Open Networks
TDC: Views from an Incumbent
TRIS meeting
Copenhagen 24-25 September
Allan Bartroff
TDC Legal and regulatory
1
Agenda
• Background: TDC in the Danish BB market
• Open Networks: Models
• Incumbent operator’s business model: Any difference compared
to ‘open networks’?
• Disclaimer: It is about conditions/options for service providers how to
access the networks ≠ any network neutrality discussion
2
The Danish BB market:
Platform and service competition
• Fixed broadband
• 1st H 2009 DK has 2.084.360 broadband subscriptions (36% penetration per
inhabitants)
• DSL is dominant, but also cable and increasingly fibre + various local networks
• 38% BB connections are based on alternative (to DSL) infrastructure: cable,
fibre, networks owned by housing associations, internal networks etc.
• Cable networks cover about 2/3 of the Danish households (homes passed) and
have a 26% share of the broadband market, FTTH accounts for 5-6% share
• Mobile:
• 4 mobile network operators
o
o
o
o
TDC
Telenor
Telia
3 (only 3G)
• Each rolling out mobile broadband: 3G, HSDPA
• + MVNOs/Service Providers
• Additionally wireless WiFi/Wimax operators
3
Danish NRA policy: ‘Several pipes to
the home’ + service competition
Service-based
competition
Infrastructurebased competition
Wholesale broadband
access:
PSTN (DSL)
• LLU - ”Raw copper”
• Shared access
• Bitstream (incl. cable?)
• Simple resale
Competition between
alternative platforms:
•
•
•
•
•
PSTN (DSL)
CATV (cable modem)
FWA/WiMax/WLAN
3G/EDGE/HSDPA
Optical fibre
- Fibre/LAN
- FTTH
• Satellite
• Digital Terrestrial Television
4
The Danish BB market: Market shares
BB subscriptions – market shares 2nd half 2008. Today TDC has 62%
due to recent consolidations
5
Open Networks – models
• Open Networks: Where to locate in the value-chain?
1. Network owner provides both wholesale and retail services. Other
service providers can get access at both service and network
layers (at non-discriminatory conditions?) to provide their
services to end-customers
2. Network owner provide only wholesale. Other operators may offer
services (at non-discriminatory conditions?) without competing at
the retail level with the network owner, i.e. a wholesale-only
model
3. Regardless 1 or 2: The end-user only needs relations with the
service provider(s), i.e. no separate relationship with network
owner (one-stop-shopping)
4. Regardless 1 or 2: Choice between more service providers at the
same time – one for Internet access, one for TV services etc.
•
•
‘Open Networks’= A business model >< vertically integrated model
of incumbents?
Not necessarily – or rather the contrary..
6
‘Open networks’: One Danish example
• When a retail customer select fibre BB from the FTTH provider Syd
Energi (South Energy) he then chooses his provider of BB services
(Internet, telephony, TV etc.) from one of 4 providers:
•
Open but! The end-user only has a choice between the providers
selected by the network owner (Syd Energi) and for an SP access is
thus conditional on the interest of the network owner in concluding
a deal, i.e. no equal access or access rights at all for providers
which may open for various exclusionary practices
•
In this example the network owner offers one-stop-shopping.
However most of the network owners in the utility sector require
separate access agreement with end-users for the network

Neither is a problem as such but it differs from the model of most
regulated incumbents
7
TDC: Open networks?
• TDC offers a variety of access products at wholesale level at nondiscriminatory conditions
• It is then left:
1. To the alternative providers to make their services available to retail
customers
2. To the retail customers to choose among these alternative operators
8
TDC Wholesale offers…
Broadband
Telephony
Mobil
TV
Infrastructur
e and netorks
DK
DK
DK
DK
DK + Scandinavia
Broadband via
3rd party
Telephony via
3rd party
Mobil
via 3rd party
Broadband Basic
Resale Fixed
networks
BSA
TeleConnect
Multicast
IPConnect/
IP VPN
Raw copper
SIP Gateway
Interconnection
13. juli 2017
Mobile
Telephony
and Data
Mobile
Broadband
Ethernet VPN
SIP MVNO
Ethernet over
SDH
SDH
Wavelength
Dedicated fibre
Control, responsibility, ressources
ProProdcuts aiming at retail
end customers and business
A strong product portfolio
SIPConnect
Exchange of
traffic
Exchange of traffic
IP Peering
9
9
Wholesale offers...
