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Revenues from electronic communications operators on the end market were €10.9 billion in the second quarter 2008. Interconnection services and sales on the wholesale market between operators generated €2.1 billion in additional revenues during the quarter.

Revenues from electronic communications services alone on the end market, i.e. excluding operators’ related revenues such as from terminal sales, directories, advertising, hosting or call centre management, was €10.1 billion in the second quarter 2008, for a 3.9% increase over one year.

Traffic from fixed and mobile telephony services represented 53.1 billion minutes in the second quarter 2008, and this volume grew 4.0% over one year.

Fixed telephony and Internet

There were 40.0 million telephone service subscriptions at the end of the second quarter 2008. This number rose 2.9% over one year thanks to the development of broadband telephony which, with 12.5 million subscriptions at the end of the second quarter 2008, represented close to one-third (31.3%) of all telephone subscriptions. Still, the number of broadband telephone subscriptions grew by only 0.6 million during the second quarter 2008, compared with about one million during the previous six quarters. At the same time, the number of dial-up telephone subscriptions (27.5 million at the end of the quarter) dropped 2.7 million over one year.

The proportion of fixed lines supporting only a “traditional” telephone subscription on the PSTN declined, though they are still a majority. They represented just 64% at the end of the second quarter compared with 75% a year earlier. Conversely, a growing number of lines have a subscription to a voice-on-IP offer in addition to or replacing the PSTN subscription. Voice-on-IP offers replacing a PSTN subscription, created by the operators (both alternative operators and the incumbent) on fully unbundled lines or “naked ADSL”, grew. So, 21% of fixed lines supported only a subscription to a telephone-on-IP service in June 2008 compared with 12% a year earlier. The number of subscriptions to telephony-on-IP offers in addition to the PSTN subscription also grew, but less strongly. This results in a slight increase in the proportion of lines on which two telephone subscriptions coexist, one on the PSTN and one on IP: it was 16% at the end of the second quarter 2008 compared with 14% a year earlier.

Revenues directly attributable to fixed telephony (revenues from subscriptions and calls) were close to €2.7 billion in the second quarter 2008 and dropped 1.9% over one year. At €1.5 billion, the “subscription” component represented close to 58% of these revenues. Despite the decline in the number of telephone subscriptions on the PSTN, revenues are balanced (+0.3% over one year in the second quarter 2008) in particular because of the telephone subscription tariff increase in July 2007. The share of revenues from telephone calls (excluding public payphones and cards) continued to shrink. Call revenues were down 3.4% over one year with €1.1 billion in the second quarter 2008.

Traffic originating on fixed phones (excluding public payphones and cards) reached 26.7 billion minutes in the second quarter 2008, and grew 5.4% over one year thanks to very strong growth in IP traffic (+47.6% over one year).

At 11.4 billion minutes, IP calls represented 42% of all traffic originating on fixed phones (compared with 30% a year earlier). IP telephony calls even represent the vast majority of international calls (63% IP minutes in the second quarter 2008). The share of long-distance calls to fixed phones (44% IP minutes) is also significant. Just 18% of minutes of fixed-mobile calls are made on IP.

Average monthly consumption of a telephony-on-IP service is two hours greater than that of PSTN telephony service (respectively 5 hours 10 minutes and 3 hours 5 minutes of calls per subscriber and per month in the second quarter 2008).

The number of Internet subscriptions reached 17.8 million at the end of the second quarter 2008, of which 93.3% (or 16.6 million) were accesses to high speed. The number of high-speed Internet accesses grew 2.5 million (+17.4%) in one year. This change marks a slowdown with respect to that observed a year earlier (3 million increase at the end of the second quarter 2007.

In June 2008, one-third of Internet subscriptions were based on unbundling (5.9 million at the end of the second quarter 2008), and primarily on fully unbundled lines (4.3 million).

Internet revenues rose 13.0% over one year in the second quarter 2008. It was €1.3 billion, of which 1.2 billion attributable to high-speed access. Revenues from dial-up declined at an annual rate of over 40% and are now marginal (2.3% of Internet revenues).

