Network sharing and co-investments in NGN as a way to fulfill the goal with the digital agenda

Bengt G. Mölleryd

22nd European Regional ITS Conference, Budapest 2011: Innovative ICT Applications - Emerging Regulatory, Economic and Policy Issues from International Telecommunications Society (ITS)

Abstract: The European Commission and most European countries have set ambitious broadband targets aiming to provide up to 100 Mbits to the end-customers. On back of a declining fixed market, negative growth for operators and a slow take up of fiber while maintaining high capex levels operators will ultimately be forced to take innovative approaches towards broadband investments. This paper relates co-investments in NGA to the regulatory framework in the form of SMP regulation and competition law making the conclusion that the current regulatory framework is sufficient to avoid a distorted competition on the market. A number of examples of ongoing co-investment projects are presented underscoring a growing interest for co-investments and indicating that co-investments, at this point, are not hampering competition. The mobile industry has gradually moved towards network sharing indicating a tendency towards vertical disintegration, although so far only a tendency. The ongoing structural separation of Telecom New Zealand with the establishment of a separate network and wholesale company is an indication of this development. The paper concludes by stating that regulators have appropriate tools to handle potential competition issues regarding coinvestments, that co-investments could be a vehicle for reaching the broadband targets, that there are efficiency gains for operators to make by lower Opex and capex, and ultimately giving network companies the means to utilize their balance sheet in order to increase the return.

Keywords: NGA; co-investment; SMP regulation; horizontal and vertical agreements; capex; network sharing; financial gearing (search for similar items in EconPapers)
Date: 2011
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