In the first quarter of 2008, electronic communications operators earned €10.7 billion in income on the end market. An additional €2.0 billion in income was generated by interconnection services and sales on the wholesale market between operators on the intermediate market.
Income from electronic communications services alone on the end market (i.e. excluding operators’ related income like sales of terminals, directories, advertising, hosting or call centre management, etc.) was €9.9 billion in the first quarter of 2008 and increased 3.1% over one year.
Fixed and mobile telephony services represented 54.2 billion minutes of traffic in the first quarter of 2008, with this volume rising 4.0% over one year.

Fixed telephony and Internet

There were 40.0 million subscriptions to a telephone service at the end of the first quarter 2008, a number that continues to grow thanks to the success of broadband telephony (VoIP). With 11.9 million subscriptions at the end of the first quarter 2008, VoIP now represents close to 30% of all telephone subscriptions, and is growing by about one million subscriptions every quarter. The number of telephone subscriptions to dial-up access (28.1 million at the end of the quarter) has been declining since the beginning of 2007 at a rate of 700 000 per quarter.

Most fixed lines (66% of all lines) supported a single “traditional” telephone subscription on the PSTN, although this proportion has been declining by three points each quarter. This reduction corresponds primarily to customers substituting their PSTN subscriptions with lines supporting only Voice on IP (VoIP) telephone service (DSL or cable). These numbers have been growing continually for the past two years. Operators (both alternative operators and the incumbent) create these offers using full unbundling or “naked ADSL” offers. The proportion of these lines, which was just 10% a year ago, reached 19% at end March 2008.
Another share of fixed lines (15% of lines at the end of the first quarter 2008) supports two telephone subscriptions (a “traditional” subscription on the PSTN and a subscription to a VoIP service). After 2007, during which their number (and proportion) remained stable, the number of these offers grew 9% during the first quarter of 2008 alone (16.1% throughout 2007).

Thanks to wholesale subscription sales offers, 761 000 subscriptions (or 2.7% of “traditional” telephone subscriptions on the PSTN) were invoiced directly to end customers by alternative operators at the end of the first quarter 2008.
The decline in the number of subscriptions to telephony offers based on carrier selection (call-by-call selection and pre-selection) has been constant for the past two years and is accelerating (-36.2% in the first quarter of 2008). Due to strong competition from the rapid development of VoIP offers (and to a lesser extent by pre-selection customers switching to telephony offers from wholesale subscription sale offers (called VGA in France)), the number of subscriptions to these offers fell by 2.4 million in one year to just 4.1 million at the end of the quarter.
Income directly attributable to fixed telephony (from subscriptions and calls) was €2.6 billion in the first quarter of 2008 and declined by 4.6% over one year. The “subscription” part of this income now represents 58% of the total and grew slightly (+1.4% over one year) propped up by the increase in the cost of telephone subscriptions in July 2007. Conversely, income from telephone calls (excluding income from public payphones and cards) is tending to decline and was down 10.9% over one year with €1.1 billion in the first quarter of 2008. This trend can be explained by the fact that income from telephone calls made on the PSTN declined at the same rate as the volume of this traffic (by about -15% over one year) whereas most of the time, calls made using IP access, which is growing strongly, were included in an Internet package and therefore were not included in call income.
Traffic originating on fixed phones (excluding public payphones and cards) reached 28.1 billion minutes in the first quarter of 2008 and rose 4.7% with respect to the volume of traffic in the first quarter 2007. The very strong growth in IP traffic (+57.6% over one year) largely offset the decline in traffic on the PSTN (-14.8% over one year). It can be explained by the marketing of new telephony-on-IP offers at the end of 2007 which systematically include unlimited calling to national fixed phones in bundled packages.
At 11.4 billion minutes, IP calls now represent 40.5% of traffic originating on fixed phones (compared with less than 27% a year earlier). IP traffic was particularly high to destinations benefiting from so-called “unlimited calling” offers (offers included in most multiplay packages). For fixed international calls, the share of IP was even significantly higher (59%). It was also high (42%) for national calls, but was just 18% for fixed-mobile traffic (for which there are no “unlimited calling” offers).
Telephone-on-IP services are generally used more intensively than “traditional” telephone service (5 hours and 34 minutes vs. 3 hours and 16 minutes of calls on average per subscriber and per month in the first quarter of 2008).

