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Document Sample
PLC Workshop, 16 October 2003
Assessment of the competitive
situation in the market for broadband
access
Leo Koolen
DG Information Society
European Commission
DG Information Society
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Context
A “competitive and dynamic
knowledge-based economy”
requires
“an inexpensive, world-class
communications infrastructure”
Lisbon European Council
March 2000
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Broadband Access
Implementation of a widely available
broadband infrastructure is probably the
key challenge for the Information Society
and telecommunications in Europe, over
the next 5-10 years.
e-Europe 2005 Action Plan
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EU liberalisation policy
Member States to ensure competition in the
provision of networks and services
EU Framework Directive for Electronic Communications
Networks and Services
Member States shall not grant or maintain in
force exclusive rights; and take all measures
necessary to ensure that any undertaking is
entitled to provide electronic communications
services or to establish, extend or provide
electronic communication networks
Commission Directive on competition in the markets for
electronic communications networks and services
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Trend in the percentage of broadband
lines provided by the incumbent
EU
64%
63%
63.20%
62%
61% 60.13%
60%
59% 58.83%
58% 58.78%
57%
56%
July 02 Oct. 02 Jan. 03 July 03
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The level of infrastructure competition in
broadband supply*
100%
90%
80%
Entrant using own
infrastructure
70%
60% Entrant using ULLs
50%
Entrant retailing
40%
incumbent's DSL
30%
Incumbent retailing
20% its own DSL
10%
0%
*Source: ECTA 2002
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The level of infrastructure competition in
broadband supply*
DSL market
UK
Sweden
Spain
Portugal
Netherlands
Luxembour
Italy
Ireland
Greece
Germany
France
Finland
Denmark
Belgium
Austria
0% 20% 40% 60% 80% 100%
Retailed by incumbent Retailed by indep. ISP LLU
Source: ECTA Sept 2003
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Penetration rates in EU
Broadband penetration rate in the EU (% of population)
12%
10.44%
10.19%
10.03%
10%
9.36%
8%
6.62% 6.64%
6%
4.65% 4.72%
4.43% 4.47%
4.09%
4%
2.82% 2.87%
2.33%
2%
0.25%
0.02%
0%
EL IRL L I P F E UK EU D A FIN NL S B DK
Source: European Commission
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Infrastructure-based competition and
broadband take up*
10.0
B S
Broadband services per 100 population 9.0
DK NL
8.0
US
7.0
Jap
A
6.0
SF
5.0
D
4.0 E
F
UK P
3.0
2.0 I
L
1.0
0.0
0% 10% 20% 30% 40% 50% 60% 70% 80%
% market non incumbent
*Source: OVUM
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Where are we now?
Broadband market development is
encouraging but concerns about
competitive conditions
New clamors that access network is a
„natural monopoly‟
New clamors for safety and security and
QoS, to restore special rights?
Marketplace approaching new status
quo where local loop remains bottleneck
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What do we need? (1)
A healthy market structure for genuine
effective and sustainable competition in the
long-run
Facilities-based competition
Policy that attracts powerful parties with key
strategic interests (customer ownership)
A changing mentality that competitive
dynamics at the network level is good for all
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What do we need? (2)
Competitive dynamics in the supply of
broadband networks
Facility based competition between alternative
infrastructure of strong players with strategic interests
superior to services based competition
Stimulates investment in network technologies,
product and services innovation and pricing packages
which do not exist with services based competition
Creates incentives for cost saving innovations, to
become more cost efficient at network level, important
in environment with rapid technological improvements
Create environment that enables talent, gives room to
innovation, ensures rapid technology dissemination of
R&D and reap dynamic efficiencies
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What do we need? (3)
Legal certainty about regulatory treatment of
technologies and systems
Stable and predictable regime and its enforcement
should encourage investment
Risks for market players to be reduced to normal
business risks
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Some statistics*
375M people in EU (+100M from 2004)
150M households (with central Europe 190M)
About 20M SMEs
Powerline grid in Europe is the best in the world
Powerline grid is ubiquitous
Number of powerlines comparable with number
of household and SMEs
*Dec 2002
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How can PLC help to achieve
Lisbon goals?
PLC may help to introduce facilities-based
competition in the access network
PLC IP platform may help to keep
development of the market horizontal
PLC may enable the individual to participate
in eEurope
PLC can help enhance regional development
(local municipalities can become TO)
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Who needs to do what?
• Market challenge is for market players
(business case/model; partnerships..)
• Government and regulators:
• to create a regulatory level playing field
for all technologies and remove
regulatory uncertainties
• to protect the legitimate use of radio
spectrum against harmful interference
• to encourage facility-based competition to
create a dynamic and competitive growth
environment which is sustainable in the
long term
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