ARCEP establishes an information collection procedure on value-added services to clarify the operation rules for this market segment and to allow the exercise of fair and effective competition

Paris, 23th January 2006

ARCEP is establishing today an information collection procedure on value-added services, which are also called special services. The purpose of the procedure is to collect from operators providing such services (local loop operators, collection operators and service providers) quantitative information on their traffic and sales from the past three years, and qualitative information on the competitive organisation and operation of this market segment.

Unlike telephone services which are used for interpersonal communication (i.e. fixed geographic numbers—ranges 01 to 05—and mobile numbers—06 range), special services give access to value-added voice services; generally with information or leisure content, such as weather forecasts, on-line reservations or after-sales services. Subscribers access these services by dialling a non-geographic number beginning with 08, or a short number with 3BPQ format, or a six-digit number with 118 format (used for telephone directory services).

A two-step market analysis

As announced last year, ARCEP plans to implement a two-step procedure:
- first, examine the relevance of "symmetrical" regulation which would establish rules applying to all operators in the value chain,
- then, if necessary, adopt a market analysis decision which might impose specific obligations if one or more operators are identified as being powerful on a relevant market.

Historically, the organisation of the special services market is closely linked to France Telecom’s activity and its quasi-monopoly on access. Indeed, calls to special services are not included in carrier selection and therefore almost all come from France Telecom’s local loop on fixed networks. This organisation was partially put into question with the appearance of mobile operators, which introduced different pricing plans.

Today, with the upcoming multiplication of local loop operators (unbundling operators, MVNO, cable-operators and soon fixed operators using wholesale sales of access to the telephone service to sell complete telephone service without using the France Telecom subscription) the prices of these services will gradually become increasingly complicated, which will eventually penalise all players, from the consumer to the service publisher.

In addition to the problem of pricing, the operating rules of this market segment need to be clarified. It is also important to clearly establish the rights and obligations of the operators as concerns the interoperability of value-added services, whether they act on the value chain as local loop operators, collection operators or service providers to content publishers.

Finally, the operation of this market segment must be examined from a competition viewpoint in order to ensure that fair and effective competition can develop on it. This examination of the market satisfies a request from France’s competition authority, the Conseil de la concurrence, which in an opinion dated February 2005, drew ARCEP’s attention to calls to service providers. It states: "currently, and given the elements at its disposal, the Conseil considers that call services to service providers are covered by a separate retail market. While approving the idea that it is preferable to regulate these services via the wholesale markets, the Conseil de la concurrence observes that such regulation has not been effective to date. Consequently, it appears necessary to include this market in the list of relevant markets in order to apply articles L. 38, L. 38-1 and L. 38-2 of the Post and Electronic Communications Code".

Information requested from operators will meet two objectives

- to provide ARCEP with quantitative data on the economic models used in providing value-added voice services

These elements may be useful to ARCEP in evaluating whether specific obligations need to be imposed on a category of operators, for example, on operators which control access to end users, independently of any market power of one or more of these operators, based on articles L. 36-6 or L. 34-8 III of the Post and Electronic Communications Code.

The information collected by ARCEP would be used in drafting draft decisions which would then be submitted for a public consultation.

- to allow ARCEP to conduct a competition analysis on the conditions of providing value-added voice services

We need to determine whether a relevant market exists and whether any operators have significant market power.

The information collected by ARCEP would be used in drafting draft market analysis decisions which would then submitted for a public consultation.

Linked documents

The following documents are available for consultation and downloading (in French Smiley )

Smiley the introductory note to the questionnaires (pdf - 293 Ko) (pdf)  Smiley

Smiley the qualitative questionnaire (pdf - 300 Ko) (pdf) Smiley

Smiley the quantitative questionnaires (zip - 62 Ko) (Excel) and their explanatory memorandum (pdf - 104 Ko) Smiley