registration document France Telecom 2009 - Orange.com

overview of the group’s business
6
OVERVIEW OF BUSINESS
France
Regulation of fixed-line telephony and broadband
Internet
Since July 2008, all of France Telecom’s regulatory obligations
relating to the general public and business fi xed-line telephony
retail markets (access and communication) have been lifted.
The only fi xed-line telephony retail offers that still require prior
clearance by the Arcep are those falling under the Universal
Service.
There is no ex ante regulation over France Telecom retail
broadband offers in the residential and business markets.
Nevertheless, as with all the Group’s other businesses,
broadband retail offers must comply with common competition
law.
Accordingly, the regulation of fi xed-line services in France involves
retail offers falling within the scope of the universal service and
wholesale offers so as to ensure effective competition in the
retail markets (call origination, call termination, wholesale line
rental, unbundling, bitstream).
Key Events
February 3 Universal Service: lodging of applications
on February 3 and awarding to France
Telecom of the public payphone component
(November 18) and of the telephony
component (December 1).
May 28 Wholesale offers: announcement by
France Telecom of rate cuts (call origination,
unbundling, wholesale line rental), applicable
since January 1, 2009.
July 1
Rate cuts on the bitstream offers
October 1 Fixed-line call termination: cut in call
termination rates of all operators with a
reduction in asymmetry between France
Telecom and the alternative operators.
November 20 Fixed-line portability: implementation of
the symmetric regulation decision designed
in particular to enable customers to more
easily move from an alternative operator
while retaining their fi xed-line telephone
number.
January 8, 2010 French overseas departments: the
Arcep published its report on the electronic
communications sector in the overseas
departments.
6
Universal Service
The Universal Service rate is the default France Telecom fi xed-line telephony rate. At end 2008, around 8 million customers paid this rate.
Components 2005-2009 2009-2012
Fixed-line telephony: line rental and calls France Telecom awarded France Telecom and SFR applied
France Telecom awarded (2009-2012)
Public payphones France Telecom awarded France Telecom sole applicant
and awarded (2009-2011)
Telephone directories and information services France Telecom awarded PagesJaunes awarded
(2009-2011)
Each of the three Universal Service components is awarded on
the basis of calls for tenders. In the previous allocation period
(March 2005- March 2009), France Telecom was awarded all
three universal service components.
For the new allocation period (2009-2012), France Telecom only
applied for two components (telephony and pubic payphones,
the directory business having been sold of), and was selected
as Universal Service operator for public payphones on
November 18 and telephony on December 1, 2009.
Principles governing the price capping of Universal Service
fixed- line communications:
■ For the 2005-2009 p eriod
Universal Service rates were subject to price caps for the
duration of the allocation for two rate service batches, one
representing subscribers located in metropolitan France and the
other subscribers in French overseas departments. The average
annual price of each batch was set so as to refl ect changes in
the consumer price index (excluding tobacco products), less
reductions in mobile and fi xed-line call termination rates, and
less 3% productivity gains representing the minimum level that
France Telecom is expected to pass on to its customers.
As regards telephone line rental, which was not included in this
batch, a multi-annual increase of 1 euro (including VAT) per
annum for three years had been agreed when awarding the
Universal Service in 2005.
■ For the 2009-2012 p eriod
A new price cap is expected to be set in 2010 for Universal Service
communication services. France Telecom is in favor of retaining the
same mechanism as used previously, as it allows all its customers
to benefi t from price cuts regardless of their usage level.
2009 REGISTRATION DOCUMENT / FRANCE TELECOM
43