ed broadband market PosTel 2010 Beograd 14 th December, 2010 Mag. Miroslava Zupančič

Transcription

1 The position of Telekom Slovenija on the regulated ed broadband market PosTel 2010 Mag. Miroslava Zupančič Beograd 14 th December, 2010

2 Content Situation on broadband market in SI Current regulation of DSL markets in SI New proposal of broadband regulation in SI Strategy of NGA regulation in EU Broadband penetration and incumbents market shares in EU and SI Telekom Slovenia s dilemmas regarding the third circle of analyze on broadband markets (markets 4 and 5) 2

3 Broadband market in Slovenija The main characteristics of the broadband market: - Strong competition in urban areas - Small usage of optical and copper access in urban areas - Fast migration from copper to other infrastructures in urban areas (cable and optic) - Strong price pressure on retail market from cable and optical competitors - Low retail prices of optical products - Low market share of Telekom Slovenija on optical access - Development of FTTN in rural areas is blocked by LLU competitors - Open networks built with EU funds 3

4 Broadband access on retail market in Slovenia / Fixed broadband lines by technology (according to the number of connections) DSL lines 67%/60% Cable modem23%/24% 24% FTTH10%/15% 15% Fixed broadband lines by operators (according to the number of connections) Telekom Slovenia 49,1 %/44,7% (39,3% DSL, 5,4% FTTH) Others 50,9%/55,3% (21,8% DSL, 24,1% cable, 9,4% FTTH) Total number of BB lines on : Fixed broadband penetration: 22,8%/23,6% 4

5 Total BB access lines in urban and rural areas Source: TS ( ) URBAN AREAS 17% 16% RURAL AREAS 1% 24% 35% 17% 66% 24% TS (DSL retail+ftth) Cable others DSL others FTTH others 5

6 Current regulation on DSL markets in Slovenia Obligations on markets 11 and 12 Market 11 (access to copper infrastructure) Transparency Non-discrimination Access to the network (access with own optical cable) Price control (cost prices based on LRIC) Prices: full LLU 8,20 - shared LLU 3,27 Market 12 (acces to bit stream) Transparency Non-discrimination (VoIP, IPTV, VoD, naked DSL ) Obligations on market 12 are defined very general: problems with naked DSL,VPN, CPE, multigain systems EMX) Access to the network (national, regional) Price control based on model retail minus x (x from 43% to 66%) 6

7 DSL retail lines by operator Source: TS Number of ADSL lines dec.05 jun.06 dec.06 jun.07 dec.07 jun.08 dec.08 jun.09 dec.09 jun.10 sep.10 Telekom Others

8 DSL access lines market share by operator Source: TS DSL lines by operator 100% 90% 8,6 17,8 24,5 28,3 30,8 32,7 32,2 33,3 34,6 35,1 35,6 80% 70% 60% 50% 40% 91,4 82,2 75,5 71,7 69,2 67,3 67,8 66,7 65,4 64,9 64,4 30% 20% 10% 0% dec.05 jun.06 dec.06 jun.07 dec.07 jun.08 dec.08 jun.09 dec.09 jun.10 sep.10 Telekom Others 8

9 DSL increment by operator Source: TS New DSL Connections st half 06 2nd half 06 1st half 07 2nd half 07 1st half 08 2nd half 08 1st half 09 2st half 09 1st half Telekom Others 9

10 Total xdsl increment on retail market in period Source: TS xdsl TS, prirast xdsl ostali, prirast 0 jan.09 feb.09 mar.09 apr.09 maj.09 jun.09 jul.09 avg.09 sep.09 okt.09 nov.09 dec.09 jan.10 feb.10 mar.10 apr.10 maj.10 jun.10 jul.10 avg.10 sep

11 New entrants DSL lines by type of access Source: TS New entrants DSL lines by type of access 86,8 58,6 24,95 23, 3,63 27,55 26,89 24,67 22,04 20,57 18,81 18,05 42,6 36,1 25,2 22,3 21,8 22,2 21,9 22,3 22,5 100% 90% 80% 70% 60% 50% 11 13,19 25,86 15,56 32,43 40,31 47,29 50,80 53,57 55,78 57,49 58,88 59,47 40% 30% 20% 10% 0% dec.05 jun.06 dec.06 jun.07 dec.07 jun.08 dec.08 jun.09 dec.09 jun.10 sep.10 PRD SRD BSA

