Paris, 25 January 2011
France Telecom's wholesale services market, which is regulated by ARCEP, is expected to represent close to €2.4 billion in 2011. Close to three-quarters of this market involves services for which France Telecom is required to charge cost-oriented prices, in accordance with the market analyses adopted by the Authority, and for which the new tariffs published by France Telecom have decreased by an average 3.8% compared to 2010. The tariffs applied to other regulated wholesale services, which are based chiefly on a principle of maximum tariffs and non-predatory pricing, remain unchanged.
The decreases concern chiefly:
- access to civil engineering;
- shared access and services related to unbundling, which operators use to install their equipment in France Telecom exchanges;
- wholesale line rental;
- broadband access offers for the business market.
These price changes reflect, on the one hand, an ongoing decrease in network costs, as discerned from the submitted accounts that were audited in accordance with Decision no. 06-1007 of 7 December 2006 and, on the other, the effects of tax reforms that were introduced by the Finance Acts for 2010 and 2011, i.e. replacing corporate tax by a contribution on businesses' value-added, or CVAE (contribution sur la valeur ajoutée des entreprises), and a flat tax on network industry businesses, or IFER (impôt forfaitaire sur les entreprises de réseau).
In the area of full unbundling, the combined effect of these two events - in other words, a decrease in network costs and an increase in fiscal pressure on the copper pair - has resulted in the new recurring monthly tariff being the same as it was in 2010, i.e. €9.00 a month. This tariff is within the average range of prices charged in comparable European markets, although it is worth mentioning that tariff increases are being planned for 2011 or 2012 in several countries, including the UK and Italy.
On the matter of wholesale bitstream tariffs, under the existing regulatory framework France Telecom is forbidden from engaging in predatory pricing in the unbundling market. Application of this principle has led to a substantial decrease in prices: of more than 25% in three years (from the end of 2007 to the end of 2010). ARCEP has also begun reviewing its analysis of the corresponding market, with plans to require cost-oriented pricing for these services, which will likely result in tariff adjustments in the first half 2011. In the meantime, bitstream tariffs will remain unchanged.