To mark the release of its annual scorecard, Arcep is offering a synopsis of key economic data on the French telecoms market in 2016.
The migration to superfast access is well underway
For the first time ever, the bulk of annual growth for fixed internet access came from FttH subscriptions, which totalled 2.2 million in December 2016, increasing by 740,000 year on year (YoY).
For the past two years, only the number of subscriptions to superfast internet plans has increased: totalling 5.4 million in 2016 (+1.2 million YoY).
Today, superfast access lines represent 20% of the 27.7 million internet subscriptions in France (N.B. more than six out of ten of these lines have a headline speed in excess of 100 Mbit/s).
4G adoption: a core market trend
In the mobile market, customers continue to switch to flat rate plans. Totalling 61.6 million, their numbers have been increasing steadily (+3.4% YoY), with a noticeable rise in the popularity of bundled fixed and mobile plans that allow consumers to obtain a discount: at the end of 2016, there were 19.2 million subscriptions to fixed-mobile bundles.
In addition, many customers opt to keep their phone number when switching operators: 6.9 million phone numbers were ported in 2016, which is well above the numbers recorded during the three previous years.
Adoption rates for 4G are especially high, with close to 10 million additional subscribers compared to the previous year, and now accounting for 44% of SIM cards.
Mobile data traffic continues to increase sharply: up to one million terabytes (+85.9% YoY)
Thanks to this tremendous surge in 4G customer numbers, data traffic on mobile networks doubled once again last year (N.B.: 4G customers are responsible for 85% of all data traffic, and their consumption is well above that of other mobile customers, totalling 2.8 Gb a month).
On the flipside, mobile calling traffic has remained relatively unchanged (237 billion minutes in 2016) for the third year in a row, while the increasing use of mobile calling (+5.4% in 2016) is only just offsetting the decrease in fixed line calling (-9.4%). Average consumption per SIM card (3 hours and 15 minutes a month, +8 minutes in 2016) now exceeds calling traffic originating on network boxes, which continues its steady decline: down to 2 hours and 57 minutes in 2016 (-25 minutes YoY).
Lastly, the number of text messages being sent (203 billion, +0.2% YoY) is no longer increasing, nor is average annual consumption (-2 SMS per month, or an average 245 text messages a month).
Mobile service prices continue to decrease, but only slightly
The price of mobile plans decreased by an average 1.6% compared to 2015, versus a 4.9% decrease in 2015 and a 10.6% decrease in 2014.
This decrease in price applies only to flat rate plans (-1.9%), whereas the price of prepaid cards increased by 1.5%.
The lower price of flat rate plans (with and without handset subsidies) is due primarily to an increase in the size of data allowances included in these offers. While they apply in comparable proportions to all customer profiles, the trends are not the same:
For light and average consumers, the decrease in price came to 1.3% and 2.2%, respectively, compared to 2015, which marks a considerable change from previous years which saw decreases of 9.9 points and 2.7 points, respectively.
For heavy consumers, prices dropped by 2.1%, after having increased by 0.7% in 2015.
Fixed service prices down slightly
The price of fixed services decreased by an average 1.4% compared to 2015, after having remained relatively unchanged between 2014 and 2015.
For broadband and superfast broadband internet access plans, prices decreased by 2.1% on average in 2016, on the heels of a 0.5% rise in 2015. This change is due to downwards price adjustments, most of which occurred in late 2016.
The price of narrowband telephone services remained unchanged in 2016. Prices increased by an average of 1.1% YoY between 2015 and 2016, as the automatic result of an increase in the price of telephone subscriptions in March 2015. In total, the price of these services rose by close to 10% between 2012 and 2016
Operators' revenue continues to decrease, albeit less dramatically than in previous years
The decrease in operators' revenue has slowed for the third consecutive year. If these revenues have been shrinking steadily since 2011, the size of the decrease (-1.1% in 2016 and -0.6%, excluding value-added services) has been diminishing steadily for the past two years.
Operators' revenue thus stood at 35.7 billion euros, excl. VAT (N.B.: 32.2 billion excluding ancillary sources of revenue such as devices, etc.). The rate at which operators' revenue is decreasing has slowed significantly in both the fixed and mobile markets. Fixed services revenue (16.9 billion euros excl. VAT) decreased by 0.5% YoY, while mobile services revenue was down by 0.7% (14.1 billion euros excl. VAT).
Record high investments, but a drop in (direct) jobs
Operators' investments (excluding spending on frequencies) rose by 13.4% last year, and thus exceeded the already significant amount posted in 2015. Totalling 8.9 billion euros in 2016, this is the highest CapEx recorded since Arcep began tracking this indicator.
This massive increase is due in large part to the rise in spending on superfast fixed and mobile network rollouts, which account for 34% of the total capital expenditure, or 3.0 billion euros, which marks a 25.1% increase YoY.
Operators were employing 115,000 people directly at the end of 2016, which is 3,100 people fewer than in 2015, and in line with an ongoing trend over the past several years which has seen direct employment decrease by 3,000 to 4,000 jobs per annum.
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