5
THE TELECOMMUNICATIONS MARKET IN France
1ST QUARTER 2003
(Licensed operators)
September 2003
Introduction
Fixed telephony
Although the number of fixed-line telephones once more topped the 34-million mark at the end of the first quarter 2003, the continuing slowdown in the fixed telephony sector is seen both in sales figures (-4% over one year) and in traffic volumes (-4.6% over one year).
On the other hand, the number of indirect connections via carrier selection grew with close to 10 millions lines concerned. The number of active call-by-call selection users rose by close to 9% over one year, whereas the number of pre-selection users rose by almost 43% over one year. There were almost 500000 new pre-selection users for the first quarter 2003 alone.
Since end 2002, local loop unbundling has been developing, especially partial unbundling used to develop ADSL offers. There were 18000 unbundled lines (partially or totally) at the end of the first quarter.
Internet
Borne up by new offers launched by several operators in late 2002 and early 2003, the broadband market is without a doubt the engine of growth for the Internet sector. The number of broadband users rose to two million with 1.8 million ADSL users, while broadband sales now represent 44% of Internet revenue compared with 22% a year ago.
Mobiles
The mobile sector continues to be the main source of growth for the telecommunications sector. With sales of €3.1billion in the first quarter 2003, it represents more than one-third of the total telecommunications sector.
The total number of mobile phones continues to grow and reached almost 39 million at the end of the quarter for a penetration rate of 64.5%. The share of flat-rate packages has been growing for several quarters and now represents close to 57% of the total.
Notes:
ü Data for one quarter may be revised in the subsequent observatory following corrections made by operators in their declaration.
ü Any discrepancies are due to rounding.
Contents
1 The overall telecommunications market 4
1.1 The end-user market 4
1.2 The intermediate market between licensed operators (telephony interconnection services) 5
1.2.1 Total market 5
1.2.2 Incoming international traffic 6
2 Market segments 7
2.1 Fixed telephony 7
2.1.1 Access, subscriptions and fixed lines 7
2.1.2 Fixed lines (excluding public payphones, phone cards and Internet) 8
2.1.3 Fixed line telephone cards 9
2.1.4 Calls from public payphones 9
2.2 Internet 9
2.3 Mobile telephony 12
2.4 Other market segments 15
2.4.1 Advanced services 15
2.4.2 Leased lines and data transport (fixed line operators) 15
2.4.3 Other telephony related services 16
Directory services 16
Terminals and equipment 16
2.4.4 Hosting and call centre management 16
1 The overall telecommunications market
1.1 The end-user market
In the first quarter 2003, the telecommunications market saw overall annual growth of 2.6% in sales. The increase was greater for telephony and Internet, reaching 4.1%, but was borne up primarily by mobile telephony, up 13.4% over one year. The share of fixed telephony in total revenues of the telecommunications market fell.
Sales(in millions of euros) / 1st quarter 2002 / 2nd quarter 2002 / 3rd quarter 2002 / 4th quarter 2002 / 1st quarter 2003 / Change Q103/Q102
Fixed telephony[1] / 3 550 / 3 497 / 3 460 / 3 479 / 3 409 / -4.0%
Internet[2] / 276 / 288 / 288 / 284 / 320 / +15.9%
Mobile telephony[3] / 2 754 / 2 856 / 3 033 / 3111 / 3 124 / +13.4%
Total telephony and Internet / 6 580 / 6 641 / 6 781 / 6 874 / 6 853 / +4.1%
Advanced services / 475 / 468 / 454 / 485 / 492 / +3.5%
Leased lines / 595 / 552 / 557 / 579 / 552 / -7.3%
Data transport[4] / 129 / 112 / 108 / 133 / 111 / -14.3%
Operator assistance. directories and advertising / 92 / 81 / 84 / 83 / 82 / -11.0%
Hosting and call centre management / 12 / 12 / 10 / 11 / 7 / -39.8%
Terminals and equipment[5] / 371 / 424 / 390 / 781 / 371 / 0.0%
Total market / 8 255 / 8 290 / 8 384 / 8 946 / 8 468 / +2.6%
Volumes
(in millions of minutes) / 1st quarter 2002 / 2nd quarter 2002 / 3rd quarter 2002 / 4th quarter 2002 / 1st quarter 2003 / Change Q103/Q102
Fixed telephony / 29 553 / 28 075 / 25 858 / 27 958 / 28 181 / -4.6%
Internet (narrow band) / 17 021 / 15 825 / 14 985 / 18 279 / 18 971 / +11.5%
Mobile telephony / 12 250 / 12 616 / 12 887 / 13 994 / 14 630 / +19.4%
Total / 58 824 / 56 516 / 53 730 / 60 231 / 61 782 / +5.0%
Global volume for the market is up 5% over one year. Traffic volumes for mobile telephony and Internet continue to grow with more than 14.6billion minutes in traffic for mobile telephony during the 1st quarter 2003 (for close to 20% growth over one year) and close to 19billion minutes for Internet.
