Europe liberalised its telecommunications sector nearly 10 years ago. A rare combination of European harmonisation and empowered industry watchdogs in France has resulted in a vibrant telecommunications sector, lead by French and other European companies that can boast world-class status. Today, France is one of the most “connected” and most “unbundled” economies in the world. France now leads Europe and frequently the world in having:
lowest telecommunication prices
highest percentage of Voice-Over IP
most developed TV-via ADSL and Video-on-Demand services
highest penetration rate of high-speed internet access
These triumphs are all the more startling given France’s slow initial adoption of the internet and historic situation. In 2002, France had not quite 1 million subscribers to high-speed internet access with 30 million fixed telephone lines and the historic operator could claim a 90% market share. Today, France Telecom’s market share has dropped to 45% but the company now counts 150 million clients worldwide and generates half its turnover outside France. Within France, 41.6% of households now have internet access with the majority of them benefiting from high-speed access. A profile of the French telecommunications sector shows the changes that have revolutionised the sector:
(All figures from 30 June 2006. Source:Arcep) French telecom market: €40.59Bn
Fixed Line = €11.71Bn
Mobile = €16.39Bn
Internet = € 3.38Bn
Number of Internet Subscribers (households) = 14.2m
Of which, high speed = 11.1m
Unbundled Lines = 3.36m
Mobile phone subscriptions crossed the number of fixed lines in June 2001. Just 2 years later, in September 2003, revenue generated from services to mobile users exceeded that to fixed lines. The volume of traffic from mobiles is expected to surpass fixed lines sometime in 2007. Voice over internet Protocol (VoiP) began in earnest in 2005 and by the end of that year, already represented 11% of total traffic.
At the start of this decade, telecomm investments represented 3% of total French investments. Much of these investments went to the outrageous pricing of UMTS licences in 2001. Investments collapsed in 2002, as the Internet Bubble burst and the telecomm giants were left cash-strapped after their UMTS frenzy. In 2002, telecomm investments dropped 40% to €5.7Bn and the sector’s weight in national investments sank back to 1.7%. It is only since 2005 that the telecomm sector has begun to increase its investments, rising to €6.3Bn, or 2% of national investments.
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