Wholesale
Wholesale
Wholesale
Characteristics
Operator/Service
provider
Operator with fully or
partly own networks,
primary focus on IT and
network services
Wholesale
services
Control, Responsibilities and
Resources
Flexible business models
Access, infrastructure,
networks and
interconnection
13. juli 2017
Service Provider who has
telecom competences and
primary focus on telecom
services or offer telecom
services complementary to
other business areas
Complete or partly
complete products in
telephony, broadband
or mobile
Brand Partner who holds
a strong position in other
business areas and offers
telecom services
complementary
Complete products in
broadband, telephony
and mobile via 3rd
party
10
10
Wholesale offers…
Flexible co-operation
Raw copper (LLU – full/shared)
Access line
Switch/
platforms
TDC
Product
CPE
Internet
-access
CPE
Internet
-access
and price
CPE
Internet
-access
Product
and price
CPE
Internet
-access
Product
and price
and price
Marketing
and sale
Service
provider/operator
Customer
service and
handling
Billing
Bitstream Access
Access line
Switch/
platforms
Product
Marketing
and sale
Customer
service and
handling
Marketing
and sale
Customer
service and
handling
Marketing
and sale
Customer
service and
handling
Billing
BB Basic
Access
line
Switch/
platforms
Billing
Mobile BB
Access
line
13. juli 2017
Switch/
platforms
Billing
11
11
Wholesale offers…
Flexible business models
TDC
Your business
3. part
TDC or your business
Operator
Access
Switching
/platform
s
CPE
Product
and price
Marketing
and sale
Customer
service and
handling
Billing
CPE
Product
and price
Marketing
and sale
Customer
service and
handling
Billing
CPE
Product
and price
Marketing
and sale
Customer
service and
handling
Billing
Service Provider
Access
Switching
/platform
s
Brand Partner
Rå kobber/Delt rå kobber
Access
13. juli 2017
Centraler/
platforme
12
12
Bit Stream Access, Shared Access and
ULL (wholesale, external sale)
500.000
450.000
400.000
350.000
300.000
250.000
200.000
150.000
100.000
50.000
-
Resold Access*
Bitstream Access
Shared Access
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
Ju
ly
20
09
Full Unbundled
Source: TDC
* Prior to 2005, Resold access is included in bit
stream access
13
So what’s the difference…
• Two major differences TDC >< ‘Open Networks’ (non-regulated, for
example Syd Energi model, i.e. wholesale only):
 Every alternative operator/SP has an access right as the basic products are
regulated, i.e. access conditions are non-discriminatory among all providers
including TDC Retail
 There is a variety of access levels, i.e. an SP can chose how to establish his
business model(s) and geographical presence. E.g. to invest in more control
of network management, development of own services (quality, security,
redundancy) or to buy more simplified products with easy access requiring
less investment and focus on short lead time to market
• Two potential drawbacks:
 TDC does not as a network provider recommend one particular set of Service
Providers
 For an SP there is a competitive pressure from TDC Retail – and vice versa!
14
Conclusions
• Impact of alternative ‘open networks’ on an incumbent regulated
operator with a proactive wholesale business is just:
 Increased competition ay wholesale level which at a point in time may
reduce the need for regulated access
 Regulatory non-discrimination obligation may make it difficult to
compete with non-regulated ‘open networks’ at equal footing
 However, flexibility and product variety of a full fledged wholesale
business is incomparable to most ‘open networks’
 Increasingly focus on access to internal networks controlled by house
owners?
15