As usual, Xavier Niel had spared his small effect for the last big ad stamped Free Mobile. To arouse the appetite of observers, he did not hesitate to make up like Sharon Stone in Basic Instinct in a small teaser with just the right amount of intriguing.
At the heart of his point, as one could guess with this video tablet, a long-standing workhorse of the French boss: subsidized telephones. Criticized for years by Niel, legal action in support, this practice consists of offering the new subscriber a smartphone for a price below market standards, by subscribing to a more expensive package and engaging customers on a or two years.
To bury this strategy once and for all, Free Mobile has therefore put the small dishes in the big ones and once again sells us what it presents as a small revolution. Xavier Niel himself, accompanied by the managing director of Free Thomas Reynaud, was responsible for unveiling the operator’s new approach to subsidies. And to definitively solve the problem, which the founder of Free does not hesitate to call disguised consumer credit, the operator will therefore go directly into the field of his opponents with a well-defined slogan: transparency.
No commitment and prices lower than the competition
So make way for Free Flex, a subsidy system that guarantees the user the separation of the costs of his package and his mobile terminal, as opposed to offers from the competition including both with prices which most often soar in the event of a loss. expensive mobile. Concretely, you acquire the terminal of your choice from among a hundred references (including 8% refurbished telephones), with one of the Free plans. You then pay a first amount, then 24 monthly rents. So far, the operation is largely akin to conventional rental. Except that at the end of these two years, you are offered a purchase option, generally cheaper than your first payment. You therefore make the definitive purchase of your smartphone, for a total price equivalent to the market price at the time of sale.
In addition, the subscriber can buy his phone at any time by paying the rest of his contributions at once. Likewise, since the package is non-binding, it can end it at any time, while continuing to pay its rents to Free for the terminal. Terminal which, according to the operator’s calculations, will ultimately cost 30 to 50% less than the prices charged by the competition in their subsidized offers – the emphasis has been placed on smartphones under € 400, which are very popular of consumers. There is therefore a risk of seeing the latter seize the material offer before heading off to the competition for less expensive packages … but Xavier Niel is confident. “If we are sure of ourselves, no need to hire the subscriber“he says with a smile.
At the end of the 24 months, the phone can also be returned to the operator, who will recondition or recycle it. In order not to cause the early renewal of a functional device, the offers are not accompanied by a preferential rate. The plan remains at the same price, with or without a mobile. Note also that they are aimed at new and old customers – at least those with a plan including at least 1 GB of monthly data. The other big news is that all the phones covered by Free Flex will be available directly in the store, while stocks last.
Free tries to reach a new market
If we are to believe the words of Xavier Niel, Free Flex is “not the most profitable offer for us“. We will have to wait two years to see the real return on investment of this bet. However, the boss is not worried, saying that the number of subscribers convinced by this new way of doing things will be a huge catch for the operator. “It is an opportunity to reach consumers who did not have the answer to their request with us until now.“He estimates the subsidy market share at 25%, which Free has therefore not touched so far. Note that on this type of offers, the competition that Free has in its sights is not to be sought on the side of operators low-cost like Sosh, B & You or Red, but with its direct rivals, the historic Orange, Bouygues and SFR.
Ambitious, Thomas Reynaud sees in this “conquest offer“a way to also reach professionals, craftsmen, VSEs and SMEs, and puts”challenged the competition to replicate“without losing tens of millions of euros in turnover in the process.
Next step for Free Flex: the possibility of subscribing to insurance with your subsidized package / mobile duo, in the event of breakage, theft or other damage more or less your fault. “We did not want to enter this field from the start for the sake of transparency, we did not want to be criticized for wanting to sell insurance!“, explains Xavier Niel, aware of the bad image from which these small additions in general suffer.
To summarize, it will always be possible to buy your phone in cash when subscribing to a Free plan. The Free Flex option comes to replace the previous operations – for which it will always be possible to opt however -, namely the payment in four installments without charge and the simple rental. It remains to be seen whether this new bet will really appeal to users, in the middle of the jungle of increasingly attractive offers offered by the various operators.