Don't approach the boss, approach your colleague himself.
You should tell him something along the lines of "you, "You know that if the competitor pays X you could probably ask for a similar/higher figure. I think you should talk to the boss about this".
Salary is a supply/demand thing,thing; your boss wants to pay as little as possible, but will be ready to pay as much as your coworker is worth (i.e. how much would an equal replacement cost). Without your coworker expressing his dissatisfaction from this situation, he is unlikely to offerbe offered a raise.