1. Introduction to Free  Created in April 1999  2 nd Internet Service Provider (ISP) in France  Belongs to the group Iliad  Since January 2001, Free developped his own modem : The Freebox  1st multiplex box which can offer :  High flow Internet  Unlimited telephony on French phone calls  HD television

2. Introduction to Free  Free employes the France Telecom network :  Reduced price :  Free low flow Internet service  50h low flow Internet at 14,99 E per month  Unlimited high flow Internet at 29,99 € per month  The strength of Free is based on simplicity :  One price, one offer, one technology  2006 turnover : 950ME  Manpower : 560 employees with 460 dedicated to the hotline.

3. Introduction to Free  10/2002 Unlimited high flow internet access up to 512K – first triple play modem (Freebox)  07/2003Unlimited phone calls in France  11/2003 Television by ADSL  06/2004High flow access up to 5 Mbit/s  07/2004Wifi functions  10/2004ADSL2+  01/2005High flow access up to 20 Mbit/s  04/2005ADSL access without phone subscription  06/2005Médiacenter (Freeplayer) - Son Dolby 5.1 - READSL  09/2005Immediate TV audience Measure  11/2005High flow access up to 24 Mbit/s  12/2005Unlimited phone calls to 14 foreign countries  04/2006Freebox HD, TNT tuner, WiFi-mimo, Wifi mobile phone  06/2006Adding 13 other countries for unlimited phone calls  07/2006High flow access up to 28 Mbit/s  08/2006Activation of digital videorecorder Technologic innovations on : Internet, television and telephony

4. Strategic business units  Internet  Television  Phone calls  Mobile phone 3 in one FREEBOX

5. Mission and objectives of Free  To provide an internet service and an integral offer to people based on its own network and with equipment from its own conception  Free wants to stay the 2 nd Internet Service Provider in France  Overcome 2,8M Internet ADSL subscribers by the end of 2007  Concerning the FTTH (optic fiber), the objective is to cover 4 million households by 2012 (including Paris + suburbs and selected cities) with a minimum of 15% market share of landlines.

6. PESTEL  Technological :  ADSL/Wifi technologies  Control of technologies and innovation capacities  Use the Internet for a lot of multimedia activities  2 future technologies

7. PESTEL  Economical :  Computers much cheaper  More and more houses are equipped  9 million of Internet subscribers  Legal :  Law modifications on networks in the last few years.  France Telecom must rent its network to others Internet service provider.  France Telecom can’t use its position of leader to sell cheaper Internet service.

8. 5P+1 - PORTER  Suppliers - 6/10  The main network is owned by France Telecom  A lot of hardware provider  Buyers - 8/10  Very strong customers, helped by consumer associations, sharing opinions ;  12 or 24 months subscription but can be canceled by paying

9. PORTER  New participants - 2/10  Not currently a strong threat,  The ARCEP is a barrier to entrance  Substitutes - 3/10  They are very rare as communication support  The cable could be a substitute but is not adapted

10. PORTER  Competitors - 8/10  They are quite strong,  They are : France Telecom (half the market), Neuf Cegetel (just under Free), AOL (decreasing)…  Competition on the price but also on the services offered  State - 2/10  With the ART and the ARCEP is a support for Free by forbidding lower prices

11. PORTER diagram Suppliers Buyers New participants Substitutes Competitors State

12. CSFs  Advertisement  Capital / cash flow  Technological innovations  Development of its own network  Relation with the customers  Simplicity of the offers + +++ ++ + ++

13. SWOT  Strengths  Communication  Financial resources  Technological resources  Human resources  Physical resources  Good notoriety  Capacity to innovate  Fast decision process  Cheap and efficient communication  Weaknesses  Hotline and support  Freebox setup

14. SWOT  Opportunities  Team specialized in ADSL technologies.  Local communities  ARCEP  A booming potential  Threats  Not everybody can access to ADSL  Imitations  Regulation standards  Consumer associations

15. Diagnostic  Price : Free is well placed because low and constant,  The technical innovations are the best on the market with a constant price,  Free must improve its technical assistance and customer support,  If the number of new subscribers decreases, they might increase advertisement,  Develop the Wimax access (wireless access with long range) in order to increase the number of potential buyers.