IDG News Service — ARCEP, the French telecommunications regulator, has promised to investigate whether new network operator Free Mobile is still offering the level of coverage required by its license, following complaints by employees of rival networks. But it also warned the company's critics to stop whining, saying that the existing three network operators had all failed to meet their coverage obligations at launch.

Free Mobile expected to make waves when it barged into the French 3G market on Jan. 10 with a a!20 ($26) plan offering unlimited voice, SMS and data, and another plan offering 60 minutes and 60 texts for a!2 a month. It succeeded: Within days, rival Orange slashed the cost of its Sosh 24/7 unlimited voice and data plan from a!39.90 to a!24.90, and introduced a new plan at a!9.90 with 120 minutes and unlimited texts and access to its Wi-Fi hotspots.

The impact of Free Mobile's launch could be felt across Europe, even though the company has no operations outside France. With many countries auctioning off spectrum to operate 4G mobile services over LTE (Long Term Evolution), new market entrants will be keeping a close eye on Free Mobile's low-cost business model. It may also affect mobile pricing across Europe by providing a new benchmark for regulators, particularly the European Commission in its mission to lower the cost of roaming: One element keeping roaming fees high is the cost of network access in the country visited.

While customers might be happy with falling prices, employees of the incumbent networks are less so, fearing price cuts will lead to job cuts. The trade union representing them, CFE-CGC & Unsa TA(c)lA(c)coms, wrote to the French Postal and Electronic Communications Regulatory Authority (ARCEP) on Thursday, repeating local media allegations that Free Mobile might have shut down some of its transmission towers and asking the regulator to investigate whether the company still met the coverage condition in its operating license.

ARCEP responded Friday, saying that it had examined the network coverage model provided by Free Mobile on Nov. 10, and verified it over the following month by taking 10,000 measurements in the field, following the same procedure as it had for the existing three 3G network operators. Free Mobile had met its coverage obligations, ARCEP said, and "no concrete element has been brought to the Authority's attention that would back up the allegations in the media, and repeated in the letter from the trade unions."

It also reminded critics that Orange France, SFR and Bouygues Telecom, the existing three 3G operators, failed to meet the initial coverage obligations listed in the licenses issued to them in 2001 and 2002.

"If ARCEP tolerated that state of affairs at the time, it was because of the technical and economic difficulties cited by the operators themselves," the regulator said. It also said it wanted to "remind users that launching a new mobile telephone network is a complex operation that can require adjustments and fine tuning. These are legitimate provided the operator has met its coverage obligations, and provided they do not alter the service that customers receive."

Peter Sayer covers open source software, European intellectual property legislation and general technology breaking news for IDG News Service. Send comments and news tips to Peter at peter_sayer@idg.com.