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Case study : Competition in France ITU/BDT Arab Regional Workshop « Developing Competition Policies and Strategies in Telecommunications » Rabat-Morocco, 19 December 2005 Laetitia DUFAY International division AUTORITE DE REGULATION DES COMMUNICATIONS ELECTRONIQUES ET DES POSTES (ARCEP).
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Case study : Competition in FranceITU/BDT Arab RegionalWorkshop« Developing Competition Policies and Strategies in Telecommunications »Rabat-Morocco, 19 December 2005Laetitia DUFAYInternational divisionAUTORITE DE REGULATION DES COMMUNICATIONS ELECTRONIQUES ET DES POSTES (ARCEP)
Disclaimer • The views expressed in this presentation are those of its author. • They do not necessarily represent the views of ARCEP or its Chairman’s.
AGENDA • REGULATORY FRAMEWORK • GLOBAL MARKET • BROADBAND MARKET • MOBILE TELEPHONY MARKET
ARCEP : an independent authority • 2005 : • Postal activities Law • ART in charge of postal regulation • ART became ARCEP on 05/20/2005 • Independent authority • Collegial Authority : 7 Members
ARCEP’s main objectives • Fair competition to the benefit of consumers • Universal Service : provision and financing • Employment, competitiveness and innovation • Regional Development
The new regulatory framework : competition, harmonisation and convergence • 2002 : 2nd package of European directives • 2004 : Electronic communications and audiovisual communication services law (French transposition) • 2006 : Review of the directives + recommendation
Market analysis : a three-step process • To define relevant market (18 markets a minima) : markets’ scope in terms of services and geography • To designate SMP under the competition law • To impose obligations on SMP operators
Remedies and obligations • Wholesale : transparency, non discrimination, accounting separation, access, cost accounting and price control. • Retail : only if remedies are not sufficient on wholesale market, transparency, non discrimination, cost accounting, price control could be required on retail market • Specific : leased-line market, interconnection • Non SMP : end to end connectivity, international commitments, emergency and security numbers
Notification • Notification to other European NRAs and the European Commission • European Commission has 2 months to examine the decision in order to make observations with a possibility to apply a veto right on relevant market and on the designation of SMP operators • Adoption of the decision by ARCEP
Market analysis milestones in 2005 • ARCEP completed 12 market analysis • 6 analysis launched • Still to be analysed : SMS
BROADBAND MARKET A dynamic and competitive market thanks to the ARCEP’s action
8,5 million BB subscribers • Subscribers : 8,5 million (Q3 2005) • DSL : 7.9 million • Modem Cable : 520 000 • Others : 5 000 • Penetration rate : 12,1% (USA : 13,5%) • 1st place in Europe for DSL
Diversity of ISPs and offers • 10 Residential ISPs : 47%Wanadoo (FT Group), 53% competitors (Free, 9Cegetel, AOL…) • Price offers : • 30€ for 20 Mbitps speed • Triple play offers : Telephony, Internet,TV
Example of an ISP’s offer : Free Telecom • Free Telecom : 2nd larger ISP in France • 1,5 million ADSL subscribers (70% unbundling) • 17% market shares • Triple play offer 29,99€/month including tax • Freebox • Up to 18 Mbps • Unlimited calls • 100 TV channels (not premium) • +possibility to pay for other channels • Wanadoo : around 46€ for the same offer
ARCEP’s regulatory action : LLU and bitstream • LLU subscribers : 2.51 million (Q3 2005) • 2.150 M partial unbundling • 0.360 M full unbundling • FT wholesale broadband offer convenient for competitors : LLU in dense zone, bitstream in zone not covered by LLU
MOBILE TELEPHONY MARKET The need for more competition
Subscribers (Q3 2005) : 46 M Penetration rate (Q3 2005) : 76.4 % Turnover (2004) : 14.9 billion € (+ 10,8%) Traffic volume (2004) : 74.3 billion minutes (+17.1%) Average monthly SMS traffic per customer (Q3 2005) : 24 on average Average monthly income per customer (Q2 2005) : around 40€ (of which recurring sales from postpaid customers : 52,2€ for postpaid customers) 46 million mobile subscribers
The players : MNOs and MVNOs • Mobile network operators (MNOs) • 3 mobile operators GSM/UMTS : Orange (47,3%), SFR (35,8%), Bouygues (16,9%) • 4th UMTS license still available • UMTS : only 2 commercial offers (end of 2004) • Mobile virtual networks operators • +/- 10 MVNO : Debitel, Breizh Mobile (regional MVNO), Tele2, M6Mobile, NRJ (1srt 3G MVNO) • Subscribers (Q3 2005) : 108 000 • Market shares (Q3 2005) : 0.24%
More than 1 million 3G/UMTS subscribers • SFR : 515 000 subscribers (Nov 2005) • Orange : 577 000 (Edge+3G) • Only postpaid for now • Multimedia services (TV live, video streaming, SMS, MMS…) : billing per Mb (pack of x Mb for y euros + z euros per additional Mb) • Billing of some individual services (pay-per-view soccer match sum up…)
Orange and SFR commercial offers • Orange France : 55 euros / month • 3 hours of voice / visiophony • 25 Mo included • Voice calls free and illimited towards fixed phones and Orange mobile phones after 3 minutes • SFR : • 25 euros / month • 1 hour of voice / visiophony only • 44 euros / month • 3 hours only
ARCEP’s action to insure competition • Monitor the development of MVNOs • Facilitate number portability • Fix price cap on terminations calls from fixed to mobile • Analyse the international roaming market • Identify a new wholesale market : SMS
THANK YOU Additional informations on www.arcep.fr