Regulation of Broadband access and - PDF document

Regulation of Broadband access and deve
Regulation of Broadband access and development of NGA networks in SloveniaNatašaVidmarKraljević, AKOSSeptember 2017, BudvaMarket development overviewMarket developmentRetail market shares by broadband internet connectionsPenetration rate 71,7% households, incumbent market share 34 %Retail market share by infrastructureConstant decrease of copper based broad

band access (39,6%), which is still dom
band access (39,6%), which is still dominant, rise of cable (30,0%) and significant growth of fiber (28,1%)Retail market share by internet speedConnectionswithinternetspeeds10Mbit/stolessthan30Mbit/s(47,7%)stillincrease,butgrowthofNGAconnections(atleast30Mbit/s)isthehighest(28,1%)Customer take-up of broadband servicesKeyfactor

s affectingconsumerchoice of servic
s affectingconsumerchoice of service bundleKeyfactors affecting consumer choice of operators80% of end-users are not willing to pay more for higher speed of internet connection (The main reason provided is: „We do not need higher speed.“)Regulatory objectives• Promoting development of innovative, high-quality and affordableservices an

d reducing barriers for switching betwe
d reducing barriers for switching between operators• Promoting equal competitiveconditionsfor all players on the market, i.e.„level playing field“• Promoting service competition• Promoting investments in deployment of NGA networks based ontechnological neutrality• Promoting migration of operators and consumers to NGA netw

orks• Taking into account developmen
orks• Taking into account developments and market trends• Taking into account changes in regulatory approach• Ensuring stable and predictable prices for access to copper networkRegulatory objectives• Defining flexible wholesale prices for access to NGA networks based oncompetitiveconditionsby imposing economic replicability test (ERT)instead of

fixed cost based prices• Taking int
fixed cost based prices• Taking into account investment plans of operators for deployment of NGANetworks• Taking into account geographical differences of market conditions• Pursuing objectivesof the DAE and nationaldevelopment plan fordevelopment of broadband networks till2020Relevantmarket definitionM3a andM3bM3a andM3b -Wholesale p

roduct definition3a –Wholesale loc
roduct definition3a –Wholesale localaccess at fixed location:•Local unbundledaccess to copper and fibernetworks•Virtual unbundledlocal access (VULA)in caseofGPON/Vectoring3b –Wholesale central access at fixed location formass-market products:•Bitstream access to copper and fibernetworks (regionalandnationalPoH)M3a and

M3b –GeographicmarketdefinitionM
M3b –GeographicmarketdefinitionMarkets3a and3b are NATIONAL, because:•Incumbent has nationalpresence with its network (cooperand fiber)•Incumbent provides regulated wholesale access based onLLU and bitstreamon equal national pricing conditions•Almost no retail price differentiationby operators indifferent areas•Business strategies

of other relevant operators are alson
of other relevant operators are alsonationalM3a andM3b –Geographicmarketdefinition•Majornetworkdeploymentsandupgradesinprogress:TelemachandothercableoperatorsupgradetheirHFCnetworksbyplacingfibernodesclosertoend-usersandDOCSIS3.0TelekomSlovenijestartedtodeployGPONfibernetworksin2015andhasalmostcompletely

replacednewlybuiltP2PFTTHconnect
replacednewlybuiltP2PFTTHconnectionswithGPON.TelemachalsocontinuestodeployGPONfibernetworksOperatorsalsocommittedthemselvestodeployNGAnetworkstomajorityofwhitespotsinthenext3yearsAKOS decided for differentiation of remedies on Market 3b (due to the fact that it is in suchcases more appropriate than geographic seg

mentation of market)Impositionof re
mentation of market)Impositionof remediesM3a andM3bM3a andM3b –Proposed remedies•Market 3a –ACCESS OBLIGATIONCopper LLU Fiber LLUVULA for Vectoring/G.FastVULA for GPON Collocation for access seekersIn-house wiringPassiveinfrastructure(terminating segments of ducts and poles –for otheroperators

for building their own network), dark
for building their own network), dark fiber, ethernet)M3a andM3b –Proposed remedies•Market 3a –NON-DISCRIMINATION OBLIGATIONEoI•Commoninformation system (ordering process, fault repairs)•KPIs, SLAs, SLGs•Technical replicability test (done by incumbent for new retail offers)•Market 3a -TRANSPARENCY OBLIGATIONPublica

tion of reference offerM3a andM3b â€
tion of reference offerM3a andM3b –Proposed remedies•Market 3a –OBLIGATION OF ACCOUNTING SEPARATION•Market 3a –OBLIGATION OF PRICE CONTROL AND COST ACCOUNTINGCoppernetwork -Monthly fee for LLU (8,09 EUR) and for shared LLU (3,27 EUR) developed by AKOS BU LRIC+ cost modelNGA network –Monthly fee for FTTH and VULA based on Econom