There were 17.6 million subscriptions to Internet at the end of the first quarter 2008 of which the vast majority (92.4%, or 16.3 million) was for high-speed Internet. The number of high-speed accesses rose by 2.6 million over one year (+18.8%). ADSL technology took the lion’s share of high-speed accesses with 15.5 million accesses at the end of the first quarter 2008.
Internet income was €1.2 billion in the first quarter of 2008 of which over 90% (€1.1 billion) came from high-speed accesses. The average invoice of a subscriber to high speed has been stable for the past two years, and was about €23.60 excluding VAT in the first quarter of 2008.

Mobile telephony

There were 55.7 million customers to mobile telephony in France at the end of the first quarter 2008, two-thirds of whom (66.1%) subscribed to a flat-rate package. Annual growth in the number of customers was high and has held steady at 7% since the beginning of 2007 (+7.1% in the first quarter of 2008 or 3.7 million additional customers over one year).
The number of mobile numbers ported from one operator to another during a quarter has risen strongly since a simplified procedure for keeping the phone number was introduced on 21 May 2007: in the first quarter of 2008, 313 000 numbers were ported, about three times more than in the first quarter 2007.
Mobile multimedia services (access to mobile Internet, MMS) were used by close to one in three customers in the first quarter of 2008, or 17.6 million customers. The number of customers using services provided on 3G mobile networks (voice, videophone, mobile television, data transfer, etc.) reached 6.6 million in the first quarter of 2008, or 12% of mobile operators’ customers.
Income from mobile services reached €4.5 billion in the first quarter of 2008. The rate of annual growth in mobile service income has held steady at around 5 or 6% since the beginning of 2006 (+5.7% in the first quarter of 2008). The share represented by data transfer services is growing slowly, representing 748 million or 16.5% of all mobile telephony income in the first quarter of 2008, compared to 14.5% a year earlier. Growth in income from these non-voice uses of mobile telephony also grew much faster than income from mobile calls (+20.6% and +3.1% respectively over one year in the first quarter of 2008).
Mobile telephony traffic represented 25.7 billion minutes in the first quarter of 2008. After seeing high growth rates in 2006 (of around +15% over one year) this traffic began to slow continuously and regularly at the beginning of 2007, falling from 8.6% in the first quarter to 3.9% in the fourth quarter. In the first quarter of 2008, growth in the volume of traffic was a bit stronger (+4.3% over one year) and marked a break in this downward trend.
Most of the slowdown was caused by weaker growth in the traffic exchanged between mobiles on the same network (“on-net” traffic) where the annual growth rate slowed progressively in 2006 and 2007, falling from 30.8% at the beginning of 2006 to a mere 2.8% over one year at the end of 2007. In the first quarter of 2008, the volume of “on-net” traffic revived slightly with 4.4% growth over one year.
The growth in traffic to third-party mobile networks, which was strong a year ago (+22.6% over one year at the first quarter 2007), also slowed progressively throughout 2007. This slowdown continued in the first quarter of 2008 with a rate of just 7.2%.
The drop in the volume of mobile calls to fixed phones (seen for the past three years) slowed and has been weak for the past two quarters (-0.7% over one year in the first quarter of 2008).
The number of interpersonal messages continued to rise very quickly, with 6.8 billion messages sent during the first quarter of 2008—2.3 billion more than a year ago. Customers sent 40 SMS per month on average in the first quarter of 2008 (12 more messages than a year earlier).

