Development of BB markets Access markets (M4 & M5) and remedies applied Linda Paršova 10 TH BALTIC ELECTRONIC COMMUNICATIONS AND POSTAL SERVICES REGULATORS’ MEETING Mārciena, 30 August 2013

1. Retail Broadband market: - development of fixed and mobile broadband - technology market shares and available speeds - deployment of NGA 2. Wholesale markets 4 & 5: - market definition - SMP - remedies applied Topic of the presentation

Retail broadband market

The retail broadband market (fixed and mobile) in Latvia has grown significantly in the past six years. Development of Retail broadband market (active broadband connections)

Technology market shares (Fixed + Mobile active broadband connections)

Technology market shares (Fixed) and available speeds (1 July 2013)

Is the deployment of NGA in the EU still at a relatively early stage of development? Source: Communications Committee

Wholesale markets 4 & 5

1st round of market analysis in 2006 For wholesale unbundled access to metallic loops and sub-loops and for wholesale broadband access over copper following obligations were imposed on Lattelecom: access obligation; non-discrimination obligation; transparency obligation; price control and cost accounting; accounting separation 2nd round of market analysis in 2009 No changes were proposed 1 st and 2 nd round of market 4 & 5 analysis

According to the analysis carried out, the retail market definition includes: cable, xDSL, FTTx, Ethernet and FWA. Geographic scope of market 4 & 5 is determined as national. We propose to define the scope of wholesale market 4 as including copper-based and fibre- based local access at a fixed location and wholesale market 5 as including copper-based and fibre based broadband access. 3rd round of market analysis/ Retail and wholesale market definition and geographical scope

Based on the analysis and evidence, we consider that Lattelecom enjoys SMP in market 4 and 5. Market analysis and determination of SMP operator

There is no demand for market 4 services but demand for market 5 services is weak: The number of fully unbundled lines and shared access lines supplied by incumbent to new entrants is zero; ~ 200 bitstream access lines are supplied to alternative operators. Demand for wholesale services

In addition to obligations already imposed on Lattelecom, Access obligation; Non-discrimination obligation; Transparency obligation; Price control and cost accounting; Accounting separation are proposed in the territory of Latvia concerning following services: Access to civil engineering infrastructure; Access to the terminating segment in the case of FTTH/B; Unbundled access to the fibre loop in the case of FTTH/B; Access obligations in the case of FTTN. Remedies proposed reflect an application of the ladder of investment principle and are in line with the NGA Recommendation except deployment of multiple fibre lines in the terminating segment. Remedies proposed (Market 4)

- Symmetrical regulation??? Where capacity is available, access to civil engineering infrastructure is proposed: - access should be provided on a strictly equivalent basis (‘principle of equivalence’) - Database (the geographical location of ducts, poles and other physical assets should be provided, as well as the available space in ducts); - Reference offer, SLA and KPIs are pointed out as instruments to ensure proper application of the ‘principle of equivalence’ - persons involved in the retail arm activities of the SMP operator do not participate in company structures of the incumbent responsible, directly or indirectly, for managing access to civil engineering infrastructure. Access to civil engineering infrastructure (sub-ducts, ducts, manholes and poles)

- Access to the terminating segment includes co-location. - Principle of equivalence - Database (the geographical location of distribution points of terminating segments and a list of connected buildings should be provided) - Reference offer Access to terminating segment in the case of FTTH/B

NRAs should assess the conditions of competition created by co-investments. There are neither co-investments nor co-investment plans in near future in Latvia. Co-investments

Where point-to-point fibre technology is chosen, full unbundling of the loop is proposed from the ODF. - Co-location at the ODF location - Ancillary services - backhaul should be made available to alternative operators to reach the access point Unbundled access to the fibre loop in the case of FTTH

Share of Lattelecom’s GPON topology is 97.68% of all Lattelecom’s NGA lines. As physical unbundling of fibre loop could be applied at the last passive optical splitter only and NRAs should be able to adopt measures for a transitional period mandating alternative access products which offer the nearest equivalent to physical unbundling, possible solution - VULA VULA is proposed for FTTB scenario. Unbundled access to the fibre loop in the case of FTTH (GPON) and FTTB

Although available, in several countries cabinet unbundling is not widely and hardly used at all. Cabinet unbundling is proposed from the street cabinet. - Cabinet unbundling includes co-location (or in their absence, equivalent co-location) and backhaul. - Reference offer Lattelecom does not deploy vectoring. Unbundled access to the fibre loop in the case of FTTN

In addition to obligations already imposed on Lattelecom, Access obligation; Non-discrimination obligation including Refference offer; Transparency obligation; Price control and cost accounting; Accounting separation are proposed in the territory of Latvia concerning non-physical access at all access levels – ensuring wholesale broadband access at the level of DSLAM/MSAN/OLT, ATM or Ethernet level and IP level over copper-based and fibre-based infrastructures - collocation at the handover point; - backhaul from handover point to a higher network level. Remedies are in line with the NGA Recommendation except obligation to make new wholesale broadband access products available at least 6 months before its own corresponding NGA retail services. Remedies proposed (Market 5)

- Remedies proposed in line with current NGA Recommendation - Final decisions soon - Necessity for regulation in accordance with Draft Recommendation on non-discrimination and cost accounting Conclusions

THANK YOU! Linda Paršova Market Analysis Division Tel