[Update] Addition of two new sections to our file concerning the Chatel law and how to use it.

6 months after the arrival of Free Mobile, a brief overview of the packages with data from the different operators, the prices of the different offers and the main smartphones.

1- Introduction:

It has now been 6 months since Free Mobile landed on the French mobile telephony market. We remember the incredible expectation that Xavier Niel aroused at the end of 2011 when he started his buzz campaign based on rockets and HTML codes. Yet it was nothing compared to what was going to happen to us on January 10, 2012 at 9:00 a.m. sharp when the CEO of Illiad took the stage.

The wait was finally going to end and we were going to know what Free was going to offer us. The rumor was at its height and we had heard everything. Some said that Free subscribers would pay nothing and that the millions of ADSL subscribers would simply receive a free SIM card with credit on it. Others had taken out the calculator to come to the conclusion that it was impossible and that Xavier Niel's promise to lower the average price of packages by 50% was economically unthinkable.

And then boom, while at 9 a.m. on January 10, we knew nothing, less than an hour later, we had gone from expectation to disbelief. Amazement had won over some while disappointment, even the most complete disillusion, ruled the others.

6 months later the heartbreak and joy are behind us, competitors have adapted and the market has changed. What seemed like an oddity to us – separating the payment of the plan from that of the phone – now seems a little less so. For some, it has even become almost natural, not to say “normal”.

This file aims to give a brief overview of the operators and their offers to try to take stock of what is most interesting for the consumer.

For the comparison to be as fair as possible, we will observe the packages over a period of 24 months. Thus, SIM Only and MVNO operators can be compared to the 3 major national operators.

We will also compare various phones in order to be as comprehensive as possible. We will therefore observe the Galaxy SIII (the test to be found here) and SII (the test here), the iPhone 4S, the Lumia 900 (find a presentation on Frawin.com) and finally the HTC ONE X.

Since we will be talking about smartphones, we will compare operators taking into consideration offers with internet use. We decided to make 2 comparisons:

2- Comparison of “smartphone discovery” packages:

“Discovery” means a package offering internet at a lower cost intended for a wider audience.

We have selected the closest offers from the 3 incumbent operators in terms of price and options. The only real difference here between the 3 operators is the Data option, 500 MB for Orange and Bouygues against only 250 MB for SFR.

For the other operators, it was more difficult to choose homogeneous packages. Free and B&You only have one offer with data so we had to show these 2 offers in our two comparisons. Sosh is in a slightly different situation since it offers a slightly cheaper offer than its competitors with more limited services both in call and in data.

For MVNOs, the prices are a little more expensive for services that are not necessarily more interesting since the calls are limited (although important in terms of number of hours). The limitations mainly concern the Data part limited to 500 MB at Nrj Mobile and 250 MB at La Poste Mobile. Moreover, none of the 3 MVNO operators mentioned here offers modem mode in their packages.

When it comes to the price of phones, fortunes are very mixed. Orange, Bouygues and SFR operators are generally cheaper than the others thanks to a historical policy of subsidizing telephones in the monthly plan. MVNOs are also following this trend, while Free, Sosh and B&You only marginally subsidize telephones. They are of advantage from a cost price perspective with a less expensive package but more expensive phones.

With a package at €14.90 cheaper than its direct competitors, B&YOU and Free, Sosh allows itself to be very well placed on the overall cost at 2 years for a “smartphone discovery” package. The package is, as we have said, more limited than the €19.90 package that Sosh offers and which competes with Free and B&YOU, but it is also more suitable for an audience that is not a smartphone specialist and does not spend its life on the internet or on the telephone.

This package is perfect for those who want a phone with a small internet package in order to discover smartphone use without breaking the bank. With this plan, you will make a minimum saving of €100 compared to the competition's plans. It is therefore really a good deal, especially since Sosh belongs to the Orange group and as such uses its network which is of high quality.

