France telecom

Comment France Telecom

Preparing for more competition

Marcel Roulet

With competition in the field of telecommunications equipment and services becoming a more pressing reality each day, the French telecom public operator, France Telecom, intends to seize the opportunity to play a major role on the international scene. Relying on a modem network and good productivity, France Telewm will now emphasize its commitment to stronger marketing and greater responsiveness to customer needs, will strengthen its efforts in the service markets, and give increased attention to the international sector.

In a large number tries,

currently the

best

debate

environment

Advantages

and

monopoly,

compared

petitive

market, term

often

is

rogation,

for

telecom-

with

of

a

the com-

however,

be

context

used

which

have

problem, ruling

already

out

or

As

with

regulations.

It

would

able step. Even a trend;

be

of

to

30%

by

the USA, petition tional

At

implies

market

that

and simultaneous Competition

is not

to

more

opportunity

should enable the real market

require-

adapt,

countries

way.

and

Telecom,

the French will continue

intends

to

telecom

evolution

of

telecommunications

scene.

must

cide with the establishment and

between

close relationships

telecommunications,

processing

and the existence

nical resources (for example, and

small

bypassing blurred

antennae) the

public

the boundaries

POLICY June 1988

that

dataof techsatellites allow

for

adapted

also

in coin-

of modern

regulations.

This

does not lie within the responsibility France

Telecom

but with

of

parliament

and the government. Until

very recently

combined

France Telecom

the responsibilities

have

ating

its network

of the classic

some

regulatory

network,

this

role on

competition

ments to be met to the highest quality

well

take

to play a major

and at the lowest cost. The increasingly

in

is thus an unavoidable

the international The

of the

at the end of

all

public operator,

and

Com-

will have to evolve in a similar

France

by real

open

and the prospect

reality.

changes,

2000.

and Japan.

telecom

it is justified

year

partially

is today a reality in

regulation.

if deregulation

of very

already exists in some internalinks,

1992

10%

an international

the UK

unified European Europe

interwhich

rise

the

an unavoid-

the

and economic

than will

These areas are already

to speak of an evolution

reinforcement

technical

the

does not mean

Such a move is, however,

than

is

of countries

dealt

deregulation

less

revenue,

to competition.

should,

cautiously.

shown by the experience

represent

quickly

database

transmission)

level, deregulation which

an end in itself, it is nonetheless

TELECOMMUNICATIONS

today

picture

Telecom’s

regulation.

drawbacks

this

communication

what

as well as opportuni-

in

new

about

‘deregulation’

used

The

services (data transfer.

ties for change are assessed. The

monopoly.

is

vis-ci-vis

munications

coun-

there

in Europe,

great

more relevant Marcel Ftoulet is Director General of France Telecom, 20 Avenue de SBgur, 75700 Paris, France.

of developed

especially

and

of oper-

services

functions

with

which

it

109

performed

on behalf of the Ministry

Post

Telecommunications.

and

combination

of these

constituted facto

two

the

framework

monopoly.

whereas

telecommunications subjected

of The

of its de in

were

that

this

areas

did

from

er,

not

such as telematics

terminal have

equipment

been

services

and PABX,

open

to

a longer

time

in

for

broader

scale than in most other Euro-

on a

towards been

operational

accepted this of

cations

functions

in France.

objective

taken.

Ministry

In

has

October

Post and directly

is

already

vices, accepting

vides

in

the

of

telecommunica-

At

the

time,

the

tion

Committee

and Civil

authority watchdog

Liberties

power.

agency of

(CNCL),

tions

field.

the

for

The

It

private

setting

will

law,

up

and

by the P&T and

heading

towards

for

flexibility

the

flexible

the

cost

operational

efficiency.

a

easily,

the

should

be eased

the day

wage levels.

so that com-

fairly

concerned.

among

France

all

Tele-

corn is not to enjoy unfair advantages, but

neither

handicapped.

Telecom

closely and

make

sure

and

to give

commercial

productivity

must

rules higher

must also be that

the

staff

gains. The

and rules of France

also be brought

into

line with equivalent

operators,

steady,

and fair common

predictable

law fiscal policy. 1 November

1987 of VAT

it be excessively

tariffs is a very significant

rights and duties

direction.

