Networks Around the World: development and sharing of networks in Europe, Africa and Asia

Transcription

1 Networks Around the World: development and sharing of networks in Europe, Africa and Asia Christophe Fichet Alexander Shepherd Christian Taylor Christopher Götz George Morris 14 May 2015

2 Overview of the session Introduction United Kingdom France Germany Africa Asia 1 / B_LIVE_EMEA1: v1

3 United Kingdom Net neutrality in the UK market forces vs legal requirements Ofcom s position and the Open Internet Code Contrast with EU position Unreasonable limitations on genuine traffic management? Mobile not-spots a story of saving face and not on my land October 2011: Government announces 150m investment to improve mobile coverage in the UK Three years later: Two 2G sites up and running under the scheme Culture Secretary Sajid Javid in September 2014: the idea of national roaming The December 2014 agreement - 5bn investment by the four MNOs for roll out in not-spots 2G coverage of 90% of the UK (by geographic area) by 2017 Roll out severely hampered by ongoing issues with rights to land and planning restrictions - 18 month site builds and 17 metre masts 2 / B_LIVE_EMEA1: v1

4 United Kingdom (continued) Fibre investments Project Lighting - 3bn investment by Virgin Media into its fibre network, to connect an extra 4m homes and businesses to the FTTP network by 2020 BT s 2.5bn (majority FTTC) roll out largely complete Other operators continue trials of small scale fibre builds 3 / B_LIVE_EMEA1: v1

5 France Network sharing regulatory requirements Following the Law on Modernizing the Economy dated 4 August 2008, ARCEP adopted a Decision on 9 April 2009 laying out the principles for 3G operators to share their mobile network installations 2 framework agreements were then concluded by the 3G operators ARCEP makes regular enquiries The French regulator launched administrative enquiries in 2014 concerning 3G rollouts in rural areas 4 / B_LIVE_EMEA1: v1

6 France Network sharing agreement compliance with competition law Autorité de la concurrence 11 March 2013 s opinion sets out the conditions for network sharing by mobile networks Competition requires deployment of infrastructures To maintain competition three main criteria shall be borne in mind: 1. The degree of cooperation between the parties to the agreement 2. Market power jointly acquired by partners, which depends on their size, strength and complementarity, as well as the ability of other undertakings to provide alternatives, either individually or collectively 3. The characteristics of the areas covered by the agreement and in particular their population density: Sparsely populated areas : prima facie, any type of network sharing should be possible Densely populated areas: The sharing of passive facilities entails little risk in terms of competition since it does not compromise operators' ability to differentiate themselves Strong reservations re Frequency sharing as it eliminates partners' ability to differentiate and consequently undermines the principle of network infrastructures competition Active infrastructure sharing or RAN sharing must be controlled and in any case limited as it involves the exchange of sensitive information In a Decision 25 September 2014 (confirmed by the Appellate Court of Paris on 5 February 2015), Autorité de la concurrence rejected Orange claim for the suspension of a network sharing agreement between Bouygues Télécom and SFR (interim measures) on the ground that no serious or immediate threat to the sector's interests, consumers or the complainant company had been established 5 / B_LIVE_EMEA1: v1

7 France Net neutrality Objectives provided for in the French Post and Electronic Communications Code and implemented by ARCEP Sept. 2010: ARCEP issued ten proposals (i) aiming at defining a sustainable, neutral and high-quality equilibrium for the functioning of the Internet, and (ii) providing appropriate tools to ensure or guarantee (if needed) that this equilibrium is maintained Sept. 2012: ARCEP submitted a Report to Parliament and the Government on Net Neutrality: A dynamic and competitive market is essential to the existence of quality Internet access products that respect the principle of neutrality Cycle of work and monitoring of Internet players' practices undertaken by ARCEP: Introduction of a system for measuring and tracking the quality of fixed internet access services (later implemented by Decision of 29 January 2013) Inventory of traffic management practices implemented by operators e.g. throttling, blocking or priority queues Recommendation for the steady elimination of service blocking (VoIP, P2P) on mobile networks ARCEP has the relevant authority to enforce this recommendation by taking enforceable measures Sept 2012: Following a claim brought by Cogent, Autorité de la concurrence ruled (confirmed by the Appellate Court of Paris on 19 Dec. 2013) that France Telecom may ask to be remunerated for opening additional capacity but it must clarify the commercial and billing relationship between its Internet access and Internet transit businesses. In September 2014, the Prime minister tasked the French Digital Council, Conseil National du Numérique (CNNum) with holding a wide-reaching debate on digital issues in France, including Net Neutrality 6 / B_LIVE_EMEA1: v1

