Paris, 9 December 2004
Under the law on electronic communications, Autorité de régulation des télécommunications (ART) is responsible for conducting market analysis and for imposing, whereappropriate, regulatory obligations on the telco operators ART designates as having significant market power on one of the 18 markets identified by the European Commission.
As regards mobile telephony, ART is entering the final phase of its analysis of the wholesale market of mobile voice call termination in the overseas dominions (departments d’outre-mer - DOM), that of:
- ART proposes designating all DOM mobile operators (Orange Caraïbe, SRR, Orange Réunion, Bouygues Télécom Caraïbe, SMM, Dauphin Télécom, et SPM Télécom) as having significant power on these markets in the aforementioned regions, and to impose certain obligations on them.
- ART expects to impose on Orange Caraïbe and SRR a price cap which would lead to a 20% per annum price decrease between 2005 and 2007, corresponding to a 49% decline over 3 years. This should result in a 38% fall in fixed-mobile retail prices for DOM consumers.
These draft decisions are open for public consultation until 14 January 2005 and have been submitted to the European Commission and other European regulators for the same period.
- The market analysis process
The EC directives adopted in 2002, which establish a new common framework for the regulation of electronic communications, stipulate that the imposition of ex ante obligations on players on wholesale or retail markets must be based on a market analysis.
The market analysis procedure has three major steps:
- defining the relevant market in terms of products and geographic area
- identifying players with significant influence on this market
- defining "remedies" in the form of obligations which are proportionate to the competition problems identified
The European Commission has identified 18 relevant markets which might be subject to sector-based regulation. In the mobile sector, the Commission has identified three wholesale markets: mobile voice call termination, access and mobile call origination, and international roaming.
- What is call termination?
This wholesale service corresponds to call termination offered by mobile operators to other operators, whether fixed or mobile, in order to terminate a fixed-mobile or mobile-mobile call.Fixed-mobile call termination (CT) value chainMobile-mobile call termination (CT) value chain
In 2002, the termination of fixed-mobile voice calls represented 10 billion minutes of traffic and €2.2 billion in sales, for an average price of €0.22 per minute (excluding VAT).
The mobile call termination fee paid by the fixed operator represents approximately two-thirds of the retail price of fixed-mobile calls, with the remaining one-third covering technical and commercial costs and the fixed operator’s profit margin.
- Market analysis for call termination on mobile networks in its final phase
ART launches today the final phase of its analysis of the wholesale market for call termination on DOM mobile networks. Aiming at carring out this analysis as quickly as possible, ART launched an initial public consultation in April 2004, and requested and received the opinion of the French competition authority (Conseil de la Concurrence opinion 04-A-17 of 14 October 2004).
As regards the DOM, ART publishes its analysis and the measures it expects to apply in the form of eight draft decisions:
- Draft decision 04-1016 defining the mobile voice call termination markets in the DOM
This draft decision identifies eight mobile call termination markets (one market for each operator’s network : four in the Antilles-Guyana region, two in Réunion, one in Mayotte, and one in Saint-Pierre-et-Miquelon).
- Seven individual draft decisions 04-1017 to 1023 designating Orange Caraïbe, SRR (for Réunion and Mayotte), Orange Réunion, Bouygues Télécom Caraïbe, SMM, Dauphin Télécom and SPM Télécom as having significant market power and establishing corresponding obligations on them:
ART proposes designating the seven DOM operators as having significant power on their respective markets and imposing on them obligations of access, transparency and non-discrimination, accounting separation and a pricing framework.
It also plans to impose accounting separation and a pricing framework on the two major operators: Orange Caraïbe and SRR (respectively 83% and 72% of retail market share). This price cap imposes wholesale price decreases of 20% on 1st April 2005, 20% on 1st January 2006 and 20% on 1st January 2007, for 49% over three years.
Call termination charge
Estimated average price in € cents/min (excluding VAT)*
(*) consumption profile: 75% peak hours and 25% off-peak hours (excluding primary digital blocks)
(**) draft decisions subject to public consultation and submitted to the European Commission
ART’s intervention on wholesale prices will allow resultant decreases in the retail prices of fixed-mobile calls to the benefit of fixed telephony consumers.
ART estimates these reductions as 16% in 2005, 15% in 2006 and 14% in 2007, for 38% over three years, since call termination represents about two-thirds of the retail price of fixed-mobile calls.
ART’s eight draft decisions are submitted for public consultation. Responses to the call for comments should be sent to ART by 14th January 2005 at: m16(@)art-telecom.fr.
ART has submitted these draft decisions to the European Commission and other European regulators.
Once the comments have been received and integrated, ART should be able to adopt the final decisions which will enable the enforcement of the various measures by the first quarter 2005.
The public consultation ( pdf (pdf - 177 Ko) )
The draft decisions :
|Project n° 04-1016 (pdf - 355 Ko)||Draft decision on the determination of relevant markets in Overseas|
|Project n° 04-1017 (pdf - 471 Ko)||Orange Caraïbe project|
|Project n° 04-1018 (pdf - 471 Ko)||SRR project|
|Project n° 04-1019 (pdf - 453 Ko)||Orange Réunion project|
|Project n° 04-1020 (pdf - 458 Ko)||Bouygues Telecom Caraïbe project|
|Project n° 04-1021 (pdf - 457 Ko)||Saint-Martin Mobile project|
|Project n° 04-1022 (pdf - 456 Ko)||Dauphin Télécom project|
|Project n° 04-1023 (pdf - 408 Ko)||SPM Télécom project|