ARCEP notifies the European Commission and submits its draft decision concerning the regulation of SMS call termination for public consultation

Paris, 16 June 2010

After implementing a first cycle of regulation in Metropolitan France in 2006, the Authority began a second cycle of analysis in 2009 of wholesale markets for SMS call termination on mobile networks in France.

Following the public consultation that was held in autumn 2009, and the favourable opinion issued by the Competition Authority, ARCEP has notified the European Commission of its draft decision concerning its analysis of wholesale markets for SMS call termination on mobile networks in France, and is launching a new public consultation that will run until 16 July.

ARCEP plans on maintaining regulation in mainland France, which has proven beneficial to consumers, and to extend it to the overseas départements.

Indeed, although the regulation introduced in mainland France in 2006 enabled high-volume retail market offers for sending SMS to any operators' network to thrive, which benefitted the heaviest users, more occasional consumers did not benefit from a decrease in the unit price of text messages.

The regulation applied in Metropolitan France also intends to satisfy the need to instil a more balanced framework between mobile operators and SMS aggregators, to ensure that the latter can develop properly and to enable the launch of innovative services for sending content via SMS.

By introducing SMS call termination regulation in the overseas départements, ARCEP intends to establish terms of competition that will allow high-volume offers to develop in all market segments, a decrease in the per-unit price of text messages and the removal of any impediments to innovation for small mobile operators, in areas where there exist very large asymmetries in market share and a high percentage of young consumers who are particularly heavy users of text messaging services.

Through its Opinion No. 10-A-12, the Competition Authority stated that it agrees with the conclusions of the ARCEP analysis. It believes that efforts to continue to reduce SMS call termination prices to match the levels found in Metropolitan France constitute, "the best way to maintain and intensify competition in the retail market, particularly with the prospect of having the market made more dynamic by the arrival of a new entrant," and that introducing regulation for governing these services in the overseas markets would help, "stimulate the electronic communications sector in the overseas départements."

The draft decision proposes ceiling tariffs for SMS call termination to be imposed on all mobile operators in France for the period running from 2010 to 2013. It has been notified to the European Commission and to national regulatory authorities, and submitted for public consultation until 16 July 2010. Once these two stages have been completed, ARCEP will be able to adopt its final decision.