BEING A buccaneering billionaire with a history of investing in sex shops and a business manner reminiscent of Ryanair’s Michael O’Leary doesn’t sound like the surest route to the hearts of the French people.
But as Xavier Niel was applauded off stage yesterday after an announcement that he hopes will reshape the country’s mobile phone market, even politicians on the left of the Socialist Party were singing his praises.
At a packed Apple-style launch event in Paris, the 44-year-old telecoms entrepreneur – whose company Iliad recently won France’s fourth mobile phone licence – unveiled a price package that could halve the cost of having a mobile phone in what is one of Europe’s most expensive mobile markets. For just €19.99 a month, and without having to sign a contract, new customers would have “unlimited” calls and texts to 40 countries, Niel said.
Those who stayed with their old operators were “mugs”, he declared. The announcement was the culmination of a masterful year-long public relations campaign. Without spending a cent on advertising, Iliad – which markets itself under the brand name Free – used a steady flow of rumours spread by fan sites to generate word-of-mouth hype. A consummate showman, Niel had refused even to divulge the date of his mobile launch until 12 hours in advance, restricting his public comments to a tweet on December 13th saying: “The Rocket is on the launch pad.”
Iliad’s move into the €20 billion French mobile market was watched so closely because it has a history of shaking up French industries. In the early 2000s, the company pioneered the “triple-play” offer of broadband internet, landline and television for a fixed price of €29.99 a month – forcing its high-charging competitors to follow suit.
France’s existing mobile operators – France Telecom, SFR and Bouygues Telecom – all lobbied for Iliad not to be granted the fourth licence, and the company has largely outperformed all three rivals since its won the right to enter the market in early 2010.
For Niel, the transformation from maverick outsider who shunned the traditional finishing schools of the French elite to a pillar of the country's establishment now looks complete. In just 15 years, he has gone from producing services for Minitel – a French forerunner to the internet – and investing in sex shops to leading a company of 4,000 employees and amassing the eighth-largest fortune in France, according to Forbes.
In 2006 Niel was given a two-year suspended sentence for embezzlement. These days, President Nicolas Sarkozy is said to consult him on technology issues. He owns a stake in the investigative website Mediapart and, in June 2010, he joined two fellow businessmen in buying the French daily Le Mondefor €110 million.
For all the hype, however, many specialists doubt whether Free can make the same impact with mobile phones as it did with landlines, TV and the internet – not least because the industry is barely growing and many consumers are locked into 24-month contracts. But for a day at least, Niel was basking in praise from unlikely quarters.
“With his new unlimited rate, Xavier Niel has done more for the purchasing power of the French people than Nicolas Sarkozy has done in five years,” tweeted Arnaud Montebourg, a Socialist Party politician best known for his advocacy of de-globalisation.