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

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