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Telecom s regulation in Norway

Telecom s regulation in Norway. International scientific conference “Current Regulatory Issues in the Area of Telecommunications and Radio Frequency Resource Usage” Kiev 18.-20. May, 2010 Kurt Arne Sandvik Head of Section, Service Markets Department

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Telecom s regulation in Norway

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  1. Telecoms regulation in Norway International scientific conference “Current Regulatory Issues in the Area of Telecommunications and Radio Frequency Resource Usage” Kiev 18.-20. May, 2010 Kurt Arne Sandvik Head of Section, Service Markets Department Norwegian Post and Telecommunications Authority

  2. NPT’s main tasks (1) • Monitoring of compliance with the legislation, regulations and licence requirements • Analysing relevant telecoms markets, determining SMP and imposing remedies on operators with SMP • Handling complaints by market players on SMP operators • Mediation between market players • Supervising of telecoms and postal service providers • Preparing regulations • Maintaining a register of service providers • Developing and publishing postal and telecoms statistics

  3. NPT’s main tasks (2) • Radio frequency management • Numbering management • Supervising service providers issuing qualified electronic certificates • Supervising registries assigning domain names under Norwegian country code top level domain • Control of telecommunications terminals on the market • Standardisation of telecommunications services • Contingency planning and security • International collaboration • Advising the Ministry of Transport and Communications

  4. NPT strategy for regulation • Technology neutral regulation • Focus on wholesale markets (interconnection, access to networks, Local Loop Unbundling (LLUB), leased lines) • Focus on “soft regulation” and minimal intervention • Transparency in decision making • Regular contact with market players, e.g. through open working groups meeting on a regular basis • Key issue: Market knowledge and high quality market data

  5. Relationship with the European Union • Norway has a relationship with the EU through the EEA agreement: European Union and 3 of the 4 EFTA countries (Norway, Iceland, Lichtenstein) • EU directives are implemented in Norwegian regulation • NPT notifies draft SMP decisions to the EFTA Surveillance Authority (ESA) in a similar way as the EU Member States do to the European Commission • European harmonisation • European Regulators Group (ERG): EC and NRAs of EU member countries. Observers; NO, IS, LI, CH, HR, TR, MK • NPT participates actively in ERG Project Teams • www.erg.eu.int

  6. Growth in the Norwegian mobile market Total number of subscriptions and yearly growth

  7. Market shares - mobile telephony

  8. Mobile licences (1) • Telenor ASA • 900 MHz band until 31 December 2017 • 1800 MHz band until 9 March 2010, will be extended • 2,1 GHz band until 1 December 2012 • NetCom AS • 900 MHz band until 31 December 2017 • 1800 MHz band until 9 March 2010, will be extended • 2,1 GHz band until 1 December 2012 • Nordisk Mobiltelefon Norge AS (ice.net, Access Industries) • 450 MHz band until 31 December 2019

  9. Mobile licences (2) • Hi3G Access Norway AS • 2,1 GHz band until 19 September 2015 • Extended deadline for meeting coverage requirement: 19 March 2012 • Minimum coverage (extended): 40 % of population • Mobile Norway AS (owned by Network Norway and Tele2) • 900 MHz band until 31 December 2013 • Minimum coverage of 170 000 people in 8 cities to get national roaming • 2,1 GHz band until 1 January 2020 • Minimum 3G coverage: 40 % of population before 14 January 2014

  10. Mobile regulation - background • A special situation in Norway with only two mobile operators with national coverage (Telenor and NetCom) • Telenor is still very dominant (both on wholesale and retail level) • Mobile regulation focusing on bringing new MNOs into the market to increase competition • Access regulation • Termination regulation

  11. Access regulation - mobile • Telenor has SMP in the market for access and origination in mobile networks (Market 15) • Obligation to give access for national roaming, MVNOs and co-location • National roaming is important for new MNOs • Price regulation: Retail minus • Market 15 has been removed from the Recommendation on relevant markets • NPT is currently analysing Market 15 to determine whether there is still a need to regulate the market • National consultation September / October 2009

  12. Termination in mobile networks • Efficient and symmetric termination rates is the long-term goal • LRIC models for Telenor and NetCom developed in 2006 • Symmetry achieved from 1 July 2008 • LRIC models will be updated during 2009 • However, NPT believes “entry assistance” for new operators is necessary in this market • Asymmetric termination rates • Ministry of Transport and Communications has indicated that Tele2 and Network Norway can keep higher termination rates also for a period after 2010 • The EU recommendation on termination rates is relevant for Norway

  13. NPT decision - May 2007 • Price cap for Telenor and NetCom • Prices in 2010 are based on NPT’s hybrid LRIC model • * 2010 prices will be adjusted according to inflation rates, new price will probably be around NOK 0,50

  14. Ministry decision - May 2009 • NPT decision November 2008 • ”Reasonable prices” for new MNOs and MVNOs • A price cap towards 50 % asymmetry in 2010 • NPT decision confirmed by the Ministry May 2009, except • Reductions for Tele2 and Network Norway postponed • Obligation to report to NPT on network rollout

  15. New LRIC calculations - preliminary

  16. Mobile termination - next steps • New LRIC models will be finished late 2009 • Market analysis Market 7 and proposed remedies out for national consultation early 2010 • Final NPT decisions summer 2010 • New regulation to take effect from 1 January 2011 • Tele2 and Network Norway must report twice a year to NPT on the progress of building their network • If the network is not built according to plans the price cap for Tele2 and Network Norway may be changed • Plans indicate a coverage of 75 % of the population by the end of 2011

  17. Mobile broadband# of mobile broadband subscriptions Market shares mobile broadband

  18. Fixed broadband subscriptions – residential market

  19. Fixed broadband subscriptions – business market

  20. Fixed broadband - growth

  21. Fixed broadband - market shares

  22. Market shares fibre access LyseTele and partners have about 80 % market share

  23. Fixed access network regulation • Telenor has SMP status in Market 4 (Local loop) and Market 5 (broadband access, bitstream) • Must give access to copper access network • Price cap: NOK 95 for full access to local loop • Fibre and other access technologies are included in the markets, but access regulation only for copper lines • Obligations for co-location, including duct access • LRIC model is under development for Market 4 and will be finished in the first half of 2010 • Results from LRIC model will be used as input for the next regulation period

  24. Fixed termination • Telenor and 12 other smaller operators are identified as having SMP in former Market 9 (new Market 3) • Telenor: Price cap on same level as current price at the time of NPT’s decision (March 2006) • Other operators: Requirement for ”reasonable prices”: • “Prices shall be based on Telenor’s prices, but may deviate somewhat should special factors so indicate.” • “Such factors can, inter alia, be related to the cost level for the provider’s network, the balance in traffic flows to/from the respective end users and how much time has elapsed since the provider entered the market.” • “Deviations must be justified and documented.” • LRIC model will be developed during 2009/2010 • New SMP decisions and remedies expected late 2010

  25. Follow-up on price regulation - fixed • NPT has evaluated and taken decisions on termination rates for six smaller operators in M9 • Charges up to 100 % above Telenor • In NPT’s view, none of these operators were able to justify higher termination rates than Telenor • NPT decisions taken February 2007 (Telio) and October 2007 (Get, Hafslund Telecom, TDC and Ventelo) • Symmetry with Telenor • All decisions appealed, but later confirmed by the Ministry of Transport and Communications • NPT decision regarding Lyse Tele April 2009 • Symmetry with Telenor from 1 July 2009 • Decision is appealed by Lyse and the appeal is currently handled by the Ministry

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