8 France Open access: recent example of Numericable s undertakings within the context of the acquisition of SFR On 27 November 2014, the Autorité de la concurrence gave conditional clearance to the acquisition of SFR by Numericable, an Altice group s subsidiary Numericable commits to give access to its cable network through two different offers for telecoms operators / ISPs (bitstream offer) and MVNOs (specific distribution offer) Non-squeezing price level, to give competitors sufficient economic leeway to develop offers on the retail market Related access reference offers shall be subject to approval of the Autorité de la concurrence First time that a European competition authority opens up access to cable 7 / B_LIVE_EMEA1: v1

9 Germany Sharing of mobile networks restricting or increasing competition? First major regulatory case: agreement between T-Mobile and O2 to share network and roam on their respective 3G networks in Germany. European Commission in 2002: national roaming restricts mobile network-based competition General prohibition of national roaming arrangements by European Commission; exemption to allow market entry (to be phased out in 2008) European Court of First Instance in 2006: national roaming agreements may be capable of increasing competition; European Commission s decision of 2002 overturned Status quo: Network sharing possible, but subject to regulatory scrutiny Long term network sharing deal in 2012 between Telefónica Germany - Deutsche Telekom 8 / B_LIVE_EMEA1: v1

10 Germany Net neutrality current position in Germany Sec. 41 a German Telecommunication Act Position of Bitkom Position of Federal Government Open Access to Fixed Networks Broadband rollout initiative initiated by Federal Government By mid-2011: almost 99% of households had access to a broadband connection with bandwidth of at least 1 MBit/s. Current goal: cover the "white spots in rural areas. The assignment of 800 MHz frequencies has been attached to a progressive coverage and rollout obligation. Coverage requirements met by mobile operators in Bavaria, Baden- Württemberg, Hessen, North-Rhine Westphalia, Rhineland Palatinate and the Saarland. 9 / B_LIVE_EMEA1: v1

11 Africa Mobile infrastructure sharing TowerCos taking over Infrastructure is costly to run in sparsely populated countries Consolidation of infrastructure with a small number of operators brings efficiencies large enough to make further roll outs economic The TowerCo model: TowerCo purchases towers from operators, and leases capacity back to the operators Complex asset transfer mechanisms and consideration of land rights Business model relies on colocation of multiple tenants on purchased sites Cameroon: MTN (2012) and Orange (2013) both sell their tower portfolios to IHS Africa 90% of towers in Cameroon now owned by IHS Rwanda : MTN (2014) and Airtel (2015) again both sell their tower portfolios to IHS Africa Tigo remains only operator in Rwanda not on IHS towers 10 / B_LIVE_EMEA1: v1

12 Africa Main Regulatory Trends Tools Ensuring non-discriminatory access to infrastructure and capacity available through (new) submarine cable capacity (e.g. ACE), fibre networks, backbones and backhaul infrastructures by small and mediumsized network service providers Clarification & harmonisation of cross-border regulations and licensing regimes for terrestrial networks Concept of essential facility Open access Infrastructure sharing: Rationing space, pricing of facilities and ancillary services, access and security arrangements for operator s equipment, appointment and supervision process for mutual cut-overs and work affecting more than one operator s facilities, negotiation of other lease and/or license arrangement 11 / B_LIVE_EMEA1: v1

