France Telecom and Iliad are in talks to amend their network sharing agreement

Orange France’s VP of wholesale, Brigitte Bourgoin, has reportedly sent a letter to Iliad CEO Maxime Lombardini complaining of the strain that Iliad’s subsidiary Free Mobile is putting on its mobile network.

Orange entered into a network sharing agreement with Free Mobile that came into effect once Free Mobile’s own network reached 27 per cent of the population. However, according to French Publication Les Echos, Bourgoin has complained to Lombardini because Free Mobile’s traffic is causing network congestion.

97 per cent of phone calls made by Free Mobile’s two million customers are taking place on the Orange network, according to market and trade union estimates.

“Free has launched an offer at €0 for its four million ADSL customers, and this was kept secret right up until the launch,” an Orange spokesperson told Telecoms.com.

“As a result, the impact of this offer was not correctly anticipated. When you put such extreme offers on the market, it is obvious that demand will be high and this was very largely under-anticipated by Free. Beyond this, we have normal working relations with our partner Free, but, we clearly could have avoided – or at least limited – some of the issues that we are facing today.”

France Telecom met with Iliad on February 14, 2012, to discuss the contract between the two. The contract between the operators is estimated at being worth €1bn over six years but the growth of Free Mobile could lead to the terms of that contract being amended.

The spokesperson confirmed: “We have meetings with Free every Tuesday. It is true that the current situation is not totally satisfactory but we are open to our partner Free and we are engaging in discussions with them with a view to ensuring that our agreement can be maintained.”

The launch of Free Mobile has shaken up France’s telecoms sector, as the low-cost brand offers 60 minutes and 60 SMS/MMS messages for no charge, and also offers a plan that includes unlimited texts, multimedia messages and free calls to 40 countries in Europe and North America, as well as “unlimited” internet use, with a fair-usage policy of 3 GB of mobile data per month, for just €19.99 per month.

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