Mobile telephony

There were 56.0 million mobile telephony customers in France at the end of the second quarter 2008. Just over two-thirds (67%) of these customers have a flat-rate subscription. The growth in the number of customers reached 6.6% over one year in the second quarter 2008, or 3.5 million new customers. This rate of growth is comparable to that observed since the beginning of 2007.

Mobile multimedia services (access to mobile Internet, MMS) were used by close to 17 million customers during the quarter. Access to these services is rising thanks to 3G terminals and mobile networks (3G). So, the number of active users of 3G services (voice, video phone, mobile television, data transfer, etc.) reached 7.6 million at the end of the second quarter 2008, corresponding to 14% of mobile operator customers. In one year, this number rose by close to three million (+61.3%).

A full 301 000 numbers were ported in the second quarter 2008, almost twice as many as in the second quarter 2007.

Revenues from mobile services (telephony and data transfer) were €4.6 billion in the second quarter 2008. The annual growth rate of these revenues remains relatively high and has held at around 5 to 6% since early 2006 (+5.9% in the second quarter 2008). With €728 million in the second quarter 2008, revenues from data transfer services represented a growing share of mobile services revenues and have grown much more strongly than mobile telephony (+21.5% and +3.4% over one year, respectively).

Mobile telephony traffic represented 26 billion minutes in the second quarter 2008. After high annual growth rates in 2006 (around +15% over one year), this traffic saw a continuous and regular slump throughout 2007 before stabilising at an annual growth rate of about 4% (+3.5% over one year in the second quarter 2008) beginning in the fourth quarter 2007.

The traffic exchanged between mobiles on the same network (“on-net” traffic) stabilised at around 3 to 4% in annual growth (+3.0% over one year in the second quarter 2008) over the past year. The growth in the traffic to third-party mobile networks has been slowing since the beginning of 2007 (+6.5% in the second quarter 2008). The volume of calls to fixed phones has tended to stabilise over the past three quarters (-0.6% over one year in the second quarter 2008).

There were 7.8 billion interpersonnal messages sent during the second quarter 2008. For the third consecutive quarter, the volume of messages grew very strongly with respect to the previous quarter, bringing annual growth to 75.2%. Customers sent an average of 46 SMS per month in the second quarter 2008, compared with 28 a year earlier.

Other market components

Revenues from added-value services were €614 million in the second quarter 2008, changing little in the past two years. Revenues from “voice and telematic” services (75% of revenues from added-value services in the second quarter 2008) were down while revenues from data services (25% of revenues from added-value services) grew strongly (+34.4%).

The directory services activity is shrinking. Calls to directory services have been declining for the past two years. In the second quarter 2008, 31 million calls were received, 4 million fewer calls than a year earlier. Revenues generated by directory services (€39 million in the second quarter 2008) shrank by 7.8% over one year in the second quarter.

Revenues from electronic communications services sold by operators on the end market (excluding operators’ addition revenues) reached €10.1 billion in the second quarter 2008. Over one year, these revenues rose 3.9%.

Revenues from fixed network services (fixed telephony and Internet) were close to €4 billion in the second quarter 2008 and grew 2.5% over one year.

Revenues directly attributable to fixed telephony (revenues from subscriptions and calls), which have been shrinking for the past several years, declined 1.9% over one year. They were €2.7 billion in the second quarter 2008. Conversely, revenues from Internet services have been growing continuously (+13.0% over one year in the second quarter 2008) but the rate of this growth, which reached 27.5% a year earlier, has since slowed progressively.

Revenues from mobile services, which have been growing regularly by 5 to 6% for the past two years (+5.9% over one year in the second quarter 2008), were €4.6 billion, or 46.0% of all revenues from electronic communications services.

The volume of “voice” services (on fixed and mobile network) was 53.1 billion minutes in the second quarter 2008 and was up 4.0% over one year.

The volume of calls originating on fixed phones (27.1 billion minutes in the second quarter 2008) grew 4.5% over one year thanks to the rapid expansion of telephony-on-IP, which represented 42% of the volume of minutes originating on fixed phones compared with 30% a year earlier.

Mobile telephony traffic was close to 26 billion minutes in the second quarter 2008. Growth in mobile traffic has been holding at an annual rate of about 4% since the last quarter of 2007.

