ARCEP Sets Termination Rate Target

French regulator makes draft decision on mobile call termination rates

March 24, 2011

2 Min Read

PARIS -- Following a public consultation that ran from 22 December 2010 to 31 January 2011 on the technical-economic model for a mobile network operator in Metropolitan France, ARCEP has notified the European Commission and submitted to public consultation its draft decision on tariff supervision for mobile voice call termination for the carriers Orange France, SFR and Bouygues Telecom, for the period running from 1 July 2011 to 31 December 2013.

Third cycle of regulation for mobile termination ratesBy ordering a decrease in applicable charges, the regulation of mobile voice call termination has enabled the development of retail market offers that include an ever increasing number of calling minutes, and this for calls to all mobile networks, as well as the introduction of flat rates for fixed-to-mobile calls.

In its Decision No. 2010-1149 of 2 November 2010, ARCEP extended the existing regulation governing mobile termination rates (MTR) in a bid to reinforce the improvements that had already been achieved in the retail market, and particularly to impose an obligation of cost-oriented pricing on mobile carriers in Metropolitan France. This decision specifies the ceiling tariffs that operators in Metropolitan France can charge during the period running from 1 January to 30 June 2011 (1), and states that future ARCEP decisions will set the tariffs applicable for the remainder of the three-year period.

It also stipulates that, by 1 January 2013 at the latest, and in accordance with the European Commission recommendation, maximum mobile termination rates will be symmetrical and based on the incremental costs of a generic efficient operator. Target rate of 0.8c€/minute for 1 January 2013 and an incremental decrease towards the target rate over the next 18 months Based on the results of the revised network cost model for a generic operator in Metropolitan France, ARCEP is today proposing a ceiling tariff of 0.8 c€/min for mobile voice call termination, to come into effect on 1 January 2013.

As stipulated in its previous decisions, the Authority considers that a final transitional period is needed to allow tariffs to decrease to this level in a progressive, predictable and proportionate fashion. To this end, ARCEP is proposing a decrease in mobile termination rates in three stages:

  • a first decrease to 2c€/minute, starting on 1 July 2011 for a period of six months,

  • a second decrease to 1.5c€/minute, starting on 1 January 2012 for a period of six months.

  • and a third decrease to 1c€/minute, starting on 1 July 2012 for a period of six months.

    These three stages will allow carriers to adapt to the target termination rate of 0.8c€/minute, which will come into effect on 1 January 2013.

    Arcep

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