Category Archives: Models

Telecoms services improving, but regulatory divergences should be addressed to support further innovation.


 

 

High speed internet is a lifeline for economic recovery which provides new opportunities to enjoy and create web content, to innovate or to buy, sell and carry out business online The telecoms sector has a key role to play in the race towards a digital EU society, where growth and jobs can be delivered by better and faster on-line activities. The report on the progress of the sector released today as part of the Digital Agenda Scoreboard (see IP/12/614) shows how citizens are enjoying greater choice of services and better prices, as a result of competitive developments. It also shows that operators are faced with new realities as users’ appetite for data, in particular mobile data, keeps growing. The report also identifies a number of areas where more co-ordinated implementation of the telecoms rules is required to support the roll-out of high speed internet.

The report issued today outlines a number of key trends and achievements:

Demand for data is exploding: 95% of Europeans have access to a fixed broadband connection, while the use of mobile internet has gone up by 62%. The huge potential growth for data traffic volumes opens up new business opportunities for the telecoms sector and online service providers. Data represents 7.6% of total industry revenues for individuals and households with revenues from mobile data services up almost 10%.

To support consumers’ demand for mobile internet services, a significant amount of radio spectrum was freed up during 2011: Belgium, Lithuania, Slovenia, Greece, Malta, Spain and Portugal opened up the 900 MHz and 1800 MHz bands (“GSM bands”) to new mobile services, while the 800 MHz band was assigned to mobile broadband in Spain, France, Italy, Portugal and Sweden.

Consumers, overall, got better deals for mobile services. The average revenue per user (ARPU) dropped in many Member States with the average EU level decreasing from €244 in 2009 to €221 in 2010. Thanks to progress in implementing the EU rules on termination rates, the fees networks charge other networks for delivering mobile voice calls, mobile termination rates went down to 3.87 cents per minute in 2011 compared to 5.47 cents per minute in 2010.

The report also points to area where targeted measures are needed to make the most out of the EU regulatory framework:

Member States need to implement the updated EU telecom rules which were agreed in 2009. To date, four Member States (Belgium, Poland, Portugal and Slovenia) have not yet transposed these rules into their national legislation These rules guarantee more competitive markets for consumers and businesses and give EU customers new rights, such as switching their phone operator in one day without changing the number or being informed without delay when their personal data is stolen online. In terms of implementation, the Commission is particularly concerned about issues like the independence of regulators, consumer protection (in particular over the adequate implementation of EU rules on number portability) but also specific taxes on operators where infringement proceedings are ongoing against Hungary, Spain and France.

There are major variations in the price of broadband access products such as the price alternative operators pay to use incumbents’ networks to provide services to customers where the monthly average wholesale price for access to the ‘local loop’ varies between €5.3 in Poland and Slovakia and €14.4 in Finland. This shows the need to increase regulatory consistency in areas like the costing methodology of broadband access products and non-discriminatory remedies.

Up to 80% of the costs of rolling out high speed broadband networks are related to civil engineering, such as the digging up of roads to lay down fibre. The Commission believes this high percentage calls for harmonised measures to reduce these costs and is envisaging an EU initiative in the beginning of 2013.

Member States are taking divergent approaches on the issue of net neutrality and quality of services which slows down the development of the digital Single Market. Recent analysis from BEREC – the body of European network regulators – shows that at least 20%, and potentially up to half of EU mobile broadband users have contracts that allow their Internet service provider to restrict access to services like VOIP (e.g. Skype) or peer-to-peer file-sharing. This shows the need for co-ordinated action to ensure better consumer information and choice of internet services (see MEMO/12/389).

Date: 18/06/2012

Data source: European Commission

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‘ULTRA-FAST BROADBAND’ – POLICY AND PRACTICE’


Overview

Overview
       
       
‘ULTRA-FAST BROADBAND’ – POLICY AND PRACTICE’
21st May 2012 – 9:00-18:30, Sofitel Brussels Europe
Keynote Speech by Neelie Kroes
Vice President and Commissioner for the Digital Agenda, European Commission
plus
TU Delft present the findings and recommendations from their new report

