1 / 7

Press Update

Press Update. Developing High-Speed Internet in France ART's opinion on France Telecom's IP/ADSL offers 7 May 2002. The high-speed Internet value chain. Origination and transport. Consumer. A ccess. ISPs. France Telecom Competing operators. France Telecom Competing operators. Wanadoo

nigel
Download Presentation

Press Update

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Press Update Developing High-Speed Internet in France ART's opinion on France Telecom's IP/ADSL offers 7 May 2002

  2. The high-speed Internet value chain Origination and transport Consumer Access ISPs France Telecom Competing operators France Telecom Competing operators Wanadoo Competing ISPs Option 1 Full unbundled access Shared access Option 3 Option 5 There must be effective competition along the entire value chain

  3. ART's goals to encourage the development of residential ADSL • Effective competition along the entire value chain • Access: the decision of 16 April 2002 on the pricing and operating conditions of unbundling (full unbundled access and shared access) • Origination and transport: the need for an offer under option 3, allowing operators to complete deployment for unbundling and to compete with France Telecom's option 5 offers (IP/ADSL) • Internetservice: to make ISPs' ADSL offers viable, while ensuring operators benefit from viable equitable conditions on the market, via unbundling and option 3

  4. The current situation on the residential market ADSL Pack: €38 before tax (€45 including VAT) • ISPs currently pay France Telecom a monthly fee of €39.70 (before tax) per subscriber for IP/ADSL offers (collection + access), an amount greater than their revenues. • An operator wishing to compete with IP/ADSL offers using option 3 would bear average monthly costs of €49.20: • monthly payment to France Telecom of €42.20 • own costs of approx. €7.00 Option 3: €49.20 before tax = €42.20 + €7.00 Third party operator FT ISP Subscriber Competing IP/ADSL offer €39.70 before tax Option 5: New estimates based on average speed of 23 kbit/sper subscriber, as per current operating conditions This squeeze effect prevents the development of competing IP/ADSL offers

  5. Observation: France Telecom's proposals lead to a long-lasting impasse • ISPs would pay France Telecom a monthly fee for IP/ADSL offers (collection + access) of €28.00, i.e. a 30% decrease, thereby making their offers profitable. • However, any operator wishing to compete with IP/ADSL offers using option 3 would bear average monthly costs of €39.10: • monthly payment to France Telecom of €32.10 • own costs of approx. €7.00 ADSL Pack: €38 before tax (€45 including VAT) Option 3: €39.10 before tax= €32.10 +€7.00 Third party operator FT ISP Subscriber Competing IP/ADSL offer €28.00 before tax Option 5: A short-term drop in expenses for ISPs, but which would make France Telecom the sole provider for ISPs, with no possible competition on the collection market.

  6. ART's opinion: set reference values adapted to opening competition on the residential ADSL market Reference value of €30: Compatible with the arrival of competitors through unbundling under the conditions established on 16 April 2002 Leads to a 25% decline in the expenses borne by ISPs Calls for a change in the conditions of option 3, whose cost should not exceed €19 (collection at the switch) and €23 (collection at the ADSL area). Adding their own expenses, operators would have estimated monthly expenses of €30, allowing them to compete with France Telecom's IP/ADSL offers. ADSL Pack: €38 before tax (€45 including VAT) €30 before tax = €19 + €11 €30 before tax = €23 + €7 Option 3 Third party operator FT ISP Subscriber Competing IP/ADSL offer Option 5: €30 before tax • a coherent solution • guarantees the best chances of economic viability along the entire chain • suited to the development of competition, which once established, should put downward pressure on prices

  7. The pricing opinion of 30 April (cont'd) • Currently: ART's opinion is unfavourable on the charges for the IP/ADSL collection offer and the IP/ADSL 512 offer (pricing decision submitted on the evening of 29 April, a pricing opinion will be published at a later date for the other measures) • By 28 May 2002: • France Telecom must modify its proposals for IP/ADSL offers which will have to be submitted to a new pricing opinion • France Telecom must make functional changes to its option 3 offer

More Related