1. Ing. Vilém Veselý Czech Telecommunications Office Local Loop Conference Bucharest 5 th July 2005 Situation in Czech Republic

2. Local Loop Conference - Bucharest 5.7.2005 / Situation in Czech Republic 2 Contents Internet access – situation in CR National broadband strategy Growth of broadband Impact of regulation Regulatory strategy Bottlenecks Challenges

3. Local Loop Conference - Bucharest 5.7.2005 / Situation in Czech Republic 3 Internet access – situation in CR National broadband strategy narrowband / low speed - contribution of mobile access – GPRS-based no flat rate access in dial-up - has not become widespread  terminated narrowband penetration - statistics: 15-20% of residential users being approx. 1/3 – 1/2 of EU average - operators and opinion polls: approx. 40%

4. Local Loop Conference - Bucharest 5.7.2005 / Situation in Czech Republic 4 National broadband strategy main problems: - low attractivity of service offer - insufficient buying power of inhabitants

5. Local Loop Conference - Bucharest 5.7.2005 / Situation in Czech Republic 5 National broadband strategy - broadband main problems: - very low penetration ie. 1,5 – 2% of residential users and approx. 20% of business users (half of the EU average)

6. Local Loop Conference - Bucharest 5.7.2005 / Situation in Czech Republic 6 National broadband strategy - broadband by the end of 2004: over 100 000 ADSL connections over telephone line, approx. 60 000 CATV data connections - fixed wireless access: over 60 000 subscribers small local operators’ subscribers (over LAN, WAN etc.) – approx. 150 000

7. Local Loop Conference - Bucharest 5.7.2005 / Situation in Czech Republic 7 National broadband strategy - broadband by the end of 2004: altogether approx. 400 000 broadband connections main causes: low availability of broadband connection, esp. outside agglomerations, unfriendly relation between price and buying power of inhabitants, negative experience of users with the quality of existing services (esp. xDSL), insufficient offer of services and content, insufficient number of households PC-equipped

8. Local Loop Conference - Bucharest 5.7.2005 / Situation in Czech Republic 8 National broadband strategy - broadband 2005 expectation: models: wholesale resale of services, interconnection between access providers converged electronic communication services incl. data, sound, video and VoIP services

9. Local Loop Conference - Bucharest 5.7.2005 / Situation in Czech Republic 9 Growth of broadband LLU is one of the effective stimulants but not the only one LLU in Telecommunications Act since 2003  RUO of incumbent 1 st LLU agreement in Dec 2003 up to now 3 agreements stimulants: RIO / intereconnection, xDSL services

10. Local Loop Conference - Bucharest 5.7.2005 / Situation in Czech Republic 10 Impact of regulation not proven yet new Electronic Communications Act since May 1, 2005 public discussion, subaltern acts relevant market definitions CTU is trying to follow the path and speed once initiated

11. Local Loop Conference - Bucharest 5.7.2005 / Situation in Czech Republic 11 Regulatory strategy fulfilling of Section 4 of Electronic Communications Act „Regulation is carried out for the purpose of substituting for any missing effects of economic competition and to provide conditions for appropriate functioning of economic competition and for the protection of users and other market actors until a fully competitive environment is achieved.“

12. Local Loop Conference - Bucharest 5.7.2005 / Situation in Czech Republic 12 Regulatory strategy CTU continues in regulation to improve the economic competition in the new regulatory environment remaining differences between service providing in cities and in rural areas similar situation as in other countries – density of equipment and subscribers/users differs much

13. Local Loop Conference - Bucharest 5.7.2005 / Situation in Czech Republic 13 Bottlenecks main bottleneck = price agreement  price regulation remains, seems to be the only way to remedy the situation  using the LRAIC method

14. Local Loop Conference - Bucharest 5.7.2005 / Situation in Czech Republic 14 Challenges keep up with the speed of the growth and development of the branch in the environment limited by the new Electronic Communications Act

15. Local Loop Conference - Bucharest 5.7.2005 / Situation in Czech Republic 15 ??? Any questions?

16. Local Loop Conference - Bucharest 5.7.2005 / Situation in Czech Republic 16 Thank you for your attention residence: Sokolovská 219 Praha 9 postal address: P.O. Box 02 225 02 Praha 025 Vilém Veselý Department of Regulation of Electronic Communication Networks and Services Czech Telecommunication Office phone:(+420) 224 004 609 e-mail:VeselyV@ctu.cz