Jean-Bernard LÃ©vy, chief executive of Vivendi, is arguing France Telecom should be forced to spin off its fixed line phone network because of its unhealthy dominance of the French market, in an interview with the Financial Times.
At the beginning of the month, as we reported, Vivendil complained to the European Commission about the lack of effective competition in the French fixed-line market, claiming that even 11 years after competition had been introduced, the incumbent still made 85% of the profits available from the fixed line market.
Vivendi is a media group and France's second-largest telecoms provider. This is the most severe criticism of the incumbent since the fixed line market was opened up to competition in 1998.
In the short term Vivendi wants regulators to reduce wholesale charges paid by rival telecoms companies which use France Telecom's infrastructure to provide services. Vivendi is also pressuring the national regulator to spell out its longer term strategy to foster competition in the French market.
One option could be imposing functional separation between France Telecom and the access network in the interests of transparency and fairness - which Ofcom has imposed on BT in the UK.
LÃ©vy thinks regulators should go further with total separation between France Telecom and its fixed line network. This would also strip France Telecom of the wholesale income it makes from its smaller rivals.
LÃ©vy also told the FT that his company complained to Brussels because it could not be sure of getting a fair hearing from the national authorities, given that the government has a 26.7 per cent stake in France Telecom.
FranÃ§ois Godard, analyst at Enders Analysis, was reported in the FT story saying that French charges were lower than equivalents in Germany and Spain, but higher than in Italy and the UK.