ARCEP publishes its observatory of electronic communications markets in France for Q1 2012 - revealing a slight decrease in revenue and a strong increase in traffic.

Paris, 5 July 2012

The decrease in revenue for France's fixed and mobile services market slowed in Q1 2012.

In the first quarter of 2012, the revenue generated by electronic communications services (excluding related income) stood at €10 billion, which is 2.8% less than in Q1 2011. It nevertheless marks a smaller decrease than the 3.4% posted in Q4 2011.

Revenue for wireline services (€4 billion, excl. VAT) was down slightly: by 1.3% on the year, after having dropped by more than 4% in the first half of 2011, and by around 2% in the second half of last year. This marked turnaround can be attributed to an annual increase of between 7% and 8% in the revenue earned by broadband and ultra-fast broadband services for three consecutive quarters. Mobile services revenue (€4.5 billion excl. VAT) is down by 4.5% on the year at the end of Q1 2012 which, once again, is less of a decrease than in Q4 2011 (-5.3% on the year).

Revenue for France's electronic communications market grew throughout 2009 and 2010 - by +0.9% and +0.8%, respectively. During these two years of economic recession, the French market therefore fared better than other major European markets. In 2011, however, it shrank by 2.8% compared to the previous year, which was due largely to the fact that mobile operators chose not to carry over the increase in the VAT applied to certain services, which came into effect on 1 February 2011, to their retail prices.

On the other hand, traffic has increased substantially and customer numbers continue to rise

Mobile customers' consumption levels rose significantly in Q1 2012 - generating a 5.2% increase in calling traffic on the year, a level rarely reached since 2007, a 30.6% rise in SMS traffic and a 73.4% increase in mobile data traffic. This trend is being sustained by a healthy 7% annual increase in subscriptions to voice/data flat rate plans, which translated into a three-point quarterly increase. As a result, there were 69.5 million mobile service customers in France (measured by SIM cards in service) at the end of March 2012, which marks an increase of 4 million card since the previous year and translates into a national penetrate rate of 106.5% - or six points more than in Q1 2011.

In the fixed broadband and ultra-fast broadband segment, there were 23.1 million internet access accounts in use at the end of March 2012. Wireline calling traffic stood at 30.8 billion minutes, or 2.8% more than at the same time the previous year, which translates into an additional 800 million calling minutes. This increase can be put down to the steady increase in voice over broadband (VoBB) calling, of which the bulk of calls are to mobile lines.