Dial-up Internet volumes have been declining for the past several years. The decline reached 39.5% over one year in the second quarter 2008.

The number of SMS sent during a quarter has been growing strongly for the past three quarters. In the second quarter 2008, it equalled 7.7 billion messages, or 3.3 billion more than a year earlier.

Clarification on the “fixed services” segment The fixed segment is composed of fixed telephony and Internet. By convention, the segmentation used in the Observatory covers all revenues from multi-service offers to Internet and includes only directly attributable revenues to fixed telephony revenues. The indicator for revenues directly attributable to fixed telephony services covers revenues from access fees and subscriptions to telephone service (PSTN and VoIP when invoiced separately from Internet service), revenues from calls made on fixed lines explicitly invoiced (PSTN and VoIP invoiced in addition to multiplay packages), revenues from public payphones and cards. Access to a voice-on-IP service and calls on IP, when included in the invoices for high-speed Internet packages, are not covered by this indicator: they are included in the “high-speed Internet access revenues” indicator and, more broadly, in the “Internet revenues” indicator.

Fixed network operators earned €1.1 billion in revenues on the intermediate market in the second quarter 2008. Revenues rose 4.4% over one year thanks in particular to growth in income from wholesale high-speed access services (unbundling, wholesale bitstream offers, etc.) which reached €432 million on the quarter (+17.5% over one year).

The contribution of earnings from the wholesale subscription offer helped to stabilise revenues from interconnection services related to telephone service which reached €707 million in the second quarter 2008.

At the same time, fixed operators’ interconnection traffic dropped 12.5% over one year, even as the retail market was growing (long-distance fixed and mobile-fixed traffic). The consolidation of the fixed market (merger between Neuf Telecom and Cegetel) begun in 2007, is probably the cause of this change.

The volume of mobile operators’ interconnection minutes rose 7.4% over one year in the second quarter 2008. Due to the decline in the wholesale mobile call termination tariff, introduced on 1^st January 2008 (13% declines for Orange France and SFR and 8% for Bouygues Telecom), revenues generated by mobile operators’ interconnection services (voice and data) declined 4.1% over one year (€993 million in the second quarter 2008).

Revenues and volumes from dial-up Internet interconnection services were marginal and declined rapidly, at an annual rate of over 40%.

Notes:
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There were 5.9 million unbundled lines at the end of the second quarter 2008 representing 17.0% of all fixed lines. Three-quarters of unbundled lines (4.3 million) are now fully unbundled and their number grew 1.4 million in one year. Full unbundling is now showing strong growth (+48.3% over one year in the second quarter 2008).

The number of partially unbundled lines (1.5 million at the end of the second quarter 2008) has been shrinking for the past two years.

At the end of June 2008, alternative operators had bought 1.1 million “naked ADSL” lines from the incumbent. The volume of these purchases rose by close to 75% over one year.

Revenues from operators earned €143 million from incoming international interconnection services in the second quarter 2008. The volume of traffic from abroad and terminating on French fixed networks is down slightly (-2.3% over one year in the second quarter 2008) whereas that terminating on French mobile networks rose 15.7% over one year.

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[1] This segment de market is un sous ensemble du market total (cf. 1.2.1)

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

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[2] This segment de market is un sous ensemble du market total (cf. 1.2.1)

Revenues from high-speed services (broadband fixed telephony and high-speed Internet) grew 20.4% over one year in the second quarter 2008. They represented 37.1% of revenues from services offered on fixed networks. Revenues from dial-up services on fixed networks (PSTN telephony, dial-up Internet) shrank 5.0% during the same period, as did other revenues such as public payphones, cards and additional Internet access revenues, down 16.0%.

There were 40 million subscriptions to telephone service at the end of the second quarter 2008. Annual growth in the number of telephone subscriptions (2.9% in the second quarter 2008) is based entirely on the development of broadband voice services.

There were 12.5 million subscriptions to a broadband telephony service (IP DSL or cable subscriptions) up 43.9% over one year at the end of the second quarter 2008, or close to one-third of telephone subscriptions. Still, this number grew by only 0.6 million during the second quarter 2008, compared with one million during the previous three quarters.

