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Fédération Française des Télécoms
French Telecoms Economics 2021
Final report
11ème édition
2
FrenchTelecoms Economics 2020
The global digital ecosystem has been growing steadily throughout the crisis,
with however limited gain for EuropeanTelecoms
01
02 French telecom operators continue to invest despite the pandemic in order
to support usage development
3
FrenchTelecoms Economics 2020
The global digital ecosystem has been growing steadily throughout the crisis,
with however limited gain for EuropeanTelecoms
01
02 French telecom operators continue to invest despite the pandemic in order
to support usage development
4
The global digital ecosystem continued to grow during the pandemic,
driven by Internet players
Source: Thomson Reuters Eikon, Arthur D. Little
Note: 1) Panel of 180 companies: By sector, selection of the top 30 companies in 2020 by their turnover, 2) Constant 2020 Euros.
3) As Huawei (Devices) and Altice-SFR (Telecoms) are not listed, revenues were added to the panel of 180 companies in the sample
Telecoms in the global digital ecosystem
Example of players
Digital ecosystem revenue1
World, 2011-2020, billion euros2
+5%
+2%
+5%
+5%
+26%
+4%
+1%
+1%
+2%
+5%
+27%
+1%
2011-20 2019-20
Annual growth
+6.6% +6.3%
915 933 957 983 1 027 1 109 1 136 1 206 1 241 1 254
163 177 178
1 003 1 166 1 184 1 175
1 291
1 276
1 402
1 544 1 564 1 602
395
416 425 452
462
474
488
546
589 621
164
167
189
212
235
261 263
117
146 177 220
270
351
464
599
730
931
Telecom
Operator3
2013
143
2011
154
124
158
Internet
2012
159
153
124
4 849
3 356
Network
Equipment
2017 2020
138
2015
2014
3 118
2016 2018
158
2019
128
4 294
Content
IT / Software
Devices3
4 562
2 943 3 020
3 555
3 861
2 737
5
The European digital ecosystem currently grows faster than GDP, but still
slower than the global digital ecosysteme mondial
Source: Thomson Reuters Eikon, World Bank, Arthur D. Little
Note: 1) Panel of 180 companies: By sector, selection of the top 30 companies in 2019 by their sales in 2020, 2) In constant 2002 euros, within the perimeter of the countries
considered in the digital ecosystem (representing 75% of world GDP, or 70% of European GDP for European data.
Telecoms in the global digital ecosystem
+7%
+2%
Digital ecosystem revenue growth1 vs. economy
World, 2011-2020, base 100 in 2011
+1%
0%
2011-20
(average)
2019-20
Annual growth
+6%
-9%
+3%
-7%
119
177
103
80
90
100
110
120
130
140
150
160
170
180
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
108
Global GDP2
Global digital
ecosystem2
European GDP2
European digital
ecosystem2
6
Since 2011, the revenue from European telecom operators has grown
slower than for Asian and American operators
Source: Thomson Reuters Eikon, Arthur D. Little
Note: 1) Region based on head office localisation, 2) Panel of 180 companies: By sector, selection of the top 30 companies in 2020 by their turnover, 3) Constant euros 2020
4) Including top 30 players except Asia, North America and Europe (Oceania, Middle-East, Africa and South America)
Telecoms in the global digital ecosystem
Telecom operators revenue by region1,2
World, 2011-2020, billion euros3
+3%
+5%
-3%
0%
+6%
+1%
+4%
+3%
2011-20
(average)
2019-20
Annual growth
+4% +1%
295 278 270 272 290 300 307 293 295 309
282 295 303 317
338
368 379 405 426 414
275 295 317 323
324
362 369
426
438 450
63 65 66 71
75
79
81
82
81 81
957
2012
2011 2014
1 241
2015
2013 2018
2016 2017
1 254
915
2019 2020
Other4
Asia
North America
1 109
Europe
933
983
1 027
1 136
1 206
7
FrenchTelecoms Economics 2020
The global digital ecosystem has been growing steadily throughout the crisis,
with however limited gain for EuropeanTelecoms
01
02 French telecom operators continue to invest despite the pandemic in order
to support usage development
8
Telecom operators play an essential role in the development of the