Finally,

also needed

TELECOMMUNICATIONS

with a

The introduction

Equal

must be guaranteed,

related

management

should

for all operators

of fixing

by allowing

A solution

situation

to define

to

staff

financial

of the

network.

can develop

it

and

To attract skilled personnel

from

parties

enabling

freedom

structure,

benefits

the

large-scale

method

pricing

operator

petition

of or in

as its competitors.

more

on its role

clear rules for operators

before

any same

found

It is first of all essential

structure

of competition,

will concentrate

French

110

with

services.

is to ensure

evolves

when France Telecom as public

point

management

Telecom

acquire A

competitive

We are

of

footing

cannot be main-

by access to professional major

the

greater

minister

operation

industry

on an equal

that they are more

will

is granted

that pro-

and

rates is badly needed in some areas, so

issue authoriza-

networks,

that

to

is that the

open to third parties.

thus clearly

home

and value-added

broadening

recom-

competition

before any authorization network

operator

of

connection

involved

competition. of the French

tained in the long term but has also to

France

should also deal with telecom-

also be consulted the

an

This independent

which is still to be passed, munications.

100%

Another

independent

ser-

to keep a strong national

be supported

created the

is already

in the audiovisual mendation

of 30

the broad-

on Communica-

of 13 members,

of executive

CNCL

law

1986 concerning

er field of communication, National

of organized

of price and delivery,

same

of move-

that this has to be in a

service coverage

tions sector. September

freedom

on the

national

a healthy

defining

principles

pro-

we claim,

And it is our firm belief that

One of its tasks is to prepare the

infrastructure

operator.

ministry.

competition

‘France Telecom is not to enjoy unfair advantages’

framework

the

bill

the

to that of a

and access to all telecom

community

to the

develop-

like to limit

It is in the interest

Regulatory

responsible

size

of deregula-

Telecom

greater

ment

the

service

On this point,

contrary,

the should

(as it is in the

would

A step

1986

to

transmission

vider.

Telecommuni-

set up a General

Committee

reg-

operator

supporters

tion in France

Pap-

service

for equivalent

respect some

mere

the need to separate

and

now well

With ment,

role of France

pean countries. ulatory

be retained

structures).

public

maintained,

probably

or

France

However,

be

of a unique

which

and

is to

principle

case of the BOCs

competition

in the Green

if effective

in

pro-

in line with the first

proposed

is that

provision

prevent

developing

by means of

As for the main infrastructure principle

officially

a pure monopo-

monopoly

initiative

networks

priced access charges.

vision, our belief,

France

ly. We have to bear in mind, however, private

interconnected reasonably

functions

to a policy of authorization

and did not constitute

as must a fair sharing of loads between

on

on French move in this

some

in negotiating

freedom

is

and con-

POLICY June 1988

Commenr eluding

agreements,

and alliances

the appropriate

ventures

all, human

who offer

complementary

corn

skills

elimination

of France

new

Tele-

target

of non-qualify.

-

the

We

con-

ducted

customer

clearer

idea of what our customers see

field and take advantage opportunities.

countries

to emphasize

that

which have opened

telecom

services

adapted

to

those

up their

beforehand.

as quality

and non-quality. network

gain

rules of the

a broader

quality.

the

service started

the provision preoperational

ly with

of the

full

participation

a change

of attitude

administrative

of

all

staff since it entails as well

evolution.

must

be made aware of what is at stake, and worries

about

an

must be dispelled.

unknown

future

our key objectives. With

the world market

munication year,

for telecom-

services growing by 12% a

and at a rate of 20%

(including

value-added)

only natural

for new

services,

for France Telecom

response

tween

local

which

must

links,

packet

switched

400

videotex,

teletext,

facsimile,

radiocommunications. mission, want

limited

to

implement

to service

a more

contractual

in particular,

approach

will

not

diversification.

be We

customers.

This,

implies an improvement

in the quality

of our commercial

net-

the setting up of a professional

more

its future

approach

rely on the quality services offered.

will

and pricing

that

still

of the

Even with the quality

or choices between or services remain period.

is the

feel

satisfied

by

our

recent

network

infra-

in the

structure

and

in basic services.

