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Price war cuts roaming fees for French mobile customers

Three large mobile network operators, perhaps prompted by looming legislation, are trying to win customers by cutting the fees that plague travelers and tourists.

Orange CEO Stephane Richard speaking at the LeWeb conference in 2013
Orange CEO Stephane Richard, shown here speaking at the LeWeb conference in 2013, has brought his company into a price war that's giving French mobile subscribers lower roaming rates elsewhere in Europe. Stephen Shankland/CNET

Three French carriers -- Orange, Bouygues, and Iliad's Free Mobile -- have begun competing for customers by cutting the roaming fees that can spook travelers and tourists from using mobile phones when abroad.

The price war is good news for people in Europe, where a fragmented mobile-network market means it's common to worry about the extra costs for making calls and downloading data while traveling outside one's home country. But it's likely the carriers aren't just motivated by the urge to woo customers: they're also likely angling for a better bargaining position for talks about proposed European legislation that would scrap roaming fees completely.

Neelie Kroes, the European Commission vice president overseeing the region's digital agenda, has been strongly pushing for a unified telecommunications market that would make it easier for carriers to span multiple countries and for individual customers to cross borders. One tenet of proposed legislation is an end to roaming fees by 2016. Kroes wants Europe to reclaim mobile-network leader leadership it's lost to the United States, a move she believes will make the region more economically competitive.

Carriers, punished by expensive investments in 3G and now 4G networks that take years to pay off, have objected to the proposed legislation that would cut off one source of revenue. But they're moving in the direction the legislation is leading anyway.

First comes Free
On January 9, Free Mobile announced that it will charge no roaming fees for its customers in Portugal and in some Caribbean islands including Martinique and Guadaloupe. Then on January 14, it added a much bigger country to the list: Italy.

Free's parent company, Iliad, has had some success rattling competitors with consumer-friendly services, first in broadband and now mobile subscriptions. Its cheapest plan costs 2 euros (about $2.70) per month for two hours talk time, unlimited text messages, and 50MB of data -- and it's free for its broadband customers.

But there are caveats to the free-roaming option: it's good for only 35 days per year; it's limited to 3GB of 3G or 4G data, after which download rates are slowed; and it's only offered with the higher-end 20-euro ($27) plan.

Next, Bouygues
Bouygues fought back January 21 with a premium subscription called Sensation that makes calls and text messages free in Europe and adds an extra 3GB of download data.

"Customers...will at last be able to use those services they dared not to, for fear of massive bills," Bouygues said, mentioning maps, photo sharing, restaurant searches, and e-mail. The plan costs 30 euros ($40.70) a month for those who already have a phone, and it's also got a 35-day-per-year limit.

Orange comes next
The price war got more serious this week when Orange, formerly called France Telecom and the holder of the French telecom monopoly, joined.

Its Origami Jet Europe plan offers free calls and text messages throughout Europe and 30 days of mobile Internet usage, up to 7GB of data per year, when traveling in Europe outside France. It's a premium plan that costs 60 euros ($81.50) per month for those who already have a phone.

A lower-end option called Origami Play that costs 25 euros a month ($33.90) also now includes a week of European Internet use outside France, up to 1GB of data usage per year. Another option goes to two weeks and 2GB.

The plans are a step short of the T-Mobile USA plan that eliminated text-message and download roaming fees entirely in 100 countries. But in Europe, for business or tourist travel, it's a lot easier to cross borders, so roaming is a more common circumstance than in the US.