French digital ecosystem
Source: Thomson Reuters Eikon, Diane, Annual Reports, Arthur D. Little
Note: 1) Reported or estimated revenues in France or documentary research, 2) Data adjusted to take into account the estimated effective revenues of international players in France,
3) Corporate income tax and similar taxes and payments - excluding fines/agreements/adjustments paid by Internet players; 4) Based on gross investments (excluding asset disposals) 5)
Netflix revenues calculated on the basis of the number of subscribers reported. 6) EIT consolidated with BT from April 2021
Telecoms in France and comparison with other countries
Revenue1,2 Direct employment
Investment4 Taxes2,3
Contribution of main players to the French digital ecosystem
France, 2020 (vs. 2019)
y compris filiales
81%
12%
4%
1%
78%
8%
2%
7%
4%
71%
7%
12%
8%
3%
47%
13%
11%
24%
5%
98 Bn€
vs. 44%
in 2019
vs. 80%
in 2019
vs. 70%
in 2019
vs. 81%
in 2019
11 Bn€ 157 000
jobs 3,2 Bn€
5 content providers5 5 internet players
5 Telecom operators6 5 network equipment
& services providers
5 connected device
OEM
9
Telecom prices continue to decrease while other regulated sectors tend
to increase their prices
Source: INSEE, Arthur D. Little
Telecoms in France and comparison with other countries
Consumer prices evolution for a selection of essential services
France, 2011-2020, Base 100 in 2011
141
156
110
110
108
54
50
60
70
80
90
100
110
120
130
140
150
160
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Postal services
Electricity
City gas
Passenger rail transporation
Inflation
Telecommunication services
10
Prices of telecom services in France are among the lowest in major
Western markets
Source: Operator sites, Arthur D. Little
Note: 1) Triple play offers only; unlimited telephony at least to landlines; unlimited broadband Internet via xDSL or fiber; television included, excluding additional packs; operators
with market share > 10% excluding promotions, 2) Unlimited calls (when available otherwise >500 minutes), unlimited SMS/MMS, Internet at least 50 GB; offers without terminal,
offers without commitment when available; operators with market share > 10%.
Telecoms in France and comparison with other countries
Price benchmark from leading operators
Country selection, September 2020, € / month (inc. taxes)
Fixed (Triple Play)1 Mobile2 Benchmark
Mobile 50 Gb
Excluding promotions and connection fees
By country, selection of the most competitive package among operators with over 10% market share
14€ 14€ 17€
22€
36€
45€
68€
0,0
0,5
1,0
1,5
2,0
2,5
3,0
0
10
20
30
40
50
60
70
80
90
100
0,17€
1,36€
0,28€
0,17€
0,44€ 0,36€
0,75€
15€
25€ 30€ 31€
44€ 45€
94€
0
10
20
30
40
50
60
70
80
90
100 Price per Gb
11
Investment in telecom infrastructure continuously increases and reached
11.5 Bn€ in 2020
Source: ARCEP, Arthur D. Little
Note: 1) Investment of the entire telecom sector in networks (telecom service operators and other private players), excluding purchases of mobile frequencies
Telecoms in France and comparison with other countries
Investment in telecom networks1
France, 2011-2020, billion d’euros
Mobile networks
Fixed networks
88 billions €
(97.3 billions including spectrum frequency acquisition)
+ 9,1 billion €
spectrum
purchase over
the period.
0,9 in 2011
2,6 in 2012
2,8 in 2015
2,8 in 2020
5,0 4,9 4,7 4,7 5,5 6,4 6,5 7,0 7,8 8,3
2,3 2,5 2,6 2,4
2,3
2,7 3,3 3,2
2,9
3,2
9,1
2011 2017
2014
11,5
2012 2013
10,7
2016
2015
9,8
2018 2019
7,3
2020
7,3 7,4 7,1
7,8
10,2
Investment phase
includingVery-High
Speed fixed broadband
12
The telecom industry represents the largest private investor in
infrastructures in France
Source: Companies, Documentary Research, Arthur D. Little
Note: 1) Telecoms: ARCEP figures (excluding purchase of frequencies); Electricity: ERDF; Railway: RFF; Motorways: ASFA (Sanef, SAPN, ASF....)