13 Africa IXPs Development of several IXPs for regional interconnection Reducing tromboning effect (economies of scale) Related content opportunities: Content Delivery Networks Google cache Data Centres New IXPs in Africa supported by the World Bank, the Africa Union and the ISOC New opportunities to optimize data traffic Public and international funds to set up IXPs and provide appropriate organisations/structures for stakeholders 12 / B_LIVE_EMEA1: v1

14 Asia Mobile Hong Kong PCCW Mobile and 3 Hong Kong have active 4G sharing since 2011 Singapore no requirement / no sharers Japan no requirement / no sharers Taiwan Chunghwa Telecom and Taiwan Star in talks for 4G networking sharing PRC mandatory requirement for passive sharing: China Telecom, China Unicom and China Mobile have shared infrastructure since / B_LIVE_EMEA1: v1

15 Asia Malaysia mandatory requirement Celcom and Altel entered an agreement in 2013 to build, operate and manage shared infrastructure across Malaysia, gave Altel MVNO access Maxis and REDtone commenced a 4G active sharing agreement in 2012 Thailand mandatory requirement TRUE and TDAC entered a passive sharing agreement in 2014 CAT and TRUE are currently in negotiations Vietnam EVN Telecom and Vietnamobile have had an active sharing agreement since / B_LIVE_EMEA1: v1

16 Asia Myanmar passive sharing agreements likely to be under discussion soon Bangladesh on-going consultation on sharing Bangalink and Grameenphone had active sharing since 2009 Pakistan on-going consultation on sharing Ufone, Telenor, Warid and Paktel entered a passive sharing agreement in 2007 Mobilink and Ufone entered a passive sharing agreement is / B_LIVE_EMEA1: v1

17 Asia Fixed Mandatory access Hong Kong essential facilities Singapore LLU TV 16 / B_LIVE_EMEA1: v1

18 Key Contacts Christophe Fichet Partner Alexander Shepherd Partner alexander.shepherd@simmons-simmons.com Christian Taylor Partner christian.taylor@simmons-simmons.com Sign up to elexica and receive TMT legal updates and resources: elexica.com George Morris Supervising Associate george.morris@simmons-simmons.com Christopher Götz Partner christopher.goetz@simmons-simmons.com Follow us on 17 / B_LIVE_EMEA1: v1

19 Networks Around the World: development and sharing of networks in Europe, Africa and Asia simmons-simmons.com This document is for general guidance only. It does not contain definitive advice. SIMMONS & SIMMONS and S&S are registered trade marks of Simmons & Simmons LLP. Simmons & Simmons is an international legal practice carried on by Simmons & Simmons LLP and its affiliated practices. Accordingly, references to Simmons & Simmons mean Simmons & Simmons LLP and the other partnerships and other entities or practices authorised to use the name Simmons & Simmons or one or more of those practices as the context requires. The word partner refers to a member of Simmons & Simmons LLP or an employee or consultant with equivalent standing and qualifications or to an individual with equivalent status in one of Simmons & Simmons LLP s affiliated practices. For further information on the international entities and practices, refer to simmonssimmons.com/legalresp. Simmons & Simmons LLP is a limited liability partnership registered in England & Wales with number OC and with its registered office at CityPoint, One Ropemaker Street, London EC2Y 9SS. It is authorised and regulated by the Solicitors Regulation Authority. A list of members and other partners together with their professional qualifications is available for inspection at the above address. 18 / B_LIVE_EMEA1: v1

20 elexica resources relevant to this session Telecoms infrastructure sharing: structures Telecoms infrastructure sharing: The tower use agreement Telecoms infrastructure sharing: The asset purchase agreement Visit the Events page for forthcoming seminars and training days and the Training page for video recordings, podcasts and slides Request a demo Contact elexica@simmons-simmons.com or speak to your usual Simmons contact to find out more. 19 / B_LIVE_EMEA1: v1