Telecom

1 telecommunications

lites

have

already

effected

than

and

of

today

at a rate

the implementation begin

our

offers

of ISDN.

in 1990. aiming by 1992.

phone

lines),

provement

of the service

stay as a top priority. excellence,

we

large programme, at mobilizing

June 1988

continue

quality

We are also extremely

im-

office

will

gramme.

In this search for

launched

in

1986

This by

which

in Paris in 1988. in major

customers

The

is

switched

be overtaken

of France

to

services.

network

of 64 kbps.

service will hopefully will

consider-

in digital

50%

The satel-

French cities in 1989 and in the whole

for all the tele-

want

risk of

to stay with the same

in five years we

the

the attraction

levels already achieved (a mean of one

the performance.

Thus,

is to the cost

failure

upgrading

expenses,

its decisions

developments

services commercial

telecom

the smaller

for the customer

digitized

of this

going

supplier.

ment of a range of maintenance the effectiveness

are

closer the rate structure

More

However,

to

for a longer

sales support service and the developtracts.

a

rates

able developments

con-

than for

to

techniques

We

especially

rather

important

change and the greater

personalized

service,

with our professional

work,

the

structure,

want to develop and

trans-

A general

up to a network

equipment

several valid

becalls,

to be able to forecast and plan

precisely about

etc.

But the more commercial we

how

is also

and also to ensure

mobile

picture

long-distance

on the basis of duration linking

service,

since

exist today

will be to realign our rates

customer

transmission,

message

we are also

be corrected.

philosophy

know

ATLAS

and

to be

to

the

our rates.

imbalances

It

digital

with

intervention

mentioned,

to adjust

distance.

needs. This is why we will continue

on a

as part

in case of line break-

it is

to users’

our range of services:

negotiated

delay

excessive

evolve,

expand

basis including,

As already

variety

adapted

of a service option

down.

present in these markets and to offer a of products

of

a guaranteed

attempting

Ths is clearly one of

view

contract

customer,

as an

They

a good

We have, for example,

Of course,

the

Our highly

guarantees

of links, but we want to

this can only be carried out successfulFrance Telecom’s

surveys to give us a

digitized

performance

competition

the management

main operator

POLICY

a

international It is fair

TELECOMMUNICATIONS

resources

towards

as well as the right to move into the of foreign

‘Worries about an unknown future must be dispelled’

joint

with partners,

a

size

information this

services;

Three

for 700 000 proud of our

and videotex figures

may

success:

more

than

a

level

which

traffic

Quality

Plus. aimed

quadrupled

the financial

and, above

calls per month;

pro-

empha7000 has

in one year with 30 million and more than three

111

million

videotex

terminals.

to

Minitel.

We are at present effort

making

on the mobile

service. shows

The

Radiocom yearly

of

reached 1991 system

digital

hopefully

transborder

an alpha digital

A

paging

network.

these

be offered

services

competitive

will

not simply

involved

fibre optics.

optical Corsica

Furthermore,

and

the fibre

Telecom

cables will

It

currently

Francs will

work with private customers,

industry.

with

to

in order to

and varied and

will

needs of

continue

French

and

to

foreign

believe.

al links

(above

considerable

of in-

we aim to increase made

for links with extremely

to the international

telecom

International

vices are of particular all operators major

who

potential

the coming

market

traffic

network, French

A

few

years

represented

venue

and

despite tariffs.

the

was

is

It is not only with the rest

but its network

for

is mod-

The Transpac

example,

which

switching

is the

system with

800

thousand

the

million

characters

is the largest X25

world

and

a

network

is connected

to

in 58

countries. It has been a long time our

customers

only working everywhere

were

in France.

have

contacts

opened

scale.

with

branches

- London,

or

and need to

on a global

their

countries

French

They are now

in the world

communicate

now since

only

in seven

New York,

Beijing,

To

France, Cara-

Singapore

and

We see these offices as a point

of contact for businesses interested links with France, them

greater

responsibilities

to customers’

Another

in

and have in mind to to

needs.

aspect of international

re-

lations which I feel to be of particular

importance

for

interest is the fact that our internation-

well

that

a

development

ago 12%

in

al customers

want

services available

to have the same in all countries.

for this reason that,

international of

a profitable

repeated

operators. access point

ser-

years lies there.

traffic

and sometimes

Europe.

packet

respond

This is a fact that we are well aware of.

with

digit-

our prices

and

know

for

64 kbps),

well connected

of the world,

give

progress here.

