OPTA: Final obstacle to competition in the fixed telephony market has been removed. Freedom of choice could yield €50.00 to €100.00 per annum.
As of tomorrow it will also be possible to choose from a variety of telephone companies to make local calls. At present they account for approximately 60% of the costs of all domestic calls.
Until now there has been virtually no competition in relation to local telephone services within the Netherlands. According to OPTA’s market research report, Aanmerkelijke Marktmacht 2001 [Significant Market Power in 2001], KPN’s share of the fixed local telephone services market exceeds 95%. Competition will also increase in this market thanks to the introduction of so-called local carrier preselection (CPS). CPS allows consumers to choose their preferred telephone service provider(s).
Why introduce CPS for local calls only now?
CPS was introduced into the Netherlands on 1 January 2000. As of that point in time consumers have been able to allow a CPS provider to carry their national, international or both types of calls. In actual fact, at the time this meant that only those numbers which began with nil could be carried by a CPS provider.
However, in 2001 the CPS providers indicated that they would also like to carry calls that are not preceded by nil via CPS, albeit subject to the condition that the so-called price squeeze which of these calls entailed would be resolved. Price squeeze refers to a situation in which KPN’s competitors find themselves squeezed between the tariff which KPN charges for the use of its network and the end-user tariffs which it charges its own customers.
In recent years OPTA has adopted various measures to resolve this price squeeze.