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ART approves France Telecom's 2002 interconnection catalogue
30 November 2001
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The principles of interconnectionThe principles of interconnection
• France Telecom, the operator with significant market power, is obliged to propose an reference interconnection offer
• This offer is presented in a catalogue which is valid for a period of one year (from 1st january to 31 december)
• The offer presents a minimal set of services and prices which must be implemented via interconnection agreements
• Using these intermediate services, the operators must create the most advantageous retail offers for consumers
• The catalogue must be approved by ART prior to its publication
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How it worksHow it works
• Operators consulted in early 2001
• ART sets work schedule
• Discussions at the interconnection committee : operators express their needs
• Negotiations with France Telecom
• Result: 2002 catalogue approved on 30 November
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Strengths of the 2002 Strengths of the 2002
cataloguecatalogue
1. Internet
2. Voice
3. Other developments
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1. INTERNET: 1. INTERNET: flat-rate offer for Internet interconnection flat-rate offer for Internet interconnection
(FII)(FII)• What is FII?
= Flat-rate Internet interconnection
= New approach introduced in 2001 in a small number of European countries
= The possibility of paying for interconnection according to the number of accesses used regardless of the number of minutes carried
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1. INTERNET: 1. INTERNET: flat-rate offer for Internet flat-rate offer for Internet
interconnection (FII)interconnection (FII)
• ART starts work in late 2000 and publishes its recommendations in April 2001
• France Telecom defines an offer, not included in its catalogue, in the second quarter 2001:– FRF 145 000 (€22 105) per year for 30 circuits on the subscriber switch
(local level) and FRF 280 000 (€ 42 686) per year for 30 circuits on the CPFI (*) (regional level)
– with overflow (cf. see next transparency)
• First offers implemented in September 2001
(*) Connection point for fixed-rate interconnection at the transit level
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1. INTERNET: 1. INTERNET: flat-rate offer for Internet flat-rate offer for Internet
interconnection (FII)interconnection (FII)
Operatorpoint of presence
France Telecomsubscriber switch
IFI circuits
Time-based circuits
Overflow
With overflow, when flat-rate circuits are all busy, additional traffic can be switched to other circuits which are billed on a time basis
The overflow principle
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• For 2002 and at the subscriber switch, operators can choose a formula with or without overflow
• 2002 offer without overflow:
1. INTERNET: 1. INTERNET: flat-rate offer for Internet flat-rate offer for Internet
interconnection (FII)interconnection (FII)
Local Regional
Price per year and per 2 Mbits port15 600 €
102 330 francs(-30%)
30 000 €196 787 francs
(-30%)
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1. INTERNET: 1. INTERNET: flat-rate offer for Internet flat-rate offer for Internet
interconnection (FII)interconnection (FII)• 2002 offer with overflow
• Compared with the prices in the 2001 catalogue set on a minute basis, before the introduction of flat-rate interconnection, prices for France Telecom's 2002 flat-rate offer represents a savings of between 30% and 40% depending on the operator's situation.
Local Regional (PRIF)
Price per year and per 2 Mbits/s port21 000 €
137 751 francs(-5%)
38 000 €249 264 francs
(-11%)
temporary
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2/ VOICE2/ VOICE
• Changes in time-based prices
• Elimination of the local exchange
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VOICE: prices VOICE: prices Decrease in time-based prices (1/2)Decrease in time-based prices (1/2)
• ART uses an identical basket of interconnection consumption services for 2001 and 2002
Panier moyenminutes per 2 Mibts port BPN and per year 2,6 millions
Average duration of calls 3 minutes 20 secRépartition du trafic :
- Peak hours 60%- Off peak hours 35%- « blue night » hours (super off-peak) 5%
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VOICE: pricesVOICE: prices Decrease in time-based prices(2/2) Decrease in time-based prices(2/2)
• The drop in time-based prices is between 6% for local to 23.5% for double transit between 2001 and 2002
eurocents per minute 1998 1999 2000 2001 2002evolution2001/2002
evolution over 4 years
Local level 0,928 0,707 0,667 0,616 0,579 -6,0% -37,6%
single transit 1,948 1,537 1,356 1,252 1,051 -16,0% -46,0%
double transit 2,679 2,163 1,918 1,755 1,342 -23,5% -49,9%
Price per minute (average basket)
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VOICE: pricesVOICE: prices European comparisons: local level (1/3) European comparisons: local level (1/3)
Comparaison européenne des tarifs d'interconnexion intra-CA
0,47
0,550,57 0,58
0,620,64
0,67
0,730,77
0,87
0,94 0,94
0,0
0,1
0,2
0,3
0,4
0,5
0,6
0,7
0,8
0,9
1,0
Royaume-Uni
Allemagne Suède FT 2002 FT 2001 Danemark Irlande Autriche Belgique Pays-Bas Italie Espagne
€/1
00
/min
Values are calculated including all pricing components, including 2Mbit/s port
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VOICE: prices VOICE: prices European comparisons: single transit (2/3)European comparisons: single transit (2/3)