Last but not least, our commitment great.

transatlantic

and high-rate

France is also an excellent

we

so that we

and have already

as high as one

the

than those of other

Bonn.

Finally,

energy

rates, for exam-

On

for medium

benefits

productivity,

112

would

buyer

the

Our

ple, are not necessarily

cas, Tokyo,

enjoy

It

will increase

now have all the assets neces-

of our role as a

novation.

‘Our commitment to the international telecom market is great’

We

can take full advantage and

increasing

and we have therefore

sary to succeed.

facilitate

I hope that we will broaden

the range of our suppliers

an

to this activity.

in its research

partners

meet the multiple

even further,

over

customers.

that their traffic

month,

devotes

also be looking

in

private

more than 43 000 ports and more than to

per year and em-

1 500 engineers We

network.

is continuing

in-

1978 to 1986

ern and well equipped.

to stay at the forefront

technology.

four billion

cooperate

km

by the year 2000, nearly

invest in R&D

our

390

a

mainland.

have been laid in the trunk France

appears

lower

fibre

operating of

from mainly

are comparable

that include

cable

for

sharply;

period

doubled,

route,

links were in service

20 000 km of optical

ploys

a

in the construc-

and we started

submarine

centres.

on

In 1987, 100 optical

video specialized in France,

of

Both of

fibres we are

tion of cable TV networks

between

mes-

service operators.

In the field of optical

interThe

decided to devote considerable

basis with the birth of two

new telecom

decrease

increased

traffic

easily sent

through the videotex

the

in lYX7 resulted

through our professional

and

(written

sages up to 80 characters)

15%

eight-year

in 1987, providing

service

a further

which

over

cover.

service also opened

of VAT

traffic

cellular

take

on

links concerned.

troduction

in the

telephones.

European

will

depending

users. At the same time, the volume of

2000 network increase

35 000 by the end of 1987. In

the

offer

car

a special

communications

a 70%

number

24%

continental

now in service.

our

In 1986, this fall reached

telephone

must be interconnected

re-

activity

lowering

64 kbps switched

of 17%

er delay. bility

ISDN be

through

the harmonization

TELECOMMUNICATIONS

prepared

from

POLICY

furth-

compati-

importance

should

the

networks

without

Europe-wide

is also of great

It is

for example,

the

and start

and defini-

June 1988

Cornmen! tion

of common

ment

operators pean

providing

operators

offer.

already

ers direct

offer

their

interface

and

‘one-stop

POLICY June 1988

or through

is with

sidiaries, team,

for joint

agreements to negotiate,

our subsidiaries.

the

help

of

creating

with

them

our

in all

telecommunica-

under

serof

initiate a

for intera recent

These are all services that

suba real

that we will be able to confirm presence

custom-

lines between

through

operating

tions fields on the international

to open

service

digital

France and Germany agreement.

To

for. There

network

adaptation

protocol.

It

and

we are prepared

directly

our

connection

we decided

shopping’ leased

com-

turnkey

all end

and providing

national

private

Private

problems

such an offer,

public

a coordinated

international

by solving

It is

telecom

keep up with in

international

TELECOMMUNICATIONS

that

ventures which

or

must be developed.

operators

‘There are many opportunities for joint ventures’

and

radio-telephony

required

petition

cemented,

are waiting

are, thus, many opportunities

between

services such as Euro-

digital

radiopaging

vices

be

our customers

and equip-

Alliances

must

supranational

also

network

standards.

the

unique

banner

Telecom

International

announced

in Geneva

scene,

of France that

was

at Telecom

I hope that my organization’s ment

to a stronger

tation,

efficient

marketing

greater

responsiveness

service

‘87.

commitorien-

provision, to

customer

needs and increased

attention

to the

international

will

strong

sector

be

assets to achieve this purpose.

113