Iliad poised to push button on mobile offers

Mon Jan 9, 2012 6:41am EST

* Free press conference on Tuesday at 0730 GMT

* Free Mobile has pledged to deeply cut prices

PARIS Jan 9 (Reuters) - France's Iliad is expected to announce details on Tuesday of its long-awaited mobile service, which will intensify price competition in Europe's third-largest telecom market.

Iliad, which markets its offers under the Free brand name, has pledged to halve mobile prices and simplify offers by eliminating long contracts and phone subsidies.

Larger rivals France Telecom, Vivendi's SFR and Bouygues Telecom cut prices last year and have launched all-inclusive bundles of mobile and fixed calls, broadband and TV to blunt Free's arrival.

The moves have weighed on their profit margins, and analysts predict the pressure will continue once Free has launched and starts wooing clients.

Speculation over the timing of the Free launch has reached fever pitch in recent weeks, with many observers having expected it before the Christmas sales season.

Free's iconoclastic founder, Xavier Niel, fuelled the rumour mill when he issued his first tweet on December 13, saying: "The Rocket is on the launch pad."

Since then, the Twitter microblogging site has been rife with rumours, ably perpetuated by a series of jokey leaks from Free that have kept its client base of tech-savvy geeks in a state of near-breathless anticipation.

A website (mobile.free.fr/) recently appeared with a photograph of a rocket on a launch pad, followed by another with an old-school drawing of a rocket hiding a coded message in an old computer language, ASCII (live.free.fr/).

Iliad's shares have largely outperformed the other French telecom operators since it won the licence to launch a mobile service in early 2010.

Attracted by growth prospects and strong profits in the fixed telecom and broadband business, investors have lifted Iliad shares more than 11 percent in the past two years.

Over the same period, France Telecom shares have fallen more than 30 percent and Vivendi's 20 percent. (Reporting by Leila Abboud; Editing by David Hulmes)

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