Page 32 - 2012 Annual Report

VIVENDI l 2012 l Annual Report 32
GROUP PROFILE – BUSINESSES – LITIGATION – RISK FACTORS 1
1
SECTION 2 - BUSINESSES
SFR
In 2012, French and European laws underwent changes.
IN FRANCE
The changes in French legislation in 2012 relate in particular to the
implementation of the new EU regulatory framework for electronic
communications:
To this end, the French decree of March 30, 2012 allows:
✱ the French Electronic Communications and Mail Regulation Authority
(ARCEP) to impose a functional separation of activities on major
operators in the electronic communications sector;
✱ restrictions on the licenses to use frequencies allocated before
August 24, 2011 to be reexamined by ARCEP upon request until
May 24, 2016; and
✱ new restrictions for operators to enhance the security of the programs
needed to intercept of electronic communications.
Allocation of frequencies for very-high-speed mobile broadband (4G)
In January 2012, ARCEP granted SFR authorization to use 10 MHz
duplex frequencies in the 800 MHz band (digital dividend) for an amount
of €1.065 billion. On this occasion, SFR undertook to cover 98% of the
population within 12 years, 90% in each department and 99.6% within 15
years. It will accommodate roaming by Free Mobile on its very-high-speed
mobile broadband network in the 800 MHz band under certain conditions,
offer MVNO support and a “full MVNO” offering.
IN EUROPE
In June 2012, the European Commission adopted the third regulation on
the regulation of roaming in Europe. This text provides for further declines
in rate ceilings applicable to retail and wholesale voice and SMS services
regulation and introduces data services on the retail market. For network
operators, the regulation also imposes an obligation to grant reasonable
requests for wholesale access to roaming services and the opportunity for
retail customers to choose an alternative roaming operator, separate from
their national operator starting on July 1, 2014.
The national market shares for mobile break down as follows: 37% for
Orange France, 15% for Bouygues Telecom, 7% for Free and 12% for
MVNOs and other operators, compared to 28% for SFR (source: ARCEP
and operator publications).
At year-end 2012, the market shares for high- and very-high-speed
broadband break down as follows: 41% for France Télécom, 22% for Iliad,
8% for Bouygues Telecom and 7% for other Internet access providers,
compared to 21% for SFR.
2.4.6. Regulatory Environment
2.4.8. Competition
2.4.7. Piracy
SFR wants to find the best solutions to the problems posed by piracy that
respect the rights and obligations of everyone. The operator applies in
particular the HADOPI law, which promotes the distribution and protection
of creative works on the Internet. SFR has always worked to maximize
legal offerings and has made many innovations to the market to offer its
customers a real alternative to piracy. It has set up a legal music download
store for its mobile and ADSL customers and a video rental platform for its
ADSL customers. Through its partnership with Spotify, the operator also
offers access to a streaming music catalog for all its mobile offerings.
2.4.9. Research and Development
In 2012, SFR’s efforts in Research and Development are based on the
following three main concepts:
✱ the quality of customer service (fixed-line and mobile);
✱ service platforms and user-friendly services; and
✱ the exploration of new telecommunications technologies in the areas
of radio (4G/LTE networks), high-speed access (enhanced access
technology with 10 GPON – 10 Gb/s on fiber optic; VDSL2; enhanced
TV set-top box services), network core or terminals through studies
and/or experiments on pilot platforms.
SFR Research and Development expenditures are estimated at
€41.6 million in 2012.