Purchasing policy is framed very principle

"Facing France Telecom and Neuf Cegetel, we are faced with two vital issues: that of our purchasing policies to this duopoly and therefore of our entry in competition with the duopoly operators", explains Patrice Giami, P - dg B3G Telecom (59 million in sales in 2005), the letter of telecommunications. "Small" operators buy indeed "raw material" of their offers, the ADSL traffic to the duopoly and then propose offers that come partly in competition with two dominant operators in the market. Purchasing policy is framed very principle. "Which protects, notes Patrice Giami, it is that the telecoms activity is an activity regulated by Arcep, which for example sentenced France Telecom on the local loop and the copper pair and imposed change his calculations of costs." But the level of attention to the commercial terms of Neuf Cegetel is the same as in the review of the very box catalogue of France Telecom "A widely shared concern.

A question of life or death

More than the duopoly, the alternative seem to fear a two-speed control. They are much more careful now that they have already suffered the effects of the rise of the duopoly (1). "Nine and Cegetel were the two largest de-Consolidators (2)."The price gap between France Telecom on the one hand and Neuf Cegetel another has continued to shrink. "So, despite all the assurances given by the second, there is a duopoly effect which, seems, has been widely anticipated", launches Patrice Giami. This phase of duopoly will maintain its transitional Other de-Consolidators arrive: Completel, T-Online, Telecom Italia (today dégroupeur for the general public and soon businesses). Twelve to eighteen months would still be necessary before "decant" the situation and determine the manner in which the pricing of these new entrants will be in competition with those of the actors of the duopoly. In the meantime, the alternative try to build their offerings. But the part of the link unbundled - their "raw material" - remains considerable in their offers, representing 75 of the final price. This percentage explains that Ungroup is same, consumer-oriented operators, a matter of life or death. With the duopoly, T-Online and Telecom Italia are forced to pass on unbundling to obtain and to propose their own offers triple play at an acceptable price. This is the model of Free: the raw material being unbundling, should control it. But for small operators which are not the general public, otherwise companies and mainly SMEs, ungroup by themselves has no meaning. It must confine itself to the duopoly because a more competitive offer, some choosing rather to interconnect with the incumbent operator (see box below).

Operator, Integrator, SSII, Council...

Therefore, it is even legitimate to ask whether large operators have interest to smother small operators deploying their own market forces or even to let them grow and win the customers themselves, national actors, will never be able to seduce Wholesale offerings are a duopoly competition regulator. "Small" operators the counteract by offering value-added personalized services in addition to the common base that all catalog to their business customers: screening, networks private virtual or VPN (3), security solutions, Internet access... Small operators arrive, by the quality of their offerings or their positioning, to avoid the possible effects of the duopoly. "No, sincerely, we do feel more concerned with this issue", explains Richard Marry, P - dg Vivaction (16 million in sales in 2005). His company, created 11 years ago, crossed the crisis of the Internet and of telecoms and hand today on external growth opportunities. Vivaction uses VoIP (4) to offer its customers of the cheaper options (5). It is also, like all his colleagues, the proximity to SMEs, by borrowing from other professions: the Integrator, system integrators and Council. Small operators adopt this strategy of "encroachment" and emerge more or less of the profession of operator, but each with a part of its offer the differentiating both of the other "small" and actors of the duopoly. All the big national operators swear more in effect by the conquest of SMEs and the constitution of networks of integrators in the region to relay their offers. Even though this strategy may experience delays, it will be to catch national operators and small niche or local actors. Entering already competing to attract system integrators.

To solve the equation, some "small" do not hesitate to come out top. Jeremiah Vinant, P - dg for Ipnotic (30 million in sales in 2005), is little illusion: "France Telecom and Neuf Cegetel, we will remain numbers." "It must be reactive, rely on high quality of services and show to our customers." Ipnotic has thus invested EUR 2 million in her own, to develop its offer "IP centrex" (6). Its major competitor, B3G Telecom, left a year before on this type of offer and broadened its spectrum. Refusing to be confined to SMEs only, he won major accounts through system integrators such as IBM and EDS (7). AFONE, for its part,

sells the service but not only of the telecoms and networks (8). "We are close to the concerns of SMEs," said Philippe Fournier, P - dg of Afone. "Small" operators believe is only able to express this proximity, in any case better than the national operators. Created in 1997 by two former Matra (9), and thanks to the industrialization of its methods, Afone succeeded to 360 million euros of turnover in 2005 for 1 000 employees.

