Federal Department of the Environment Transport, Energy and Communications DETEC

Federal Office of Communications OFCOM Telecom Services Division

July 2007

The Swiss telecommunications market – an international comparison

Extract from the 12th European Union implementation report extended to include Switzerland

In accordance with the method used by the European Commission, all prices have been converted using a nominal exchange rate.

Biel/Bienne, July 2007 Foreword

For some years now, the Commission of the European Communities has been publishing an annual communication addressed to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions; its aim is to assess the implementation of the European Union’s regulations on electronic communications. The latest version of this report, also entitled the 12th European Union implementation report, was published in March 20071.

Apart from a detailed examination of the regulatory situation in the European Union and in the various member countries which constitute it, this report provides, in its Annex 2, a massive amount of information on the situation of the electronic communications market in 2006 and on the evolution observed between 2005 and 2006. In addition to describing the telecommunications market in an extremely comprehensive manner, the statistical data provided in this annex have the merit of being based on unified, transparent methodologies and therefore make it possible to make pertinent comparisons between the various countries considered.

Since Switzerland is positioned geographically, economically and culturally, at Europe’s crossroads, it would be regrettable not to have made the same effort of comparison and analysis for our own country. This is why Switzerland has been incorporated, symbolically and materially, wherever possible, into Annex 2 of the 12th implementation report.

The essential purpose of this report is therefore to compare Switzerland with the European Union member countries and, where applicable, Japan and the United States, on the basis of Annex 2 of the 12th European Union implementation report, and to provide an overview, with as many figures as possible, of the situation which prevailed in the Swiss telecommunications market in 2006. In this regard, the various methods elaborated by the European Commission have been rigorously applied. Please also note that the text which is not in blue is taken directly from Annex 2 of the 12th report.

This report is available in English only. However, the executive summary is available in French, Italian, German and English.

1 Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, European Electronic Communications Regulation and Markets 2006, - COM (2007) 155 final, Brussels, 29/03/2007.

Extract from the 12th EU implementation report extended to include Switzerland - 2 Executive Summary

Fixed network telecommunication services providers (chapter 1) In Switzerland, as of 30 June 2006, there were 130 registered operators holding a licence, meaning that they independently operate a major proportion of the telecommunications equipment used for transmission. This number has changed by only two operators in relation to the previous year. However, the situation is different in terms of the number of operators able to provide fixed-network voice telephony services; their number has increased from 170 in 2005 to 208 in 2006, representing an increase of 22.4%. In comparison with other countries, these figures are high, all the more so if they are compared with the surface area of the national territory. Although apparently positive, the high number of operators able to provide public telephony services provides no indication of the degree of competition actually characterising the market. In fact, it is only a matter of operators who are potentially able to provide services. In reality, only 60 operators out of 208 are actually active in the market – 29% of the total. This phenomenon shows that although there is no administrative barrier to entering the telecommunications market, the will to penetrate that market and develop services on a sustainable basis represents a much more difficult challenge. Moreover, it is worth mentioning that this gap between the number of administratively registered operators and the number of genuinely active operators is not a feature which is specific to Switzerland. Indeed, within the European Union (EU), there are many nations in which the same phenomenon can be observed. An analysis of the competitive situation which prevails in the voice telephony market can usefully be complemented by calculating the combined market share, expressing the number of competitors who share 90% or more of a given market. In terms of this indicator, Switzerland gets a value of six, which places it in the group of countries which can pride themselves on strong competition in the fixed-network public telephony market. Of the 26 states in question, eight get a value of five or more – the maximum value (11) goes to the United Kingdom – and five achieve a value of one, which means that a de facto monopoly continues to exist. The remainder have values between two and four. The market shares retained by the historic operators over time also provide essential indications of the competitive situation and how vigorously it has developed. Of course the higher these shares, the less alternative operators have managed to put their arguments across in the market in question. We should note in this regard that the Swiss historic operator’s share of the total fixed-network telephony market – expressed as a percentage of sales – is clearly below the weighted average calculated for the European Union countries. Indeed, more than five points separate the two values: 58.5% for Switzerland and 63.9% for the European Union. If we take a detailed look at the situation in each country, it is apparent that Switzerland is well positioned, as only the historic operators of the United Kingdom (51.9%), Austria (54.6%) and Germany (55.0%) have lower market shares. One particularly striking fact: within the Union, there continue to be major differences between the various member nations, as in certain countries the historic operator’s market shares are higher than 90%. There is therefore definite potential for increasing competition in the Union; in future years, this should result in a fall in the historic operators’ average share of the market. A positive development has already taken place between December 2003 and December 2005, when this share fell from 70.3% to 63.9%. On the other hand, there have not been any major changes in Switzerland over the same period and no clear trend is apparent. Thus the historic operator’s market share grew from 59.9% to 60.6% between December 2003 and December 2004, before falling again to 58.5% in December 2005.

