Transcript Local loop unbundling - ITU

Local loop unbundling :
keystone of the competition on the
broadband markets in France
ITU/BDT Arab Regional Workshop
Developing Competition Policies and Strategies in Telecommunications
Rabat-Morocco 19-21 December 2005
Bertrand Vandeputte
Broadband Access Division
ARCEP
[email protected]
Disclaimer
The views expressed in this presentation are those of its author.
They do not necessarily represent the views of the Autorité de
Régulation des Communications électroniques et des Postes
(ARCEP) or its Chairman’s.
2
Overview of the broadband retail market
The relevant broadband wholesale markets
Broadband regulation focused on LLU
3
French broadband retail market
overview : DSL is predominant
Broadband Access
– bandwidth > 128kbps
– always connected
– no incidence on traditional voice services
cable
6%
other technologies
< 1%
xDSL
– thanks to xDSL technologies (ADSL,
ADSL2+, READSL, VDSL), copper line =
lead means to broadband access
– today, 95% of the population covered in
xDSL technologies (-> 98% end 2006)
Other technologies
– cable = second means to broadband,
only in big cities (30% pop. covered)
– Wireless Local Loop, FTTx, Satellite,
Power Line etc.
xDSL on
copper line:
94%
situation at Q3 2005
nearly 9M broadband access
4
French DSL retail market is competitive
8.4M DSL subscribers
– high DSL penetration within the 30M
copper lines
– rank 1st in Europe
– rapid growth: +100% in 2003 and
+90% in 2004
Active competition
– the retail market is dynamic
– incumbent market share below 50%
9000000
8000000
7000000
6000000
other ISPs
Tele2
4%
Club Internet
4%
Alice
AOL 6%
7%
NeufCegetel
14%
Wanadoo
47%
Free
18%
Wanadoo
5000000
4000000
3000000
2000000
1000000
1
ja
nv
ie
r
20
1
02
av
ri
l2
1
00
ju
2
ill
et
1
20
oc
0
to
2
br
e
1
20
ja
02
nv
ie
r
20
1
03
av
ri
l2
1
00
ju
3
ill
et
1
20
oc
03
to
br
e
1
20
ja
03
nv
ie
r
20
1
04
av
ri
l2
1
00
ju
4
ill
et
1
oc
20
04
to
br
e
1
2
00
ja
nv
4
ie
r
20
1
05
av
ri
l2
1
00
ju
5
ill
et
1
oc
20
05
to
br
e
20
05
0
main DSL market players
with market shares
(September 2005)
5
Retail offers diversity increases and
retail tariffs drop…
Diversity of the offer
– increase of bitrate (up to
20Mbps with ADSL2+)
– new services have developed
(double-, triple-play offers):
Voice over DSL, TV over DSL…
– professional offers: data, VPN…
Drop of the retail tariffs
– down by a factor 2.5 in 2 years
– today tariffs are stabilized
around 30€/month for a
double- or triple-play offer
=> The broadband retail market
is not regulated in France.
6
…but geographic disparities in terms of
competition have arisen
Two areas identified
– depending on how many
operators are present on the
wholesale market
– directly connected to LLU (Local
Loop Unbundling)
–
only France Télécom
= non-unbundled area
LR + Internet 8M
30€ VoIP
–
at least two operators
= unbundled area (53% of
the population covered)
30€
Internet 20M
TV over DSL
VoIP
situation at Q3 2005
7
Overview of the broadband retail market
The relevant broadband wholesale markets
Broadband regulation focused on LLU
8
Technical architecture of France
Télécom’s network
Access
ATM backhaul
IP backhaul
ATM network
managed IP
backbone network
Services
PSTN
xDSL
Copper line
Copper Lines
(≈30000000)
MDF DSLAM
splitter
BAS
ATM switch
Central Exchanges
(≈12500)
Internet
contents
ATM switches
(≈130)
Broadband Access Servers
(≈20)
9
Broadband wholesale offers
MDF
managed IP
backbone network
ATM network
Internet
contents
CEx
≈ 12500 central
exchanges
LLU
≈ 130 ATM
switches
≈ 20 broadband
access servers
Other OLO
OLO’s network
ISP
ATM Bitstream
OLO’s network
IP Bitstream
ISP
OLO’s network
National IP broadband offer for ISP
Market 11 : LLU
1 national
delivery point
Market 12 : Bitstream
ISP
ISP
Market 12bis
10
Three wholesale broadband offers :
geographical architecture
Increased capillarity for the OLOs
– more investments in facilities, networks…
– more independency (technical / economical) towards France Télécom
National offer
– 1 delivery point
– no need for a
network
Bitstream offer
– regional delivery (20
to 130 points)
– need for a national
network
Local Loop Unbundling
– need to bring optical fibber
till the central exchanges
– need for a national and
regional capillar networks
11
Brief view of LLU offers
Rental of the local loop
Two kinds of LLU
Cu
low
