Mobiles

ARCEP notifies the European Commission and submits its draft decision on tariff supervision for mobile voice call termination in Metropolitan France up to the end of 2013 to public consultation

Paris, 23 March 2011

Following a public consultation that ran from 22 December 2010 to 31 January 2011 on the technical-economic model for a mobile network operator in Metropolitan France, ARCEP has notified the European Commission and submitted to public consultation its draft decision on tariff supervision for mobile voice call termination for the carriers Orange France, SFR and Bouygues Telecom, for the period running from 1 July 2011 to 31 December 2013.

Third cycle of regulation for mobile termination rates

By ordering a decrease in applicable charges, the regulation of mobile voice call termination has enabled the development of retail market offers that include an ever increasing number of calling minutes, and this for calls to all mobile networks, as well as the introduction of flat rates for fixed-to-mobile calls.

In its Decision No. 2010-1149 of 2 November 2010, ARCEP extended the existing regulation governing mobile termination rates (MTR) in a bid to reinforce the improvements that had already been achieved in the retail market, and particularly to impose an obligation of cost-oriented pricing on mobile carriers in Metropolitan France.

This decision specifies the ceiling tariffs that operators in Metropolitan France can charge during the period running from 1 January to 30 June 2011 (1), and states that future ARCEP decisions will set the tariffs applicable for the remainder of the three-year period.

It also stipulates that, by 1 January 2013 at the latest, and in accordance with the European Commission recommendation, maximum mobile termination rates will be symmetrical and based on the incremental costs of a generic efficient operator.

Target rate of 0.8c€/minute for 1 January 2013 and an incremental decrease towards the target rate over the next 18 months

Based on the results of the revised network cost model for a generic operator in Metropolitan France, ARCEP is today proposing a ceiling tariff of 0.8 c€/min for mobile voice call termination, to come into effect on 1 January 2013.

As stipulated in its previous decisions, the Authority considers that a final transitional period is needed to allow tariffs to decrease to this level in a progressive, predictable and proportionate fashion.

To this end, ARCEP is proposing a decrease in mobile termination rates in three stages:

  • a first decrease to 2c€/minute, starting on 1 July 2011 for a period of six months,
  • a second decrease to 1.5c€/minute, starting on 1 January 2012 for a period of six months.
  • and a third decrease to 1c€/minute, starting on 1 July 2012 for a period of six months.

These three stages will allow carriers to adapt to the target termination rate of 0.8c€/minute, which will come into effect on 1 January 2013.

Symmetrical MTR as of 1 July 2011

Given the planned decreases in mobile termination rates and so the much smaller gap with operating costs, and in an environment where fixed-to-mobile calling traffic is expected to increase substantially over the coming months and years, ARCEP considers that imposing symmetrical termination rates on all three mobile operators as of 1 July 2011 to be a justified and proportionate measure.

This proposal is in accordance with the European Commission recommendation, and in line with the remarks issued by the Commission on the particular situation in France.

ARCEP underlines that Free Mobile is out of the scope of this decision, since this operator is not commercially active yet.

The draft decision has been notified to the European Commission and to national regulatory authorities in the other European Union Member States, and submitted to a public consultation that will run until 26 April 2011. Once these two stages are complete, ARCEP will be in a position to adopt its final decision which will come to complete the framework decision for these markets that was adopted on 2 November 2010.

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View(1) 3c€ for Orange France and SFR and 3.4c€ for Bouygues Telecom