ART suggests requiring from the three metropolitan mobile operators that they accede to reasonable requests for access from mobile virtual network operators (MVNO)

Paris, 14 April 2005

Under the electronic communications law, Autorité de régulation des télécommunications (ART) is responsible for analysing the 18 markets identified by the European Commission as being subject to ad hoc regulation, and for imposing regulatory obligations, where appropriate, on operators having significant power on any of these markets.

ART is now in the final phase of its analysis of the wholesale access and mobile call origination market (market no. 15), and is proposing a draft decision which requiresfrom the three metropolitan operators that they accede to reasonable requests for access from virtual operators.

ART has submitted its draft decision to the European Commission and to its European counterparts. The decision is also the subject of a public consultation open until 16 May.

The analysis of the wholesale access and mobile call origination market was completed in three phases in accordance with the directives (the so-called "telecoms" package) which were transposed into national law in 2004, and which establish a new Community framework for regulating electronic communications:

- the first phase defined the relevant market in terms of services and geographic area

- the second identified the players which might have significant power on the market

- the third defined "remedies" in the form of obligations proportionate to the competition problems identified

• On the metropolitan market

 

Following a detailed analysis of the functioning of the metropolitan wholesale access and mobile call origination market which took account of the underlying retail market, ART concludes that Orange France, SFR and Bouygues Telecom jointly exercise significant power on this wholesale market.

In this respect, ART welcomes the recent opening of the wholesale access and mobile call origination market, which occurred during the market analysis process. However, it notes that these prospects for development will have to be confirmed in the long term. In particular, the MVNO contracts signed to date can have full effect only if the newly created virtual operators reach critical size granting them relative economic and commercial independence with respect to their host operators.

Until that time, it appears necessary to temporarily assist the opening of the market by using ad hoc regulation.

Called on by ART for its opinion, France’s competition authority, the Conseil de la concurrence, concluded that ART is "fully within its prerogatives in using ex ante intervention to prevent the risk of insufficient competition on the wholesale market" (opinion no. 05-A-09 dated 4 April 2005).

Therefore, ART suggests imposing on each of the three metropolitan mobile operators an obligation to accede to reasonable requests for access from virtual mobile operators or new entrant third-generation mobile operators. For the latter, access consists in providing wholesale national GSM roaming services, at a price that is neither excessive nor predatory.

ART reminds undertakings that this regulation imposes no criteria for the access, and is a temporary measure which will be removed as soon as competition alone can ensure the wholesale market operates satisfactorily.

Through its action, ART hopes to encourage an increase in competition on the retail market to the benefit of both consumers and business, and to allow the development of new convergence-based innovative electronics communications services, using both fixed and mobile networks.

• On overseas markets

 

For the Antilles-Guyana region, ART considers the lack of competition to be primarily the result of an imbalance between mobile operators at the retail level. This situation falls under the jurisdiction of competition authorities.

However, ART notes that a refusal to grant national roaming to a mobile operator not having frequencies for the entire area would limit the offer on the market. For this reason, it proposes requiring that Orange Caraïbe grant service continuity roaming to these operators.

For the Réunion, Mayotte and Saint-Pierre-et-Miquelon regions, ART’s analysis leads it to consider that the action of competition authorities alone should suffice to guarantee fair competition. The wholesale access and mobile call origination markets in these areas are therefore not considered relevant under sector-based regulation.

• Commission notification

 

ART submitted today its draft decision to the European Commission and to its European counterparts. At the same time, the draft decision is also being submitted for a public consultation. Contributions must be sent before 16 May to m15@art-telecom.fr. Once all observations and contributions have been received and examined, ART will be able to adopt its final decision.