SFR fires first in mobile price war

Existing customers offered discounts of up to 45% after a year, with rivals expected to follow

MOBILE phone users could benefit from more competitive prices on their monthly contract, after SFR announced a series of tariff changes that could trigger a price war.

The operator, which has 16 million customers in France, has announced discounts of between 25% and 45% on some packages after the first year, to encourage people to stay with SFR and keep their existing phone.

The monthly savings will typically range from €9 to €17 depending on the package.

The new tariffs will come into force on June 15. Every package will be available with or without a contract and with or without a new phone.

Monthly fees for mobile contracts include a contribution to the cost of the handset. SFR says it does not make sense to continue charging the same amount once the cost of the phone has been recovered.

SFR director Frank Cadoret said: "We hope this will also help to avoid wastage, where mobile phones end up in a drawer never to be used again."

The big three mobile operators in France - SFR, Orange and Bouygues Telecom - are facing increased competition from "virtual" operators such as La Poste, Numéricable and Virgin Mobile, which use their transmitter network but offer cheaper deals.

Internet service provider Free is also preparing to enter the market, becoming France's fourth mobile operator next year.

UFC-Que Choisir deputy research director Edouard Barreiro said consumers should wait a while to see how the other operators respond to SFR's price cuts.

"We are in a transition period," he told France Soir. "The situation will change in the coming months and offers will become more and more attractive."

Orange is expected to announce some changes to its tariffs on June 20.