The Challenges for the Mobile Sector

The European Commission’s perspective

Pearse O’DonohueEuropean Commission DG INFSO

Implementation of the Regulatory Framework

The Challenges for the Mobile Sector

The European Commission’s perspective

Pearse O’DonohueEuropean Commission DG INFSO

Implementation of the Regulatory Framework

New Framework - ProceduresNew Framework - Procedures

1. Market definition1. Market definition

2. Market Analysis2. Market Analysis

3. Designation of SMP3. Designation of SMP

4. Obligations4. Obligations

-- Consultation: nationally, other M/S Consultation: nationally, other M/S NRAs & CommissionNRAs & Commission

-- Possible Commission vetoPossible Commission veto

Different stages of the analysis

Different stages of the analysis

Relevant Markets - Commission Recommendation

product aspect of the market

NRA analysis

is competition effective ?

dominance test/SMP designation

NRA designates SMP operator(s) -

maintains or modifies existing obligations, or

imposes new obligations

NRA removes existing obligations -

does not impose new obligations

NRA input

Commission Guidelines

competition is effective

competition not effective

NRA Market definition

taking account of the Commission Recommendation

define geographical aspects

define other product markets, following Art 7 FWD

New Framework - guidanceNew Framework - guidance

Definition andIdentification of

the Markets

SMPAssessment

Choice ofobligations

CommissionRecommendation

on RelevantMarkets

CommissionGuidelines on

Marketanalysis and

SMPassessment

CommissionRecommendation

on Remedies

SMP/Dominance AssessmentSMP/Dominance Assessment

• Single:Single:

• Evolution of market shares

• Potential competition and barriers to entry

• Control of essential facilities

• Joint dominance:Joint dominance:

• “oligopolistic markets the structure of which was considered conductive to coordinated effects”

• Market characteristics: concentration, transparency, retaliatory mechanisms.

• LeveragingLeveraging

Obligations / RemediesObligations / Remedies

• Transparency

• Non-discrimination

• Accounting Separation

• Access to, and use of, specific network facilities

• Price control and cost accounting - cost orientation

• Other access obligations...

Obligations to be proportionate and based on the problem

found

Obligations to be proportionate and based on the problem

found

• Leveraging Leveraging • transparency• non-discrimination and accounting

separation• access to, and use of, specific network

elements and associated facilities

• Prices at an excessively high level Prices at an excessively high level or price squeezes or price squeezes• price control• accounting separation and cost-

accounting

27

Appeals on NRA decisions

• National legal systems must allow National legal systems must allow for appeals on NRA decisionsfor appeals on NRA decisions

• Appeal body may be a court or Appeal body may be a court or tribunaltribunal

• Merits of the case must be taken into Merits of the case must be taken into accountaccount

Dispute resolutionDispute resolution

• National levelNational level• resolve in 4 months

• refer to alternative dispute resolution mechanisms

• results must be in conformity with the framework

• Cross-borderCross-border• co-ordination of NRAs concerned to resolve

in 4 months

Transposition - TimelineTransposition - Timeline

24.4.2002

Entry into force

25.7.2003

Date of application in all MS

M States transpose, but don’t apply

NRAs do market analyses

15 months

NRAs - data gatheringNRAs - data gathering

• Market analysis key aspect of new Market analysis key aspect of new frameworkframework

• need for comprehensive and need for comprehensive and accurate overview of marketsaccurate overview of markets

• interest and obligation of market interest and obligation of market playersplayers

• consultation mechanismsconsultation mechanisms

• possibility of streamlining once possibility of streamlining once systems in placesystems in place

Mobile MarketsMobile Markets

• Access and call origination on public Access and call origination on public

mobile telephone networksmobile telephone networks

• Voice call termination on individual Voice call termination on individual

mobile networksmobile networks

• The wholesale national market for The wholesale national market for

international roaming on public international roaming on public

mobile networksmobile networks

MVNOsMVNOs

NRAs may impose obligations to meet reasonable NRAs may impose obligations to meet reasonable requests for access, including requests for access, including inter alia:inter alia:

- resale- resale- intelligent network services- intelligent network services- roaming- roaming

Obligations must be proportionateObligations must be proportionate

Effect on competition (short term) and investment Effect on competition (short term) and investment (long term)(long term)

Number PortabilityNumber Portability

• Mobile number portability must be Mobile number portability must be available under new frameworkavailable under new framework

• Pricing for interconnection related to Pricing for interconnection related to portability to be cost orientedportability to be cost oriented

• Charges to subscribers should not Charges to subscribers should not act as a disincentiveact as a disincentive

• No imposition of retail tariffs that No imposition of retail tariffs that would distort competitionwould distort competition

RoamingRoaming

• Wholesale national market for Wholesale national market for

international roaming targetedinternational roaming targeted

• Evidence of excessive chargesEvidence of excessive charges

• DG COMP sectoral enquiry and DG COMP sectoral enquiry and

specific investigationsspecific investigations

• Introduction of local/national Introduction of local/national

roamingroaming

3G3G

• Delays in roll-outDelays in roll-out

• Equipment and servicesEquipment and services

• License sunk costsLicense sunk costs

• Developments in WiFi / RLANDevelopments in WiFi / RLAN

• Intermediate market / 2.5GIntermediate market / 2.5G

• Coordinated measures at EU levelCoordinated measures at EU level

Radio SpectrumRadio Spectrum

• Allocation & assignment based on Allocation & assignment based on transparent, objective, non-transparent, objective, non-discriminatory & proportionate discriminatory & proportionate criteriacriteria

• Auctions & beauty contests permittedAuctions & beauty contests permitted

• Spectrum trading an option for Spectrum trading an option for Member StatesMember States

two conditions:

• no distortion of competition

• no threat to harmonisation

DG Information Society:DG Information Society:http://europa.eu.int/information_society/thttp://europa.eu.int/information_society/t

opics/telecoms/index_en.htmopics/telecoms/index_en.htm

Pearse O’DonohuePearse O’DonohueEuropean Commission DG INFSOEuropean Commission DG INFSO

Implementation of the Regulatory FrameworkImplementation of the Regulatory Framework