Brussels, 17/04/2012 (Agence Europe) - On 16 April, the French telecommunications regulator Arcep announced that it is to review its plans to apply preferential “voice” call termination rates to three new operators - Free Mobile, the fourth operator which recently entered the market, and the so-called virtual mobile operators Lycamobile and Omea Telecom, the latter being a subsidiary of Virgin Mobile. This decision follows concerns expressed by the European Commission, which will open an investigation on 13 April into the issue. In its letter, the Commission expresses “serious doubts” over Arcep's plans and calls on it to provide justification for its intentions, stating that the preferential call termination rates would cause an imbalance in exchanges of traffic.
The voice call termination corresponds to the sum of money paid by one operator to another when it has to direct a customer's call onto the other operator's network. This is described as asymmetrical if it differs from one operator to the next. This asymmetry is a means for the regulator to grant an advantage to a newcomer to the market, if it feels that the newcomer needs encouragement to become a proper player. In France, Bouygues Telecom has enjoyed this advantage for a number of years. This time, Arcep proposes to apply a preferential rate for two years to Free Mobile, Lycamobile and Omea Telecom, which did not join the market until 2012. When directing calls on behalf of their competitors, Arcep proposes that they charge at the rate of 2.40 euro cents a minute until 30 June 2012, then 1.60 cents from 1 July to 31 December 2012, and then 1.10 cents for the whole of the year 2013. This will allow the rates to come gradually into line with those applied by their three main competitors. These competitors, Orange, SFR and Bouygues Telecom, are currently receiving 1.50 euro cents until 1 July 2012, coming down to one cent after this period, to route calls from Free, Lycamobile and Omea Telecom. The newcomers “incur structurally higher costs than those of their competitors to terminate calls to their customers”, states Arcep in justification, adding that it is therefore relevant to “compensate these new mobile entrants for the temporary additional costs linked to their newcomer status”. The Commission does not follow this line of argument, taking the view that “the traffic imbalance is not due to the small size of the new entrants but rather to their distinct commercial strategies compared to the established operators”. The Commission adds that “it has not been sufficiently demonstrated that new entrants incur losses on calls made outside their own network”. In view of the Commission's misgivings, Arcep will over the next few weeks determine the conditions under which they can grant operators an advantage, within the limits of European regulations. With this in mind, it has decided to carry out a market analysis in order to verify, after a broad consultation of the players concerned, whether or not its procedure is the right one. The Commission expects to hear from Arcep in the next three months. (IL/transl.fl)