ART checks that Orange and SFR, the two mobile operators with significant market power on the interconnection market, decrease their call termination charges by 15% on average by 1st January 2003

6 November 2002

In November 2001, Autorité de régulation des télécommunications (ART) decided to decrease by about 40%, over three years, the average price for call termination charges on the networks of Orange and SFR, operators with significant market power on the interconnection market.

The call termination charge is the main component in the retail price of fixed to mobile calls and is paid by the fixed operator to the mobile operator for call termination.

ART decisions 01-970 and 01-971 established the change in the average revenues for termination on their networks for the period 2002-2004 as shown in the table below.

(*) beginning 1st March 2002 ART examines Orange and SFR’s prices for 2003

Orange and SFR submitted their pricing proposals for 2003 to ART in late September, in accordance with the measures set in 2001.

ART checked that, as of 1st January 2003, the average price of Orange France and SFR’s proposed charges did indeed match 17.074 euro cents per minute on average excluding VAT.

Following this examination, ART considers that the call termination charges for fixed to mobile calls of domestic origin proposed by Orange France and SFR do conform with its decisions.

Major savings for consumers

For 2003, these new prices will represent an average drop of 15% in the call termination price on the networks of the two mobile operators, evaluated as an average on both peak and off-peak hours.

ART considers that this decrease has to benefit consumers and invites fixed operators to pass on the savings generated by the drop of the termination charge to the retail prices for fixed to mobile calls as of 1^st January 2003.

Continuing work on interconnection with mobiles

Going beyond the average price of call termination on Orange and SFR’s networks, ART is continuing discussions with operators on a number of subjects.

     1. Changes to the pricing structure

The call termination charge for fixed to mobile calls of domestic origin on Orange and SFR’s networks is currently applied with an indivisible period of 50 seconds. This type of pricing structure weighs heavily on very short calls and ART invited, last year, the two mobile operators with significant market power to take the concerns of consumers into consideration.

Orange and SFR have moved in the direction of these recommendations by decreasing the length of the indivisible period from 60 seconds in 2001 to 50 seconds in 2002, then to 40 seconds in 2003.

ART wishes to see a pricing structure without an indivisible period in place by 1^st January 2004.

     2. Other pricing elements for interconnection with the powerful mobile operators

Interconnection with the powerful mobile operators brings into play a whole range of services and prices which are not limited to the single call termination charge whose level is set by decisions 01-970 and 01-971 for Orange and SFR.

The operators were consulted on this topic on 12 September, and ART is currently examining the prices for 2 Mbit/s ports.

     3. Call termination charges for calls of international origin

ART notes that, despite an apparent convergence of national and international termination, differences persist because of the different pricing structures, which might cause calls to be rerouted internationally.

Therefore, ART asks that SFR and Orange change the pricing structure for terminating calls of international origin.