BEREC dismisses a portion of the European Commission’s serious doubts on ARCEP’s draft regulation on call termination rates applying to new entrant mobile operators

Paris, June 1, 2012

In accordance with existing directives, on 29th May the Body of European Regulators for Electronic Communications (BEREC) published its opinion on the European Commission’s opening of a Phase II investigation concerning ARCEP’s draft analysis of the wholesale market for voice call termination on the networks of new entrants, Free Mobile, Lycamobile and Oméa Telecom, and which will delay the adoption of these draft measures.

 •   ARCEP welcomes the fact that BEREC does not share the Commission’s doubts on taking account of traffic imbalances for new entrants, which BEREC considers to be in line with its common position of 2008.

 •   BEREC also contests the negative impact that, according to the Commission, the proposed remedies would have on the internal market, and so ultimately on European consumers.

 •   ARCEP notes that BEREC did not take a position on the Commission’s assertion that the proposed remedies would result in higher retail prices, which would be detrimental to consumers in France. In any event, the Commission’s analysis on this point seems very theoretical, not backed by a compelling argument, and does not reflect the reality of recent developments in France’s mobile telephony market: retail prices in France have in fact dropped sharply since this draft regulation was announced – by as much as half for some flat rate plans. ARCEP considers these changes, which are beneficial to French consumers, to be the direct result of increased competition in France’s mobile market since the start of 2010 – following the award of a new mobile network operator’s licence. The notified decision is just one element in an overall regulatory scheme whose aim is to increase competition in the mobile market, and to encourage innovation, investment and lower retail prices.

 •   ARCEP also underscores the fact that, although BEREC shares the Commissions view that imposing higher call termination rates for a new entrant can generally result in higher wholesale roaming tariffs, BEREC nevertheless recognises that, in the case of France, these “circularity effects” do not apply, particularly because of the special precautions that ARCEP took in its decision.

 •   Lastly, the Authority welcomes the fact that BEREC has asked the Commission to clarify its position, to determine those instances in which the asymmetry provided for by Article 10 of the recommendation of 2009 would apply.

Under these conditions, ARCEP plans on continuing its dialogue with the Commission and BEREC during the forthcoming stages of the procedure, to reach a satisfactory regulatory situation that lays the groundwork for fair and healthy competition that benefits users, and which derives the full practical advantages of the Commission’s 2009 recommendation on call termination rates, and particularly its Article 10.