The volume of calls from fixed lines, while slightly higher than the previous quarter is down 4.6% over the first quarter 2002.
1.2 The intermediate market between licensed operators (telephony interconnection services)
1.2.1 Total market
Interconnection sales declined overall by 12% over one year. The share of mobile operators represented close to 47 % of the value of the intermediate market for just 16% of the share of traffic.
Sales(in millions of euros) / 1st quarter 2002 / 2nd quarter 2002 / 3rd quarter 2002 / 4th quarter 2002 / 1st quarter 2003 / Change Q103/Q102
Interconnection services / 1 649 / 1 561 / 1 710 / 1 561 / 1 448 / -12.2%
of which fixed operators / 754 / 735 / 725 / 697 / 716 / -5.0%
of which narrow-band Internet / 62 / 61 / 50 / 60 / 57 / -7.1%
of which mobile operators / 834 / 765 / 935 / 804 / 675 / -19.1%
Volumes
(in millions of minutes) / 1st quarter 2002 / 2nd quarter 2002 / 3rd quarter 2002 / 4th quarter 2002 / 1st quarter 2003 / Change Q103/Q102
Interconnection services / 34 156 / 34 868 / 33 391 / 38 077 / 39 175 / +14.7%
of which fixed operators / 17 334 / 17 916 / 17 605 / 19 528 / 20 495 / +18.2%
of which narrow-band Internet / 11 078 / 10 924 / 9 509 / 12 319 / 12 269 / +10.7%
of which mobile operators / 5 744 / 6 027 / 6 278 / 6 230 / 6 411 / +11.6%
Notes:
- Sales and volumes of interconnection are not based on the same perimeters, making it difficult to compare these two indicators to calculate average prices (interconnection revenues include fixed revenues such as payments for connection links and services to operators).
- The reader’s attention is drawn to the fact that in the interconnection figures above, some data may be counted twice, in particular for fixed operators.
1.2.2 Incoming international traffic[6]
Revenues from traffic originating outside France to users in France grew globally over the previous quarter thanks to fixed telephony. However, revenues and volumes are down sharply with respect to the figures from the 1st quarter 2002.
Sales(in millions of euros) / 1st quarter 2002 / 2nd quarter 2002 / 3rd quarter 2002 / 4th quarter 2002 / 1st quarter 2003 / Change Q103/Q102
Interconnection services – incoming international / 282 / 258 / 289 / 217 / 228 / -19.2%
of which fixed operators / 197 / 179 / 201 / 153 / 166 / -15.5%
of which mobile operators / 85 / 79 / 88 / 64 / 62 / -27.7%
Volumes
(in millions of minutes) / 1st quarter 2002 / 2nd quarter 2002 / 3rd quarter 2002 / 4th quarter 2002 / 1st quarter 2003 / Change Q103/Q102
Interconnection services - incoming international / 1 934 / 1 838 / 2 006 / 1 763 / 1 747 / -9.7%
of which fixed operators / 1 489 / 1 432 / 1 571 / 1 442 / 1 417 / -4.8%
of which mobile operators / 445 / 405 / 435 / 322 / 330 / -26.0%
2 Market segments
2.1 Fixed telephony
2.1.1 Access, subscriptions and fixed lines
Access sales(in millions of euros) / 1st quarter 2002 / 2nd quarter 2002 / 3rd quarter 2002 / 4th quarter 2002 / 1st quarter 2003 / Change Q103/Q102
Access fees, subscriptions and additional services / 1 336 / 1 341 / 1 367 / 1 381 / 1 383 / +3,5%
During the 1st quarter 2003, the number of fixed lines rose once more above the 34-million mark. With 9.6 million lines, the number of indirect connections grew 7.8% over one quarter. The strongest growth was for the number of indirect connections via pre-selection with 12.4% growth, or an increase of over 490 000 lines with respect to the previous quarter.
Number of fixed lines(units) / 1st quarter 2002 / 2nd quarter 2002 / 3rd quarter 2002 / 4th quarter 2002 / 1st quarter 2003 / Change Q103/Q102
Number of fixed lines / 34 065 040 / 34 002 736 / 33 928 746 / 33 994 409 / 34 011 616 / -0.2%
of which cable / 63 552 / 58 824 / 58 471 / 57 839 / 57 976 / -8.8%
Number of indirect connections
(units) / 1st quarter 2002 / 2nd quarter 2002 / 3rd quarter 2002 / 4th quarter 2002 / 1st quarter 2003 / Change Q103/Q102
Number of indirect connections / 7 740 767 / 8 169 620 / 8 546 665 / 8 916 988 / 9 615 850 / +24.2%
of which call-by-call selection / 4 613 792 / 4 725 721 / 4 599 625 / 4 815 465 / 5 015 683 / +8.7%
of which pre-selection / 3 126 976 / 3 443 899 / 3 846 698 / 3 976 179 / 4 467 474 / +42.9%
Partial unbundling of the local loop allows operators to develop new ADSL offers for the general public. Total unbundling of the local loop is used for business applications.