The number of dial-up subscriptions (on analogue or digital lines and on cable) has been declining for over three years. With 27.5 million subscriptions at the end of the second quarter 2008, this number was down 2.7 million over one year.

Resulting from the sale of wholesale telephone subscription offers, 820 000 subscriptions to telephone service on the PSTN (or 3.0% of these subscriptions) are now invoiced directly to customers by an altnerative 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“.

While most (64% at the end of the second quarter 2008) telephone lines host just one subscription to “traditional” telephony on the PSTN, a growing share of lines now supports a telephone-on-IP service. Operators can create these voice-on-IP offers on:
- fully unbundled lines or in “naked ADSL”. The customer only has a subscription to a voice-on-IP service and no longer a “traditional” telephone subscription on the PSTN. The proportion of these lines is growing constantly, and represented 21% of all fixed lines at the end of the second quarter 2008, compared with 12% a year earlier.
- partially unbundled lines or based on wholesale “bitstream” offers (excluding “naked ADSL”). In this case, the subscription to a voice-on-IP service is in addition to a PSTN telephone subscription, which the user keeps. The proportion of these lines is up slightly, in particular thanks to the development of wholesale telephone subscription offers. At the end of the second quarter 2008, 16% of lines in service supported two subscriptions to telephone service compared with 14% a year earlier.

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 bearer (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 over one year Internet access network with a bandwidth of more than 128 kbit/s and whose quality is controlled by the operator providing the service, and “Internet voice services” to mean voice call services using the public Internet network and whose quality is not controlled by the operator providing the service. The Observatory only records VoIP service calls which originate in the access layer. The indicators do not cover traffic which uses IP protocol solely in the core network. Furthermore, the Observatory does not take into account unregistered operators which offer PC-to-PC Internet voice services. These operators are not covered by the scope of the survey. Revenues 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, revenues recorded cover only the billed VoIP traffic (e.g. calls made on top of those included in a multiplay package).

During the second quarter 2008, 444 000 numbers where kept through “porting” between fixed telephony operators. This number is down -21.1% over one year.

Telephony offers based on carrier selection concerned 4.1 million customers at the end of the second quarter 2008, or 1.7 million fewer in one year. The decline in these offers has been continuous since the beginning of 2006, and is tending to accelerate, due to the replacement of these offers by telephony-on-IP offers or by offers including a telephone subscription.

The number of subscriptions to pre-selection (3.4 million at the end of the second quarter 2008) declined 1.2 million over one year. This number has been declining since the beginning of 2006, but at a faster pace of about -25% over the past year.

There were just 0.8 million subscriptions call-by-call selection offers at the end of the second quarter 2008, declining at a high annual rate of -30 to -40% since the end of 2006.

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.

Global access revenues (€1.5 billion in the second quarter 2008) held stable (+0.3% over one year) in spite of the decline in the number of “traditional” telephone subscriptions on the PSTN (down 9.0% over one year in the second quarter 2008) and corresponding revenues. Access revenues, which represented close to 58% of all revenues from fixed telephony services, are balanced in particular due the increase in France Telecom’s telephone subscription monthly fee (+6.7% at 1^st July 2007.

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

Revenues directly attributable to telephone calls from fixed lines were €1.1 billion in the second quarter 2008. These revenues declined 3.4% over one year primarily due to revenues from calls made on the PSTN (down 7.6% over one year in the second quarter 2008). Revenues from calls originating on IP access (€136 million in the second quarter 2008) were up 43.5% over one year. Still, since most IP calls are included in a high-speed Internet package, they are not counted in these revenues.

Note: Revenues from VoIP calls only include the charges billed by operators for such calls made in addition to 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) was up 5.4% over one year. It reached a total volume of 26.7 billion minutes in the second quarter 2008.

The volume of fixed long-distance calls, which represented over 80% of the total volume of calls made on fixed lines, continued to grow (+5.0% over one year in the second quarter 2008). While the volume of long-distance calls made on the PSTN was down (-13.5% over one year in the second quarter 2008), the volume of long-distance calls made on IP was up strongly (+44.6% over one year).