Telecoms in France and comparison with other countries
Investment1 fromTelecom versus other Infrastructure industries
France, 2016-2020, 5 years annual average, billion euros
équivalent
aux
investissements
suivants, chaque
année…
ou
15 500 energy renovation
of buildings
ou
ou
ou
126 Hospitals
800 Schools
2 236 Wind turbine
(x2 vs. current state)
4 millions of bike-sharing bikes
(x190 vs. current state in France)
1,5
4,7
6,1
10,2
Electricity
networks
Highways Railways Telecom
11,5 Bn€ in 2020
For the 2nd successive year, investments
in telecom infrastructure crossed
the 10 Bn€ threshold.
13
The continuous investment provides a state-of-the-art infrastructure
connecting all French people
Telecoms in France and comparison with other countries
Source: ARCEP, operators, Arthur D. Little
Note: 1) Consumption by active 4G card
11Gb monthly usage per user threshold
crossed early 2021
Generalization of very-high
speed internet
57%
New milestone in household passed in
low density areas in 2021
Deployment of FttH fiber x3 in three years in
less densely populated areas
XX
Rise of mobile data
Accelerated fiber
deployment
National connectivity
Low density
areas
Medium density
areas
High density
areas
18,7
31,0
T2 2018 T2 2021
5 6
5
14
7
27
T2 2021
2
T2 2018
12
6.6 Gb
T2 2021
T2 2018
11.6 Gb
Equivalent of 15h of
Netflix video (3,5h
HD)
45 63 35%
Average 4G data consumption1
Monthly average
Premises eligible to very high-speed
internet offers - Million premises
Number of premises eligible for FttH in millions
% of eligible premises
Number of 4G SIM cards (millions)
14
Investment effort of French telecom operators is amongst the most
important ones in Europe
Source: Annual Report, Arthur D. Little
Note: 1) Turnover and CAPEX of telecom operators with a fixed or mobile market share >10%.
Telecoms in France and comparison with other countries
Largest investment effort in Europe Largest Fiber deployment in Europe
Investment effort rate per country (CAPEX1/Revenues1)
United Kingdom, France, Spain, Germany, Italy 2020
Number of premises connected in FttH/B over 12 months
Selected European countries, Sept 2019 - Sept 2020, millions of premises
20,4%
13,1%
14,5%
20,2%
16,7%
66€/hab 136€ /hab
96€/hab
129€/hab 86€/hab
4,6
2,8 2,7
1,7
0,5
UK
Germany
Italy Spain
Ø 2,5
+87%
vs. average
x€/hab CAPEX/Habitant
CAPEX/Revenues
15
Telecom investments keep increasing and have reached their highest level
in 10 years
Source: Arcep, DARES, Insee, Arthur D. Little
Note: 1) Telecom players investment (excluding spectrum purchase) / revenues, 2) provisionnal Arcep data for 2020,
3) Arcep data, 4) Arcep data including a part of direct employment, 5) provisionnal Arcep data for 2020
Telecoms in France and comparison with other countries
Employment, revenues and investment of Telecom players in France
France, 2011-2020, base 100 in 2011
Revenues5
Direct employment3
Average annual
growth
2011-2020
- 2,4 %
- 2,7 %
Ecosystem
employment4
- 2,1 %
Investment
(excl. Spectrum purchase)2
+ 7,4 %
Investment1
+ 5,2 %
Annual growth
2019-2020
- 2,1 %
- 3,2 %
- 0,4 %
+ 8,6 %
+ 8,1 %
78
80
83
158
191
60
70
80
90
100
110
120
130
140
150
160
170
180
190
200
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
16
The taxation level for telecom operators remains stable while it decreases
for other players of the digital ecosystem
Source: Diane, Annual Reports, Arthur D. Little
Note: 1) Corporate income tax and similar taxes and payments - excluding fines/agreement/adjustments paid by Internet players between 2018 and 2020, 2) Revenue declared in
France or documentary research, 3) Data adjusted to take into account the estimated effective revenue of international players in France.
