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No regulatory holiday for fibre investors

01 октября 2008

There will be no regulatory breaks for telecoms operators rolling out next-generation access networks, the European Commission reiterated Tuesday, despite pleas from telcos to guarantee them a return on their investment.

The use of new technology in a network does not eliminate the requirements for dominant players to give competitors access to those networks, said Cecilio Madero Villarejo, director, competition directorate general at the European Commission, speaking at the conclusion of a lively panel debate on NGAs and fibre rollout at Broadband World Forum Europe on Tuesday.

"NGA deployment does not mean regulatory holidays," Villarejo insisted.
"Dominant companies will have to provide access to their fibre," he added, noting that dominant companies will not necessarily be incumbent operators.

But that is not what the big telcos are keen to hear.

"[KPN] is only thinking of a modest investment in fibre," because the regulatory environment is not conducive, said Jos Huigen, director of European affairs at KPN.

The Dutch incumbent' fixed-line business is worth around €3 billion-€3.5 billion, whereas investment to provide fibre throughout the
Netherlands would run to €6 billion-€7 billion Huigen said.
"Your share price will tank," with numbers like that, he added.

"Regulatory conditions are key [to the rollout of fibre]," Huigen said.
"There has to be some form of risk-sharing."

incumbent BT agreed, with Emma Gilthorpe, group director, industry policy and regulation, stating that it is key to ensure that NGA rollouts happen with a reasonable rate of return and a sustainable level of competition.

"Regulation is here to stay," she conceded.
[However}, any intervention [from the government or from the regulators] is always going to produce a less effective outcome than leaving the market to deliver," she said.

Meanwhile Orange, which can afford to be more upbeat on fibre since competition in that space is already flourishing in France, took inspiration from another market.

Competition in the fibre access loop is desirable, said Vianney Hennes, permanent representative, European institutions at Orange
These benefits have already been seen in the mobile market, he said.

"It would be a huge boon," to end up with the same market structure in the fibre space, Hennes said.

"If we assume fibre will be monopolistic, in the end it will be monopolistic," he added. "[I am optimistic we can] move to something that looks like a mobile model."

Источник: Total Telecom

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