France Télécom’s
equipments
splitter
high
shared
full LLU
access
high
full bandwidth
bandwidth
MDF
– copper local loop = essential
facilities than cannot be duplicated
– direct access to the end user
– no more bundled with other
services of the incumbent
low
full bandwidth
OLO’s DSLAM
optic fibber
comminglings
mid 2005
2003
2004
– shared access
– full LLU
Collocation in Central Exchanges
– the OLO installs its equipments in
France Télécom’s premises
– all collocation's tariffs are
described in a Reference Offer
pop. coverage = 52%
15%
30%
12
Brief view of Bitstream offers
France Télécom’s Bitstream’s
offers differ with:
=
=
– the number of delivery points
– the technology (ATM or IP)
– the characteristics of the access
(guaranteed bandwidth ,QoS)
access segment
CEx
delivery in ATM
=
= area covered
with a
delivery in IP
ATM BAS
residential
professional
“DSL Access +
DSL Collecte ATM”
“DSL Entreprises”
ATM
FT’s DSLAM
ATM
40 to 130 delivery
points = ATM
switches
40 to 130 delivery
points = ATM
switches
ATM
FT’s local backhaul
networks
IP
CEx
delivery in ATM
“DSL Access +
DSL Collecte IP”
20 delivery points
= BAS
13
Evolution of the wholesale DSL market
9 000 000
8 000 000
number of access
full LLU
7 000 000
6 000 000
nat.
offer
IP
Bitstream
7% 6%
ATM
Bitstream 10%
full LLU 3%
5 000 000
47%
4 000 000
27%
3 000 000
shared access
2 000 000
1 000 000
France Télécom
situation at Q3 2005
14
Overview of the broadband retail market
The relevant broadband wholesale markets
Broadband regulation focused on LLU
15
LLU: keystone of competition on the
broadband markets
Strategic offer for OLOs, and for ARCEP, because it allows long
term competition:
OLOs become independent
from France Télécom’s
network and equipments
OLOs invest in the
building of a wide
network
LLU
OLOs can
differentiate
and innovate
OLOs control most
of the broadband
value chain
16
Action of ARCEP focused on LLU
ARCEP’s regulation of the wholesale broadband markets is focused on LLU
– extension of infrastructure-based competition
– LLU is high on Cave’s ladder of investments
– new entrants climb up this ladder of infrastructure competition by migrating from
one form of access to the next higher step
ARCEP considers Bitstream as the geographical complement to LLU
– OLOs address the retail market at a national scale
– Bitstream prices are regulated in such a way as to guarantee sufficient margins
to offers based on LLU
ARCEP’s working program:
–
–
–
–
control LLU’s tariffs
preserve LLU’s economical margin
promote LLU’s extension
improve LLU’s quality of service
17
Market analysis of the broadband market
access
LLU
Bitstream
France
Télécom
has SMP
no discrimination
transparency
Reference Offer
price control
accounting separation
LLU:
cost oriented tariffs
Bitstream:
cost oriented tariffs
no squeeze with LLU
National offer
France
Télécom
has SMP
no squeeze with LLU
no discrimination
accounting separation
formalization of
internal prices
between FT and its
subsidiary Wanadoo
Retail market : non regulated
18
Control LLU’s tariffs
Monthly cost of the copper line
– new cost methodology = Economic current costs
– evolution of CCA (current cost accounting) which
integrates economic annuities
– based on France Télécom’s actual investments (real
time series since the 50s)
– take into account price evolutions Objectives
– to develop long term competition
(and thus progress rate)
– to pay for France Télécom’s investments
– provides stable cost measures
in its local network
– to give visibility to the industry
Review of the collocation tariffs
35M
– OLOs install their equipments in
France Télécom’s premises
30M
– OLOs’ rental include collocation fares, 25M
energy, ventilation, etc.
15M
(+ one-off fees)
– the amount of costs per line increases 10M
5M
drastically for smaller CEx
– Summer’05, average drop of 1 € per
unbundled access was negotiated
1200th CEx: 5000 lines
cumulative sum of
CEx’s number of lines
90% CEx have less than 5000 lines
bigger CEx
smaller CEx
Rank of CEx
ordered by decreasing number of lines
1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 11000 12000
19
Preserve LLU’s economical margin
Model of the cost of an unbundled access
– developed by ARCEP in a multilateral approach
– computes the tariffs of the Reference Order
– parameters: DSL penetration, market share, rank of the CEx, etc.
