The Iliad-owned French broadband, pay-TV and telephone service provider Free may be offering the best deal on the planet: $38 a month for HDTV, unlimited intra-France phone calls and broadband download speeds of at least 28 Mbps.
It also turns out that Free’s subscribers are the most satisfied and least likely to switch, according to a study of French service providers by Strategy Analytics. Cable TV provider Numericable was at the bottom of the list with 72% of its customers saying they would switch providers if offered a 20% price reduction.
The ‘Broadband Satisfaction and Customer Churn: France 2H’08’ study was done in the fourth quarter of 2008. Some 502 French broadband decision makers were surveyed on the ‘three pillars’ of customer churn: customer satisfaction levels, propensity to churn and perceived obstacles to defecting.
Respondents were presented with various broadband speed and price scenarios to gauge sensitivity.
Free customers were at the top overall with 81% saying they were ‘somewhat’ or ‘very’ satisfied with the provider’s performance. Strategy Analytics said French broadband customers were the least likely to be swayed by offers of lower prices or higher speeds of any major European country.
‘Traditional price or speed-matching strategies may not be as effective in the French market,’ said Ben Piper, analyst and director of Strategy Analytics multiplay market dynamics service. ‘Rather, French broadband service providers (BSPs) need to focus on differentiating in other ways, such as in excelling in overall customer quality of experience.’ The number-one barrier to switching service providers was the inconvenience of canceling existing service and the hassle of returning equipment.
Looking at the matter from the other end of the telescope, David Mercer, VP of Strategy Analytics digital consumer practice, said, ‘BSPs that can effectively streamline and simplify customer switchover will be at in advantage in France’s competitive market. The survey includes France’s top BSPs, including Iliad-owned Free, SFR/Neuf, France Telecom’s Orange and Numericable.
At the end of June 2008, Free had 3.134 million broadband subscribers, up from 2.626 million at the end of June 2007, an increase of more than 500,000. Free’s share of the French DSL market increased from 19.5% on June 30, 2007, to 19.8% on June 30, 2008.
In November it told financial analysts it had 3.275 million broadband subscribers and a market share of 20.2%. Its average revenue per user at that point was €36.4 ($47).
It said its goals are:
– To remain the first alternative on the French broadband market after France Telecom’s Orange.
– 3.25 million subscribers by end 2008 (excluding Alice) and 5 million by the end of 2011 (including Alice).
– Invest in fiber-to-the-home with a total capital expenditure budget of €1 billion ($1.3 billion) by 2012.
– 70% of Paris covered with fiber by the second half of 2009.
– Quick integration of the Alice service and deployment of Alice set-top boxes.
– To address the mobile market by becoming the fourth mobile phone service in France.