Unbundling in Europe - Trends, strategies and impacts

Unbundling in Europe - Trends, strategies and impacts

In recent years, there has been a sea change in the role played by the local copper wire loop that links the subscriber to the operator’s exchange. Through the local loop, the subscriber can now make phone calls, access the Internet, watch TV, use video-on-demand services over a single telephone line. The local loop has thus become a fundamental element in the market for telecom services.

Most of Western European countries started to unbundle the local loop in 2000-2001. By making it compulsory for incumbent operators to offer third parties access to their local loop at a cost-oriented price, unbundling was expected to foster competition in telephone services and in Internet access via DSL. This measure was based on the recognition of the local loop as an “essential facility” that is difficult to duplicate. It appeared all the more important in that there was little infrastructure competition in the broadband market (DSL, cable, FTTx) in the majority of European countries.

After a slow start, the pace of unbundling began to speed up considerably in mid-2004. Recourse to unbundling has now become one of the chief points of focus in the growth strategy adopted by operators and Internet service providers (ISPs) in the broadband market in Europe. It enables them to differentiate their offerings and roll out new options (especially in regard to triple play services).

The report details the main developments in unbundling in Western Europe in recent years and highlights the features of the individual domestic markets. It assesses the impact of unbundling on the growth of competition in the various European markets and looks at the current debate on the benefits of unbundling, particularly its potential impact on investments in access networks, and at the future prospects for unbundling.


1. Unbundling in Europe in brief

• Growth of unbundling in Europe
• Operators’ and major unbundling players’ strategies
• Role of regulatory authorities
• Economics of unbundling: cost and business models
• Impact of unbundling on competition
• Unbundling and investments
• Challenges, opportunities and forecasts to 2010


2. Key questions

• How much progress has unbundling really made in Western Europe?
• What are the strategies adopted by operators and major players in unbundling?
• What is the impact of unbundling on competition among operators?
• What are the costs involved for incumbent operators? Alternative operators?
• What solutions exist for rural areas?
• Will the current unbundling model remain feasible for new infrastructures?
• In addition to unbundling, what can be done to foster infrastructure-based competition?


Players:
• Arcor
• Belgacom
• BT
• Deutsche Telekom
• e.Biscom
• Eircom
• France Télécom
• Iliad
• KPN
• neuf cegetel
• NexGenTel
• OTE
• Tele2
• Telecom Italia
• Telefonica
• Telenor
• Telia Sonera
• Tiscali


3. Who should read this report?

Telecom operators
• Assess incumbent operators’ exposure
• Understand alternative operators’ positioning

Internet players
• Assess the opportunities in terms of positioning and offerings
• Analyse unbundling business models

Equipment manufacturers
• Assess unbundling-related investment opportunities

Telecom regulators & Administrations
• Compare the positioning of domestic markets in Europe
• Identify the issues related with the digital divide

Investors and analysts
• Assess unbundling prospects
• Understand the specifics of domestic markets

Unbundling in Europe - Trends, strategies and impacts