MEMORANDUM
Date
Our reference
Page
31 May 2011
File no.:11-6069
1(9)
Consumer Markets Department
Karin Fransén
+46 (0)8-678 57 81
[email protected]
Summary of ‘Follow-up of the
Government’s Broadband Strategy, 2011’
Assignment
The Swedish Government has assigned PTS to follow up the objectives and
action areas contained in the Government’s Broadband Strategy for Sweden1,
using the indicators that the Agency presented in the report entitled ‘PTS’s
Proposed Indicators for Following up the Broadband Strategy’ as a point of
departure. This follow-up shall include an analysis of how access to the IT
infrastructure will develop considering technical and market trends.
Method
The follow-up of the Government’s Broadband Strategy is based on use of a
number of indicators, divided between the five action areas contained in the
Strategy: Broadband throughout the Country, Functioning Competition, Publicsector Players in the Market, Spectrum Use and Reliable Electronic
Communication Networks. The purpose of the indicators is that they should
each describe a prerequisite or situation that is key to achieving the targets of
the Broadband Strategy. Taken together within the respective action area, these
indicators will provide a basis for a forward-looking assessment of how to
develop the action area, and thereby help to achieve the broadband targets. A
further aim is to bring to the fore issues relating to the indicators and action
areas in order to stimulate positive development through increased awareness.
Action area: Broadband throughout the Country
1
See www.regeringen.se
PTS
Swedish Post and Telecom Agency
Postal address:
Box 5398
SE-102 49 Stockholm
Visiting address:
Valhallavägen 117
www.pts.se
Telephone: +46 (0)8-678 55 00
Fax: +46 (0)8-678 55 05
[email protected]
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2(9)
Interpretation of targets: PTS interprets the target ‘90 per cent of all
households and businesses should have access to broadband at a minimum
speed of 100 Mbps’ as permanent homes and fixed places of business being
able to order an Internet subscription within a short time-frame and without
any special costs that allows transmission capacity of 100 Mbps downstream, in
any event under proportionately favourable circumstances. In practice, access
to fibre networks or cable television networks using EuroDOCSIS 3.02 is
measured within the framework of this year’s follow-up, i.e. access to access
technologies that currently provide an average actual transmission rate of more
than 50 Mbps downstream according to Bredbandskollen.3These access
technologies can achieve 100 Mbps.
Prerequisites: Both scenarios described below are based on a number of
prerequisites that should be satisfied in order to achieve the target of 100.
These are:

Properly functioning markets with demand from customers who are
willing to pay.

The rollout of and investment in several access technologies that jointly
contribute to the target – these access technologies should thus
complement each other to some extent.

LTE allows for rates corresponding to the targets contained in the
Government’s Broadband Strategy, with rollout that is commercially
reasonable.

Action on the part of the municipal authorities and other public-sector
players will make it easier for private stakeholders to compete and make
investments.

Robust and secure IT infrastructure. This promotes confidence in both
the infrastructure and services, which in its turn is important in respect
of demand for subscriptions that entail high transmission capacity.
The report does not include a comprehensive inventory of activities intended to
help to achieve the targets of the Broadband Strategy, although PTS has
A protocol that allows high transmission capacity via cable television networks
Bredbandskollen.se is a web-based consumer tool that helps broadband customers to evaluate their
broadband connection. The consumer can use this tool to get a measurement together with a
recommendation about how well this measurement corresponds to the capacity expected for the Internet
connection.
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identified many ongoing and planned measures and activities. PTS is expecting
these ongoing and planned activities to be implemented and that they will
thereby help to achieve these targets.
PTS considers that 80 to 90 per cent of all households and businesses
should have access to broadband at a rate of at least 100 Mbps by 2020
PTS describes below a conceivable development towards the target of
100 Mbps for 90 per cent of households and businesses by 2020, given the
above prerequisites and action areas being developed in a desirable way.