3- comparison of "hard core internet user" packages:

By “hard core internet user”, we mean here packages rich in data which correspond to the advantages of the geek public who constantly download apps, watch TV on their smartphone, listen to the radio in streaming. In short, who has an intensive use of the Internet on his phone. We have decided to take the high-end packages of the incumbent operators. We have nevertheless observed a sorting in the packages to set aside those offering international options (both for roaming and for calls). This distinction being made, we observe that the Orange offer is more expensive, in return for many services included in the offer (subscription to the Deezer Premium music streaming service, Orange Cineday, etc.) The other notable difference between the 3 operators concerns the Data part. Sfr only offers 1 GB of monthly data against 3 GB for its competitors. If you want to consume more, you will have to buy refills. This difference places the offer of Sfr 10€ below its competitors with a price of 49€. As far as the other operators are concerned, there are again 2 different camps. The MVNOs are significantly more expensive than Free, Sosh and B&You for equivalent or lesser services. Attention, this difference is to be compared to the price of the telephone since the MVNOs subsidize part of the price of the telephones in the packages, which – as we said previously – the 3 other operators do not do.Virgin Mobile and Nrj Mobile require consumers to commit to several months to benefit from a reduction. This is the main difference compared to La Poste Mobile, which will offer you the same offer (but with less data) without obligation. What you gain in independence, you lose in data.Sosh, B&You and Free are cheaper here, without commitment and with less limited offers than MVNOs. As we will see in the following, you will nevertheless pay more for your phones with them. The incumbents who offer more expensive packages make up for it by offering cheaper phones to accompany the packages. This corresponds to the subsidy policy that we mentioned earlier and which is even more visible here. No phone here is over €200 for these operators except the iphone 4S 16 GB at SFR. We have chosen to compare rather high-end phones with the exception of the Galaxy SII which is now beginning to show the age. This is felt since apart from the latter, no telephone is offered at 1 €. Let us also mention the problem of the availability of terminals. We can note for example that the Lumia 900 is only offered on the Orange network while the iPhone is not offered by Nrj Mobile and La Poste Mobile. Finally, remains the case of the HTC ONE X which is also less distributed than the ONE S even though there is no longer an exclusive contract on this phone and it is very interesting in terms of characteristics. Here is the link to his test for the most curious.

Free and Sosh seem to be the most interesting in the configuration studied. In the case of a top-of-the-range internet package, the advantage is therefore given to Free. Sosh's plan is 5 euros more expensive per month but offers some phones with better rates. Sosh also offers a lot of phones while Free's phone store is more than limited at the moment.

For Virgin Mobile, we have decided to use the Extaz M offer, but another offer exists, the Extaz XL plan giving you the right to purchase a cheaper smartphone. Only, when we calculate over 24 months, this package seems less interesting, at least in the configuration studied. We have therefore chosen not to include it in the context of our comparison and to use the Extaz M plan instead.

Finally, we can still say that the arrival of Free Mobile has been beneficial since it is its offers (and those of its most direct competitors) that are the most interesting in the two configurations that we decided to study. .

The price difference over 24 months is substantial with differences of €700 to €800 between the most interesting prices and those least interesting. Remember that just over 2 years ago, MVNOs only represented a small part. We can therefore say that the average price of packages has fallen sharply over the past 2 years.

It is nevertheless difficult to say what was the impact of Free on these tariffs since the operator only arrived in January of this year but one can imagine that the incumbent operators, feeling the wind changing direction, started to work on new offers before ARCEP signs the official arrival of Free. They therefore began to test new offers mainly through branches such as MVNO, Sosh and B&You. The consequence was a price drop prior to the arrival of Free, although this drop has accelerated since the start of the school year in September 2011 with the imminent arrival of the new operator.

