In a country where entrepreneur is a dirty word and the establishment despises him, telecom and web pioneer Xavier Niel has built a $4.5 billion fortune and become a cult hero
Xavier Niel knows how to work France into a carefully orchestrated frenzy. On a December afternoon last year the country’s only internet billionaire sent out his first ever tweet, in English: “The rocket is on the launch pad.” The Wall Street Journal pondered his cryptic tweet, as did French tech blogs with names like Journal du Geek. Niel then went silent for a month. He returned to Twitter in early January to taunt 60,000-plus followers with the first three lines of Paul Verlaine’s poem “Chanson d’Automne,” known in France as the coded radio message broadcast in 1944 to alert the Resistance that the Allies were preparing to storm Normandy’s beaches.
Niel’s D-Day came on January 10 on a purpose-built stage in the foyer of his telecom conglomerate Free in a grand building not far from the Elysée Palace, home of President Nicolas Sarkozy. Outside, some of Niel’s fans, known as “Freenauts,” had been camping for hours in the drizzle.
Projected on a movie screen at the rear of the stage was a televised rocket launch, with a voice-over, “Three, two, one ... ” Then out strode Niel, his chin-length black hair slicked behind his ears, to declare war against France’s Big Three, the old titans of telecom: SFR, Bouygues and France Télécom. In his uniform of white button-down shirt, dark jeans and shiny black Christian Dior lace-ups, Niel launched a new offshoot, Free Mobile, offering unlimited calls, texts and data for $27 a month—less than half his competitors’ rates. “The other operators have been swindling you,” Niel told the whooping crowd, his voice starting to tremble. “This is the beginning of your freedom.”
At 44, Niel is by far the richest technology mogul in France, with a net worth of $4.5 billion. He’s also something of an interloper, with no college degree or aristocratic ties in a country known for its nepotistic, good-old-boy network. In France, “entrepreneur” is a four-letter word, three times over.
“It’s an insult, like you’re a poor man,” says French-Israeli tech investor Jeremie Berrebi, Niel’s partner in private equity fund Kima Ventures and a friend since 1996. Niel has expanded Free’s parent company, Iliad, from a fledgling ISP in the late dotcom era to a communications empire with a $7 billion market cap and a 23 percent share of the country’s broadband market. He’s also weathered controversy: An early fortune from sex chat rooms, investments in peep shows and a stint in jail after a prostitution scandal.
Today Niel claims Kima Ventures is the most active angel investor in the world, pouring $150,000 at a time into at least one startup per week. In 2010, he became co-owner of Le Monde, Paris’ centre-left daily paper, much to the chagrin of Sarkozy, who tried to stop the bid. The president reportedly wasn’t amused by Niel’s colourful past. “For Sarkozy this guy was the enemy,” says Berrebi. “The French authorities have been trying for ten years to find a way to stop Xavier.” More like 13 years. In 1999, when Niel introduced the first reverse phone directory service for Internet forerunner Minitel, France Télécom—then nationalised—sued Iliad for 100 million francs, accusing Niel of pirating its database. They eventually settled. In 2004, when Niel was arrested for his alleged involvement in a prostitution racket, it was after a tip from an anonymous source. When Niel applied for a mobile phone license from the French government in 2009, France Télécom, SFR and Bouygues complained to the European Commission.
At the time Niel told the Economist: “If I commit suicide, or if I die in a car accident in the next three months or so, you will know the threats were serious, because I am not feeling at all suicidal and I drive very slowly.” The EC rejected the complaint in 2010.
Niel grew up in Créteil, a working- class suburb of charmless tower blocks to the southeast of Paris. When he was 14, his father gave him his first computer: A Sinclair ZX81, a black slab with 1 kilobyte of memory, no monitor and an audiocassette drive for storage. “It was small and cheap, but it was a revolution for me,” Niel says in heavily accented English, slouched in an Iliad conference room so high up that the Eiffel Tower, two miles away, is visible through Paris’ wintry fog.
(This story appears in the 13 April, 2012 issue of Forbes India. To visit our Archives, click here.)