France Telecom Readies for Price War

France Telecom has launched a new low-cost mobile brand, the latest sign that Europe's second largest mobile market is bracing itself for a price war.

France Telecom said the new brand, called "Sosh"—short for social—was aimed at young adults and would be exclusively sold over the Internet. France Telecom, which has 27 million mobile subscribers here, predicted that the set of lower-cost offers will attract half-a-million clients over the next year.

The contract, which starts at €19.90 ($28) for two hours of calls a month, is roughly €5 cheaper than France Telecom's existing similar mobile offer, a spokesman for the group said. France Telecom's Sosh offer allows subscribers to pay on a-month-by- month basis, without any long-term commitment.

France Telecom's new offer comes just months before competitor Iliad SA launches the country's fourth mobile-phone service. Iliad has pledged to drastically cut the cost of subscriptions and gain a significant share of France's €20 billion mobile-phone market.

France Telecom Readies for Price War (Wall Street Journal subscription required)