OPTA presents its outlook for 2004, and its market monitor findings and annual report for 2003: Broadband competition is spurring on developments in telecommunications
‘Competition has improved in the telecommunications markets and charges for calls from landline to mobile phones are dropping ever lower. The broadband Internet market is evolving rapidly on the basis of infrastructure competition,’ says Prof. Dr. J.C. Arnbak, Chairman of the Commission of OPTA, the regulator for the telecommunications and postal markets, while presenting OPTA 2004 Market Vision, and its market monitor findings and annual report for 2003.
Other important developments in the telecommunications sector are that traditional telephone services are being squeezed, the number of people relying solely on a mobile phone to make calls is gradually rising, and providers are increasingly offering plans comprising different services. OPTA expects the pace of market developments to determine the level of investments in new infrastructure, such as the installation of fibre-optic cable.
In OPTA’s case 2004 is a crucial year. The new Telecommunications Act will come into effect on 19 May. The most important duty which the new legislation will confer on OPTA is that of defining at least 18 markets for electronic communication. Each of these markets will then be analysed to determine if any market party occupies a dominant position in it. If this is the case, OPTA will be able to choose what obligations to impose on the party concerned. The maxim to be applied for the purpose of this exercise is: be flexible where possible, and strict where necessary. This means that it is possible to tailor regulation to the circumstances.
Full-blown competition is ensuing between cable (about 1 million connections at present) and xDSL (1.1 million) for broadband Internet access. There does not appear to be a natural monopoly in this market. Price-based competition is fierce and the provision of television, telephony and Internet services through both infrastructures is within reach. In order to facilitate the operation of market forces OPTA has recently ruled that switching between DSL providers must be effected more rapidly.
Traditional telephone services are being squeezed. For example, KPN turned over 20% fewer call minutes for consumers. The carrier selection and preselection providers have extended their local call market share to between 20% and 25%. The corresponding figure is higher in other markets (national and international). The number of people who rely solely on a mobile phone to make calls has increased slightly to between 7% and 8%. Thanks to pressure exerted by NMa and OPTA, calls from fixed to mobile phones will again decline further this year. It is anticipated that various new ways of making telephone calls, for example, via the Internet, will be offered in the market this year. OPTA estimates that this could have an effect on the universal service in the future because there will be fewer callers to bear the costs involved.
There are now 13 million active mobile connections. T-Mobile achieved the largest increase in 2003. Telfort has opted for a different business model by offering access to their network to alternative providers. There is a convergence of market shares with the result that competition is constantly increasing in the mobile telephony market. Data transmission (for instance, of images) is below expectations. However, the SMS market has grown and OPTA believes that tariffs are sufficiently differentiated in this respect.
Competition is occurring in several sectors of the postal market, such as business-to-business parcel services and the delivery of unaddressed post. The other markets are dominated by TPG. OPTA is satisfied with the manner in which TPG is complying with the requirements that apply under the terms of the Postal Act. Further liberalisation may occur as of 2007, as far as the Minister of Economic Affairs is concerned.
The presentation given by Dr. Arnbak, the Commission Chairman, and the complete version of Market Vision, the market monitor findings and the annual report may be