International traffic rose 25.2% over one year in the second quarter 2008. The development of this traffic is encouraged by the very strong increase in the volume of international calls made on IP (+70.7% over one year in the second quarter 2008), whereas traffic from international calls made on the PSTN declined 13.6% during the same period.

Note:
- While the volume of VoIP calls covers all of this traffic observed on the end market, revenue covers only invoiced VoIP traffic (for example in addition to a multiplay package).

a) Calls on the PSTN

The volume of minutes of calls originating on the PSTN was 15.4 billion minutes in the second quarter 2008 and declined 13.0% over one year. Revenues generated by these communications also declined (-7.6% over one year).

b) Calls on IP originating on fixed networks

The volume of calls originating on IP access represented 11.4 billion minutes in the second quarter 2008. In one year, IP traffic originating on fixed lines grew 47.6%. In the second quarter 2008, it represented 42.5% of the total volume of minutes originating on fixed phones compared with 30.3% a year earlier.

The rapid development of IP telephony in traffic originating on fixed networks is encouraged by the inclusion of so-called unlimited calling offers in “multiplay” packages, in particular for calls to national and international fixed phones. The share of IP telephony is therefore particularly notable for international calls where the proportion of IP traffic reached 63% in the second quarter 2008. A significant share of long-distance calls to fixed phones (44%) is also now being sent on IP, whereas just 18% of fixed-mobile call minutes are made on IP.

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

In seasonally adjusted data, after declining for several years, the volume of traffic originating on fixed phones has held firm for more than three years at a level of about 26 billion minutes. For the third consecutive quarter, it is at a higher level of 27 billion minutes in adjusted data.

The number of public payphones in service has been declining for the past three years by about 10 000 phones per year (or a 5.6% decline over one year in the second quarter 2008). Revenues and the volume of calls correspondants declined by -22.9% and -30.7%, respectively.

There were 17.8 million subscriptions to Internet access at the end of the second quarter 2008. High-speed access represented 93.3% of Internet accesses, or 16.6 million. The growth in the number of high-speed accesses remained strong in the second quarter 2008. In one year, 2.5 million new high-speed subscriptions were purchased, up 17.4% over one year. Still, this growth is slower than a year earlier (3 million increase at the end of the second quarter 2007).

Revenues from all Internet accesses were up 13.0% over one year in the second quarter 2008 and reached €1.3 billion (of which €1.2 billion attributable to high-speed access alone). The average monthly invoice for a high-speed Internet subscription (which has varied little in the past two years) was €24.20 excluding VAT in the second quarter 2008.

The number of dial-up Internet accesses has been declining for the past several years and, with 1.2 million at the end of the second quarter 2008, were down 36.4% over one year. The decrease in the volume of connection minutes and in the revenues generated by these dial-up connections is similar (about -40% over one year). The average invoice of a dial-up subscriber was €8.00 excluding VAT per month in the second quarter 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 revenues such as web hosting or revenues from online advertising. Income from the sale and rental of telephones and terminal equipment is included in the item “Sale and rental of telephones and terminal equipment by fixed operators and Internet service providers”.

There were 15.8 million Internet subscriptions via ADSL at the end of the second quarter 2008, or 2.4 million more than a year earlier.

Subscriptions to a television service via ADSL technology slowed slightly. There were 5.2 million subscriptions at the end of the second quarter 2008, up 1.4 million in one year.

Note: This indicator covers subscriptions, which 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, which are part of a “multiplay”, service package, that include access to one or more other services besides television (Internet, telephone service).

There were 56.0 million customers to a mobile telephony service at the end of the second quarter 2008. Just over two-thirds of these customers (66.9%) chose a flat-rate subscription.

The growth in the number of SIM cards has been holding at a relatively high level (close to 7%) since the beginning of 2007. It was 6.6% over one year in the second quarter 2008, representing an increase of 3.5 million customers.

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 messages are not covered by this definition) at least once in the past month, regardless of the type of bearer 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.

There were close to 17 million users of mobile multimedia services (access to “mobile Internet”, MMS services, etc.) in the second quarter 2008, for 15.7% growth over one year.

