Introduction to Free

Created in April 1999

2nd Internet Service Provider (ISP) in France

Belongs to the group Iliad

Since January 2001, Free developped his own modem : The Freebox

1st multiplex box which can offer :

High flow Internet

Unlimited telephony on French phone calls

HD television

Introduction to Free

Free employes the France Telecom network :

Reduced price :

Free low flow Internet service

50h low flow Internet at 14,99 E per month

Unlimited high flow Internet at 29,99 € per month

The strength of Free is based on simplicity :

One price, one offer, one technology

2006 turnover : 950ME

Manpower : 560 employees with 460 dedicated to the hotline.

Introduction to Free

10/2002  Unlimited high flow internet access up to 512K – first triple play modem (Freebox)07/2003 Unlimited phone calls in France11/2003  Television by ADSL06/2004 High flow access up to 5 Mbit/s07/2004 Wifi functions10/2004 ADSL2+01/2005 High flow access up to 20 Mbit/s04/2005 ADSL access without phone subscription06/2005 Médiacenter (Freeplayer) - Son Dolby 5.1 - READSL09/2005 Immediate TV audience Measure11/2005 High flow access up to 24 Mbit/s12/2005 Unlimited phone calls to 14 foreign countries04/2006 Freebox HD, TNT tuner, WiFi-mimo, Wifi mobile phone06/2006 Adding 13 other countries for unlimited phone calls07/2006 High flow access up to 28 Mbit/s08/2006 Activation of digital videorecorder Technologic innovations on :

Internet, television and telephony

Strategic business units

Internet Television

Phone calls

Mobile phone

3 in one FREEBOX

Mission and objectives of Free

To provide an internet service and an integral offer to people based on its own network and with equipment from its own

conception

Free wants to stay the 2nd Internet Service Provider in France

Overcome 2,8M Internet ADSL subscribers by the end of 2007

Concerning the FTTH (optic fiber), the objective is to cover 4 million households by 2012 (including Paris + suburbs and selected cities) with a minimum of 15% market share of landlines.

PESTEL

Technological :

ADSL/Wifi technologies

Control of technologies and innovation capacities

Use the Internet for a lot of multimedia activities

2 future technologies

PESTEL

Economical :

Computers much cheaper

More and more houses are equipped

9 million of Internet subscribers

Legal :

Law modifications on networks in the last few years.

France Telecom must rent its network to others Internet service

provider.

France Telecom can’t use its position of leader to sell cheaper

Internet service.

5P+1 - PORTER

Suppliers - 6/10

The main network is owned by France Telecom

A lot of hardware provider

Buyers - 8/10

Very strong customers, helped by consumer associations, sharing

opinions ;

12 or 24 months subscription but can be canceled by paying

PORTER

New participants - 2/10

Not currently a strong threat,

The ARCEP is a barrier to entrance

Substitutes - 3/10

They are very rare as communication support

The cable could be a substitute but is not adapted

PORTER

Competitors - 8/10

They are quite strong,

They are : France Telecom (half the market), Neuf Cegetel (just under

Free), AOL (decreasing)…

Competition on the price but also on the services offered

State - 2/10

With the ART and the ARCEP is a support for Free by forbidding lower

prices

PORTER diagram

SuppliersBuyers

New participants

SubstitutesCompetitors

State

CSFs

Advertisement

Capital / cash flow

Technological innovations

Development of its own network

Relation with the customers

Simplicity of the offers

+

+++

+++

++

+

++

SWOT

Strengths

Communication

Financial resources

Technological resources

Human resources

Physical resources

Good notoriety

Capacity to innovate

Fast decision process

Cheap and efficient communication

Weaknesses

Hotline and support

Freebox setup

SWOT

Opportunities

Team specialized in ADSL technologies.

Local communities

ARCEP

A booming potential

Threats

Not everybody can access to ADSL

Imitations

Regulation standards

Consumer associations

Diagnostic

Price : Free is well placed because low and constant,

The technical innovations are the best on the market with a constant price,

Free must improve its technical assistance and customer support,

If the number of new subscribers decreases, they might increase advertisement,

Develop the Wimax access (wireless access with long range) in order to increase the number of potential buyers.