Other market components

Income from value-added services reached €610 million in the first quarter of 2008 and rose 1.5% over one year. The “data” component of these services grew more quickly than the “voice and telematic” component (+5.9% and +0.7%, respectively, over one year).
Income from directory services (€38 million) shrank 1.8% over one year in the first quarter of 2008. The number of calls to directory services has fallen continuously for the past two years. In the first quarter of 2008, 31 million calls were made, or 5 million fewer than a year ago (-13.9%).

Operators earned €9.9 billion in the first quarter of 2008 from sales of electronic communications services on the end market, a 3.1% increase over one year. Income from mobile services has been growing by 5 to 6% for the past two years (+5.7% over one year in the first quarter of 2008), and was €4.5 billion (or 45.9% of all income from electronic communications services).

Income from services sold on fixed networks (fixed telephony and Internet) reached €3.9 billion in the first quarter of 2008. It grew slightly (+0.5%) over one year despite a decline in income from fixed telephony (-4.6% over one year in the first quarter of 2008), which has been continuous for several years. Strong growth in income from Internet services (+13.9% over one year) contributed at least a third of income from fixed services, helping to maintain a degree of dynamic growth in services on fixed networks.

The volume of “voice” services (on fixed and mobile networks) was 54.2 billion minutes in the first quarter of 2008, up 4.0% over one year.
The volume of calls made from fixed phones (28.6 billion minutes in the first quarter of 2008) inched up 3.7% over one year thanks to the strong growth of telephony on IP which now represents over 40% of the volume of minutes originating on fixed phones.
The volume of calls made on mobile networks (25.7 billion minutes in the first quarter of 2008) also turned upward. The first quarter 2008 marks a break in the slowdown in the annual growth rate of the volume of calls originating on mobiles observed since the beginning of 2007. After continuously and regularly dropping throughout 2007 (falling from 8.6% in the first quarter to 3.9% in the fourth quarter) growth in these volumes held at a stable level in the first quarter of 2008 with growth of 4.3% over one year.
The downward trend in dial-up Internet volumes has been accelerating since mid 2007 and has now reached a negative rate of more than 40%. The decline reached 44.9% over one year in the first quarter of 2008.
There were 6.7 billion SMS sent during the first quarter 2008, 2.3 billion more than a year earlier (+52.8%).

Fixed network operators on the intermediate market reported income of €1.1 billion, up 6.2% over one year due to the growth in income from wholesale high-speed access services (unbundling, wholesale bitstream offers, etc.). This income reached €420 million in the first quarter of 2008, up 23.2% over one year.
Income from services related to telephone service (€706 million in the first quarter of 2008) stabilised, in part due to the contribution of sales of the wholesale subscription sale offer (VGA).
The volume of interconnection minutes of mobile operators rose 10.7% over one year in the first quarter of 2008: the main reason was growth in traffic to national third-party mobile networks and in incoming international traffic. Income generated by voice and data mobile interconnection services (€900 million in the first quarter of 2008) slumped 5.7% over one year due mainly to the cut in the wholesale price of mobile call termination on 1st January 2008 (13% for Orange France and SFR, and 8% for Bouygues).
Income and volumes of dial-up Internet interconnection services fell by about 40% over one year.

Notes:
- Interconnection covers all the services provided by one carrier to another under the terms of an interconnection agreement. In cases of mergers or takeovers, some of the income streams between the telcos disappear, which might account for decreases in income from one quarter to the next.
- Interconnection income and traffic volumes are not calculated on the basis of the same criteria, making a comparison between the two indicators unsuitable for estimating average prices (interconnection income include fixed income such as charges for connection links and intercarrier services).
- Please note that the interconnection figures shown above might be accounted for twice, particularly in the case of fixed operators.
- Wholesale broadband services include income from both LLU and bitstream or equivalent services

There were 5.4 million unbundled lines at the end of the first quarter 2008, representing 15.6% of all fixed lines.

At 4.1 million lines, more than three out of every four unbundled lines are fully unbundled. In one year, the number of fully unbundled lines jumped by 1.5 million while the number of partially unbundled lines fell by 0.5 million. Some of the partially unbundled lines that disappeared were converted into fully unbundled lines.

