The French telecom Iliad SA said today that its disruptive mobile business continued to lure consumers in the third quarter, claiming 60 percent of new subscribers. Free Mobile has won 4.4 million since its launch nine months ago with ultra-cheap voice and data plans that lean heavily on residential Wi-Fi connections operated by the parent company.
Free Mobile has been a huge disruption in France’s mobile market, forcing entrenched players to lower their prices substantially to compete. That renewed competition helps explain why customer defections to Free Mobile actually slowed to 805,000 during the third quarter, down from 990,000 in the second quarter and a whopping 2.6 million in the first.
It’s unclear just how much money Iliad’s mobile business makes, however. As my colleague Kevin Fitchard notes, Free Mobile generated $304 million during the third quarter and saw a monthly ARPU of $20.45 aside from handset sales revenues. But the carrier has spent much — if not all — of its existence in the red, as I noted in our recent 2012 segment analysis of the mobile industry. Free has conceded that roughly 90 percent of its cellular traffic is handled by Orange, which is surely an expensive model to maintain. Whether Free Mobile has real staying power is unclear. But French consumers who are enjoying lower prices surely don’t care — regardless of who their carrier is.