It seems a little easy to say that the telephone operators anticipated the arrival of Free, but let's not forget that they knew Free's strategy since it was the same approach as for ADSL and Xavier Niel had no stopped saying what he would do. Moreover, the package market is a market where changes are made over time and where anticipation is essential. Indeed, the operators reflect on their offers taking into consideration that they generally commit their customers for a period of 12 or even 24 months. During this period, prices and services only change marginally and certainly not downwards. It is therefore preferable to do your calculations well beforehand. It was therefore necessary for the operators to think long before the arrival of the fourth operator about the commitment of their customers by offering them sufficiently interesting offers for them to remain committed.

As we will see in the rest of this file, there are nevertheless other elements to take into account other than the price which make it possible to explain these differences in tariffs between the operators. All operators do not offer the same service or the same quality with their packages.

To conclude, we can still say that the difference is significant and largely to the advantage of the operators Free, Sosh and to a lesser extent B&You. But is it possible to pay even less by going to get your phone elsewhere than from your operator? This is what we will try to answer with the next part of this file.

4- A point on the possibilities offered by the Chatel law:

The Chatel law was created in 2008 to strengthen competition, one aspect of which specifically concerns telecoms and the duration of commitments. In particular, this law prohibited commitment periods of more than 24 months. It has also made it easier and less costly for the consumer to opt out of an operator for people engaged for 24 months.

So when you are hired by an operator, you have 3 options: Not to commit or to commit for 12 or 24 months. For the last two possibilities, if you wish to terminate your mobile phone contract before term, there are 2 scenarios:

Termination before term results in the loss of the telephone number unless you request portability. To do this, simply subscribe to the new operator you want to go to, indicating your RIO number. This code is available by calling 3179 between 6 a.m. and 10 p.m. from your current operator. (free call, except at Prixtel).

If you opt for this choice, the operator will take care of everything and you will only have to wait to receive your SIM card and send back the documents necessary to finalize your file.

Be careful, however, to benefit from the Chatel law as part of a 24-month commitment, do not forget to wait until you start your 13th month of commitment. If you do it before, it is not sure that you fall within the framework of the Chatel Law (therefore the payment of 25% of the sum from the 13th month to the last month of commitment).

Indeed, ARCEP noted in a report at the end of 2010 that not all operators had the same behavior with regard to the Chatel law in the context of termination before the end of 24 months. Thus, while Orange, Bouygues Telecom and Virgin Mobile only billed 25% after the 12th month, SFR and Nrj Mobile charged the full cost of the remaining monthly payments, considering that the Chatel law did not provide for this scenario. I could not find precise and consistent information on what is happening today, so check with your operator to be sure if you are in this case.

If you can withdraw before term, it may be interesting to commit for 24 months and then leave after 13 months by paying 25% of the remaining monthly payments. What is it really ? This is what we are going to try to see now.

If we take the packages studied in our file, only the operators Bouygues Telecom, Orange and Sfr offer packages with a 24-month commitment and with sufficiently attractive mobile subsidies for the calculation to be made.

Indeed, Nrj Mobile and Virgin Mobile also offer 24-month commitments, but the package prices are more attractive because the mobile subsidy is less substantial. It is therefore not interesting to integrate them into the calculation.

We therefore compared the 3 operators to 2 new ones offering the most attractive offers according to our previous calculations. We took the 3 most popular phones of the moment from 3 different manufacturers to ensure comparisons.

In view of the calculation, it is therefore not interesting to commit to 24 months to leave after 12 full months. It is preferable to choose an operator directly without commitment by paying for your phone without subsidy. Remember, however, that the purpose of the Chatel law was not to lower prices but to reduce the duration of commitments to avoid a certain captivity of consumers with the same operator.

5- Using the Chatel law and changing the offer before leaving, the most profitable solution?

I saw that some people advised in the comments to commit to 24 months and to leave after a year, having first lowered your package so that the 25% of the monthly payments remaining to be paid correspond to a smaller sum.

The first thing to look at for this is whether it is possible and how much it costs if not free. The second is to remember to unlock your phone before leaving the operator. Doing it afterwards is either very complicated or simply impossible as the operator hotlines are not very customer service oriented even if that is their purpose. Still, in terms of unlocking the phone, French law says that it's free after 3 months. That being clarified we can return to our comparisons.