There were one million naked ADSL lines at the end of the first quarter 2008. Their number increased by 600 000 in one year.

Traffic from other countries terminating on French fixed networks held stable (+0.9% over one year in the first quarter of 2008) while traffic terminating on French mobile networks rose strongly (+48.3% over one year).

Note: Roaming-in is a service whereby a French mobile operator carries calls made and received in France by customers of foreign mobile operators. Income corresponds to the out-payments made between operators. The ratio of income to volume does not correspond to any specific tariff and particularly not to the price billed to the customer.

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(1) This market segment is a subset of the overall market (cf. 1.2.1)

More than one-third (35.6%) of income from services offered on fixed networks is now generated by high-speed services (fixed broadband telephony and high-speed Internet) compared with less than 30% a year ago. Growth in this income reached 22.5% over one year in the first quarter of 2008 whereas income from dial-up services on fixed networks (PSTN telephony, dial-up Internet) shrank 8.3% over the same period.

The number of subscriptions to a telephone service continued to grow, approaching 40 million at the end of the first quarter 2008. Over one year, the number of telephone subscriptions increased 3.3%, growth that was borne up entirely by the success of broadband telephony offers, where the number of subscriptions doubled in one year.

There were 11.9 million subscriptions to a voice on broadband service (IP DSL or cable subscription) at the end of the first quarter 2008, representing close to 30% of all telephone subscriptions. This number has grown by about one million each quarter since the end of 2006.

There were 28.1 million subscriptions to narrowband access (on analogue or digital lines and on cable) at the end of the first quarter 2008. This number has been declining regularly by 700 000 subscriptions each quarter (or -2.8 million over one year) since the beginning of 2007.
Resulting from wholesale telephone subscription sale offers (VGA), 761 000 subscriptions to telephone service on the PSTN are now invoiced by an alternative operator.

Note:
- Subscription to telephone on IP service on xDSL lines without PSTN subscription: a subscription to telephone service on lines where low frequencies are not used to support voice service (by the incumbent or by an alternative operator). This is the case of offers to broadband voice services resulting from full unbundling and “naked ADSL” offers.
- Subscription to telephone on IP service on xDSL lines with PSTN subscription: a subscription to telephone service on lines where low frequencies are also used to support voice service, on the PSTN. This is the case of telephone offers resulting from partial unbundling and “bitstream” outside naked ADSL“.

Operators can create VoIP offers:
- on fully unbundled lines or on “naked ADSL”. The customer has only a subscription to a VoIP service and no longer has a “traditional” telephone subscription on the PSTN. At the end of the first quarter 2008, this case represented 19% of all fixed lines. This proportion was just 10% a year earlier.
- on lines where it is added to a PSTN telephone subscription which was kept by the user. So, 5.3 million lines supported two telephone service subscriptions at the end of the first quarter 2008 (or 15% of lines in service).

Further information concerning the IP telephony service indicators The terminology used: The IP telephony service indicators referred to in this issue cover broadband voice services, regardless of the type of carrier (primarily DSL IP, but also cable IP) and Internet voice services where the operators are registered with ARCEP. ARCEP uses the term “broadband voice services” to refer to fixed telephony services which use VoIP technology on an Internet access network with bandwidth of more than 128 kbit/s and whose quality is controlled by the operator providing the service. It uses “Internet voice services” to refer to voice call services on the public Internet network where the quality is not controlled by the operator providing the service. The Observatory only records VoIP service calls, which originate on the access layer. The indicators do not cover traffic that uses IP protocol solely in the core network. Furthermore, the Observatory does not take into account unregistered operators offering PC-to-PC Internet voice services. These operators are not covered by this survey. Income taken into account: The Observatory distinguishes between calls originating from IP telephony services and other voice calls. However, while the volume of VoIP calls relates to all such traffic on the retail market, the income recorded covers only billed VoIP traffic (e.g. calls made on top of those included in a multiplay package).

