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KPN must grant competitors access to its copper and fiber networks

17-12-2015

Dutch telecom company KPN must continue to grant its competitors access to its copper and fiber-optic networks for the next three years. This has been laid down in the final version of the market analysis decision on unbundled access of the Netherlands Authority for Consumers and Market (ACM). With this decision, ACM promotes investments in the copper and fiber-optic networks, while at the same time, the decision offers telecom providers long-term certainty. Henk Don, Member of the Board of ACM, explains: “This decision is good news for consumers: they will continue to have different providers to choose from. Furthermore, ACM’s regulation of the market will keep prices for telecom services competitive. Consumers and businesses will save at least EUR 250 million per year on their telecommunication costs.’

Towards faster and cheaper telecommunication services

Mr. Don continues: “KPN will still have plenty of options to continue to invest in expansion of its fiber-optic network, and in upgrading its copper network and making it faster. That is how KPN will continue to be able to compete with cable provider Ziggo effectively. We facilitate the arrangements that KPN has made with users of its network such as Tele2, Vodafone and Online regarding new forms of access. That way, these competitors will also have the opportunity to offer consumers and businesses faster, better and cheaper telecom services. This will result in increased competition in the Dutch telecom sector, and in better prices.’

Healthy competition requires more than two providers

The Netherlands has two major networks that consumers can use for their broadband, television and telephony needs: the cable network of Ziggo and the copper and fiber-optic networks of KPN. In ACM’s opinion, having just two providers on these markets cannot be considered healthy competition. That is why ACM stimulates other companies to give consumers competitive offers. Thanks to ACM’s regulation of the market, these competitors are able to use KPN’s networks.

KPN versus Ziggo

Mr. Don adds: “Access to KPN’s network is sufficient for making competition possible. Other providers are able to offer their own products and services over KPN’s networks. However, due to technical reasons, access to Ziggo’s cable network is practically impossible, thereby offering other providers very little to no options to compete. ” Furthermore, KPN is stronger than Ziggo because of its position in the business market. One explanation for this is that many business parks only have a KPN network. Customers in such business parks are unable to choose Ziggo.

Background

A lengthy and thorough process preceded this ACM decision. Earlier this year, the European Commission was still critical of the draft decision. Following the Commission’s criticism, ACM further substantiated and revised the decision over summer, devoting more attention to the role of cable networks, among other revisions. In late-November, the Commission approved the decision with just a few comments.

The new regulatory regime comes into force on January 1, 2016. Market participants will still have the opportunity to file an appeal against the decision.