France - the dominance of France Telecom

Vivendi and Iliad Complain to EU over France Telecom's Fixed-Line Dominance

Vivendi and Iliad have announced they have filed a complaint with the European Union (EU) against France Telecom, citing alleged abuse of its dominant position by the country's incumbent operator. The two alternates, France Telecom's main rivals in the fixed-line market, say the incumbent is still charging too much for access to its networks. Jean-Bernard Levy, CEO of Vivendi, which owns 56% of telecom operator SFR, stated: "Today, we consider that in the vast sector of the Internet and fixed-line telecommunications, competition isn't happening."

Significance: Vivendi CEO Levy claims that France Telecom still gets 85% of the sector's gross margins before investment, saying: "It's a situation that doesn't allow us to do our job". Now the alternate hopes to prompt actions to cut wholesale and residential prices, or even to break up the infrastructure and services sections of France Telecom's network. Broadband operator Iliad has announced it is joining Vivendi in filing the complaint. SFR has recently signalled its intention to take over control of France's fixed-line network from France Telecom, saying it could offer wholesale access at nearly 20% less than the former incumbent's rates. With the rollout of next-generation networks in France imminent, it is important that the regulator sorts out this dispute and ensures the incumbent is charging fairly for wholesale access—or the alternates may be unwilling to co-operate in any further network developments.