There were 667 000 numbers kept through “porting” between fixed telephony operators during the first quarter 2008.

By the end of the first quarter 2008, a total of 4.1 million customers had used telephony offers based on carrier selection, or 2.4 million less in one year. The decline in these offers, which has been continuous for the past two years, accelerated (-36.2% in the first quarter of 2008) because many customers tend to replace these offers with telephony on IP or an offer including a telephone subscription (wholesale subscription sale offers (VGA).
The slump in the rate of the number of subscriptions to pre-selection (3.2 million at the end of the first quarter 2008) has been progressively accelerating since the beginning of 2007 and reached -36.5% over one year in the first quarter of 2008 or 1.9 million fewer subscriptions for the period.
Call-by-call selection offers have been falling for several quarters at an annual rate of about 30 to 35% with just 0.9 million subscriptions at the end of the first quarter 2008.

Note: The number of call-by-call selection customers takes into account only active subscriptions, while carrier pre-selection figures take into account only current subscriptions, net of cancellations.

The decline in income caused by the drop in the number of “traditional” telephone subscriptions on the PSTN (down 9.0% over one year in the first quarter of 2008) was offset by the increase in the France Telecom’s monthly telephone subscription fee (+6.7% on 1st July 2007). Thanks to this increase and to more income from subscriptions to a telephony-on-IP service (€125 million in the first quarter of 2008), global income for access (€1.5 billion in the first quarter of 2008) edged up 1.4% over one year and now represents 58% of all income from fixed telephony services.

Note: In addition to the income relating to access to the telephone service, access income also includes subscriptions to IP telephony and income generated by supplementary services (such as calling line identification presentation, etc.).

Operators reported €1.1 billion in income directly attributable to telephone calls on fixed lines in the first quarter of 2008. This income declined 10.9% over one year; the contribution of income from calls originating on IP access (€131 million in the first quarter of 2008) could not offset the decline in income from calls made on the PSTN (-16.1% over one year in the first quarter of 2008). Although the volume of calls on the PSTN was down, most IP calls were included in a high-speed Internet package haut and therefore were not counted as call income.

Note: Income from VoIP calls only includes the charges billed by operators for such calls made on top of those included in a multiplay package. Therefore, this amount does not include the cost of the multiplay subscription, nor the charge for connection to a broadband telephone service.

Traffic originating on fixed lines (PSTN and IP traffic) represented 28.1 billion minutes in the first quarter of 2008 and was up 4.7% over one year.
The volume of fixed national calls represented 82.6% of the total volume of calls on fixed lines and rose 3.6% over one year in the first quarter of 2008. The declining volume of national calls made on the PSTN (-14.8% over one year in the first quarter of 2008) was actively relayed by the very strong expansion in the volume of national calls made on IP (53.5% over one year). At 11.4 billion minutes, IP telephony now represents a full 40.5% of all minutes originating on fixed phones compared with less than 27% a year earlier.
Traffic to international numbers rose 28.9% over one year in the first quarter of 2008. It was fed by the increase (continuous for the past two years) in international calls made on IP (+89.4% over one year), while calls to international numbers on the PSTN fell 11.9% over the same period.
The volume in calls to mobiles edged up slightly (+0.7% over one year in the first quarter of 2008).

Note:
- The Observatory distinguishes between calls originating on IP telephony services and other voice calls. Still, while the volume of VoIP calls covers all of this traffic observed on the end market, income covers only invoiced VoIP traffic (for example in addition to a multiplay package).
- Volumes and income from calls originating on VoIP services are counted in each of the market segments (long distance, international and to mobiles).

a) Calls on the PSTN

Traffic in calls originating on the PSTN was down 14.8% over one year in the first quarter of 2008, The decline in traffic was observed most where competition from IP telephony was the strongest: on national calls (-16.1%) and on the international calls (-11.9%).

b) Communications on IP originating on fixed networks

The volume of calls made originating on IP access jumped 57.6% over one year in the first quarter of 2008.
The proportion of IP traffic in calls originating on fixed networks varied depending on the destination of the calls. It was definitely highest for international calls (59% of IP minutes in the first quarter of 2008). It was strong (42% of IP minutes) for national calls to fixed phones, but represented just 18% of minutes for fixed-to-mobile calls.