 
Topics include:
  • Do we need industrial policy to achieve Digital Agenda targets?  Will the market deliver the Commission’s broadband targets on its own or should policy-makers be more pro-active?  Should we favour fibre-to-the-home or be technology neutral?  Should pricing be used to incentivise investment in NGA? Should policy-makers favour “infrastructure competition” or a “one-network” approach?  Delft University of Technology presents new research and other high-level stakeholders from industry and regulators debate the pros and cons of different approaches.
  • Access pricing and non-discrimination: How could proposed new rules from the European Commission on access pricing and non-discrimination affect ultra-fast broadband deployment
  • Could entrants win the fibre race?: Under what circumstances can new entrants get ahead and is the business case sustainable?
  • Infrastructure competition and technologies: where are the limits? Presentations on the future capabilities of fixed and mobile technologies and case studies on fibre and cable roll-out. Is infrastructure duplication a realistic and desirable objective?
  • Enabling fibre roll-out: financing and demand – exchange of views with equity and bond investors and infrastructure funds on factors influencing investment decisions. Are the interests of investors and consumers in conflict or can they be made to coincide?
  • Ownership, separation and equivalence: an assessment of outcomes achieved through different models ranging from functional separation in the UK, to “independent” utility fibre investors, to Government as the network owner to co-investment by multiple telcos. 

Fiber – a good investment for society


Acreo has carried out a feasibility study to evaluate the socio-economic return of FTTH investment in Sweden, on behalf of the Swedish government’s Broadband Council (Bredbandsforum). The study has investigated the fiber-based broadband effects on economic growth, both at a national level and in individual municipalities. The result demonstrates that a fiber investment generates economic gain in less than 3.5 years.

The greatest impact is found for the public sector where the result indicates that communication related costs can be cut by 30-50% thanks to the availability of fiber. The study also shows that the municipalities that have invested in fiber will have a positive economic growth in the form of increased employment and a positive population trend.

“A particularly interesting finding is that the deployment of new fiber-based broadband networks in Sweden has a clear impact on economic growth and population development” says Crister Mattsson Senior Advisor at Acreo. “In order to stimulate local initiatives this needs to be clarified with the local authorities, too often they are not aware of the positive effects of fiber investments.”

Acreo has performed a statistical analysis that links the effects of fiber investments, spread over a four year period, to the specific socio-economic factors. The return of investment was then calculated year by year, up to five years after the investment. The study also estimates the investment needed to connect the remaining households that do not have access to fiber. The analysis is based on data from Statistics Sweden (SCB), Swedish Post and Telecommunications Authority (PTS), meta-analysis, Acreo’s own research in the field, and on extensive interview data where Acreo has conducted both surveys and in-depth interviews with local governments, telecom operators and network owners.

“The actual return is expected to be greater than what is calculated in the study when indirect and induced economic effects are likely to increase over time and also due to effects not currently quantifiable” says Marco Forzati Senior Researcher at Acreo. “Therefore, to be able to calculate the true value of an investment, a more comprehensive method needs to be developed.”

Traditionally, the success of broadband investments is primarily evaluated from a telecom perspective. For society, however, economic growth and the impact on the public sector are more important success factors for the assessment of the investment.

“This feasibility study is the first step to better understand the real social impact of broadband investments in Sweden. It provides a good basis for further discussions in the efforts to spread knowledge of broadband-related issues and its benefits for society” says Patrik Sandgren at the Government Broadband Forum.

For further information please contact:

Crister Mattsson, Senior advisor at Acreo, +46 (0)8-632 77 92; crister.mattsson(at)acreo.se

Marco Forzati, Senior scientist at Acreo, +46 (0)8-632 77 53, marco.forzati(at)acreo.se

Press Contact:

Tove Madsen, Marketing and Communication
+46 (0)8-632 77 86, tove.madsen(at)acreo.se

About Acreo

Acreo is one of Europe’s top research institutes providing breaking edge results within the field of electronics, optics and communication technologies. Turning academic research into commercial products, Acreo offers value-adding technology solutions for growth and competitiveness in industry and society. The types of assignments are ranging from feasibility studies, long term research projects, prototyping and small scale production, to verification and testing. Acreo also supports small and medium sized companies with technology transfer, business networks and financial advice. Acreo is part of Swedish ICT, and has 145 employees located in Kista (headquarter), Norrköping and Hudiksvall, in Sweden.

About Acreo Broadband Technology

Acreo Netlab is active in the field of Broadband Technology; our activities span core networks through access networks to home networks. We address network design, optical transmission and IP protocols, we measure how networks are used and how network performance influence quality of experience of important services such as video and IPTV. We perform technical research and development; we drive standardization and policy issues as well as analyze business models.