Paris, 1 July 2013
Today, ARCEP is publishing its annual report for 2012. The report is addressed by our Chairman and the members of our Executive Board to Parliament and the Government. It provides a detailed account of ARCEP’s activities in 2012, and the application of legal and regulatory provisions that govern electronic and postal communications.
2012 was a year of profound changes for businesses operating in the electronic communications sector. These changes required ARCEP, and all of the other State administrations concerned, to work, more than ever before, on making decisions that would ensure balanced and lasting development for this sector that constitutes the very core of the digital ecosystem, which is itself a vital part of our economy’s growth potential.
The year was also marked by the sector’s highest rate of investment of the past ten years: €10 billion, which is 20% more than the year before, and equal to 2.5% of gross fixed capital formation (GFCF). Operators’ retail market revenue dropped to €39 billion, while the number of direct jobs they provide increased slightly. At the same time, subscriber numbers and network traffic – and especially data traffic – both shot up.
ARCEP’s 15th anniversary provided an opportunity to measure the effects of regulation over a long period of time: from a monopoly to a competitive market; ongoing technological innovations on the networks and in services; a 70% increase in telcos’ revenue in 15 years, due to the combination of a 25% decrease in the price of services and a volume of services produced and consumed that has doubled.
Mobile market: increased competition and preparing for the transition to superfast access
The advent of the fourth mobile network operator in January 2012 marked the completion of the convergence of fixed and mobile services which has been ongoing for several years, and resulted in the creation of four major national telcos operating in both markets. It has also led to a sizeable decrease in prices – 11.6% annually, on average – and accelerated a shift in revenue generation from voice calls to data services.
Second, the successful allocation of the first digital dividend frequencies in the 800 MHz band in early 2012, on the heels of the 2.6 GHz band spectrum allocated in late 2011, also enabled operators to begin upgrading their mobile infrastructure, while also monetizing the State’s intangible asset. Swift rollouts resulted in the first commercial 4G superfast mobile solutions being made available to retail market customers in 2013.
And, finally, a few months ago, ARCEP gave Bouygues Telecom the green light to reuse the 1800 MHz-band frequencies it currently employs to deliver GSM (2G) services for 4G. In accordance with the provisions of the European framework that was transposed into national law in 2011, the aim of this refarming measure is to achieve more efficient use of the spectrum – for which demand will only continue to rise – and help accelerate investments.
Making the transition from broadband to superfast broadband
The fixed access market is also in the process of transitioning to superfast broadband, through the deployment of optical fibre local loops across the country. Rollouts that were well underway in high-density areas steadily expanded into more sparsely populated ones in 2012, thanks to the combined efforts of private sector operators and local authorities with their public-initiative networks. The number of homes eligible to receive a fibre-to-the-home (FTTH) service thus grew by close to 50% during the year: to a total 2,165,000 at the end of 2012, of which 20% are located outside high-density areas. If we add in upgraded cable networks, close to 9 million households – or roughly 30% of households in France – are now able to access a superfast service (over 30 Mbps), and 1.6 million have actually signed up for one.
The internet’s technical and economic regulation: moving into the operational stage
A decision issued in March 2012 gave us the ability to gather information on a regular basis on the market for interconnection between ISPs and the main content and application providers. This will allow us to better track the development of relationships between the market’s players, and so to increase our knowledge and expertise – notably with a view to settling future disputes.
Moreover, the work carried out all year long in concert with stakeholders resulted in a decision in March 2013, introducing a quality of service (QoS) monitoring mechanism for internet access services, which will provide an accurate measure of the service actually being provided, in addition to supplying end users with clear and objective information. The first results are expected in late 2013.
The methods ARCEP uses to achieve net neutrality must be pragmatic and progressive. They must correspond to the ever-evolving needs of the internet’s technical-economic regulation, and the means of intervention at our disposal.
Postal services: qualitative developments in a shrinking market
If the state of competition in the postal sector has not evolved substantially two years after it was opened up to competition, we did see significant developments in the universal postal service in 2012.
This was the first full year of sales for the La Poste “lettre verte” universal service: an economical two-day delivery service. The sale of this service was attached to commitments that La Poste made to ARCEP to continue to offer its priority, one-day delivery service. QoS indicators for the universal postal service reveal an overall improvement: percentage of items delivered in D+1: 87.9% for priority letters and 94.7% for registered mail. Also, in a series of opinions on planned price changes, ARCEP expressed its views on an increase in national and international postal tariffs, and on operational and pricing changes to parcel services. In particular, we expressed our commitment to having an affordable solution for sending small items.
NB: The French version of our annual report is available to download on our website. The English language version will be available before the end of July.
Paris, 1 July 2013