Notes:
- The volume of traffic originating on a fixed line includes calls from fixed telephones, public payphones and prepaid phone cards.
- Seasonally adjusted values for this data can be found in the “Séries chronologiques” spreadsheets available on ARCEP’s website

Following a three-year period during which the total volume of traffic originating on fixed phones (including public payphones and cards) held steady at around 26 billion minutes in seasonally adjusted values, traffic during the past two quarters settled at a higher level (27 billion minutes in seasonally adjusted values).

The number of public payphones in service has been declining regularly for the past three years by 10 000 per year (or a 5.6% decline over one year in the first quarter of 2008). The income and volume of calls from public payphones declined even more strongly than the number of phones in service (-23.2% and -28.9%, respectively, over the same period).

There were 17.6 million Internet accesses at the end of the first quarter 2008, with high-speed Internet representing the vast majority of these (16.3 million subscriptions or 92.4% of the total). Accesses based on DSL technology represented almost all high-speed connections (over 95%). In one year, 2.6 million additional subscriptions to high speed were taken out, representing an 18.8% increase over one year in the first quarter of 2008. Though still high, this rate of growth has slowed significantly over the past several quarters. Since most dial-up subscriptions have already been converted to subscriptions to high speed, this substitution no longer contributes to high speed’s growth.
Income from all Internet accesses reached €1.2 billion in the first quarter of 2008 (of which €1.1 billion can be attributed to high speed) and was up 13.9% over one year. The average invoice for a high-speed Internet subscription has held at around €23.00 or €24.00 excluding VAT per month (€23.60 excluding VAT in the first quarter of 2008) for the past two years.

The number of dial-up Internet accesses (1.3 million at the end of the first quarter 2008) shrank 41.1% over one year. The income and volume of connection minutes generated by dial-up plummeted by almost 45%. The average invoice of a dial-up subscriber was €8.20 excluding VAT per month in the first quarter of 2008.

Note: There may be a time lag between the delivery of a service on the wholesale market (LLU or bitstream) and its actual availability on the retail market. A comparison between the data relating to these different markets might reflect this.

Note: The “Other Internet services” item corresponds to related ISP income such as web hosting or income from online advertising. Income from the sale and rental of telephones and terminal equipment is included in the “Sale and rental of telephones and terminal equipment by fixed operators and Internet service providers” item.

There were 4.9 million subscriptions to a television service via xDSL at the end of the first quarter 2008, or 1.6 million subscriptions more than a year earlier.

Note : This indicator covers subscriptions that are “eligible” for television services, i.e. those where subscribers are able to activate this type of service, regardless of the number of channels available or the pricing plan involved. It takes into account both standalone subscriptions and those that are part of a “multiplay” service package including access to one or more other services besides television (Internet, telephone service).

The number of customers to a mobile telephony service reached 55.7 million at the end of the first quarter 2008. Two-thirds of customers (66.1%) purchased a package subscription.
The number of mobile telephony customers rose 7.1% over one year in the first quarter of 2008, with 3.7 million additional customers. This strong growth is in line with that observed since the beginning of 2007.

During the first quarter 2008, close to one in three customers (17.6 million) used the multimedia services offered by mobile operators (access to “mobile Internet” services, MMS, etc.).
The number of customers having used at least one of the high-speed services offered on 3G mobile networks reached 6.6 million in the first quarter of 2008, representing 12% of mobile operators’ customers. Over one year, the number of 3G users shot up 59.1%.