Services available on 3G mobile networks were used at least once during the second quarter 2008 by 7.6 million customers (or 14% of all of the mobile operators’ customers). Growth in the number of 3G users is strong, reaching 61.3% over one year in the second quarter 2008, and representing close to three million new customers.

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 dependencies.

In the second quarter 2008, the number of ported mobile numbers reached 301 000, almost twice the number in the second quarter 2007. The number of numbers ported from one operator to another duing a quarter has grown strongly since the implementation of a simplified mobile number portability procedure on 21^st May 2007.

Revenues from mobile services (telephony and data transport) were €4.6 billion in the second quarter 2008 and rose 5.9% over one year. The annual growth in revenues from mobile services has been holding at a relatively strong rate of 5% to 6% since the beginning of 2006.

Revenues from data transfer services on mobile networks (personal messaging services, mobile Internet and multimedia services) were €728 million in the second quarter 2008. Although these revenues still represented just 15.7% of revenues from mobile operators, their growth (+21.5% over one year in the second quarter 2008) is faster than that of mobile telephony (+3.4% during the same period).

Note: Following changes in accounting methods, certain revenues which were previously included with data transfer revenues, are now included with mobile operators’ “data” added-value services revenues, in accordance with the Observatory definition. The data in the table below take these corrections into account.

The volume of traffic originating on mobiles represented close to 26 billion minutes in the second quarter 2008. Following strong growth (around 15%) throughout 2006, the annual growth rate of traffic originating on mobiles slowed sharply throughout 2007 (falling from 8.6% at the start of the year to 3.9% in December). This rate has since stabilised at around 4% (+3.5% over one year in the second quarter 2008).

The slowdown in the growth of traffic volume observed in 2007 is due primarily to the slowdown in the growth of the volume of calls made between mobiles on the same network (“on-net” traffic). Indeed, the growth rate of “on-net” traffic declined in 2007, stabilising at around 3% to 4% since the beginning of 2008. The “on-net” volume which includes calls to voice messaging and operators’ short numbers (about 9% of this volume), represented over half of the volume of traffic originating on mobiles.

The volume of mobile calls to fixed telephones is tending to stabilise. While this volume had declined by close to 5% over one year in early 2007, the decline in the volume was less than 1% during the past three quarters (-0.6% over one year in the second quarter 2008).

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

Mobile operators’ customers sent 7.8 billion interpersonal messages (SMS and MMS) during the second quarter 2008, for an increase of one billion during the quarter for the third consecutive quarter. This very strong growth in interpersonal messaging is propped up largely by “unlimited texting” offers proposed by mobile operators. It reached +75.2% over one year in the second quarter 2008. Growth is as strong for customers having flat-rate packages as for those using pre-paid cards.

A customer sends 46 SMS per month on average, or 18 more messages than a year earlier. A customer having a flat-rate package generally has a higher level of consumption than a customer using a pre-paid card (54 SMS and 29 SMS per month, respectively).

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

Note: Following changes in accounting methods, certain revenues which were previously included with data transfer revenues, are now included with mobile operators’ “data” added-value services revenues, in accordance with the Observatory definition. The data in the table below take these corrections into account.

Revenues from added-value services (€614 million in the second quarter 2008) were up slightly (0.6% over one year). Revenues from “voice and telematic” services still represented 75% of these revenues but are slipping (-7.2% in the second quarter 2008). Revenues from data services have been growing strongly and progressively (+34.4% in the second quarter 2008) and now represent 25% of revenues from added-value services.

During the quarter, 1.2 billion calls, generating a volume of traffic of 3.1 billion minutes, were made to “voice and telematic” services. Over 86% of calls and of the volume of minutes to these services originated on fixed phones.

* 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, ringtone downloads, etc.

Revenues from telephone directory services were €39 million in the second quarter 2008. After declining regularly throughout 2007, the annul growth rate in telephone directory services revenues has been negative since the beginning of 2008 (-7.8% in the second quarter).

The volume of calls to directory services numbers, 31 million calls in the second quarter 2008, also fell (-11.9%.or 4 million fewer calls over one year). Calls made on mobile networks generated 68.3% of minutes of calls to directory services.

