Tariffs of mobile call termination (vocal or SMS) are regulated by ARCEP (the French regulator of the electronic communications and postal sectors). The regulator aims to adjust tariffs to reflect actual costs. It also intends to favour new operators by allowing them to apply higher tariffs than the historical operators (Orange, Bouygues, SFR). The television and market regulation is currently being modified.

Following comments from the European Commission, ARCEP issued a new decision on vocal mobile termination. As of 1 July 2013, all operators have to apply the same tariff. Furthermore in August, ARCEP launched a public consultation on SMS termination. Tariffs of Orange, Bouygues and SFR are framed by the decision n°2012-0892; since July 2012, they cannot invoice a price higher than 1 cent per SMS. So far tariffs of new operators are not regulated: for instance, Free (Iliad) published a price of 2.35 cents for the second semester of 2012.

If eventually this consultation leads to a tariff framework similar to that of the three largest operators, the economic impact for a newcomer, like Free, coupled with the consequences of the vocal mobile terminations tariff reduction would be significant. Sums generated by vocal mobile termination and SMS represent a significant source of revenue, constituting an important component of Free’s business model. Some argue such a model could now be called into question.

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