Press Releases

ANCOM proposes to eliminate obligations of the operator with significant market power in the market for access to infrastructure elements

13.08.2015

 
 
Yesterday, the Romanian National Authority for Management and Regulation in Communications (ANCOM) launched the public consultation on a draft decision regarding the identification, analysis and regulation of the relevant market for the services of access to infrastructure elements. Based on the analysis criteria and results (a market share below 50 % and in steady decline, reduced barriers to market entry, the existence of a declining minimum demand in the wholesale market, the existence of a competitive retail market, in the absence of regulations in the corresponding wholesale market), ANCOM considers that the company Telekom Romania Communications S.A. no longer holds significant market power and proposes the withdrawal of the previously imposed obligations.
The document under consultation is the result of a new round of market analyses conducted in order to evaluate and – if deemed necessary - intensify the level of competition in the retail market for broadband Internet access services provided at fixed locations, through regulatory measures imposed on the wholesale markets. This process of re-analysing the markets susceptible to ex ante regulation in the communications sector on a regular basis is one of the most important tools for ensuring competition created by the European regulatory framework and implemented by ANCOM.
The objective of any ex ante regulatory intervention (including on the wholesale level) is to generate benefits for the end users, by sustainably fostering competitive retail markets.
The previous analysis - conducted in 2010 on the relevant market for the services of access to infrastructure elements, including services of full or shared access to the local copper loop or sub-loop -showed that Romtelecom S.A. (now - Telekom Romania Communications S.A.) had significant power on this market. Thus, in order to ensure and foster competition on the segment of broadband Internet access services provided at fixed locations, in 2010, the operator received a number of specific obligations.
The latest analysis at the retail level of the market for the services of broadband Internet access provided at fixed locations did not reveal the existence of competition problems that could justify maintaining or imposing additional regulation on the wholesale or retail markets. Both now and in the analysis time horizon, the market for services of broadband Internet access provided at fixed locations remains competitive, even when the use of the local loop, on the level of the corresponding wholesale market, is almost insignificant. The market is not stable, it witnesses fluctuating market shares and significant increases for each of the major operators over time, Romania featuring the highest degree of infrastructure competition in the European Union - with a total of over 750 providers of services of broadband Internet access at fixed locations in 2014. Moreover, there is a high degree of product innovation and differentiation in the market, hence a wide range of products, various transmission speeds and price offers, on a competitive level. For example, the charges for fixed broadband Internet access connections, especially for those with transmission speeds of at least 30 Mbps, are among the lowest in the European Union.
In this context, it should be noted that the relatively low penetration rate of broadband Internet access connections provided at fixed points is caused by external factors (such as the low penetration of personal computers or terminals that allow Internet access from home, at the population level, and also the low level of digital literacy and low average income per capita, especially in rural areas), and not by the lack of competition in the market.
Following this round of market analysis, revealing that Romtelecom S.A. (now Telekom Romania Communications S.A.) does no longer hold significant power in the market for the services of access to infrastructure elements, ANCOM proposes that the obligations of transparency, non-discrimination, granting access, tariff control and accounting separation imposed on Telekom Romania Communications S.A., as regards the local loop access services, be withdrawn starting with the entry into force of the decision. Transitionally, for ongoing contracts, these obligations will be maintained for one year from the enforcement of the current measures subject to public consultation, while the obligation to keep separate accounts will be withdrawn starting with the financial statements for 2015.
The draft decision regarding the identification of the relevant market for the services of access to infrastructure elements is available, in Romanian, here. The interested persons are invited to submit comments and proposals until 25.09.2015, to the ANCOM headquarters (2 Delea Noua Street, District 3, Bucharest), directly to the Registry office or through the Authority’s regional divisions. Comments can also be sent by fax to +40 372 845 402 or by e- mail to consultare@ancom.org.ro.
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