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SFR and Orange France’s 3G Coverage Obligations

3rd July , 2006

Europe France : ARCEP reports today on the verification procedure for the UMTS roll-out obligations of the operators Orange France and SFR, which has been underway since December 2005.

Under a decree dated 18 July 2001, Orange France and SFR were authorised to establish and operate a public third-generation radiocommunication network and to provide public telephone service.

Because of the significant gap between the technical and economic reality and the forecasts made when the UMTS frequencies were allocated, ARCEP revised Orange France and SFR’s coverage and commercial launch obligations in March 2004: both operators had committed to launching their UMTS services by the end of 2004 and to cover 58% of the population by 31 December 2005.

UMTS has taken off in France since its launch in late 2004

SFR and Orange France launched their third-generation mobile networks commercially in late 2004. With over two million 3G customers, France is in step with the 3G development movement in Europe, where the UMTS Forum estimates there are over 38 million UMTS customers. This period has also seen a great increase in the use of multimedia services, and mobile video and television services in particular.

SFR and Orange France have respected their roll-out deadline of end 2005

Thanks to the significant efforts made by SFR and Orange France to roll out UMTS, they were able to respect their commitments made in 2004 and to develop 3G mobile telephony in France. Indeed, in early 2006, SFR reached coverage of 60% of the population and Orange France 58% of the population. This coverage allows the operators to offer all the services made possible by UMTS, up to 384 kbps for downlink and 64 kbps for uplink: telephony, videophony, SMS, MMS, television, file transfer, etc.

New commitments for 70% coverage

Now that this initial roll-out phase is complete, 3G coverage will continue to spread in coming years. Indeed, both operators have committed to covering 70% of the population. It will be by the end of 2007 for SFR, and by the end of 2008 for Orange France.

ARCEP will also check Bouygues Telecom’s roll-out obligations: in 2005, it committed to opening its 3G service in April 2007 with coverage of 20% of the population.

Continuing 3G roll-out: a major issue for regional development

The roll-out of 3G must go even further. Access for all residents to 3rd generation mobile services is a critical factor for regional development. The higher speeds offered by the new generation of mobile telephony are the foundation for the development of innovative services and multimedia services. ARCEP considers that the medium-term coverage goal of offering 3G services to as many users as possible must be attained.

The technology has made significant gains since UMTS licences were issued in France. One of the most remarkable advances concerns the increase in speeds, thanks to the HSDPA technology (High Speed Downlink Packet Access), which makes downloading speeds of 1.8 or even 3.6 Mbps possible for each user. In addition, HSUPA (High Speed Uplink Packet Access) will increase speeds available for uploading.

The need for low frequency bands

Because of their better propagation and penetration inside buildings, low frequency bands will have to be used to expand 3G coverage. This could be made possible in at least two ways:

- reusing the GSM 900 MHz bands

- identifying low frequencies made available through the planned disappearance of analogue television (the "digital dividend")

Orange France and SFR’s GSM authorisations include the possible reuse of the 900 MHz bands for UMTS. Both operators have shared with ARCEP their desire to take advantage of this possibility.

In conformity with their authorisations, ARCEP will launch a public consultation on this subject in the Fall. The consultation will aim to determine whether the distribution of the 900 and 1800 MHz bands will have to be redefined in order to guarantee the frequencies are distributed equitably among all 2G and 3G mobile network operators. Thus, the market will be surveyed once more on its interest in the fourth UMTS licence which is still available. ARCEP will then take necessary decisions on the future allocation of corresponding frequencies based on the interest expressed.

Moreover, the freeing of a coherent and harmonised digital dividend at the European level is critical for the development of very high speed wireless systems. In this respect, ARCEP is pleased that on 4 May 2006 the President of the Republic created a Strategic Committee for Digital Issues (Comité Stratégique pour le Numérique).

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