We’re not talking about Homer’s epic tale of the Trojan War, although this story could end in a siege: France’s Iliad SA , which runs mobile carrier Free Mobile, is making a bid to buy T-Mobile .  Iliad has been operating in the French mobile market since early 2012, and had taken a 12% share of the market by last December. Its launch sparked a price war in France, with the company offering cut-price plans for as little as €2 ($2.68) a month.  The company’s founder is a price cutter at heart–a good match for T-Mobile’s current approach to shaking up the U.S. market. As the WSJ reported in late 2011, in the lead up to Free Mobile’s launch:  Iliad’s founder, Xavier Niel, has long pledged to cut the French households’ mobile and Internet bills in half. He says he can win over clients with a cheaper and more straight-forward mobile offer. Mr. Niel said recently that his company’s main advantage is low overhead. “My competitors’ chief executives travel by chauffeur-driven cars with their communications officers,” he said. “We have one person who does communications, and she travels by bike.”  Iliad is betting that it only needs a few flagship stores across the country and that most of its mobile-phone contracts can be sold via the Internet, holding down costs. The strategy will allow the company to offer one of the cheapest mobile services in Europe, Mr. Niel says. When asked what he thought about a €10-a-month mobile subscription, he replied that it seemed “still a little bit expensive.”  Iliad gained prominence in the mid-2000s by disrupting the French broadband market and slashing prices to €29.99 a month for unlimited high speed internet, telephone and broadband. This helped make French broadband Internet one of the cheapest in the world, according to the Paris-based think tank, the Organization of Economic Cooperation and Development.  Free Mobile was also a champion in France for simplified pricing and contracts that avoid handset subsidies and lock-in periods–similar to the model T-Mobile has been successfully rolling out in the U.S. lately.  “The US mobile market is large and attractive,” Iliad said in a statement confirming the bid. “T-Mobile US has successfully established a disruptive position, which in many ways, is similar to the one Iliad has built in France.”  Disruptive is one word for it. In France, the company has shaken up the market to such an extent that one competitor attributed its impact to a higher power (emphasis ours):  Free Mobile’s fast growth has raised hackles among its competitors, which have seen profit fall sharply. Though they all still make money, both SFR and Bouygues have said they would have to cut jobs in order to keep up with lower prices. SFR is also planning to unveil a new series of offers in late September or early October to woo increasingly picky customers.  On Wednesday, Martin Bouygues, chief executive of his eponymous company, blamed the French government for granting a fourth mobile-carrier license, as well as for higher taxes. “What did we do to God to deserve this?” he asked during a news conference, after unveiling first-half results in which Bouygues’ net profit fell 29%.  Will God unleash Iliad upon the U.S. mobile industry? See the full story here.
The French mobile and internet company has made its name by aggressive discounting and a simplified approach to pricing, reshaping the market in the process.