Bouygues Telecom Unit Offers 4G Service to Subscribers with No Price Hike

By Inti Landauro

PARIS--The telecom unit of French conglomerate Bouygues (EN.FR) Monday said it will offer the 4G service to all its subscribers for free in reaction to a similar announcement made by rival Iliad SA (ILD.FR), a first sign competition risks are preventing telecom operators from boosting cash from faster data services.

Like Iliad, Bouygues will offer the latest fourth-generation, or 4G, high speed mobile internet connection to all its subscribers automatically. Additionally, the company won't adjust its prices in line with the sales-tax increase imposed by the government starting on Jan. 1.

The Bouygues move adds to pressure on other French telecom operators Orange SA (OR.FR) and Vivendi SA's (VIV.FR) SFR to follow suit to prevent customers from migrating to Iliad or, now, to Bouygues.

Since Iliad launched its low-cost mobile service dubbed "Free" almost two years ago, setting off a price war, the other operators have seen margins and profits shrink. They all invested heavily in 4G networks, under the assumption the new service would allow them to raise their prices and increase revenue per user.

Write to Inti Landauro at [e-mail]

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