ARCEP submits its new fixed telephony market analysis to public consultation

Paris, 22 February 2008

ARCEP is launching today its second cycle of fixed telephony market analysis. It is submitting to public consultation its plan which involves deregulating the fixed telephony retail markets and focusing solely on access and interconnection which constitute a long-time bottleneck (access to the telephone network, call origination and termination).

The telephony market is pulled by broadband voice offers

The first cycle of fixed telephony market analyses led us to establish regulation for the 2005-2008 period requiring France Telecom to propose carrier selection offers, wholesale subscriber sales, and to respect pricing obligations on certain of its services. Thanks to changes observed on fixed telephony markets during this first analysis cycle ARCEP can now progressively ease regulation.

The easing of regulation that ARCEP is proposing today is the result of the dynamism of telephony markets. The past few years have seen the rapid development of broadband telephony services: ARCEP estimates that in 2007, broadband telephony communications represented about 44% of the total volume of calls made on fixed lines on the residential market, whereas they represented 28% in 2006, 12% in 2005 and just 2% in 2004.

Furthermore, this market growth went hand in hand with the sale of innovative offers (unlimited calling to an increasing number of destinations, fixed/mobile convergence offers, etc.) from fixed and mobile operators, certain call offers from mobile operators, unlimited calling in particular, compete directly with fixed offers (about 30% on average of mobile calls are made from home).

Protecting consumer interests

Following the raising of the sector obligations which weigh on France Telecom on fixed telephony retail markets, the only competition regulation on these markets will be competition common law, which is overseen by the Conseil de la Concurrence. ARCEP will continue to protect consumer interests through the universal service offer which remains under its control, to ensure universal service continues to be affordable and non discriminatory.

Last, ARCEP announces that it will reinforce the symmetrical regulation on retail markets to allow consumers to better take advantage of competition. In particular, it is concerned with the quality of service, with the transparency of pricing offers, number portability and the costs of switching operators. It has begun monitoring the implementation of the law for the development of competition in the interest of consumers.

The document is open to public consultation until 4^th April 2008 at 5.00 PM. Responses must be sent to the following address: fixe(@)arcep.fr.

This document, with player contributions, will then be submitted to the competition authority, Conseil de la Concurrence, for its opinion.