Press Releases

The Romanian Market of Fixed Broadband Internet Access Services Is Competitive, No Remedies Required

12.11.2015

Today, the Romanian National Authority for Management and Regulation in Communications (ANCOM) has established - in Consultative Council, together with the industry representatives, and following extensive analysis - that the relevant wholesale market for services of access to infrastructure elements corresponding to the retail market is competitive, therefore no regulatory intervention is required in this market. Thus, ANCOM has withdrawn the obligations previously imposed on Telekom Romania Communications, considering that this company no longer holds significant power in the market for services of access to infrastructure elements.
Ex ante regulatory intervention in the wholesale market is necessary and justified only to the extent that it would bring about actual benefits for the users, determining the corresponding retail market to become a sustainably competitive market. In the case above, given the ANCOM analysis that revealed strong infrastructure-based competition in the retail market for services of internet access provided at fixed locations, which is expected to persist within the analysis timeframe, the Authority established that ex ante regulation in the corresponding wholesale market is no longer necessary.
ANCOM’S Decision adopted today in Consultative Council resulted from a regular process of review of the markets susceptible to ex ante regulation in the communications field, which is one of the most important instruments for ensuring competition created by the European regulatory framework and implemented in Romania by ANCOM. The measure is part of ANCOM’s strategy for promoting infrastructure-based competition and for fostering investment in the communications infrastructure, and observes the principles of opportunity and proportionality.
The previous analysis, conducted by ANCOM in 2010 on the relevant market for services of access to infrastructure elements, indicated that Romtelecom (now, Telekom Romania Communications) had significant power in this wholesale market. Thus, the operator had been imposed – back in 2010 – a series of specific obligations. Following this new market analysis revealing that Telekom no longer holds significant power in the market for services of access to infrastructure elements, the Authority withdraws - by today’s decision – the obligations of transparency, non-discrimination, granting access, tariff control and accounting separation, imposed on Telekom as regards local loop access services. Transitionally, for ongoing contracts, these obligations will be maintained for one year from the enforcement of ANCOM’s decision, while the obligation to keep separate accounts will be withdrawn starting with the financial statements for 2015.
ANCOM’s analysis showed that – both at present, and within the analysis timeframe - the market for fixed broadband Internet access services will remain competitive. The market is dynamic, fluid and in constant growth, Romania featuring the highest degree of infrastructure competition in the European Union, with a total of over 750 providers of fixed broadband Internet access services in 2014, over 60% of the access connections enabling 30Mbps and more, and over 2/3 of the population in localities covered by at least three networks offering fixed internet access. 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 terminals that allow Internet access from home, 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.
Furthermore, ANCOM’s analysis indicates the existence of a wide range of products, various transmission speeds and price offers, hence a high degree of product innovation and differentiation in the market. 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.

 

Next, ANCOM’s decision will go through the European consultation process. 
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