If one considers the different segments which make up the fixed-network public telephony market, the values which apply to Switzerland are, not surprisingly, below the averages for the European Union. The smallest difference concerns the segment for calls from fixed to mobile networks and the greatest concerns the international calls segment.

3 - Extract from the 12th EU implementation report extended to include Switzerland The table below shows the relative shares of the historic operator in Switzerland and in the Union for the fixed-network voice telephony market as a whole and for the different segments which make up this market.

Shares of the Swiss Shares of EU historic historic operator operators as % of sales as % of sales, weighted average Total 58.5% 63.9% Segments: National calls (local + long-distance) 61.5% 69.4% * International calls 48.0% 56.7% Calls to mobile networks 59.4% 62.2%

* Simple average: 0.5 x (local calls + long-distance)

Consumer choice in the fixed-network communications market (chapter 2) Since the liberalisation of the telecommunications market which took place in the late ‘nineties, both Swiss and European consumers have had the possibility of choosing between several operators to make telephone calls. Thanks to the speedy introduction of carrier selection, either by pre-selection or on a call-by-call basis, Swiss consumers have not hesitated to avail themselves of the new opportunities offered by the market. For several years now, proportionally more of them have been taking advantage of alternative operators’ services than their European counterparts. In 2006, Switzerland strengthened its position. In fact, 36.2% of users used an alternative operator to carry their international calls, as against 32.2% on average in the Union countries. In terms of national and local calls, the gap is even more pronounced, as 36.2% of Swiss users used the services of alternative operators to carry their national calls (cf. 27.7% in the Union) and 33.6% to make their local calls (cf. 23.6%). With regard to subscriber connections, the situation which prevails in Switzerland is somewhat less satisfactory. The proof is that on average 10.4% of European subscribers are connected by an alternative operator, whereas only 5.4% have taken this step in Switzerland. This difference is explained essentially by the fact that unbundling of the local loop was not yet provided for in the Law on Telecommunications in 2006, whereas it was already in effect in the Union countries at the beginning of 2001. However, when one considers that the proportion of users with a connection provided by an alternative operator was virtually zero in Switzerland in 2004, it has to be admitted that the evolution since then has been pleasing. It has certainly been assisted by the marketing by cable operators, in summer 2004, of telephony services (including the connection). What is more, the improvement is not expected to stop there, as after several years of discussions unbundling became a reality in Swiss law from 1 April 2007 onwards.

Interconnection (chapter 3) Acknowledging the crucial role which interconnection could play in facilitating the transition from a monopoly situation to a genuine market economy, the telecommunications regulatory authorities of all countries have devoted much time and effort to fixing interconnection charges which meet the criteria of transparency, non-discrimination and cost-based pricing, whether within the framework of procedures implemented in advance (i.e. ex ante regulation) or after the event as a response to conflicts (so-called ex post regulation). Almost ten years after the launch of the liberalisation process in Europe, although the

