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Broadband Access Catalin MARINESCU, President of ANCOM CASPIAN TELECOMS Istanbul, 19-20 April 2012
Broadband Access
Catalin MARINESCU, President of ANCOM
CASPIAN TELECOMSIstanbul, 19-20 April 2012
Outline
• A short introduction to the Romanian market• Addressing the challenges
The Romanian Market:A Combination of 3 HIGHs & 3 LOWs
HIGH Competition levels Very LOW Penetration Infrastructure based, minor LLU
take-up after 9 years of regulationThe only EU market with no WBA
regulation
Constantly at ½ EU average with 15% population, 39% households
22nd place in the EU at accession in 2007, now the last place
HIGH Speed LOW prices One of the fastest internet
countries in the world 34 Mbps average connection in
peak time, top 3 fastest cities in Europe
Some of the most competitive prices in Europe
10 euro/month for 3P package incl FTTH 100 mbps
3,5 euro/month 3G internet & unlimited traffic
(first 5 Gb uncontained)
HIGH Urban/Rural divide LOW DSL 66% urban usage, 68% rural non-
usage 20% population lives in localities
without wireline internet
DSL < 30% active connections (EU avg. 77%)
A market unlike other European peers
Dynamics of the supply side: A retrospective incumbent
limited territorial coverage and shy (non-existent) expansion of access network concentrating to cream the market on voice, the incumbent lost momentum in
broadband, creating a window of opportunity (nearly 3 years) for competition
Rights of way & urban planning rules de facto no mans’ land, aerial cables could hang
everywhere enhanced business opportunities for rapid network
deployment in density areas, and at low cost
Competition between fixed infrastructures cable operators & network neighbourhoods (coaxial, fibre, UTP/FTP) exploit the
windows of opportunity especially through competitive bundles incumbents’ network becomes less interesting, even with competitive LLU
regulation cable operators consolidate & start overlapping their networks
Incumbents’ fibre deployment a direct response to competition & high customer churn Incumbent goes further and grows a low cost subsidiary which mimics CATV
business Advent of mobile broadband as mass market – early 2010
with the liberalisation of 900 MHz & 1800 MHz and upcoming of LTE in 800 & 2600 MHz
Several technologies for super-fast broadband
The Demand side:
source: market survey for ANCOM, individuals
When did you last use internet?6,6 mil. broadband connections at 20 mil.
population
~ half of them are mobile
~ half of population never went online
multiple subscription, fixed & mobile
Main Dividing lines on Broadband Adoption
% adopters in the group
The fibre getting closer & closer to the citizens
TOTAL fixed broadband 3,13 mil.
active lines
88% of broadband lines have some fibre
build-in
50% at least FTT-Building
Mobile broadband coverage for > 90% of citizens
source:
ANCOM statistics, H1 2011
HSPA and HSPA+ in urban, UMTS in rural
Rapid deployment through multi-mode SDR solutions (software defined radio)
Benefits of competition in fixed infrastructures
Source: WIK - NGA Progress Report march 2012
FTTB/H coveragein % of homes at mid
2011
FTTN (VDSL+DOCSIS 3.0) penetration
in % of homes, mid 2011
The challenges
Key challenge areas: stimulate demand
Understanding the reasons of non-adopters is not easy
Several reasons often quoted Digital illiteracy & lack of relevance
surely hide behind the “no need, no use” reason
“Too expensive” may in fact refer to access equipments (PCs, Smartphone, etc.) rather than monthly price
Non-adopters need to be provided compelling reasons to get online
source: market survey for ANCOM, individuals
Why is there no internet in your household?
e-RomâniaNet
neutrality
Main challenges on the supply side
e-România
Net neutrality
Infrastructure sharing
Digital Dividend
Equity / investments investments take place in response to
competitive threats and/or to improve efficiency
before mass adoption effects, the significant upfront investments with NGA seem riskier (to the operators)
end-user equipments to get online (PCs, routers, dongles) come at a cost, even though subsidised (by the operators)
Productivity new content & applications of the digital
economy expected to lead to productivity gains in all sectors
technological progress makes services cheaper
Cost of digital exclusion already huge & rising exacerbates territorial imbalances
Supply side challenges: Net neutrality is the key to success
networks’ congestion and content applications are not excuses to renounce to neutrality
technical progress resolves congestion problemsoperators should be capable to respond to disruptions from content applications,
they just need to be creative Promote competition:
effective competition is the main driver for growthin reality, investments usually take place in response to competitive threats
and/or to improve efficiency, not in response to regulatory holidayswire-line networks as broadly available as possible, wire-less everywhereinfrastructure based competition where efficient, services based competition
everywhere Spectrum issues:
significant impact, especially if fixed networks are not omni-presentliberalise spectrum usage (2G…4G) to increase spectrum efficiency and let higher
speeds & cheaper services pass through mobile networks put to auction as much spectrum as possible enable a minimum number of competing networks in high & low bands, ensure
against hoarding Universal service:
universal service provider does not necessarily mean 1 single provider in the entire country
technologically neutral, i.e. fixed or mobilethe most efficient solution for the white area(s)
Fixed broadband dynamics in the EU
EU-27 = 7.5%
EU-27 = 25,7%Penetration increase (2010/ 2009)
Penetration rate per population
Source: Digital Agenda Scorecard, EC Commission
Mobile broadband dynamics dedicated equipments
Penetration rate per population
Penetration increase (2010/ 2009)
EU-27 = 7.24%
EU-27 = 42%
~900.000
Source: Digital Agenda Scorecard, EC Commission
FTTB/H take-up rates (subscribers/homes passed), mid 2011
Source: WIK - NGA Progress Report, march 2012
FTTN take-up rates (subscribers/homes passed), mid 2011
Source: WIK - NGA Progress Report march 2012
Super - fast Broadband
penetration in % of homes
at mid 2011
Source: COCOM 2011
14% above 100 Mbps
42% above 30 Mbps
Cătălin MARINESCU, ANCOM
President
Thank you for your time and attention!
