Paris, 21 July 2016
On 30 June, Arcep called on the sector to fully engage its fibre rollout efforts, and projected that three years from now, seven to eight million additional households and businesses in France would have access to an FttH connection being supplied by at least two operators/co-investors, across more than 80% of this network.
It is within this context that, today, Arcep is kicking off its triennial review of its analysis of fixed broadband and superfast broadband markets by publishing a "scoreboard and outlook" for public consultation.
This document has a wide radius and intersects with several required courses of action that Arcep identified during its strategic review, which are already underway in fixed markets. Two consultations are currently being held: one on connectivity for businesses and the emergence of a mass market for SMEs (1) and one on investment in and transitioning to optical fibre, notably through changes to copper pair pricing (2).
• What is a market analysis?
Market analyses are the decisions through which Arcep determines, if applicable, that an operator enjoys significant power in a given market and can, if it considers it appropriate, impose certain obligations on this operator to remedy any identified competitive imbalance.
• What is the current state of affairs?
The document provides a snapshot of the current status of fixed broadband and superfast broadband retail and wholesale markets, along with an analysis of wholesale products, in in particular those that enable operators to build the retail products they market to residential and business customers.
What are the salient points?
→ Competition in the non-specialist retail market has been marked by the merger of SFR and Numericable. Player rankings have changed very little since 2014: Orange has maintained its 40% - 45% share of the market as a whole, but has increased its share of the superfast access market significantly.
→ The retail market for business customers has become very concentrated since Numericable took control of SFR, two non-specialist companies with a comparable market share. Orange and SFR-Numericable have a combined market share of over 60%.
→ In the wholesale market for superfast local loops, the gap has widened between Orange (which markets retail products to more than 90% of all households eligible for FttH) and other operators, which is a reflection of the investment effort the incumbent carrier has made in recent years.
→ In the wholesale market for superior quality services aimed at businesses, the state of competition that led Arcep to designate Orange as the operator with significant market power (SMP) has evolved very little since the last market analysis.
• What are the key imperatives that Arcep has pinpointed for 2017 - 2020?
→ Ensure a state of strong competition over spending on superfast access
In a situation where Orange enjoys an even greater lead in the number of homes passed for FttH, Arcep must ensure that the regulation in place continues to stimulate a steady pace of investment in superfast access networks, and enables both the widespread deployment of these networks and a sufficiently strong degree of competition across the country. In particular, Arcep plans on making adjustments and additions to the existing regulatory framework governing very high density areas.
→ Encourage efficient investments in infrastructure, synergies and innovation
The ability to access Orange civil engineering infrastructures is critical for the deployment of a shared optical local loop. To this end, Arcep sets out several options for operational changes and for increasing access products' versatility of application.
→ Enable the emergence of a mass fibre access market for SMEs
Arcep believes that, to allow all business customers to upgrade to a fibre connection within a sufficiently competitive marketplace, at least one new player-investor with a national footprint needs to join the market, and is exploring the market analysis tools required to achieve this. Changes may also need to be brought to the symmetric regulations that apply to all market players.
→ Increase connection speeds and develop services nationwide
As fibre to the home (FttH) networks are gradually being deployed, improvements need to be made to both connection speeds and the services available across France. The document examines the potential solutions capable of satisfying demand for superfast access in the near future (LTE, fixed 4G, satellite, VDSL and fibre to the village), and investigates the actions that Arcep could take to improve and expand this "toolkit".
→ Improve liquidity and non-discrimination in the business market
To do so, Arcep is planning on bringing changes to the asymmetric regulations governing the incumbent carrier's wholesale products for the business market, particularly with a view to improving quality of service and reducing the risk of downtime when switching operators. [Arcep also plans on imposing on all Orange wholesale offers for the capacity services market an obligation of non-discrimination, based on the principle of a strict equivalence of access conditions, otherwise known as equivalence of inputs (EoI).]
• What comes next?
The public consultation will run until 20 September 2016.
By November: draft decisions will be published for consultation then submitted to the Competition Authority for feedback, before being notified to the European Commission.
Mid-2017: the review process will conclude with the adoption of the market analysis decisions that will succeed those that Arcep adopted in June 2014 (3)
(1) 14 June 2016: "Arcep launches a public consultation on the market for telecommunications services for businesses, and on access to superfast optical fibre networks"
(2) 23 June 2016: "Arcep opens a consultation on a geographical adjustment of unbundling prices"
(3) Arcep Decisions No. 2014-0733 (former market 4), No. 2014-0734 (former market 5) and No. 2014-0735 (former market 6) of 26 June 2014.
The public consultation (pdf - 2.92 Mo) (pdf - in French only)
Arcep Decisions No. 2014-0733 (pdf - 1.47 Mo) (former market 4) (pdf - in French only)
Arcep Decisions No. 2014-0734 (pdf - 1.07 Mo) (former market 5) (pdf - in French only)
Arcep Decisions No. 2014-0735 (pdf - 1.53 Mo) (former market 6) (pdf - in French only)