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June 18, 1987

FRENCH TELECOM BODY “SHOULD FOLLOW BT INTO PRIVATE HANDS – REPORT

By CBR Staff Writer

The French public Direction Generale de Telecommunications authority is strongly criticised in a report for holding up progress in the European telecommunications market. The report, drawn up by the Mission d’Information in France, on the future of the European telecommunications market points to the DGT’s inability to anticipate and respond to new trends in the market, and to react quickly enough to the changing telecoms climate. It recommends that the DGT should be privatised within the next five years. The report draws three main conclusions from its research: on the one hand growth in the world telecommunications market is enormous but unstable; experience of deregulation for the countries that have embraced it, such as the UK, has allowed them to track demand but at the same time Europe as a whole is penalised by lack of standards; these factors, claims the report must encourage the French telecommunications market to become more competitive. The report says the DGT continues to treat the French telecoms market as a public monopoly, and its inability to create a competitive climate is is holding up progress – value-added network services are cited as an example. It says the DGT has spent money in the wrong areas: it moved into cable television too early, when statistics showed that demand would not justify investment – and spent some UKP500m in research without taking into account the cost of laying the cable. Yet the DGT has not invested significantly in mobile communications, where demand is already enormous, and is widely expected to be worth thousands of millions of francs over the coming decades.

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