting that it is repeating the model in Italy, where it is still willing to disclose market share data. Its Q3 numbers show that Iliad Italia had 8.2 million subscribers and a 10.5% share of the market as of the end of September, just under three and a half years after launch.

When it published its third-quarter data Iliad described itself as having “an organic growth profile unlike any other telco in Europe.” And indeed, with growing subscriber numbers and revenues ticking up by more than 34% year-on-year, it can back up that statement. We’ll have to wait for its full-year figures to gain insight into its earnings performance, but the signs are good: EBITDAaL grew by 18.4% to almost €2 billion in 2020, despite Italy having yet to break even.

Free Mobile might have chosen its metrics carefully when it provided a run-down of its performance over the last 10 years, but it’s hard to argue that it seems to have found a winning formula.

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