But the Arcep is loath to regulate retail rates

Brussels indicated yesterday have given the green light to the regulation of the price of SMS in France, confirming information from "The rostrum". Viviane Reding, Commissioner for the information society, said that the demonstration of the French regulator was "compelling" and that the price of a SMS wholesale was "several times higher" than its actual cost. Arcep will therefore, as she wanted, power down the wholesale price of SMS. In practical terms, this price will drop 3 eurocents for Orange and SFR, and 3.5 cents for Bouygues Telecom, against a current rate of 4.3 cents. Mid-2005, Arcep had already imposed 5.34 to 4.3 cents lower. Note that Brussels has requested that the wholesale price, term, the same for the three operators.

It should be noted that this wholesale price applies to exchanges between mobile operators. Virtual operators (MVNO) do not have access and purchase the SMS at a higher rate, set by the mobile operator. In theory, the financial impact of this decision may be important, given the volumes of SMS exchanged: 12,721 billion in 2005. But in practice the financial impact will be minimal, because a mobile operator receives roughly as many SMS it sends. Above all, the question is whether if this decrease will be passed on to the retail tariff and therefore will benefit to the final customer. Indeed, the retail price is much higher than the wholesale price: between 10 and 11 cents on average, according to Arcep, even if the three operators offer cheaper rates for large consumers.

The problem is that the three operators are not required to pass this decline and are apparently not the intention. Orange said not to consider its retail tariff reduction "in the immediate future" and SFR "not in 2006. However, precise SFR have lowered its rate of 10 in April and Bouygues said launched an unlimited offer for pupils and students.

This point has not escaped to Viviane Reding, who "demand to Arcep to ensure that the lowest wholesale price will lead prices ultimately lower for all clients". Meanwhile, UFC-Que choose believes that "it's much ado about nothing." Arcep has already dropped 20 the price of wholesale a year ago, but neither the MVNO or end customer to have never seen the colour. "Should that Arcep understands that only wholesale rates regulation has its limits: it can walk in a competitive market as broadband, but not for an oligopoly as mobile". The association of consumers Afutt had claimed a retail tariff regulation, while the competition Council and Tele2 demanded that the MVNO take advantage of this decrease.

But the Arcep is loath to regulate retail rates. "We have never done and have no specific tool for this," responded to the AFP Gabrielle Gauthey, Member of Arcep. It relies on "pressure from consumer associations" and on the MVNO: "the question is whether if the MVNO will succeed, on the basis of our decision to renegotiate the price at which they purchase the SMS." This will allow to test the level of competition"on the terms proposed by the mobile operators in the MVNO.