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French minister warns Free against effects of price war
2013-12-19 16:20:00| Telecompaper Headlines
(Telecompaper) French economic development minister Arnaud Montebourg has met with Free founder Xavier Niel and warned him the price war sparked by the new mobile operator may have disastrous effects for the market. After initially congratulating Free on bringing prices down in the mobile market when it launched as the fourth operator in 2012, Montebourg has since turned on the company, most recently accusing Free of destroying jobs in the sector with its low prices. This followed the operator's announcement that it would offer 4G at no extra cost, which the other operators have now followed. Montebourg told RTL that he met with Niel on 18 December to discuss the matter further. "I have a problem in this war," Montebourg said. "All these operators are working on the basis of the public spectrum which belongs to all the French, so we are obliged by law to demand something in return in terms of employment and investments." He noted in particular the need to finance the roll-out of fibre in the country, expected to cost around EUR 30 billion and which needs to be financed by the operators. However, if the price war continues, the funds may not be available. The minister said the price war could lead to a "death", suggesting the market could narrow again to three operators and there would be little gained in the end. He called for "moderation" by the operators and for consumers to be prudent and look beyond the low prices.
Tags: free
price
war
french
Category:Telecommunications
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