Unbundling capitation stifles innovation
Iliad Telecom boss Xavier Niel claims his telco is effectively being punished for making a bigger commitment to upgrading its network technology than any other competitor. Niel told a French senate committee hearing this week that challenger telco Iliad has re-invested a significantly higher proportion of its revenue into laying new fibre, among other things.
In return the telco has been threatened with punishment by demands from Orange France for an increase in unbundling fees for its copper network. Orange has also called for the closure of the legacy network to be expedited, according to Digital TV Europe.
Increasing costs?
If Orange is allowed to increase the cost of unbundling there will be two effects according to Niel. Risk averse telcos would be dissuaded from committing to more investment and the take-up of fibre in France would be slowed.
The controversy came as Orange called for an increase of €2 in the regulated unbundling fee, much higher than the €0.39 recently permitted by regulator ARCEP. Niel said that increasing the cost of accessing copper effectively maintains Orange’s monopoly in regions without real competition.
Need for more speed
He also said that ARCEP should force the pace on the closure of the copper network, describing the conditions currently imposed on the incumbents as “not satisfactory”. Niel said that any increase in the fee for unbundling would make the situation worse.
His intervention follows a spat last year between Orange CEO Christel Heydemann (pictured) and the regulator over what Heydemann considered to be an unfair threat of a sanction over delays in the deployment of Orange’s fibre network.
Heydemann had also contended that ARCEP’s resistance to allowing an increase in unbundling fees meant it was impossible for Orange to make a return given increases in the cost of maintaining the copper network.