Unbundling(units) / 1st quarter 2002 / 2nd quarter 2002 / 3rd quarter 2002 / 4th quarter 2002 / 1st quarter 2003 / Change Q103/Q102
Number of partially unbundled lines / - / - / - / - / 16 664 / -
Number of fully unbundled lines / - / - / - / - / 1 363 / -
Total unbundled lines / - / - / - / - / 18 027 / -
2.1.2 Fixed lines (excluding public payphones, phone cards and Internet)
The decline in the number of calls from fixed lines observed during the first quarter 2003 over the first quarter 2002 should be qualified given the relative stability in terms of both value and volume during these two quarters.
Sales(in millions of euros) / 1st quarter 2002 / 2nd quarter 2002 / 3rd quarter 2002 / 4th quarter 2002 / 1st quarter 2003 / Change Q103/Q102
National calls excluding fixed to mobile* / 1 105 / 1 056 / 982 / 1 030 / 1 011 / -8.5%
of which local calls ** / 714 / 659 / 624 / 659 / 645 / -9.7%
of which long-distance calls / 391 / 397 / 358 / 371 / 367 / -6.2%
International calls / 204 / 197 / 240 / 203 / 200 / -1.9%
Calls to mobiles / 742 / 738 / 693 / 706 / 692 / -6.8%
Total calls from fixed lines / 2 051 / 1 991 / 1 916 / 1 939 / 1 903 / -7.2%
* the breakdown between local calls and long-distance calls is an ART estimate
** excluding Internet access calls
Volumes(in millions of minutes) / 1st quarter 2002 / 2nd quarter 2002 / 3rd quarter 2002 / 4th quarter 2002 / 1st quarter 2003 / Change Q103/Q102
Calls locales** / 17 883 / 16 449 / 14 795 / 16 693 / 16 672 / -6.8%
Long-distance calls / 7 171 / 7 030 / 6 443 / 6 724 / 6 981 / -2.6%
International calls / 1 161 / 1 199 / 1 198 / 1 146 / 1 158 / -0.3%
Calls to mobiles / 2 503 / 2 619 / 2 566 / 2 669 / 2 699 / +7.8%
Total calls from fixed lines / 28 719 / 27 296 / 25 001 / 27 231 / 27 510 / -4.2%
**excluding Internet access calls
2.1.3 Fixed line telephone cards[7]
User cards and pre-paid cards / 1st quarter 2002 / 2nd quarter 2002 / 3rd quarter 2002 / 4th quarter 2002 / 1st quarter 2003 / Change Q103/Q102Sales (in millions of euros) / 68 / 56 / 62 / 54 / 52 / -23.2%
Volumes (in millions of minutes) / 441 / 370 / 402 / 358 / 338 / -23.4%
2.1.4 Calls from public payphones
Public payphone sales (down 26%) and volumes (down 15%) fell sharply. There are now fewer than 200000 public payphones.
Public payphones / 1st quarter 2002 / 2nd quarter 2002 / 3rd quarter 2002 / 4th quarter 2002 / 1st quarter 2003 / Change Q103/Q102Sales (in millions of euros) / 96 / 109 / 115 / 105 / 72 / -25.8%
Volumes (in millions of minutes) / 393 / 409 / 455 / 370 / 333 / -15.3%
Number of public payphones at end of quarter (units) / 212 975 / 209 563 / 206 004 / 202 459 / 197 674 / -7.2%
2.2 Internet
Sales(in millions of euros) / 1st quarter 2002 / 2nd quarter 2002 / 3rd quarter 2002 / 4th quarter 2002 / 1st quarter 2003 / Change Q103/Q102
Total Internet revenues / 276 / 289 / 287 / 284 / 320 / +15.9%
of which narrow band / 195 / 194 / 179 / 169 / 161 / -17.2%
of which broadband / 60 / 76 / 90 / 96 / 140 / +133.4%
of which other revenues / 21 / 19 / 19 / 19 / 19 / -12.6%
Borne up by new operator offers, revenues from broadband Internet rose sharply during the first quarter 2003 (+133% over the first quarter 2002 and +46% over the fourth quarter 2002). Broadband is now clearly the engine for growth for the Internet sector.