Notes:
- The number of active multimedia users is defined as the number of customers (contract or prepaid subscribers) who have used a multimedia service such as Wap, i-Mode, MMS or email (SMS are not covered by this definition) at least once in the past month, regardless of the type of carrier technology used (CSD, GPRS, UMTS, etc.). Scope: Mainland France and overseas dependencies.
- The number of active 3G users is defined as the number of customers having used (sent or received) a high-speed mobile service (voice, videophone, mobile TV, data transfer, etc.) using 3G wireless technology during the past three months.

The number of mobile numbers ported from one operator to another during a quarter has skyrocketed since the implementation of a simplified mobile number portability procedure on 21st May 2007 which reduces the amount of time required for the operation (less than 10 days compared to two months previously). In the first quarter of 2008, the number of ported numbers (313 000 numbers) was almost triple that of the first quarter 2007 (113 000 numbers).

Note:
- The number of ported numbers is defined as the number of telephone numbers effectively ported to another operator (numbers activated by the receiving operator) during the course of the quarter in question. Scope: Mainland France and overseas

Income from mobile services (telephony and data transfer) reached €4.5 billion and rose 5.7% over one year in the first quarter of 2008, Since the beginning of 2006, although lower than previous years, growth in income from mobile services continued at a relatively strong rate of 5% to 6% over one year.
Income from data transfer services on mobile networks (interpersonal messaging services, mobile Internet access services and multimedia services) represented €748 million in the first quarter of 2008. The share of this income in all income from mobile services grew (16.5% in the first quarter of 2008 compared to 14.5% a year earlier). Growth in income from these “non-voice” uses of mobile telephones (+20.6% over one year) was much faster than that of mobile voice calls (+3.1% over the same period).

Note: Calls to voice messaging were included in on-net traffic. They represented 8.6% of on-net traffic at the end of the first quarter 2008.

The volume of traffic originating on mobiles represented 25.7 billion minutes in the first quarter of 2008, Following strong growth (of around 15%) throughout 2006, the rate of annual growth in traffic originating on mobiles was down sharply in 2007, declining progressively from 8.6% at the beginning of the year to 3.9% at the end. The first quarter 2008 marked a break in this slowdown with growth of just over 4.3% over one year.

The slowdown in the volume of traffic observed in 2007 was caused primarily by the slump in the growth of the volume of calls exchanged between mobiles on the same network (this volume represented over half of the volume of traffic sent originating on mobiles). After progressively slowing over the past two years, the growth of this “on-net” traffic saw a slight upturn in the first quarter of 2008 with +4.4% over one year compared to 2.8% in the fourth quarter 2007.

Growth in the volume of mobile calls to third-party mobile networks continued at a slightly stronger rate (+7.2% over one year in the first quarter of 2008) although it was down sharply from the beginning of 2007 when it reached 22.6%.
The volume of mobile-to-fixed calls has been declining for three years. After reaching 4.9% at the beginning of 2007, it began to slow and has been weak for the past two quarters (-0.1% over one year in the fourth quarter 2007 and -0.7% in the first quarter of 2008).

(Seasonally adjusted values for this data can be found in the “Séries chronologiques” spreadsheets available on ARCEP’s website)

The number of interpersonal messages (SMS and MMS) sent by mobile operators’ customers during the first quarter of 2008 reached 6.8 billion, with 2.3 billion more messages than during the first quarter 2007. Operators’ offers, like “unlimited text messaging”, encourage this strong expansion in interpersonal messaging.

Customers send an average of 40 SMS per month, 12 more than a year ago. Customers having a flat-rate subscription use this communication mode twice as much as customers using pre-paid cards (49 SMS and 23 SMS sent per month, respectively).

(Seasonally adjusted values for this data can be found in the “Séries chronologiques” spreadsheets available on ARCEP’s website)

Income from value-added services (€610 million in the first quarter of 2008) was up 1.5% with respect to the first quarter 2007. Income from data services grew more quickly (+5.9% over one year) than income from voice and telematic services (+0.7% over one year).
During the quarter, 1.2 billion calls (for traffic volume of 3.3 billion minutes) were made to “voice and telematic” services. Calls made on fixed phones represented over 86% of calls and of the volume of minutes to these services.