We therefore searched the operators' sites to try to find the conditions for changing the package. Here is what we found:

For Orange, if we take the latest price list, changing offers is possible but the conditions depend on the package and the time chosen to change offers.

I have put the summary table for you for information but let's just remember that for the package we are observing (at 69€) the conditions are 180€ before 6 months and 90€ after 6 months. If we had taken a cheaper package, the conditions would be different, but who says cheaper package, says cheaper services or less attractive subsidies. Knowing that this plan is the only one to offer 3 gigabytes of data and that you have to pay more than €48.90 to have more than 500 MB (with the Origami Star plan at €49.90), we would in any case be obliged to pay the same amount to change the offer.

We have therefore decided to change the offer to go for the cheapest offer M6 Mobile Bloqué 1h at €14.90 as part of a 24-month commitment with unlimited SMS.

For Bouygues Telecom, here is what the website says:

The change of offer at Bouygues Telecom directed us towards the €14.90 offer with the same conditions as Orange: 1 hour of calls and unlimited texts.

Finally SFR indicates this on its site:

We therefore have to switch to an offer at €29, which corresponds to the Carré Connect offer offering 2 hours of unlimited calls, SMS and MMS and 250 MB of internet.

Now let's take a look at what it costs. We are going to do 2 projections:

– One with departure after 6 months after change of offer

– One with departure after 12 months after change of offer

As we can clearly see, by trying to pay as little as possible through the use of the various artifices available, the cards are reshuffled and other companies appear to be competitive. This is the case of Bouygues Telecom which is systematically interesting here in the case of a withdrawal after 7 months. This comes from the package chosen for the change of offer (much more competitive than that of Sfr) but also from the price of the initial package, cheaper than at Orange.

Be careful however, we have tried to create these comparisons taking into account the conditions for changing packages which are more than brief. Without being a customer of an operator in a position to be able to change plans and therefore have access to possible new prices as well as change costs, we can only extrapolate. This is how we chose to take the prices of the packages given as part of a 24-month commitment without being sure that these are the prices that are actually offered. The same applies to the costs of changing packages.

We can still say that unless you want to change operator every 6 months, it is better to choose your operator well from the start and stay there for a period of 12 or 24 months. And in this game, Free and Sosh are systematically the most interesting – what's more if you find your phone even cheaper than in the shops of these 2 operators.

This is all the more true since the fact of changing operators regularly means that you are unreachable for the duration of the change and/or unable to make full use of your telephone. Is the minimal gain made worth the sacrifices and complications that this entails? We don't think so, but everyone is free to draw their conclusion according to what they consider to be the most important.

6- Where to buy your phone?

We have just seen that the most interesting operators for the 2 packages we chose to study were Free, Sosh and B&You. However, these 3 operators offer non-binding offers with a separation between the payment of the mobile and that of the package. This means that you can come to this operator with your own smartphone or telephone without having to reinvest in a new mobile. This also means that you can also buy a new phone elsewhere than with this operator.

We will therefore try to see where is it best to buy your phone: from the operator, the manufacturer or via an intermediary?

The comparison here is to the advantage of the operators. It can be estimated that the ability to negotiate volume prices allows operators to offer more attractive prices for the consumer.

However, we can only advise you to take a good look at the price of the phone you want to buy and not to hesitate to compare prices. Observing the competition carefully can make it possible to benefit from the best price, especially since more and more promotional offers are available on the sites of resellers and from operators. In view of the calculation, it is therefore not interesting to commit to 24 months to leave after 12 full months. It is preferable to choose an operator directly without commitment by paying for your phone without subsidy.

To sum up, a smartphone with a comfortable internet data package without breaking the bank is possible, but you have to have cash, wait for the right moment and jump at the chance.

