French network Orange has been fined a record €26million by the telecoms regulator for its failings in the rollout of France’s fibre optic network.
The regulator, l’Autorité de régulation des télécoms, or Arcep, ruled on October 8 that the network had not met requirements in the deployment of the new service.
This is the highest-ever fine issued by Arcep, five times higher than the €5million fine handed to Numericable in 2011. Arcep has not detailed how it determined the level of fine.
The case dates to March 2022, when Arcep first criticised Orange for perceived failings in its obligation to provide fibre coverage in areas where private companies are supposed to pay for the fibre rollout.
These areas are referred to by the acronym AMII, for appel à manifestation d’intention d’investissement, or call for intention to invest.
The AMII areas covered 13 million properties in a ‘medium-density’ area. In 2018, Orange said that it would connect 92% of properties in these areas by the end of 2018, and connect the remaining 8% within the following six months.
However, Arcep said that the commitment to connect the remaining 8%, which concerns 543,000 properties, was not fulfilled.
‘Totally disproportionate fine’
Orange, which is contesting the fine, says it will take the issue to the Conseil d’Etat (France’s supreme court).
The company disputes Arcep’s fine penalising it for the last 8% of properties saying it fails to account for the successful connection of the other 11.31 million properties within the zone.
In a statement, Orange said: “[We] regret that Arcep has chosen to hand a totally disproportionate financial sanction to the operator that invests the most in fibre deployment in France.
“The fine imposed by Arcep could reduce the investment in fibre rollout, to the detriment of households waiting to be connected,” it said.
The company added that the fine of €26million is “how much it costs to connect a town the size of Caen”.
Orange said that the timing of the fine was especially harsh given that the network had announced a draft agreement to speed up the rollout of fibre the day before (November 7) with Minister for Digital Technologies Jean-Noël Barrot.
But the president of Arcep, Laure de La Raudière, has said that the regulator is only following its investigation and penalty timetable, and that the timing of the fine was a coincidence.
‘Connection obligation still valid’
Ms de La Raudière said that the obligation to cover the AMII area is still in place, and that only 88% of the area is currently connected despite Orange's commitment to a 100% connection.
“This penalty is not the end of the matter,” said the president. “This obligation is still valid.”
The agreement with Mr Barrot could ease some of the pressure on Orange as it provides for the connection of an additional 1.12 million properties, bringing fibre coverage up to 98.5%. It has also extended the deadline to the end of 2025.
This new agreement states that Orange is not obliged to connect the 1.5% of properties that are most difficult - and therefore costly - to cover. This will save the company millions of euros.
However Arcep is set to make another ruling on this latest agreement, which could see it overturned.