Transcript Sketching the competitive landscape for NGN

NGN
European Commission – Workshop
22 June 2005
Roger Wilson
Managing Director
European Competitive Telecoms Association (ECTA)
ECTA: promoting competition
 The leading pan-European trade association serving
the alternative telecommunications industry.
 150 member companies – operators, service
providers and suppliers, as well as national
associations
 ECTA objectives are to:
 Work for a fair regulatory environment which allows all electronic
communications providers to compete on level terms in order to
multiply investment and innovation throughout an effective European
internal market.
 Represent the telecommunications industry to key government and
regulatory bodies
 Maintain a forum for networking and business development
throughout Europe.
The liberalisation process is NOT complete
 Ofcom Strategic Review (2005): input of the entire
industry – some interesting conclusions:
• UK market has 20 years of liberalisation, and NRF more
substantially implemented than in any other Member State
• “The market has made good progress, however, its
foundations are unstable”. Bottlenecks still exist (local loop)
• Regulation is still needed and Ofcom plans to reinforce its
efforts to prevent discrimination by the incumbent: the
equivalence debate
 Detailed non-discrimination is probably a
building block in ensuring effective competition
key
Risk or Opportunity (I)
 NGN is a converged Internet Protocol (IP) backbone network
– NGN is NOT to be confused with fibre-to-the-home
 Many alternative operators are already delivering converged
services via IP networks: it’s an Evolution, not a Revolution!
 NGNs involve a potentially substantial redesign of network
architectures.
 The future of competition is now in the hands of European
regulators and Institutions:
• Opportunity to ensure that networks are built in a way that
enables effective competition based on non-discrimination (ex
ante regulation)
• Failure to act will enable incumbents to build networks that
foreclose competition (reducing benefit for consumers for years
to come)
Risk or Opportunity (II)
 Incentive to invest:
• Costing methodology (cost of capital taking account of
associated risks)
• NGNs offer the opportunity to differentiate between
services based on their different characteristics and
inherent risks
• This could lead to lower prices for access facilities whilst
a risk premium may be appropriate for some aspects of
NGN development
 The move to NGNs represents an opportunity for
regulators to establish in advance ground rules for
ensuring the continued passage to effective
competition and minimise damage during transition
Competition stimulates Investment
Incumbent and new entrant investment follows
similar pattern: highest in “best” regulated (most
competitive) markets
Investment as % of
GFCF
Relationship between Regulatory Scorecard and
Investment as Percentage of GFCF
8
UK
6
4
2
NL
DE
0
200
BE
FR ES SE
250
DK
IT
IE
300
350
Regulatory Scorecard
Source: JonesDay & SPC Network (Regulatory Scorecard)
400