Telecoms in France and comparison with other countries
5,7%
0,2%
5,8%
4,7%
0,2%
5,6%
0,2%
2,8%
3,7%
0,2%
Telecom operators Devices Network equipment Content Internet
-0.1pts
+0.1pts
-2.9pts
-1.0pts
-0,1pts
2015 2020
Taxation level1 as a proportion of revenue2,3
For main players in the French digital ecosystem, 2015 vs 2020
y compris filiales
17
2020
The taxation specific to telecom operators represents a major part of
their overall taxation
Source: telecom players, Fédération Française des Télécoms, Arthur D. Little
Telecom operators taxes
France, 2020, million euros and split per tax
2020
1 145
(45%)
1 416
(55%)
2 561
Specific tax
Corporate
tax
Telecoms in France and comparison with other countries
1 145
455
219
240
208
112
175 8
IS
IFER mobile (antenna)
IFER fixed
TOCE (France TV)
Fréquences + FH
COSIP (CNC)
Private copying levy
VOD
18
France pursue its investments and aim for a global top 10 ranking on the
network readiness index by 2030
Source: World Economic Forum, Arthur D. Little
Telecoms in France and comparison with other countries
…to be coordinated with public authority
◼ Generalize optical fiber
◼ Encourage high speed mobile network (4G and 5G)
Progress and ambition…
Network readiness index*
France progressed on the following criteria:
Pursue infrastructure deployment
1
Reduce deployment constraints
2
Develop usages
3
Criteria 20 vs.15
Technology 18 +8
Governance 15 +11
People 20 +4
Impact 12 +11
2010-2015
average
2020 2030
target
25 17
7 8
13 9
34 25
◼ Act on inconsistent directions between key stakeholders to ease
network deployment
◼ Go on with digitalization of public authority services
◼ Promote digitalization and high speed network (for both fixed
and mobile) for individuals and companies
3 1
TOP 10
(*) the network readiness index is an index published annually since 2002 by the World Economic
Forum in collaboration with INSEAD that aims to measure the degree of readiness of countries to
exploit opportunities offered by information and communications technology.
19
New generation telecom networks and evolution of usages contribute to
the ecological transition
Source: APCC, Haut Conseil Climat, étude TeamViewer, ADEME, Arcep, Nokia, Arthur D. Little
Telecoms in France and comparison with other countries
…and a usage substitution
Communication technologies provided by telecom
operators enable new usages and encourage the
development of responsible behaviour
◼ 1 videoconference user
reduces its yearly cabon
footprint by 4t of CO2
◼ 1 day per week of remote work
represents a saving of 200kg CO2
per worker per year
An increasing energy efficiency…
Shift to optical fibre divides by 3 the energy use for fixed
network
2,1 W
1,8 W
0,5 W
RTC ADSL Fiber
Shift to 5G network increases by 90% energy efficiency for
mobile networks
Yearly energy use per line per technology
1 train journey of
100 000 km,
equivalent to 2.5x
world tour
1 075km by plane,
equivalent to a
round trip Paris -
Toulouse
4G 5G
-90%
Energy use by data unit
transported
The telecom industry provides solutions to the environmental challenges and facilitates the
ecological transition
Client Logo Area
Remove borders
Prepared for Fédération Française desTélécoms
Contacts:
Ignacio GARCIA ALVES
Global Chief Executive Officer
garciaalves.ignacio@adlittle.com
Julien DUVAUD-SCHELNAST
PrincipalTIME France
duvaud-schelnast.julien@adlittle.com
Arthur D. Little has been at the forefront of innovation since 1886.We
are an acknowledged thought leader in linking strategy, innovation and
transformation in technology-intensive and converging industries.We
navigate our clients through changing business ecosystems to uncover
new growth opportunities.We enable our clients to build innovation
capabilities and transform their organizations.
Our consultants have strong practical industry experience combined
with excellent knowledge of key trends and dynamics.ADL is present in
the most important business centers around the world.We are proud
to serve most of the Fortune 1000 companies, in addition to other
leading firms and public sector organizations.