ic replicability test developed by AKO
ic replicability test developed by AKOSPassive infrastructureDuct Rental –based on BU LRIC+ cost model developed by AKOSPoles Rental –Based on BU LRIC+ cost model developed by AKOSOther services: based on LRIC+ methodologycalculatedby SMP operatorM3a andM3b –Proposed remedies•Market 3b –DIFFERENTIATION OF REMEDIESSettlem

entswith no price controland cost a
entswith no price controland cost accountingobligationbutwithaccessobligation, non-discriminationobligation, transparencyobligation, obligationofaccountingseparation1)atleast65%ofhouseholdscoveredwithinfrastructure(copperandfiber)ofotheroperators.IftheoreticallythewholesalepricesofSMPbecomeunacceptable,accesssee

kerswouldhaveapossibilitytoengage
kerswouldhaveapossibilitytoengageincommercialagreementswithownersofalternativeinfrastructure)M3a andM3b –Proposed remedies•Market 3b –DIFFERENTIATION OF REMEDIESSettlementswith no price control and cost accountingobligation: 2)TelekomSlovenijehas lessthan 40% retail market share of BB access connections(retail market

share is not dominant, retail competi
share is not dominant, retail competition is more developed in comparison to other areas)3)IfparticularsettlementhassufficientnumberofhouseholdsconnectedtoSMP‘sMDForODFthathaveatleast500lines(existenceofeconomicjustificationofLLU).IFtheoreticallythewholesalepricesbecomeunacceptable,accessseekerswouldhaveaviableoptiont

ounbundlelocalloopsateconomicallyf
ounbundlelocalloopsateconomicallyfeasibleterms.M3a andM3b –Proposed remedies•Market 3b –Settlementswith no price control and cost accountingobligation : (2,6%settlements/31%households)M3a andM3b –Proposed remedies•Market 3b –ACCESS OBLIGATIONBitstreamaccess oncopper networkBitstreamaccesson fiber

network(P2P/P2MP)Regionalbitstr
network(P2P/P2MP)Regionalbitstreamaccess(fourPoH)Nationalbitstreamaccess(one PoH)M3a andM3b –Proposed remedies•Market 3b –NON-DISCRIMINATION OBLIGATIONEoI•Multicast/unicastfunctionality•L2/L3 wholesaleservice•Commoninformation system (ordering process, fault repairs)•KPIs, SLAs, SLGs•Access to

networkinformationandplannednetwork
networkinformationandplannednetworkupgrades•Technical replicability test (done by incumbent for new retail offers)•Market 3b -TRANSPARENCY OBLIGATIONPublication of reference offerM3a andM3b –Proposed remedies•Market 3b –OBLIGATION OF ACCOUNTING SEPARATION•Market 3b –OBLIGATION OF PRICE CONTROL AND COST ACCOUNTINGNGA pro

ducts –to be tested based on Econom
ducts –to be tested based on Economicreplicability test developed by AKOSNon -NGA products (copper below 30 Mbit/s) –basedon LRIC+ methodology calculated by SMP operatorOther services: based on LRIC+ methodologycalculatedby SMP operatorSlovenia 2020Slovenia2020 Europe 2020 StrategyandDigital Agenda for Europe, by 2020, all

Europeans have access to much higher int
Europeans have access to much higher internet speeds of above 30 Mbps and 50% or more of European households subscribe to internet access above 100 Mbps.Slovenian NGN plan deployment, by 2020, 96% ofhouseholds have access to internet speed of 100 Mbps and 4% or households have access to internet speed of above 30 Mbps.Commercialinterest

Departmentalministrytestedcomme
Departmentalministrytestedcommercialinterest(secondhalfof2016)fordeploymentofhighspeednetworksandmanyoperatorscommittedthemselvestodeploythosenetwork,soalotofnewinfrastructureandupgradesareexpectedtill2020(AccordingtoSlovenianElectronicCommunicationAct-1whoeverexpressesamarketinterestinconstructingabroadbandnet

workmustconstructitwithinthreeyear
workmustconstructitwithinthreeyearsfromnotifyingtheministryandAKOSoftheirinterestBuildingofNGNnetworksandmajorupgradesofalmostalllargestinfrastructureoperatorsonthemarketareintheprogress(GPONinsteadofP2PfibreGRONinsteadofcable,DOCSIS3.0upgradesandcopperupgrades)Open broadband networks (state aids)Less then

1% households (white spots areas) wi
1% households (white spots areas) will be build by state aid funds by 2020 Cost reductionDirective(2014/61/EU)PossibilitytousepassiveinfrastructureinaccordancewithimplementedDirective2014/61/EUonmeasurestoreducecostofdeployinghigh-speedelectroniccommunicationsnetworkFor NGA products Economic replicability test and not cost oriented p

ricestosupporttheSMPoperators'
ricestosupporttheSMPoperators'investmentsinNGAnetworkandprovideincentivesforinnovationinNGA-basedservices.Slovenia2020 Ensuring stable and predictable prices for access to copper networkTo enable all possible access for access seekers based on current topology and technologyGPON andG.fast(VULA)Slovenia2020 Thank younatasa.vidmar-k