Values are calculated including all pricing components, including 2Mbit/s port
Comparaison européenne des tarifs d'interconnexion simple transit
0,65
0,76 0,78
0,900,93
1,051,08 1,10 1,10
1,25
1,35
1,51
0,0
0,2
0,4
0,6
0,8
1,0
1,2
1,4
1,6
Royaume-Uni
Suède Danemark Allemagne Irlande FT 2002 Pays-Bas Autriche Belgique FT 2001 Italie Espagne
€/1
00
/min
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VOICE: pricesVOICE: pricesEuropean comparisons: double transit (3/3)European comparisons: double transit (3/3)
Values are calculated including all pricing components, including 2Mbit/s port
Comparaison européenne des tarifs d'interconnexion double transit
0,87
1,091,14
1,23
1,34 1,361,42
1,56
1,75
1,88 1,88
2,19
0,0
0,5
1,0
1,5
2,0
2,5
Suède Danemark Royaume-Uni
Irlande FT 2002 Pays-Bas Belgique Allemagne FT 2001 Autriche Italie Espagne
€/1
00
/min
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VOICE: pricesVOICE: pricesTermination diagramTermination diagram
1
2
3
Single transit
Double transit
Local level
2
1
3
NewOperator
NewOperator
NewOperator
Direct interconnection offer for L.33-1 operators
TS TS
SSTS: Transit switch
SS: Subscriber switch
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VOICE: pricesVOICE: pricesCollection diagramCollection diagram
1
2
3
Single transit
Double transit
Local level
2
1
3
NewOperator
NewOperator
NewOperator
Direct interconnection offer for L.33-1 operators
TS TS
SSTS: Transit switch
SS: Subscriber switch
Subscriberdials a prefix
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. What is the local sorting zone ?= the département (except for the Paris region and Corsica)= the zone inside which France Telecom keeps geographical voice calls and inside which the selection of alternative carriers was not possible for geographical calls until the end of 2001.
. ART's decision dated 18 July 2001 announced its elimination for 31 December 2001 at the latest.
. Approved by the Secretary of State for Industry on 26 September 2001
VOICE:VOICE:Introducing the carrier selection in the local Introducing the carrier selection in the local
sorting zonesorting zone
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. Decision taken following consultation of consumer associations
. Can refuse the offer, without penalty
. Maintains call-by-call carrier selection for long distance and local calls
. Maintains the France Telecom subscription with an expected drop in charges for local calls, a market worth FRF 19 billion in 2000, i.e. 30% of the fixed line market excluding Internet.
The consumer at the heart of the The consumer at the heart of the operationoperation
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. The catalogue follows ART's decision:
- the operation is conducted by transit area
- operators must inform their client twice prior to the operation
Introducing the carrier selection in the Introducing the carrier selection in the local sorting zonelocal sorting zone
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ART's decision reflects its prioritiesART's decision reflects its priorities
• Support competition (decrease interconnection prices and improve operating conditions)
• To benefit the consumer (Internet and introducing competition for local calls)
• Including regional development concerns (approach favourable to local connections)
• Encouraging the progress of the information society (flat-rate Internet interconnection)
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3/ Other developments3/ Other developments
• Decrease of interconnection fees for calls originated from phone box– France Telecom adds an extra fee to the single transit
charge for calls from a phone box. This fee represents 3/4 of operator payments to France Telecom
– it falls by 30% from €0.046 in 2001 to € 0.0325 in 2002– this decrease has a direct impact on the services offered to
the consumer by prepaid card operators.
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3/ Other developments3/ Other developments
• Pre-selection charge– the charge paid by the operator to France Telecom to create
a pre-selected line is cut by 30% (from € 8.54 to €6.00 per line)
– this cut will accompany the development of pre-selection which will be expanded to include local calls in 2002
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3/ Other developments3/ Other developments
• The third party invoicing with shared revenues offer is strengthened:– can open new pricing brackets
– defines pricing methods
– includes changes to the ethics framework
• Extends collection for third parties to carrier pre-selection traffic
• Extends third party invoicing to 3B PQ numbers
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3/ Other developments3/ Other developments
• Introduces the quasi-associated mode (a more efficient signalling mode which better manages complex interconnection
architectures)
• Interconnection implementation conditions– Adapts the order process, notably through the reduction in the
minimum duration for 2Mbit/s port contracts from two years to one
– Reduces opening time for area codes and numbers
– Reduces the price of ad hoc services (see next transparency)
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3/ Other developments3/ Other developments
• Ad hoc services– ad hoc services are invoiced by France Telecom for
interconnection architecture modifications (technician intervention to modify connections between switches)
– prices fall 50% between 2001 and 2002– these services are expected to develop because of the
introduction of flat-rate interconnection and the opening of the local exchange