ARCEP submits a draft recommendation on the wholesale value-added services (VAS) market to public consultation. The recommendation seeks to facilitate negotiations between telcos and service providers, to prepare for the introduction of retail tariff reforms on 1 January 2015

Paris, 29 November 2013

ARCEP reminds stakeholders of the usefulness and urgency of retail pricing reforms to regain consumers' trust in the VAS market.

After two years of discussions and work with operators and services providers on improving operational aspects and the transparency of the declining value-added services (VAS) market, and to revive the use of VAS on mobile lines, in July 2012 ARCEP adopted Decision No. 2012-0856 which reforms the VAS retail market by modernising the operating rules for special numbers starting with 08 and the short numbers that consumers use to access these services.

The main reforms include:

- harmonising rates for calls to VAS from fixed and mobile lines;
- introduction of free numbers for calls originating on fixed and mobile lines;
- clear separation of the price of the service supplied by the service provider ("S") and the price of the call ("C"), which is to be the same as the price of a call to a fixed number;
- simplifying the range of time-based rates and creating a range of call-based rates (in other words regardless of the length of the call) for service providers;
- measures against fraud and abusive practices.

The provisions contained in this decision are to be introduced gradually between now and 1 January 2015.

The aim of the draft recommendation being submitted to consultation is to provide operators with clarifications on the changes to be made to their interconnection agreements, so that retail price reforms can be implemented smoothly.

Value-added services are provided to consumers through a set of interconnection relationships that make up a service provision platform which is co-managed by the operators, and on which service providers position their offerings (see diagram below). As a result, changes need to be made to the wholesale VAS interconnection market before retail market reforms can be put into effect.

Since July 2012, operators and service providers - which formed working groups under the aegis of the French telecoms federation, FFT (Fédération française des télécoms), the Fixed number portability association, APNF (Association de la portabilité des numéros fixes) and the VAS+ association - have worked on establishing a new rate schedule for retail market value-added services, and on designing a centralised repository for special and short numbers. The purpose of the repository is to make it possible, among other things, to easily identify the service provider responsible for each number, and to manage pricing based on the exact number, and not on a block of numbers.

In the run-up to the 1 January 2015 deadline, several stakeholders have nevertheless shared their concerns with ARCEP over the slow progress being made in interconnection contract negotiations between call origination operators and call recipient operators - as contract negotiations between call recipient operators and service providers hinge on these agreements. This lack of clarity is thus preventing call recipient operators from entering safely into business negotiations with their counter-parties parties, i.e. service providers, even though their agreements must be signed before 1 January 2015.

As a result, ARCEP decided to draft a recommendation, which is not prescriptive in any way, but whose purpose is rather to remind stakeholders of their legal and regulatory obligations, and the terms of application of the existing symmetrical regulatory framework governing the VAS interconnection market - notably Decision No. 2007-0213 and Article L. 34-8-2 of the French Postal and electronic communications code. Through this recommendation and the public consultation on it, ARCEP is inviting all of the stakeholders along the VAS value chain to continue their technical and commercial negotiations, to ensure a smooth introduction for VAS retail market reforms on 1 January 2015. And this under conditions that make it possible to develop fair and lasting competition between these players, and to consolidate operators' current investments in improving the market's operation and transparency in a way that is beneficial to service providers.

ARCEP will thus keep a close watch over the way interconnection services in the wholesale VAS market evolve, and ensure that each link in the chain has enough time to adapt its contractual ties, and so contribute to achieving a successful reform of retail market tariffs as of 1 January 2015.

Today's consultation also includes three measures for adjusting retail pricing reforms, which ARCEP is proposing in response to requests from operators.

The document is thus also submitting to public consultation three proposed adjustments to VAS retail market reforms, in response to changes in the marketplace that operators had not yet identified when the previous consultation was held.

ARCEP thus proposes to:

- extend the provision on actions against ping calls to short numbers;
- have numbers starting with 0809 be free for another year, to allow certain existing phone cards that are valid beyond 1 January 2015 to continue to work properly;
- require that a VAS charge the same rate, excluding VAT, for the service component in both Metropolitan France and the French overseas markets.

Linked documents

The public consultation (pdf - 692 Ko) (in French only - since 29th November 2013 to 7th January 2014)