Telecoms: 15 billion euros of investment in France in 2021

The French telecoms market continued to grow in 2021. The amount of investments by operators, excluding frequency purchases, reached 14.9 billion euros, an increase of 10.9% (1.5 billion euros ) within a year. This figure rises to 15.5 billion by integrating the 664 million put on the table to buy frequencies in the 900 MHz, 1800 MHz and 2.1 GHz bands reallocated last year. This is what emerges from the annual report of the Observatory of electronic communications markets in France carried out by the Regulatory Authority for Electronic Communications, Posts and Press Distribution (Arcep).

In detail, most of these investments come from deployments in very high-speed fixed and mobile local loops, which represent 8.5 billion euros invested, i.e. 910 million more compared to 2020. Optical fiber and 5G contributed to this increase. These investments have thus made it possible to bring the total number of Internet accesses to 31.5 million in France, of which 58% are very high speed.

The number of fiber internet subscriptions higher for the first time than those in DSL

Of these very high-speed accesses, 14.5 million are end-to-end fiber optics, or an additional 4.1 million in one year. This acceleration in the deployment of optical fiber has enabled subscriptions on FttH networks (Fiber to the Home, fiber to the subscriber) to exceed for the first time the number of subscriptions on DSL (14.4 million). And for good reason, while optical fiber is rapidly gaining ground, broadband subscriptions on the copper DSL network are decreasing at an accelerated pace (-2.9 million in 2021, compared to -2.5 million in 2020).

This phenomenon should increase further in the coming years when Orange will stop its investments in its aging network of copper telephone lines, on which are based the xDSL technologies still used by a majority of French people. The dismantling of its historic network must be completed in 2030. This will be one of the projects to be carried out for Christel Heydemann, general manager of the group since April 4.

36.1 billion euros in revenue in 2021 for operators

This increase in investments in very high-speed networks is accompanied by an increase in the prices of fixed services for the second consecutive year, up to 5% in 2021. It is with the offers on DSL technologies that the increase is the strongest (+7%), ahead of the prices of fiber offers (+4%). Despite this price increase, their level remains lower than that observed in 2018, just before they fell sharply. As for the prices of mobile services, these are fairly stable (+0.6%). “The fall in prices for services with terminal subsidization offsets the rise in prices for non-subsidized offers”notes Arcep.

As regards mobile services, the number of 4G network users (66.1 million) now represents 82% of the 80.4 million SIM cards in service in France. These customers active on 4G networks, whose number is gradually converging towards the number of active cards on 3G networks (67.7 million), consumed 12 GB per month on average, an increase of approximately 1 GB per consumer per compared to 2020. On the other hand, 5G is still very much in the minority since it only has 3 million users in France, or barely 4% of active SIM cards.

In a context more favorable to investment and consumption, operators captured 36.1 billion euros in revenue in 2021, up 2.5% year on year. After a year 2020 heavily disrupted by the health crisis, the mobile market, which had seen its growth melt to 1% with the drop in usage abroad due to travel restrictions, has picked up again. Revenue from mobile services has thus increased by almost 5% in 2021.

Similarly, revenue from the sale of terminals, down 7% in 2020 due to the closure of points of sale for several months, recovered with growth of 7% over the past year. . As for revenues from fixed services, they remained stable (+0.6%). However, the sale of high and very high speed subscriptions showed a more pronounced increase, up 4% over one year.

Optimal 4G before switching to a 5G eagerly awaited by companies

After this year 2021, marked in particular by the withdrawal of Iliad from the Paris Stock Exchange and the consolidation of the market of virtual mobile operators (MVNO) with SFR and Bouygues Telecom, many projects must be carried out in 2022 and beyond on the French telecom market. In particular, there is the acceleration of the deployment of fiber to make it the reference infrastructure of the fixed network, as well as the continued implementation of the “New Deal” concluded in January 2018 between the government, Arcep and the four mobile operators (Orange, SFR, Bouygues Telecom and Free) to generalize 4G coverage throughout France. If the population is now almost 100% covered, the challenge now is to improve the quality of the network, as well as to ensure the coverage of the railway axes in 2025, with coverage inside trains for all operators in 2030.

Optimal 4G coverage will make it possible to focus fully on the deployment of 5G with 10,500 sites deployed by each operator by 2025, compared to 3,000 this year. This will make it possible to prepare for the arrival of the 26 GHz bands which will offer speeds never before achieved in terms of mobile connection. These frequencies are particularly eagerly awaited by companies, while France is still far from the account on industrial 5G.

At the business level, Arcep has also wanted stronger competition for several years in a market very largely dominated by Orange Business Services, which imposes its law with a 70% share, very far ahead of SFR Business (20%). But the landscape could change in the coming years as Iliad kicked in the anthill in 2021 with the launch of Free Pro, its non-binding fiber offer for businesses.

Beyond the deployment of 5G, essential to switch to industry 4.0, Arcep wants to anticipate the next structural changes in the sector. In this context, the organization headed by Laure de La Raudière launched this May 23, 2022 a public consultation on the future of mobile networks, in particular the allocation of new frequencies for services.