The following table summarises a conceivable development up until 2013, and
also two alternative scenarios for the period 2014 to 2020. PTS considers that
the first scenario for the period 2014 to 2020 – with favourable assumptions
about the rollout of infrastructure – is realistic, while the second scenario is
based on more moderate assumptions. The table describes how the respective
access technology may contribute to accessibility, together with the activities
and investments that must be implemented during the period.
Year
Activities
/time period
Contribution
to
accessibility
Total proportion
of households
and businesses
with 100 Mbps
2011
Fibre and upgraded cable television networks today
+44%
= 44%
2011-2013
Investments in fibre and cable television networks,
mainly in urban areas and small districts
+11%
= 55%
Scenario 1:
Rollout of VDSL2 and LTE (1000 metres)
2014-2020
-
Investments in fibre networks (87,000-200,000 of
households involved) and/or completely new LTE
base stations in areas without other access
technologies that allow 100 Mbps
Scenario 2:
Rollout of VDSL2 and LTE (750 metres)
2014-2020
Table 1
-
Investments in fibre networks (approx. 150,000
households) and/or completely new LTE base
stations in areas without other access
technologies that allow 100 Mbps
+25%
= 85-90%
+5-10%
(+20%)
(= 80%)
(+5%)
Conceivable rollout of infrastructure
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PTS considers that all households and businesses in 2020 will have
access to broadband of 1 Mbps. PTS will follow up the second target –
which involves all households and businesses having good opportunities to use
electronic public services and other services via broadband by 2020 – by
continuously measuring the number of households and businesses that do not
have access to broadband of 1 Mbps. However, this assessment is based on the
assumption that the coverage requirement in the 800 MHz band will take care
of much of the need represented by these households and businesses. This
assessment is also based on the assumption that the Agency will by the start of
2012 have received the funds that the Government announced in its autumn
2010 Budget Bill would be provided to PTS with the aim of ensuring that all
households and businesses have functional access to the Internet.
Demand for 100 Mbps increases, but there is uncertainty about how
quickly this will take place. PTS’s operator statistics show that only
approximately eight per cent of all households with access to broadband of 100
Mbps have purchased broadband services that require such rates. However,
historically there has always been an increase in the demand for transmission
capacity. For instance, statistics show that the average rate for fixed broadband
increased overall by approximately 6 Mbps between April 2008 and April 2011,
and that the proportion of all fixed Internet subscriptions with at least 10 Mbps
has increased from 14 to 50 per cent over the past seven years.
Growth in demand depends on several factors. One factor is the attractiveness
of services in the market that are both in demand by end users and that use the
potential of the IT infrastructure. Another factor for services having a broad
impact is that Swedes have both the interest and knowledge required to
assimilate such services, i.e. that the ‘perceived digital participation’ will
increase. Perceived digital participation lies at around 50 per cent4 and has fallen
in recent years. This may partly be explained by the fact that the more digitally
literate society becomes, the more difficult it is for certain groups to ‘keep up’.
Action area: Functioning Competition
The development of the indicators ‘Proportion of broadband subscriptions
based on broadband access lines produced by operators other than the
dominant operator’ and ‘Market shares for operators other than the
dominant operator in the retail market for broadband subscriptions’
remained constant at around 60 per cent during the period 2007 to 2010. In its
Broadband Strategy, the Government emphasises the importance of PTS
4
Stiftelsen.se
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generating predictability for the long-term orientation of regulation. PTS has
issued obligation decisions since 2004, affording operators opportunities to
establish themselves and compete in the Swedish broadband market. The last
decision was made in May 2010. PTS is now supervising TeliaSonera’s
compliance with the obligation decisions for bitstream and network
infrastructure access to fibre and copper-based access networks respectively. It
should be possible for PTS to start evaluating the effect of these decisions by
the autumn of 2011. PTS will therefore regularly communicate how the
competition situation has evolved and how this may affect regulation in the
respective market.
The indicator ‘Competition in apartment blocks’ should provide a picture of
the level of parallel infrastructure in the properties of municipal housing
companies, and also the existence of contracts entailing the exclusion of
competition from alternative infrastructures in the property.
