The threat of a third cellular operator’s arrival in France has provoked a price war between France Telecom and Societe Francaise de Radiotelephone SA, propelling forecasts of new subscribers to nearly twice original estimates. Lured by a monthly subscription rate cut last month to the equivalent of $35, from $45 by both operators and even lower prices from independent cellular distributors, France Telecom estimates the country will see 400,000 new mobile phone users instead of the 250,000 predicted at the beginning of the year. Licensed to sell mobile phone subscriptions and equipment at any rate they desire, some of France’s 12 societes de commercialsation de services are devising all kinds of schemes to cut prices even further. Bosch Telecom, for example, offers a subscription at only $17.27, with a minimum of $28 in monthly communication charges, which works out to some 22 minutes at $1.25 a minute. Some service companies have gone so far as to offer phones for free or for one franc, so long as the buyer agrees to sign on for a subscription of anywhere from six months to five years. Typically, these offers are on older phones that would be unsellable in a market where Motorola Inc and Alcatel NV bring out new models every three months. The third operator should be named in September; it’s between Alcatel, Bouygues SA and la Lyonnaise des Eaux SA and Bouygues is the favourite – but the price war could make it a hollow victory.