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

Revenues from leased lines, which have been stable for several quarters, were €358 million in the second quarter 2008. Revenues from sales with other operators represented €203 million or 56.6% of revenues from leased lines. Data transfer revenues reached €464 million in the second quarter 2008 and grew 4.6% over one year.

Note: Revenues 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 revenues

Revenues from terminal sales and rentals reached €671 million in the second quarter 2008 and grew 5.5% over one year. Sales by mobile operators (€458 million in the second quarter 2008) represented 68.2% of these revenues.

Note: Revenues from terminals and equipment include commissions to distributeurs.

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 revenues, including roaming-out, excluding revenue 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 revenues, or those from value-added services, is not the same as the traditional Average Revenue 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 revenues) 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 in addition to 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]

Further information about indicators per customer With the growing use of broadband voice services as a second line, it is no longer very useful to use average revenue per subscription as an indicator. In fact, a large number of households now have a second telephone service subscription, usually a VoIP service, but this doesn’t mean that they make twice as many calls. Consequently, the average volume of traffic and average bill per subscription is, naturally, lower. In order to obtain a clearer picture of the indicators reflecting customers’ usage of telephone services and their average expenditure, the concept of what constitutes a “line” has been redefined. Until 2004, the terms “line” and “subscription” were used interchangeably when referring to the number of subscriptions to telephone services. In the case of telephony over analogue lines, a subscription corresponded to a fixed line. It was accepted practice, in the case of digital lines, to take the number of channels subscribed for as the number of fixed lines, i.e. two for BRI lines and up to 30 for PRI lines. In practice, the business customer pays as many monthly line rental charges as the number of channels subscribed for, i.e. two for BRI lines and up to 30 for PRI lines. This convention has been retained. With the implementation of broadband voice services, operators can provide an IP telephone service over an analogue line which is already used for a PSTN telephone service. In order to facilitate comparisons over time, the number of “lines” indicator has been defined as: - for digital lines: the number of channels subscribed for, i.e. two for BRI lines and up to 30 for PRI lines; - for analogue lines:   - the PSTN subscriptions                                      - the xDSL line subscriptions without a PSTN subscription; - for cable telephone service subscriptions: the subscription As far as revenues are concerned, the number of multiservice packages is constantly growing. These include the possibility of making unlimited calls to national fixed lines and to certain international destinations with no additional charge. Consequently, the overall bill covers an increasing range of services, regardless of the number of calls made (as also happens with mobile services). Internet access and telephone services are becoming increasingly inseparable. The average bill per line reflects what the customer pays per month for both telephone service and Internet access. Revenues taken into account are: - revenues from service subscription charges and supplementary services - revenues from calls made from fixed-line telephones, including IP calls made in addition to the multiplay inclusive package - revenues from dial-up Internet access and broadband Internet access. The following are not taken into account: - revenues from payphones and phone cards; - revenues from other services linked to the Internet access, which correspond to the ISP revenues from online advertising and commissions paid to the ISPs in relation to online trading; - revenues from value-added services and information services. Average bill and average volume per customer, ARPU or AUPU – how do they differ? The market Observatory publishes indicators for the average monthly bill per subscription for fixed telephony, mobile telephony and Internet. These indicators correspond to the average subscription and call charges (voice and data) billed by operators to customers. Revenues from interconnection (incoming calls) are not taken into account. These indicators are not the same as the ARPU (Average Revenue Per User) figures which generally correspond to the operators’ revenues from all income related to the use of the network. For instance, in the case of mobile operators, the ARPU includes revenues from outgoing calls, data services and value-added services as well as revenuese from incoming calls (interconnection). It may or may not include revenue from roaming, depending on the operator. The Observatory also publishes indicators for the average monthly outgoing traffic per customer, representing the use consumers make of their telephone. As with the ARPU, the indicator of average traffic per customer or AUPU (Average Usage Per User) is used by certain financial firms and the operators. It covers some or all of the incoming calls in order to create a figure for volume which is comparable to that used for the ARPU. It does not represent the average usage per customer and is considered rather as an indicator of the operator’s volume of business per customer.