For further information please visit www.adlittle.com or
www.adl.com.
Copyright © Arthur D. Little 2021.All rights reserved.

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Arthur D. Little - FFT 2021 - ENG

  • 1. Fédération Française des Télécoms French Telecoms Economics 2021 Final report 11ème édition
  • 2. 2 FrenchTelecoms Economics 2020 The global digital ecosystem has been growing steadily throughout the crisis, with however limited gain for EuropeanTelecoms 01 02 French telecom operators continue to invest despite the pandemic in order to support usage development
  • 3. 3 FrenchTelecoms Economics 2020 The global digital ecosystem has been growing steadily throughout the crisis, with however limited gain for EuropeanTelecoms 01 02 French telecom operators continue to invest despite the pandemic in order to support usage development
  • 4. 4 The global digital ecosystem continued to grow during the pandemic, driven by Internet players Source: Thomson Reuters Eikon, Arthur D. Little Note: 1) Panel of 180 companies: By sector, selection of the top 30 companies in 2020 by their turnover, 2) Constant 2020 Euros. 3) As Huawei (Devices) and Altice-SFR (Telecoms) are not listed, revenues were added to the panel of 180 companies in the sample Telecoms in the global digital ecosystem Example of players Digital ecosystem revenue1 World, 2011-2020, billion euros2 +5% +2% +5% +5% +26% +4% +1% +1% +2% +5% +27% +1% 2011-20 2019-20 Annual growth +6.6% +6.3% 915 933 957 983 1 027 1 109 1 136 1 206 1 241 1 254 163 177 178 1 003 1 166 1 184 1 175 1 291 1 276 1 402 1 544 1 564 1 602 395 416 425 452 462 474 488 546 589 621 164 167 189 212 235 261 263 117 146 177 220 270 351 464 599 730 931 Telecom Operator3 2013 143 2011 154 124 158 Internet 2012 159 153 124 4 849 3 356 Network Equipment 2017 2020 138 2015 2014 3 118 2016 2018 158 2019 128 4 294 Content IT / Software Devices3 4 562 2 943 3 020 3 555 3 861 2 737
  • 5. 5 The European digital ecosystem currently grows faster than GDP, but still slower than the global digital ecosysteme mondial Source: Thomson Reuters Eikon, World Bank, Arthur D. Little Note: 1) Panel of 180 companies: By sector, selection of the top 30 companies in 2019 by their sales in 2020, 2) In constant 2002 euros, within the perimeter of the countries considered in the digital ecosystem (representing 75% of world GDP, or 70% of European GDP for European data. Telecoms in the global digital ecosystem +7% +2% Digital ecosystem revenue growth1 vs. economy World, 2011-2020, base 100 in 2011 +1% 0% 2011-20 (average) 2019-20 Annual growth +6% -9% +3% -7% 119 177 103 80 90 100 110 120 130 140 150 160 170 180 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 108 Global GDP2 Global digital ecosystem2 European GDP2 European digital ecosystem2
  • 6. 6 Since 2011, the revenue from European telecom operators has grown slower than for Asian and American operators Source: Thomson Reuters Eikon, Arthur D. Little Note: 1) Region based on head office localisation, 2) Panel of 180 companies: By sector, selection of the top 30 companies in 2020 by their turnover, 3) Constant euros 2020 4) Including top 30 players except Asia, North America and Europe (Oceania, Middle-East, Africa and South America) Telecoms in the global digital ecosystem Telecom operators revenue by region1,2 World, 2011-2020, billion euros3 +3% +5% -3% 0% +6% +1% +4% +3% 2011-20 (average) 2019-20 Annual growth +4% +1% 295 278 270 272 290 300 307 293 295 309 282 295 303 317 338 368 379 405 426 414 275 295 317 323 324 362 369 426 438 450 63 65 66 71 75 79 81 82 81 81 957 2012 2011 2014 1 241 2015 2013 2018 2016 2017 1 254 915 2019 2020 Other4 Asia North America 1 109 Europe 933 983 1 027 1 136 1 206
  • 7. 7 FrenchTelecoms Economics 2020 The global digital ecosystem has been growing steadily throughout the crisis, with however limited gain for EuropeanTelecoms 01 02 French telecom operators continue to invest despite the pandemic in order to support usage development