Used as a squeeze model
– in order to ensure that there are sufficient margins between offers based
on LLU and Bitstream access prices
– a drop of the collocation prices enables mechanically the economical
viability of smaller CEx
cost of access
30
LLU
20
Bitstream
10
Rank of CEx
ordered by increasing number of lines
1000 2000 3000 4000 5000 6000 7000 8000
20
Promote LLU’s extension
Three steps
extension of DSL coverage
cumulative sum of number of lines
– to lower collocation costs :
Summer’05 drop allows the
unbundling of small CEx to
become profitable
– to advise local authorities in
their action in electronic
communications
– to negotiate with France
Télécom an offer of passive
optical fibber enabling the OLOs
to link new unbundled CEx
25M
20M
15M
2003
France Télécom
2008
2001
2005
Objective :
+ 2000 unbundled CEx in 2008
2004
LLU
2000
2003
10M
2002
2002
5M
LLU’s extension nearly
stopped during 2005…
only driven by local
authorities’ actions
number of CEx equipped in DSLAM
0
0
500
1000
1500
2000
2500
3000
Prospective situation of LLU in 2008:
local authorities’ projects
unbundled CEx thanks to FT’s fibber offer
21
Improve LLU’s quality of service
QoS, a major topic for LLU
– competition shall not develop at the expense of quality for the
end user
– OLOs must have access to a high QoS on the wholesale market,
allowing them to compete with the quality of France Télécom’s
retail products
– this is particularly crucial on the professional market, where the
end user ask for Guaranteed Time of Repair
120
80%
Délai de livraison des 99% des accès les plus rapidement livrés
100
heures
jours
100%
Délais moyen de relève des signalisations
Durée de relève des signalisations des 80% des cas les plus rapidement traités
80%
Durée de relève des signalisations des 95% des cas les plus rapidement traités
Taux de respect du délai contractuel de livraison (8 jours ouvrés ou RdV client)
Taux de respect du délai contractuel de relève des dérangements (GTR 4h)
80
80
60%
60
60%
60
40%
40
20%
0
0%
06 - 2005
07 - 2005
08 - 2005
09 - 2005
Délais moyen de livraison
80%
Délai de livraison des 95% des accès les plus rapidement livrés
0%
04 - 2005
100%
100
20%
0
10 - 2005
jours
05 - 2005
20
120
100
05 - 2005
07 - 2005
08 - 2005
09 - 2005
10 - 2005
100%
80%
Délais moyen de relève des signalisations
Délai de livraison des 99% des accès les plus rapidement livrés
Durée de relève des signalisations des 80% des cas les plus rapidement traités
Taux de respect du délai contractuel de livraison (14 jours ou RdV client)
80
06 - 2005
heures
20
120
40%
40
Durée de relève des signalisations des 95% des cas les plus rapidement traités
80
Taux de respect du délai contractuel de relève des dérangements (GTR 4h)
60%
60
60%
60
40%
40
20%
20
0
0%
05 - 2005
06 - 2005
07 - 2005
08 - 2005
09 - 2005
100
0
0%
04 - 2005
100%
80%
Délais moyen de livraison
20%
20
10 - 2005
jours
04 - 2005
120
40%
40
120
100
06 - 2005
07 - 2005
08 - 2005
09 - 2005
10 - 2005
100%
80%
Délai de livraison des 95% des accès les plus rapidement livrés
Délais moyen de relève des signalisations
Délai de livraison des 99% des accès les plus rapidement livrés
80
05 - 2005
heures
DEGROUPAGE
TOTAL (construct.)
SAV
100%
Délais moyen de livraison
Délai de livraison des 95% des accès les plus rapidement livrés
100
04 - 2005
TURBO DSL
– asked by ARCEP in its market
analysis
– enables comparisons between LLU,
Bitstream and retail offers
120
OFFRE DSL FT
MARCHE PRO
Since Spring’05, France Télécom
publishes key QoS indicators
OFFRES D'ACCES PROFESSIONNEL
LIVRAISON
Durée de relève des signalisations des 80% des cas les plus rapidement traités
80
Taux de respect du délai contractuel de livraison (14 jours ou RdV client)
Durée de relève des signalisations des 95% des cas les plus rapidement traités
60%
60
60%
Taux de respect du délai contractuel de relève des dérangements (GTR 4h)
60
40%
40
40%
40
20%
20
0
0%
04 - 2005
05 - 2005
06 - 2005
07 - 2005
08 - 2005
09 - 2005
10 - 2005
20%
20
0
0%
04 - 2005
05 - 2005
06 - 2005
07 - 2005
08 - 2005
09 - 2005
10 - 2005
22
Thank you very much for your attention
Bertrand Vandeputte
Broadband Access Division
ARCEP
[email protected]
23