ART approves France Telecom's interconnection catalogue for 2003

29 November 2002

Autorité de régulation des télécommunications (ART) has approved France Telecom’s interconnection technical and pricing offer for 2003.

    • Interconnection with France Telecom: sales of over €1 billion

The interconnection catalogue sets the gross prices between France Telecom, the operator "with significant market power", and other operators. It therefore is a major element of regulation.

Since France Telecom has a major influence on the telecommunications market, it is obliged to publish its technical and pricing offer called a "catalogue", which establishes the conditions under which competing operators can interconnect to its network.

For 2002, interconnection is expected to represent sales of over €1 billion for France Telecom, and traffic volume of around 100 billion minutes, voice and Internet included, or close to 30% of the switched traffic on France Telecom’s local loop. This confirms that the market has truly been opened to competition.

As every year, catalogue preparation required long and in-depth discussions with all operators, in particular during the Interconnection Committee meetings, and negotiations with France Telecom.

The main points of the catalogue are as follows:

    • Flat-rate Internet access: maintaining current technical and economic conditions

The flat-rate Internet interconnection offer (FII) lets operators pay for interconnection based on the number of accesses used, regardless of the number of minutes actually carried.

Added to the catalogue in 2002, this service, offered at the local (subscriber switches) and regional level (regional flat-rate interconnection access points) lowered the price of collecting low-speed Internet traffic, by over 30% compared with the prices paid by operators in 2001 for classic "time-based" interconnection.

The focus of discussions this year was whether to maintain or eliminate the "overflow" option offered at the local level, which lets operators transfer excess traffic to other circuits which are billed on a time basis.

A detailed survey conducted by ART, showed that this option, which is used by operators, is necessary to guarantee the use of flat-rate interconnection at the local level under satisfactory economic conditions. Eliminating it would result in a significant increase in the average cost of Internet collection.

Thus, ART asked that France Telecom maintain in its catalogue the current technical and economic conditions of its flat-rate interconnection offer.

    • Voice services prices fall 1% to 4%

The decrease in base prices with respect to 2002 is:

    • 1% for the local price (local conveyance)
    • 4% for the regional price (single transit)

After four years, during which each of these two services saw prices fall by over 10% per year, the—more moderate—declines in the 2003 catalogue conform with the changes in France Telecom’s costs between 2002 and 2003. They also include elements of the general economic environment, such as lower switched traffic growth than in the past, and the 2003 increase in the return on France Telecom’s capital for its interconnection activity.

ART emphasizes that the decrease in the local conveyance price for 2003 includes a significant decrease in the average price for connections to subscriber switches, around 11% for a 6-kilometre link excluding service access fees.

    • A decline in the price of partial leased lines

The catalogue also includes a drop in the price of partial interconnection leased lines: this service, introduced to the catalogue in 2002, lets operators offer its professional clients short-distance medium- and high-speed access lines competing with those of France Telecom everywhere in France. For 2003, the price of these services has been lowered by 8 to 10% depending on the speeds for monthly rates, and by 11% on average for service access fees.

    • Additional measures

In addition to base prices, the 2003 catalogue includes major changes on a number of points:

    • An improvement in pre-selection processes: for the first time, the 2003 catalogue includes maximum deadlines for implementing the pre-selection service, which should help carriers better guarantee set-up times for their clients. France Telecom also confirmed that it would allow pre-selection clients wishing to keep their telephone number when moving house, to also maintain their pre-selection service.
    • Improved interconnection processes: the 2003 catalogue also includes an improvement in the average delivery times for transmission resources required by operators, as well as the conditions of interconnection security.