  • 8. 8 Telecom operators play an essential role in the development of the French digital ecosystem Source: Thomson Reuters Eikon, Diane, Annual Reports, Arthur D. Little Note: 1) Reported or estimated revenues in France or documentary research, 2) Data adjusted to take into account the estimated effective revenues of international players in France, 3) Corporate income tax and similar taxes and payments - excluding fines/agreements/adjustments paid by Internet players; 4) Based on gross investments (excluding asset disposals) 5) Netflix revenues calculated on the basis of the number of subscribers reported. 6) EIT consolidated with BT from April 2021 Telecoms in France and comparison with other countries Revenue1,2 Direct employment Investment4 Taxes2,3 Contribution of main players to the French digital ecosystem France, 2020 (vs. 2019) y compris filiales 81% 12% 4% 1% 78% 8% 2% 7% 4% 71% 7% 12% 8% 3% 47% 13% 11% 24% 5% 98 Bn€ vs. 44% in 2019 vs. 80% in 2019 vs. 70% in 2019 vs. 81% in 2019 11 Bn€ 157 000 jobs 3,2 Bn€ 5 content providers5 5 internet players 5 Telecom operators6 5 network equipment & services providers 5 connected device OEM
  • 9. 9 Telecom prices continue to decrease while other regulated sectors tend to increase their prices Source: INSEE, Arthur D. Little Telecoms in France and comparison with other countries Consumer prices evolution for a selection of essential services France, 2011-2020, Base 100 in 2011 141 156 110 110 108 54 50 60 70 80 90 100 110 120 130 140 150 160 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Postal services Electricity City gas Passenger rail transporation Inflation Telecommunication services
  • 10. 10 Prices of telecom services in France are among the lowest in major Western markets Source: Operator sites, Arthur D. Little Note: 1) Triple play offers only; unlimited telephony at least to landlines; unlimited broadband Internet via xDSL or fiber; television included, excluding additional packs; operators with market share > 10% excluding promotions, 2) Unlimited calls (when available otherwise >500 minutes), unlimited SMS/MMS, Internet at least 50 GB; offers without terminal, offers without commitment when available; operators with market share > 10%. Telecoms in France and comparison with other countries Price benchmark from leading operators Country selection, September 2020, € / month (inc. taxes) Fixed (Triple Play)1 Mobile2 Benchmark Mobile 50 Gb Excluding promotions and connection fees By country, selection of the most competitive package among operators with over 10% market share 14€ 14€ 17€ 22€ 36€ 45€ 68€ 0,0 0,5 1,0 1,5 2,0 2,5 3,0 0 10 20 30 40 50 60 70 80 90 100 0,17€ 1,36€ 0,28€ 0,17€ 0,44€ 0,36€ 0,75€ 15€ 25€ 30€ 31€ 44€ 45€ 94€ 0 10 20 30 40 50 60 70 80 90 100 Price per Gb
  • 11. 11 Investment in telecom infrastructure continuously increases and reached 11.5 Bn€ in 2020 Source: ARCEP, Arthur D. Little Note: 1) Investment of the entire telecom sector in networks (telecom service operators and other private players), excluding purchases of mobile frequencies Telecoms in France and comparison with other countries Investment in telecom networks1 France, 2011-2020, billion d’euros Mobile networks Fixed networks 88 billions € (97.3 billions including spectrum frequency acquisition) + 9,1 billion € spectrum purchase over the period. 0,9 in 2011 2,6 in 2012 2,8 in 2015 2,8 in 2020 5,0 4,9 4,7 4,7 5,5 6,4 6,5 7,0 7,8 8,3 2,3 2,5 2,6 2,4 2,3 2,7 3,3 3,2 2,9 3,2 9,1 2011 2017 2014 11,5 2012 2013 10,7 2016 2015 9,8 2018 2019 7,3 2020 7,3 7,4 7,1 7,8 10,2 Investment phase includingVery-High Speed fixed broadband
  • 12. 12 The telecom industry represents the largest private investor in infrastructures in France Source: Companies, Documentary Research, Arthur D. Little Note: 1) Telecoms: ARCEP figures (excluding purchase of frequencies); Electricity: ERDF; Railway: RFF; Motorways: ASFA (Sanef, SAPN, ASF....) Telecoms in France and comparison with other countries Investment1 fromTelecom versus other Infrastructure industries France, 2016-2020, 5 years annual average, billion euros équivalent aux investissements suivants, chaque année… ou 15 500 energy renovation of buildings ou ou ou 126 Hospitals 800 Schools 2 236 Wind turbine (x2 vs. current state) 4 millions of bike-sharing bikes (x190 vs. current state in France) 1,5 4,7 6,1 10,2 Electricity networks Highways Railways Telecom 11,5 Bn€ in 2020 For the 2nd successive year, investments in telecom infrastructure crossed the 10 Bn€ threshold.
