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NGN European Commission – Workshop 22 June 2005

NGN European Commission – Workshop 22 June 2005. Roger Wilson Managing Director European Competitive Telecoms Association (ECTA). ECTA: promoting competition. The leading pan-European trade association serving the alternative telecommunications industry.

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NGN European Commission – Workshop 22 June 2005

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  1. NGNEuropean Commission – Workshop22 June 2005 Roger Wilson Managing Director European Competitive Telecoms Association (ECTA)

  2. ECTA: promoting competition • The leading pan-European trade association serving the alternative telecommunications industry. • 150 member companies – operators, service providers and suppliers, as well as national associations • ECTA objectives are to: • Work for a fair regulatory environment which allows all electronic communications providers to compete on level terms in order to multiply investment and innovation throughout an effective European internal market. • Represent the telecommunications industry to key government and regulatory bodies • Maintain a forum for networking and business development throughout Europe.

  3. The liberalisation process is NOT complete • Ofcom Strategic Review (2005): input of the entire industry – some interesting conclusions: • UK market has 20 years of liberalisation, and NRFmore substantially implemented than in any other Member State • “The market has made good progress, however, its foundations are unstable”. Bottlenecks still exist (local loop) • Regulation is still needed and Ofcom plans to reinforce its efforts to prevent discrimination by the incumbent: the equivalence debate • Detailed non-discrimination is probably a key building block in ensuring effective competition

  4. Risk or Opportunity (I) • NGN is a converged Internet Protocol (IP) backbone network – NGN is NOT to be confused with fibre-to-the-home • Many alternative operators are already delivering converged services via IP networks: it’s an Evolution, not a Revolution! • NGNs involve a potentially substantial redesign of network architectures. • The future of competition is now in the hands of European regulators and Institutions: • Opportunity to ensure that networks are built in a way that enables effective competition based on non-discrimination (ex ante regulation) • Failure to act will enable incumbents to build networks that foreclose competition (reducing benefit for consumers for years to come)

  5. Risk or Opportunity (II) • Incentive to invest: • Costing methodology (cost of capital taking account of associated risks) • NGNs offer the opportunity to differentiate between services based on their different characteristics and inherent risks • This could lead to lower prices for access facilities whilst a risk premium may be appropriate for some aspects of NGN development • The move to NGNs represents an opportunity for regulators to establish in advance ground rules for ensuring the continued passage to effective competition and minimise damage during transition

  6. Competition stimulates Investment Incumbent and new entrant investment follows similar pattern: highest in “best” regulated (most competitive) markets Source: JonesDay & SPC Network (Regulatory Scorecard)

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