Leveraging services to differentiate

It is a "large" among the "small", in a decade, which first survived the monopoly and duopoly now. To get this far, Afone has shown great determination in the telecoms services market to companies but it symbolizes well the difficulty of alternative operators to take the advantage of the game. Today, Philippe Fournier admits that "it is certainly more network which is an element of competition but the telecoms services. And add immediately: "Must have access to these networks." AFONE knows whereof he speaks. For the first ADSL, it signed two agreements: one of third-party with Neuf Cegetel, the other with Completel. "We are less the situation, now having a second with Completel agreement allows us to be more self-reliant," analysis Philippe Fournier. For the next mobile, Afone attempted the same transaction by searching for a network operator. His choice is focused on SFR, which refuses to open its network. Where a legal conflict between the two. As a first step, Arcep gave successful Afone in blaming the "bad faith" and "slow" which is evidence the host (10) operator. SFR has appealed the settlement of dispute.

Faced with the fixed duopoly and the mobile triopole

The case is followed by all operators, mobility in the coming months becoming an axis of development for the alternative "large" or "small". All wish to reach with a MVNO agreements (11) for the business market. "Large" operators already offer forms quadruple public play, after to be worn on all fronts in business: fixed, mobile Internet. "Small" operators also want to offer their customers business mobile offers. To do this, need them to obtain acceptable wholesale rates, or even access to the networks of mobile operators. Another solution could come from agreements signed by the "small" operators with Transatel, the only accepted by Bouygues Telecom and oriented MVNO business. "After the duopoly, the subject will likely to expand without changing nature, it will be that of cartelization," notes Philippe Fournier. The horizon of six to eighteen months, the conditions of existence of the "small" operators should change with: on the ADSL and the duopoly, the arrival of new operators fixed; in the mobile and the "triopole" (12), hoping to fit in the mobility market.

(1) - See "France Telecom and Neuf Cegetel: alternative operators fear a potential duopoly", the letter of telecommunications No. 167, pp. 1-5.

(2) - Free also is dégroupeur but does not sell this "unbundled" tariff as a wholesaler

(3) - Virtual Private Network (VPN).

(4) - Voice over Internet Protocol (VoIP).

(5) - Operator of services to French SMEs in the first place, he is working more and more international by connecting the call centres offshore companies fançaises of the Maghreb and of black Africa or the call.

(6) - Outsourcing of virtual telephony and transmission of data (IP Centrex or PBX) system.

(7) - B3G Telecom recently for example be retained by Intermarché with IBM Global Services.

(8) - Afone for example offers a computer surveillance at one end of the network and monitoring the other cameras.

(9) - Matra did not wish to become operator and sold Club Internet, its provision of Internet access subsidiary, Deutsche Telekom, and since at the same time undertook a disengagement of its industrial network in selling part PABX to the Canadian Aastra, which however has the right to keep the name Matra in the Aastra Matra company.

(10) - Decision of Arcep No. 06-0406 dated April 4, 2006.

(11) - Mobile Virtual Network Operator (MVNO).

(12) - See letter of communications No. 140, pp. 1-6.

BOX .

Five operators chose the solution of the interconnection

In the grip of the duopoly, operators are trying an alternative based on the interconnection of the incumbent operator offers. According to our information, five operators are now connected on its infrastructure and managed by its division operators. "France Telecom offers still one of the most reliable networks that is". We can offer a solution to our customers, knowing that in 14 days they will be connected to France Telecom. Neuf Cegetel, to wait three to four months. "With such a delay, the consumer client" cracking"", reflects Samir Koleilat, the P - dg Acropolis Telecom (aka initials Online, 3 million in sales in 2005). This "small" operator is not likely to change policy, even if the duopoly widens with Colt, Completel or Free: "we will remain in interconnection with France Telecom and its catalog offers." Since the month of December, France Telecom offers the option of the interconnection in ADSL2.