In municipally owned apartment blocks it is common for there to be parallel
infrastructure over which broadband services can be provided. Just over half of
apartments are covered by some kind of exclusivity agreement. PTS can
conclude that there are currently good opportunities for those living in
municipal housing company accommodation to choose between several
different service providers, regardless of whether the respective property owner
had chosen to promote competition via parallel property networks or through a
CO model5. Municipal property owners consider that the number of exclusivity
agreements will reduce up to 2014. Just over half believe that the number of
service providers will increase and many believe that more apartments will be
covered by an open business model by 2014. It is likely that many of these will
conclude agreements with CO in light of work on the open network model that
is being conducted by SABO.
Investments made by operators represent a prerequisite for the continued
increase in accessibility to high capacity broadband, and also for achieving the
Government’s broadband targets in the long run. Since 2007 operators invested
on average SEK 8bn per year in mobile and fixed networks. The future pace of
investment will principally be governed by demand from customers and their
willingness to pay. However, ongoing and planned public measures, which
The Communications Operator (CO) leases its specific property networks to service providers to
distribute broadband services to those living at the property. CO is responsible for the property network
being connected to the rest of the network. CO usually finances the active equipment that is connected to
the property network to enable the distribution of broadband services to the intended recipients.
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make it more profitable to invest in areas where there are currently no market
prerequisites for fibre investments, are extremely important.
Action area: Public-sector Players
The proportion of public-sector players that own IT infrastructure and
that are active both at a service and infrastructural level is measured as the
proportion of public network owners that sell both dark fibre products and
Internet subscriptions. This proportion reduced from 63 per cent in 2007 to 28
per cent in 2010, indicating a positive trend. This trend may be expected to
continue, as various stakeholders and organisations are working to disseminate
knowledge about these issues. PTS, SALAR (Swedish Association of Local
Authorities and Regions) and KKV (Swedish Competition Authority) have
jointly produced Principer för kommunala insatser på bredbandsområdet [Principles for
municipal initiatives in the broadband sector], which has generated interest in
these issues.
Sixty-six per cent of the municipal authorities that responded to PTS’s and
SALAR’s questionnaire are committed to broadband. In this context a
municipality committed to broadband means a municipal authority with a
current IT infrastructure programme (complete or underway) or that has
observed the changes to PBL (Planning and Building Act). The involvement of
municipal authorities is of great importance and the fact that a third of
municipal authorities are still not committed to broadband means that there is
reason to consider whether new measures are required in addition to those
already ongoing and planned. The municipal authorities should draw up IT
infrastructure programmes or corresponding within the framework of their
implementation of PBL.
Action area: Spectrum Use
Spectrum available for broadband: PTS considers that the spectrum
available and planned to be assigned over the next few years is sufficient to
contribute to 90 per cent of the population receiving access to 100 Mbps. It is
also sufficient to provide the remaining ten per cent of the population with 1
Mbps.
The indicator Rollout of mobile broadband describes the use of assigned
frequencies by measuring the rollout of mobile broadband via a number of base
stations. PTS considers that LTE Advanced and corresponding technologies
are among the technologies that will help to achieve the targets of the
Broadband Strategy. Several operators are planning to roll out LTE coverage in
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2011 and the number of base stations that can handle LTE is expected to
increase in the near future.
Action area: Reliable Electronic Communication
Networks
The purpose of the indicator Number of interruptions and disruptions
resulting in supervision is to follow up changes to the number of
interruptions and disruptions resulting in supervision. This follow-up can be
used to prioritise measures to improve the operational reliability of networks.
The primary causes of interruptions were power cuts, cable cuts and problems
when updating software. This indicator will be replaced by the mandatory
reporting of operational reliability incidents under Chapter 5, Section 6c of the
new Electronic Communications Act (LEK). PTS will issue regulations about
when and how incidents should be reported.
