registration document France Telecom 2009 - Orange.com

6 OVERVIEW
overview of the group’s business
OF BUSINESS
France
Low income plans as part of the Universal Service:
As part of the Universal Service, France Telecom currently
offers a low income plan with switched access at a price of
5.43 euros (ex VAT) (representing a reduction of 60% of the
regular price). This price is achieved by means of a 3.74 euro
(ex VAT) contribution to the 4.21 euro (ex VAT) rate cut decreed
by ministerial order.
Following the speech by the French Prime Minister on
January 18, 2010 asking operators to “develop a social needs
scheme that would enable even the lowest income households
to access the Internet on attractive terms”, the French Minister
for the Economy undertook a public consultation on the
possible development of the social needs component of the
electronic communications universal service to include VOIP.
France Telecom responded to the Minister’s consultation on
February 5, 2010 and is now awaiting government clarifi cation
regarding the regulatory framework.
Regulation of fixed-line services wholesale offers
Cut in fixed-line call termination rates (FTRs)
In July 2008, the Arcep established a price cap for fi xed-line call
termination services provided by France Telecom and alternative
operators, designed to bring all these rates down towards the
costs of an “effi cient” benchmark operator.
On October 1, 2009, France Telecom’s fi xed-line call termination
rate was cut -5.6%, compared to -22.2% for alternative
operators, in line with the price cap set by the Regulatory
Authority.
Caps in euro cents per minute
France Telecom
FTR
Alternative
operators’ FTR
Asymmetry index
Year 2007 0.5486 1.088 98%
Q1 - Q2 - Q3 2008
Oct. 1, 2008
change
Oct. 1, 2009
change
Oct. 1, 2010
change
0.4935
-10.0%
0.45
-8.8%
0.425
-5.6%
0.4
-5.9%
1.088
0.0% 120%
0.9
-17.3% 100%
0.7
-22.2% 65%
0.5
-28.6% 25%
Rate cuts on wholesale offers subject to cost orientation (applicable from
January 1, 2009)
For wholesale offers subject to cost orientation, the corresponding
rates are directly linked to changes in forecast costs. An analysis
of 2009 forecasts costs showed a reduction notably as a result of
the foreseeable increase in volumes in 2009.
Following consultations with the Arcep, France Telecom
thus announced a reduction on May 28, 2009, applicable
as of January 1, 2009, in regulatory cost-orientated rates for
unbundling, wholesale of analog and Numéris line rentals, and
call origination (carrier selection).
Rate cuts applicable as of January 1, 2009 (monthly rates) Old rate New rate Change
Full unbundling 9.29 euros 9 euros -3%
Wholesale of analog line rentals 11.7 euros 11.2 euros -4%
Wholesale of Numéris basic access 25 euros 20 euros -20%
Call origination rate 0.491 euro cents 0.45 euro cents -8%
Following these cuts, France Telecom is still under the European
average for fi xed-line services wholesale rates.
Rate cuts on bitstream offers (applicable from July 1, 2009)
France Telecom is required to provide third-party operators with
a DSL access and collection service (called bitstream) enabling
them to offer their own broadband services throughout France.
This wholesale offer is purchased from France Telecom by thirdparty
operators in areas in which they generally don’t use an
unbundling offer, and represented around 20% of third-party
operator broadband lines in September 2009.
The Arcep requires that the rate of this wholesale offer be
cost-orientated, except where the application of this principle
means that extending unbundling would no longer be fi nancially
attractive.
The current rate is determined on the basis of a model published
by the Arcep and factoring in a range of parameters associated
with the broadband market (penetration rate, market share
of third-party operators, economics of unbundling). France
Telecom periodically reviews the parameters in this model, in
consultation with the Arcep, with a view to potentially making
changes to its rates. This process resulted in the revision of the
rates applicable as of July 1, 2009, with an average reduction of
1.5 euros / access / month (since a number of types of access
and collection are offered, the amount of the reduction depends
on the technical confi guration).
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2009 REGISTRATION DOCUMENT / FRANCE TELECOM