PARIS -- France Télécom will cut its long-distance call rates while raising its basic service charge, following a pattern among European telecommunications operators since competition was allowed last year.
Starting 1 March, France Télécom will cut international rates by 10 percent and national long-distance rates by 12 percent, and will charge only half the regular rate all day Saturday. Currently it offers a discount only on Saturday afternoons.
Its basic service charge, which has risen 70 percent since 1994, will rise 14.7 percent to 78 francs. Local phone rates will remain unchanged.
The state-controlled company plans to lower charges by 9 percent before the end of 2000, but its rate structure is now largely in place, officials told a news conference.
A trend toward lower long-distance rates, offset by higher basic charges, has accompanied the liberalization of Europe's telecommunications market. In Germany, where freer competition has touched off a price war, long-distance rates fell as much as 70 percent last year.
Price cuts have been more moderate in France, where France Télécom still owns the telecommunications infrastructure.
The shift also comes after French Internet users held their second Net strike against France Télécom, protesting the company's rising phone bills.
Officials declined to estimate the impact of the rate adjustments on turnover, which totalled 118.4 billion francs (US$20 billion) in the first nine months of 1998, the latest figures available.
They pointed to strong growth in the volume of communications, with the number of minutes rising nine percent last year after an increase of 6.7 percent in 1997.
On the Paris bourse, France Télécom, the most heavily weighted share in the blue-chip CAC index, was down 1.48 percent at 76.60 euros at 1400 GMT.
Carole Froucht, France Télécom's marketing director, rejected criticism that since the group's stock listing in October 1997 it has favored wealthier clients to the detriment of people on low incomes -- not only through its rate structure but also through the elimination of unprofitable public booths.
Froucht said that the company had put in place a service at less than half the regular rate for low-income households.
She also said that figures from telecom regulator ART showed the average client's phone bill fell 5.5 percent in 1998. The basic service charge represents around 30 percent.