  • 13. 13 The continuous investment provides a state-of-the-art infrastructure connecting all French people Telecoms in France and comparison with other countries Source: ARCEP, operators, Arthur D. Little Note: 1) Consumption by active 4G card 11Gb monthly usage per user threshold crossed early 2021 Generalization of very-high speed internet 57% New milestone in household passed in low density areas in 2021 Deployment of FttH fiber x3 in three years in less densely populated areas XX Rise of mobile data Accelerated fiber deployment National connectivity Low density areas Medium density areas High density areas 18,7 31,0 T2 2018 T2 2021 5 6 5 14 7 27 T2 2021 2 T2 2018 12 6.6 Gb T2 2021 T2 2018 11.6 Gb Equivalent of 15h of Netflix video (3,5h HD) 45 63 35% Average 4G data consumption1 Monthly average Premises eligible to very high-speed internet offers - Million premises Number of premises eligible for FttH in millions % of eligible premises Number of 4G SIM cards (millions)
  • 14. 14 Investment effort of French telecom operators is amongst the most important ones in Europe Source: Annual Report, Arthur D. Little Note: 1) Turnover and CAPEX of telecom operators with a fixed or mobile market share >10%. Telecoms in France and comparison with other countries Largest investment effort in Europe Largest Fiber deployment in Europe Investment effort rate per country (CAPEX1/Revenues1) United Kingdom, France, Spain, Germany, Italy 2020 Number of premises connected in FttH/B over 12 months Selected European countries, Sept 2019 - Sept 2020, millions of premises 20,4% 13,1% 14,5% 20,2% 16,7% 66€/hab 136€ /hab 96€/hab 129€/hab 86€/hab 4,6 2,8 2,7 1,7 0,5 UK Germany Italy Spain Ø 2,5 +87% vs. average x€/hab CAPEX/Habitant CAPEX/Revenues
  • 15. 15 Telecom investments keep increasing and have reached their highest level in 10 years Source: Arcep, DARES, Insee, Arthur D. Little Note: 1) Telecom players investment (excluding spectrum purchase) / revenues, 2) provisionnal Arcep data for 2020, 3) Arcep data, 4) Arcep data including a part of direct employment, 5) provisionnal Arcep data for 2020 Telecoms in France and comparison with other countries Employment, revenues and investment of Telecom players in France France, 2011-2020, base 100 in 2011 Revenues5 Direct employment3 Average annual growth 2011-2020 - 2,4 % - 2,7 % Ecosystem employment4 - 2,1 % Investment (excl. Spectrum purchase)2 + 7,4 % Investment1 + 5,2 % Annual growth 2019-2020 - 2,1 % - 3,2 % - 0,4 % + 8,6 % + 8,1 % 78 80 83 158 191 60 70 80 90 100 110 120 130 140 150 160 170 180 190 200 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
  • 16. 16 The taxation level for telecom operators remains stable while it decreases for other players of the digital ecosystem Source: Diane, Annual Reports, Arthur D. Little Note: 1) Corporate income tax and similar taxes and payments - excluding fines/agreement/adjustments paid by Internet players between 2018 and 2020, 2) Revenue declared in France or documentary research, 3) Data adjusted to take into account the estimated effective revenue of international players in France. Telecoms in France and comparison with other countries 5,7% 0,2% 5,8% 4,7% 0,2% 5,6% 0,2% 2,8% 3,7% 0,2% Telecom operators Devices Network equipment Content Internet -0.1pts +0.1pts -2.9pts -1.0pts -0,1pts 2015 2020 Taxation level1 as a proportion of revenue2,3 For main players in the French digital ecosystem, 2015 vs 2020 y compris filiales
