French Telecom loses monopoly status

The French government is to strip France Telecom of its monopoly status, in a move toward the wholesale deregulation of the domestic telecommunications market.

In a bill to be introduced in the French parliament next month, the government plans to open the market to an unlimited number of private competitors, under the supervision of an independent regulator.

The move comes in advance of the 1 January 1998 deadline set by Brussels for wholesale liberalisation of telecommunications throughout the European Union.

Introducing the bill yesterday, the telecommunications minister, Francois Fillon, stressed the benefits to consumers from deregulation, citing the fall in prices and proliferation of services in Britain and Sweden. He anticipated that prices in France could fall by more than 30 per cent after deregulation.

The radical deregulation follows a controversial decision, announced last month, that France Telecom will be least 51 per cent state-owned, even after 1998 - a concession seen at the time as a transparent attempt to reassure the company's powerful trade unions.

Publication of the new Bill so soon after apparently shelving plans for the privatisation of France Telecom suggests the government may be following a long-term strategy designed to make privatisation inevitable down the road.

Faced with full competition for the first time, the state operator could start to lose customers, and be forced to shed jobs on a massive scale. That might encourage it to seek privatisation of its own accord in order to compete.

Media upheavals, page 26