ARCEP notifies the European Commission and submits its draft decision on mobile voice call termination in mainland and overseas France to public consultation.

Paris, 9 September 2010

Following the public consultation held in spring 2010, and the opinion received from the Competition authority, ARCEP has notified the European Commission of its draft decision on its analysis of the wholesale market for voice call termination on mobile networks in France, and is launching a concurrent public consultation which will run to 11 October 2010.

ARCEP plans on maintaining existing regulation, whose beneficial effects for consumers could be further strengthened.

Mobile voice call termination regulation in mainland France has helped spur the growth of high volume off-net mobile calling offers in the retail market, and the introduction of flat rates for fixed-to-mobile calls, thanks to the decrease in applicable rates. In overseas markets, the impact of regulation on local markets has been encouraging - one case in point being the launch of high-volume offers for calls to all other mobile networks, similar to the ones available to retail customers in mainland France.

Maintaining this regulation will help strengthen the improvements that have already been achieved in the retail market in both mainland and overseas France.

In its Opinion No. 10-A-17, the Competition authority expressed its agreement with the ARCEP analysis and indicates that, "it is important to maintain the steady rate of decrease in call termination fees on mobile networks, through ex ante regulation".

The draft decision concerns the period running from 1 January 2011 to 31 December 2013, which constitutes the third regulatory cycle.

• ARCEP plans on designating Bouygues Telecom, Orange France and SFR in Metropolitan France, and Dauphin Telecom, Digicel, Orange Caraïbe, Orange Réunion, Outremer Telecom, SPM Telecom, SRR and UTS Caraïbe in the overseas territories, as having SMP (significant market power) in the mobile voice call termination market.
  
  
• ARCEP plans on imposing non price-related access obligations, as well as non-discrimination and transparency obligations on all of these operators, along with an accounting separation and cost accounting obligation on Bouygues Telecom, Orange Caraïbe, Orange France, SFR and SRR.
  
  
• ARCEP also plans on requiring all SMP operators to comply with an obligation to charge cost-oriented prices. The draft decision specifies the terms of application of this obligation by setting the ceiling tariffs for mobile voice call termination for all mobile operators:

  o For the period running from 1 January to 30 June 2011 for Metropolitan France, extending current ceiling tariffs:

  

   

  o For the years 2011 and 2012 for overseas markets:

  

   

• ARCEP will set the ceiling tariffs to apply for the remainder of the three-year period in future decisions, based in particular on the cost model that is currently in the process of being revised for mainland France, and which will be revised for overseas markets in 2011. In all instances, the ceiling prices will be symmetrical and established to reflect the incremental costs of a generic efficient operator. They will be set by 31 December 2012 at the latest, in accordance with the European Commission recommendation.

The draft decision was notified to the European Commission and to the national regulatory authorities of the other European Union Member States, and submitted to public consultation until 11 October 2010. Once these stages have been completed, ARCEP will be able to adopt its final decision.