* This corresponds to all amounts billed to customers by operators, including out payments from operators to service providers. “Data” value-added services include premium-rate services such as those on the Orange “Gallery” portal, push services, chat rooms, weather forecasts, TV game shows, horoscopes, ring-tone downloads, etc.

Income from telephone directory services (€38 million) was down 1.8% over one year in the first quarter of 2008.
The number of calls to directory services numbers has been declining continuously (by around 5 to 6 million calls over one year) since the definitive elimination of the old directory service numbers on 3rd April 2006. In the first quarter of 2008, with 31 million calls made, this decline was 13.9% over one year, or 5 million fewer calls during the period.
The volume of calls to directory services was 68 million minutes in the first quarter of 2008. Two-thirds of these minutes were for calls made on mobile networks.

Note: Directory services include the 118xyz numbers in use since November 2005 and the short numbers used to access reverse directory services (3288. 3217, 3200) or international directory services (3212).

Sales of leased lines between operators represented €192 million in the first quarter of 2008 (or 52.6% of income from leased lines).

Income from leased lines may be accounted for twice as the figures include operator-to-operator sales. These sales may represent up to 29% of total leased-line income.

Income from terminal sales and rentals reached €637 million in the first quarter of 2008, rising 19.4% over one year. Sales by mobile operators (€439 million in the first quarter of 2008) represented over two-thirds of this income.

Note: income from mobile packs and telephones given here include the commission paid to distributors.

The average monthly bill per fixed line is calculated by dividing the income from calls originating on fixed lines (line rental, call charges and Internet service charges) for quarter N by the estimated average number of fixed lines in existence for quarter N, and then by the number of months. (See the box on page 28 for an explanation of the concept of a “line”)
The average monthly bill per mobile customer is calculated by dividing the income from mobile telephony (voice and data income, including roaming-out, excluding income from incoming calls) for quarter N by the estimated average number of mobile customers for quarter N, and then by the number of months. This indicator, which does not include interconnection income, or those from value-added services, does not equate to the traditional Average Income Per User (ARPU) indicator.

The average monthly volume of traffic per fixed line is calculated by dividing the volume of traffic (PSTN and IP) for quarter N by the estimated average number of fixed lines in existence for quarter N, and then by the number of months.
The average monthly volume of traffic per mobile operator customer is calculated by dividing the volume of mobile telephony traffic (including roaming-out) for quarter N by the estimated average number of mobile customers for quarter N, and then by the number of months.
The average number of SMS messages per customer is calculated by dividing the number of SMS messages for quarter N by the estimated average number of customers for quarter N, and then by the number of months.

The average monthly bill per PSTN subscription is calculated by dividing the income from line rental and calls made from PSTN fixed lines (i.e. excluding VoIP income) for quarter N by the estimated average number of subscriptions for quarter N, and then by the number of months.
The average monthly bill per subscription to an IP telephony service is calculated by dividing the income solely from IP calls billed (i.e. those made on top of those included in a multiplay package) for quarter N by the estimated average number of subscriptions for quarter N, and then by the number of months.
The average monthly bill per dial-up (or broadband) Internet subscription is calculated by dividing the income from the dial-up (or broadband) Internet connections for quarter N by the estimated average number of customers for quarter N, and then by the number of months.

The average monthly volume of PSTN (or IP) traffic is calculated by dividing the volume of PSTN (or IP) traffic for quarter N by the estimated average number of subscriptions to a PSTN (or IP) telephone service for quarter N, and then by the number of months.
The average monthly volume of dial-up Internet traffic is calculated by dividing the volume of dial-up Internet traffic for quarter N by the estimated average number of subscriptions to a dial-up Internet service for quarter N, and then by the number of months.

Average number of customers for quarter N: [(total number of customers at the end of quarter N + total number of customers at the end of quarter N-1) / 2]