Beware of the blocking of telephones. A phone purchased from an operator is often blocked on its network. To use it on the network of another operator, you will either have to pay for the unlocking (price varies depending on the phone), or wait for a minimum period of 3 months after purchase in order to have it unlocked for free.

7- What is hidden behind the price of a package:

For the creation of this file, we decided to compare the operators on similar packages by taking as a guideline the two elements which seem to us the most important: internet access and price.

We have therefore compared the operators leaving aside many elements related to the services offered by some.

Thus, the 3 incumbent operators have, for example, a network of shops which can explain – at least in part – the cost differential compared to other operators. While Free, Sosh or B&You offer services only via the internet, Orange, Sfr and Bouygues telecom are accessible through shops that dot the territory. This element can greatly influence the consumer's purchasing decision and for this reason we had to talk about it. Indeed, with these operators, you can go and complain in the shops and you will be answered directly in person. However, some operators are beginning to filter the comings and goings of shops by asking customers before going to a shop to contact the operator's hotline to try to resolve the problem.

These same 3 incumbent operators are also the only ones to have branches throughout the territory (we leave aside Free, which is just beginning to deploy its network). This network of antennas obviously has a cost that must be well amortized on the packages offered. Olivier Roussat, CEO of Bouygues Telecom indicated in a column in the newspaper Les Echos dated July 2 that the various operators were investing between €600 million and €1 billion per year in the networks.

The other operators also participate in network investments thanks to what they pay under the roaming contracts signed with the big 3. Thus, Virgin Mobile customers use the Orange network. Free has also signed a roaming contract with Orange so that Free mobile subscribers can use the latter's 2G and 3G network. Rumor has it that Free would pay more than 1 billion euros per year for this roaming contract.

The last element to observe when comparing operators is that of the after-sales service policy. It is often said that incumbents are more flexible and tend to give away more easily than MVNOs to retain customers. This is also the case in the context of renewal operations. We remember, for example, that Orange had added loyalty points to its iPhone customers so that they could re-engage at a lower cost for 12 or 24 months.

All these elements that we cannot easily compare are also to be taken into account when one wishes to commit to an operator. They represent a cost for the operators, a cost which is therefore partly passed on to the prices of the packages and which may explain the difference in competitiveness between these operators and the others.

8- Conclusion: the lessons of this dossier:

Now that we've looked at both scenarios, it's time to take stock of what we just learned:

1 – incumbent operators are less competitive than other operators even if they catch up on additional services

2 – For the scenarios studied, Free, Sosh and B&YOU are the most interesting. On packages with internet, Sosh seems to have an advantage over its competitors on the small "smartphone discovery" package, while Free is more profitable for the large "hard core internet user" package.

3 – It is more interesting to buy a full price phone rather than subsidized over several months as part of a package

4 – Buying a phone from your operator is not necessarily the most interesting. It is better to compare prices and do not hesitate to buy on sites specializing in the sale of telephones or from other operators

5- I would add a fifth which is very important: There is no perfect package suitable for everyone.

You have to start by knowing your needs and from there, compare the different offers to bring out the most interesting offer for your profile.

Another element must also be taken into account, it is the loyalty advantage that you can receive. Your internet service provider may, for example, offer you a reduction on your mobile plan or even offer you a quadruple play offer, thus making its offer more competitive than those studied here.

Do not hesitate to compare, observe and do your calculations to find the offers and the most interesting prices for you.

In any case, since the arrival of Free Mobile, Sosh and B&You, the contract market has become more dynamic and more uncertain. It is for this reason that we do not recommend that you commit to the same operator for long months. Commitments to 24 months are to be avoided because even if thanks to the Chatel law, the conditions for disengagement have been greatly facilitated, it is not the miracle cure either. Therefore, favor a commitment for 12 months or even no commitment at all. Indeed, whereas before it was more interesting to commit to benefit from a substantial reduction on the telephone, today, 24-month commitments no longer bring much for the consumer.

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