12 Open questions and dilemmas under the current regulation High regional differences (TS market share in urban area is 35%, others: cable 24%, DSL 24%, FTTH 10%, July 2010) Low wholesale (BSA) and retail (FTTH) prices Undefined migration to FTTC (rural areas) High infrastructure competition in urban areas (four infrastructures) Low use of optical fibre and copper network Inappropriate cost model for naked services Low Telekom Slovenia market share of new DSL lines (only 11%, of total increment in 18 months) Fast decreasing of TS s retail market share (49,1% in January 2009, 44,7% in July 2010) 12

13 New proposal of broadband regulation in Slovenija In November 2010 NRA (APEK) published third analyses on markets 4 and 5 Basic elements: Harsher remedies (access to all passive elements copper and optical loops, ducts, dark fibers, in-house wiring) on market 4 Copper and fiber on market 5 Markets are defined as national in spite of high geographical differences between urban and rural areas Strong price control of optical access (based on LRIC model) TS is concerned about possible negative impact of proposed obligations to market development and motivation for new investment Slovenian market is very dynamic with strong infrastructure competition, especially in urban areas 13

14 FTTH lines (total and Telekom Slovenia) Source: TS and APEK No. of FTTH connections /3q 2007/4q 2008/1q 2008/2q 2008/3q 2008/4q 2009/1q 2009/2q 2009/3q 2009/4q 2010/1Q 2010/2Q Total RS TS 14

15 Total BB increment on retail market in period Source: TS prirast BB, ostali prirast BB TS jan.09 feb.09 mar.09 apr.09 maj.09 jun.09 jul.09 avg.09 sep.09 okt.09 nov.09 dec.09 jan.10 feb.10 mar.10 apr.10 maj.10 jun.10 15

16 Quarter BB increment on retail market in period per technology Source: TS Koaks. skupaj xdsl FTTH skupaj 0 jan.09 feb.09 mar.09 apr.09 maj.09 jun.09 jul.09 avg.09 sep.09 okt.09 nov.09 dec.09 jan.10 feb.10 mar.10 apr.10 maj.10 jun

17 Retail BB connections of TS per technology Source: TS BB CONNECTIONS PER TECHNOLOGY FTTH xdsl without TDM xdsl with TDM 17 No. of connections

18 NGA Recommendation In September 2010 EC published NGA new NGA Recommendation Basic elements: Ladder of investment principle New regulator instruments to promote co-operation/ co-iinvestments Symmetric access obligations as complement for asymmetric Rate of return should reflect investment risk Geographical differences should be taken into account 18

19 Strategy of deployment and regulation in EU In September 2010 EC published NGA new NGA Recommendation Basic elements: FTTC/VDSL as the prevailing technology FTTH in GPON technology Symmetric access obligations as complement for asymmetric Different approaches in EU: Access to ducts (France, Spain, Portugal) Access to VULA (Great Britain) Access to FTTH (Netherland, Finland, Sweden) 19

20 Broadband penetration rate in EU and SI Source: EU % ,2 20,0 17,3 21,7 19,1 22,9 21,0 23,8 22,1 24,8 22,9 25,6 23, ,8 14,9 16,2 14,0 15,3 EU 25 SI 10 11,0 8,0 9,9 11,5 5 0 jun. 05 dec. 05 jun. 06 dec. 06 jun. 07 dec.07 jun.08 dec.08 jun.09 dec.09 jun.10 20

21 Market shares of incumbent in EU and SI Source: EU % 71, ,5 61,2 59,4 55, ,3 56,5 52,2 51,9 49,2 47, ,3 47,5 44, jun jun jun jun jun.08 jun.09 jun.10 EU % SI % 21

22 Telekom Slovenija s dilemmas regarding the proposed regulation on markets 4,5 Dilemmas regarding the proposed regulation: Harsher remedies will cause additional lowering of Telekom Slovenia s retail market share New remedies will further increase geographical differences between rural and urban networks (Telekom Slovenia covers only 28% households in urban areas) Low retail prices of optical connections will be transferred to wholesale market Implementation of the new remedies will cause additional costs Regulation of in-house wiring should be symmetrical Regulation of FTTN nodes in rural areas should be adapted to existing situation (small nodes with maximum 200 subscribers) Strong competition from the side of cable operators (cable networs are excluded from regulation on market 5) 22

23 Thank you for attention 23