Consumers' feeling of security when using the Internet is an index,
computed by combining variables concerning feelings of security when using
the Internet with a measurement of the proportion of Internet users who stated
that they have not encountered any problems when using the Internet. The
confidence index for 2011 is 109. If this index falls, it is important to analyse
the reason for the change and what can be done. However, PTS considers that
it is unlikely that the index and confidence would develop in such a negative
way that the overall target of the Broadband Strategy cannot be achieved.
Colour assessment for a rapid snapshot
In order to create a snapshot of the status of the indicators and action areas,
PTS uses colour marking to show how well the indicators and action areas are
considered to be developing and the extent to which they are expected to help
meet the broadband targets for 2020. Each indicator is assigned a colour, and
the colour ascribed to each action area will be the same colour as the indicator
that is assumed will have the least favourable development. This colour
marking illustrates PTS’s assessment in 2011 and is based on the actual value of
the indicators and planned measures. Please note that colour marking is not
based on an exhaustive analysis of factors that may affect the development of
the indicator or action area.
A green colour shows that the development of the indicator or action area is
positive and is expected to continue, helping to meet the broadband targets for
2020. The measures that are ongoing and planned for the indicator are positive
and should be implemented, even if it is possible that the indicator would in
some cases develop in a positive way despite the measures not being taken.
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A yellow colour shows that development is uncertain and there is reason to
consider whether new measures are needed, in addition to those that are
ongoing and planned, to enable the indicator or action area to help achieve the
broadband targets for 2020.6
A red colour shows that the development of the indicator or action area is likely
to be problematic despite ongoing, planned and new measures being taken.
Striped markings mean that it is not possible or appropriate to make an
assessment using colour marking.
That PTS considers that new measures may be necessary does not mean that the Agency specifies such
measures. The purpose of colour marking is to provide a snapshot and to function as a basis for
discussions, which means that it is very valuable to ‘flag up’ in this report that new measures may be
appropriate in the future. Such measures may be described in future follow-ups of the Broadband
Strategy, and may also be described in other contexts.
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Action area:
Overall target
(Yellow)
Broadband
throughout
Sweden
(Yellow)
Indicator
2007
2009
Households and businesses with
access to 100 Mbps downstream
Proportion of households and
businesses in, or within 353
metres from, a property
connected to a fibre or cable
television network
Number of households and
businesses without access to
broadband of at least 1 Mbps
Public-sector
Players in the
Market
(Yellow)
Proportion of public-sector
players that are active at a
service and infrastructural level
Proportion of municipal
authorities committed to
broadband
44%
Yellow
51%
54%
Green
7,100
4,400
2,800
1,100
Green
12.1
15.6
17.6
Yellow
61%
59%
56%
Yellow
57%
58%
59%
59%
62%
61%
62%
62%
Proportion of apartment blocks
with exclusivity agreements
Investments made by operators
(SEK m)
2020
100Mbps
49%
Perceived digital participation
Proportion of broadband
subscriptions based on
broadband access lines
produced by operators other
than the dominant operator
Market shares in the retail
market for broadband
subscriptions
2010
47%
Actual average rate per year for
fixed broadband (Mbps)
Functioning
Competition
(Yellow)
2008
55%
8.7
9.9
7.1
8.1
Yellow
63%
58%
37%
28%
Green
66%
Yellow
Spectrum available for
broadband services
Spectrum Use
(Green)
- Spectrum less than 5 GHz
469
670
720
723
Green
- Spectrum less than 1 GHz
13
18
19
20
Green
10,513
10,804
12,347
12,883
Green
0
0
200
398
Green
5
11
3
Green
109
Green
Rollout of mobile broadband
- Total number of base stations
- Number of LTE base stations
Reliable
Electronic
Communication
Networks
(Green)
Table 2
Number of interruptions and
disruptions resulting in
supervision
The consumers’ feeling of
security when they use the the
Internet (index)
Summarised outlook for action areas and indicators
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Swedish Post and Telecom Agency
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