Editor’s note: This practice note is based on a press release by the Autorité de Régulation des Telecommunication, dated 10 December 2004. For the full press release click here.
The European Commission directives on Electronic Communications require member countries to conduct market analysis before imposing ex ante regulatory obligations on telecommunications network operators. The French telecommunication regulator, Autorite de Regulation des Telecommunication (ART) concluded its first such market analysis, dealing with the market for wholesale mobile call termination in metropolitan France, in December 2004.
The ART’s analysis concluded that the three mobile operators in the metropolitan France (Orange France, SFR and Bouygues Telecom) had significant market power. This led the ART to impose reductions in wholesale fixed-mobile call prices charged by the three mobile operators. The operators were required to phase in these over two years (2005 and 2006):
- From 1 January 2005 Orange France and SFR were required to reduce prices by16.3%, and Bouygues Telecom by 17.3%,
- From 1 January 2006 all three companies were to reduce prices by a further 24%.
The table below shows estimated termination charges resulting from this ruling.
Another decrease is planned from 1 January 2007.
Table 1: Mobile Termination Charges (2004, 2005, 2006)
Termination charge for calls originating in France Estimated average price in € cents/minute (excluding VAT)*
| |
2004 |
2005 |
2006 |
|
Orange/SFR14 |
14.94 |
12.50 |
9.50 |
|
Bouygues Telecom |
17.89 |
14.79 |
11.24 |
(*) consumption profile: 75% peak hours and 25% off-peak hours on the “intra-access switch” service
If fixed line operators pass the benefits of the decrease in wholesale prices to their retail customers, it is predicted that fixed-phone consumers (both residential and business users) would save €250 million in 2005 and €560 million in 2006. This would represent a fall in retail prices of 11% and 15% in 2005 and 2006 respectively.