  • 17. 17 2020 The taxation specific to telecom operators represents a major part of their overall taxation Source: telecom players, Fédération Française des Télécoms, Arthur D. Little Telecom operators taxes France, 2020, million euros and split per tax 2020 1 145 (45%) 1 416 (55%) 2 561 Specific tax Corporate tax Telecoms in France and comparison with other countries 1 145 455 219 240 208 112 175 8 IS IFER mobile (antenna) IFER fixed TOCE (France TV) Fréquences + FH COSIP (CNC) Private copying levy VOD
  • 18. 18 France pursue its investments and aim for a global top 10 ranking on the network readiness index by 2030 Source: World Economic Forum, Arthur D. Little Telecoms in France and comparison with other countries …to be coordinated with public authority ◼ Generalize optical fiber ◼ Encourage high speed mobile network (4G and 5G) Progress and ambition… Network readiness index* France progressed on the following criteria: Pursue infrastructure deployment 1 Reduce deployment constraints 2 Develop usages 3 Criteria 20 vs.15 Technology 18 +8 Governance 15 +11 People 20 +4 Impact 12 +11 2010-2015 average 2020 2030 target 25 17 7 8 13 9 34 25 ◼ Act on inconsistent directions between key stakeholders to ease network deployment ◼ Go on with digitalization of public authority services ◼ Promote digitalization and high speed network (for both fixed and mobile) for individuals and companies 3 1 TOP 10 (*) the network readiness index is an index published annually since 2002 by the World Economic Forum in collaboration with INSEAD that aims to measure the degree of readiness of countries to exploit opportunities offered by information and communications technology.
  • 19. 19 New generation telecom networks and evolution of usages contribute to the ecological transition Source: APCC, Haut Conseil Climat, étude TeamViewer, ADEME, Arcep, Nokia, Arthur D. Little Telecoms in France and comparison with other countries …and a usage substitution Communication technologies provided by telecom operators enable new usages and encourage the development of responsible behaviour ◼ 1 videoconference user reduces its yearly cabon footprint by 4t of CO2 ◼ 1 day per week of remote work represents a saving of 200kg CO2 per worker per year An increasing energy efficiency… Shift to optical fibre divides by 3 the energy use for fixed network 2,1 W 1,8 W 0,5 W RTC ADSL Fiber Shift to 5G network increases by 90% energy efficiency for mobile networks Yearly energy use per line per technology 1 train journey of 100 000 km, equivalent to 2.5x world tour 1 075km by plane, equivalent to a round trip Paris - Toulouse 4G 5G -90% Energy use by data unit transported The telecom industry provides solutions to the environmental challenges and facilitates the ecological transition
  • 20. Client Logo Area Remove borders Prepared for Fédération Française desTélécoms Contacts: Ignacio GARCIA ALVES Global Chief Executive Officer garciaalves.ignacio@adlittle.com Julien DUVAUD-SCHELNAST PrincipalTIME France duvaud-schelnast.julien@adlittle.com Arthur D. Little has been at the forefront of innovation since 1886.We are an acknowledged thought leader in linking strategy, innovation and transformation in technology-intensive and converging industries.We navigate our clients through changing business ecosystems to uncover new growth opportunities.We enable our clients to build innovation capabilities and transform their organizations. Our consultants have strong practical industry experience combined with excellent knowledge of key trends and dynamics.ADL is present in the most important business centers around the world.We are proud to serve most of the Fortune 1000 companies, in addition to other leading firms and public sector organizations. For further information please visit www.adlittle.com or www.adl.com. Copyright © Arthur D. Little 2021.All rights reserved.