OPTA presents it annual report for 2004 and outlook for the market in 2005: Growing convergence of electronic communications markets

The markets for electronic communications, especially the Internet, telephony and television, are continuing to converge. Broadband Internet access is ensuring that the traditional differences between the IT, media and entertainment markets are blurring. The Internet is increasingly being used to provide television and telephony, often in the form of bundled services. Jens Arnbak, Chairman of OPTA, the Independent Post and Telecommunications Authority, announced this today during the presentation of OPTA’s annual report for 2004 and its outlook for the market in 2005.

Mr Arnbak stated the following:

Since the structure of the communications markets is changing, the potential for competition between the various providers of services and infrastructure is growing. However, the traditional providers, such as the cable companies and KPN, still wield economic power. It is imperative that their actions continue to be regulated.

At present 45% of households in the Netherlands have a broadband Internet connection, thereby putting the country at the vanguard in Europe. The growth of cable is lagging behind that of DSL connections. The level of service is becoming increasingly more important in this market, although competition has been based predominantly on price and speed in recent years. Internet access is now four times faster than that provided for the same price two years ago. OPTA is focusing its regulatory endeavours on the potential for facilitating switches between providers, safeguarding opportunities for fair competition, and combating all threats to security on the Internet, such as spam.

The decline in the use of the traditional fixed telephone network is persisting. This is due to the emergence of broadband Internet and mobile telephony. This development may gain strength as telephone calls are routed through the Internet, a phenomenon which is likely to rocket this year. This will have the effect of reducing call charges further. Earlier this year OPTA had already announced that it would be lowering charges for calls from fixed to mobile telephones further.

Market parties are increasingly providing bundled services through a single connection. Although this may yield considerable benefits for consumers, OPTA is alert to high switching thresholds, tied sales, excessive discounts offered by dominant providers and the erosion of transparency for consumers.

In the postal market OPTA has noted a cautious emergence of new entrants, although the volume of post is continuing to fall. It is anticipated that the impact of the further liberalisation of the postal market, which is scheduled for 2006 and 2007, will mainly occur in the business market. It is anticipated that TPG Post also complied with its legal requirements in exercising its postal monopoly in the past year.