ARCEP enhances its publications relating to the electronic communications market and, for the first time, publishes a price index for consumer fixed services in Metropolitan France. Also published today are an index of mobile service prices in Metropolitan France in 2014, and provisional data on the electronic communications market for 2014, including detailed information on French overseas departments.

Thursday, 28 May 2015

A new indicator to track the evolution of fixed service prices

Already in place in the mobile services sector for several years, the index of fixed service prices allows ARCEP to have an objective tool for tracking how prices are evolving in the telecommunications market by completing its existing system. The method used to create the index was designed in collaboration with INSEE (French national institute of statistics and economic studies), which will employ it for calculating the consumer price index starting in January 2016.

The price of fixed services decreased by an average of 1.0% in 2014, compared to the year before, after having increased by 2.6% in 2013. Prices charged for broadband and superfast broadband products decreased by 2.7% in 2014, on the heels of a 2.7% increase in 2013. As a result, broadband and superfast broadband prices for the entire period running from 2012 to 2014 are practically unchanged (-0.2%).

As concerns dial-up products, an increase in the price of fixed telephone plans in June 2013 resulted in a 2.4% increase in 2013, followed a further 2.1% rise in the price of dial-up access products in 2014.

Mobile service prices remained relatively stable over the course of 2014. The annual index for 2014 nevertheless dropped by an average 10.0% on the year - to be compared to a decrease of 26.3% in 2013 - due to price decreases in 2013.

For post-paid contracts (flat rate plans, which account for 85% of the market in terms of volume), prices decreased less dramatically in 2014: by 13.5%, compared to -25.6% in 2013. This change can be attributed to the price hike that occurred in late 2013, and masks a strong inertia in 2014.

Prepaid card users saw the first price increase since 2011: +7.5% in 2014, on average. As with flat rate plans, prices in the prepaid card market were very stable in 2014.

Electronic communications operators' revenue decreased last year, but less significantly than in 2013, due in part to a smaller decrease in prices, and in part to an increase in the number of user devices and consumption levels.

The revenue earned by operators in the electronic communications market totalled €36.8 billion, excluding VAT, in 2014 - which marks a 3.4% decrease over the previous year, versus a drop of 7.3% in 2013. The less dramatic decrease can be explained, first, by a less significant decline in revenue from fixed telephone services and, second, by a less pronounced decrease in the price of mobile services in the residential market in 2014.

As of 31 December 2014, electronic communications operators were employing 122,000 people directly. Their investments for the year stood at €6.9 billion, excluding license fees.

The number of direct jobs decreased by 3,200 in 2014. This figure does not take the entire electronic communications economic sector into account. In particular, it excludes retailers, service providers (consultancies, market research companies, call centres, etc.) and manufacturers. Expenditures decreased slightly compared to the three previous years (-3.5% in 2014) but remained above the 10-year average of €6.5 billion, excluding licence fees.

As unlimited (or very high volume) plans become ubiquitous in the mobile market, mobile consumption will rival, and to some extent replace, calls originating on landline phones, while mobile data consumption skyrocketed in 2014.

Calling traffic on mobile networks continued to increase in 2014: by 147 billion minutes or 7.0% over the previous year. On the flipside, calling traffic on fixed lines (9.6 billion minutes) reached its lowest point since 1998. Mobile data traffic (305,000 Terabytes) was double what it was in 2013, and more than 200 billion messages were sent during the year, or 5 billion more than the year before.

Fixed broadband and mobile services developing in France's overseas departments and collectivities

Operators in France's overseas markets earned €1.2 billion in 2014, including €744 million from mobile services (-2.1% on the year) and €466 million from fixed services (+1.7% on the year).

The number of fixed broadband and superfast broadband access lines grew by 7.0% on the year, which enabled more widespread availability for voice over broadband plans. Today, they represent up to 50% of phone subscriptions in Reunion. If the number of SIM cards in use in the overseas departments changed very little in 2014 (-1.5% on the year), mobile calling traffic increased at the same rate as in Metropolitan France (+6.5% on the year) and mobile data traffic by 50% over the year before.

Linked documents

Index of MOBILE service prices, 2010 - 2014 (pdf - in French only)

Index of FIXED service prices, 2012 - 2014 (pdf - in French only)

ANNUAL OBSERVATORY, 2014 (provisional figures) (pdf - in French only)

Annual observatory, 2014 - figures for OVERSEAS MARKETS (provisional figures) (pdf - in French only)