Extract from the 12th EU implementation report extended to include Switzerland - 4 procedures for setting interconnection charges have attained cruising speed, it has to be admitted that the subject remains highly topical and has lost none of its relevance. Indeed, in a market characterised by the need to devote substantial investment in order to be able to enter the race and the fact that the situation is regularly shaken up by technological changes (e.g. the emergence of new-generation networks), it is essential for the regulatory authorities to maintain their efforts and continue to ensure that the new entrants can access the market under fair conditions. Without these efforts, the risk of “reconcentration” of the market is indeed higher. This report starts by analysing the situation which prevails in the different countries with regard to call termination on the fixed networks occupying a dominant position, i.e. essentially the historic operators. Three types of service are examined: interconnection at national level (termed “double transit” in the jargon), interconnection at regional level (“single transit”) and interconnection at local level. Unlike other countries in Europe, Switzerland does not have a local interconnection service. Echoing developments in the European countries between 2004 and 2006, the call termination charge at national level fell in Switzerland. This, at 1.40 euro centimes per minute in October 2006, is 12.0% higher than the weighted European average (1.25 euro centimes). However, the results for each country are hardly homogeneous within the European Union, as the amount of the charges varies from 0.65 (United Kingdom) to 3.50 euro centimes (Lithuania). In terms of a league table of countries, we note that Switzerland is in 16th place out of a total of 23 countries considered; this means than seven countries impose higher charges. Despite a fall in the charge for terminating calls at the regional level between 2004 and 2006, Switzerland, at 1.01 euro centimes, is above the weighted European average (+17.4% compared to an average of 0.86). In this case also, the disparity between countries is high. Once again, the United Kingdom is top of the league, at 0.34 euro centimes, and Lithuania is bottom (3.50). As for Switzerland, it heads up the bottom third of the table, in 17th position out of a total of 26 (EU25 + CH). In all probability, there is still potential for a reduction in wholesale prices in Switzerland. At present, four procedures relating to fixed-network interconnection charges for the years 2004, 2005 and 2006 are still pending with the Communications Commission (ComCom). Once the price calculations have been checked, to verify that they are actually based on costs, ComCom will make a decision, probably in the second half of 2007. The second part of the analysis deals with charges for termination of calls on mobile networks. For each country, a national average was established on the basis of the wholesale prices charged in October 2006, these prices having been weighted as a function of the number of respective customers of each operator considered. If one examines the averages established for all the countries taken into account, i.e. 26 in this particular case, it has to be admitted that the mobile telephone operators active on the Swiss market are charging prices in 2006 which are among the highest in Europe, despite a significant fall observed between 2004 and 2005 (-28.3%) and a slightly less pronounced fall recorded between 2005 and 2006 (-5.1%). With a weighted termination charge of 15.05 euro centimes per minute, Switzerland is 32.0% above the weighted European average. Even though this is a distinct improvement compared to 2004 – where the gap was still 51.9% – the undeniable evidence is that the difference is still substantial. Indeed, only Belgium, Slovenia, Estonia and Poland have higher prices. From this, one can therefore conclude that competition has not yet managed to bring prices down to their lowest level in Switzerland. The potential for a reduction is even higher given that the interconnection charge for call termination on mobile networks is approximately eleven times higher than the termination charge on the fixed network at the national level. In the European countries, this ratio is nine, on average. Starting out from the fact that the level of termination charges was high in comparison with that in the European Union countries, in October 2002 the Competition Commission (ComCo) launched an inquiry directed at the three Swiss mobile telephony operators (Swisscom Mobile, Orange and Sunrise). In February 2007, the ComCo delivered an initial decision for the period from 1 November 2002 to 31 May 2005. It decreed that Swisscom Mobile had abused its dominant position by imposing excessively high

5 - Extract from the 12th EU implementation report extended to include Switzerland prices on its end customers and imposed a penalty of CHF 333 million, a penalty against which Swisscom lodged an appeal. A decision is awaited for the period starting on 1 June 2005 and this could affect all the operators which were the subject of the investigation. Finally, we note that virtually all the requests for decisions on fixing the amount of call termination charges on mobile networks lodged with ComCom at the end of 2005 and during 2006 have been withdrawn, the operators concerned having managed to come to an agreement without the regulatory authority having finally to pronounce on the subject of the prices charged.

The mobile telephony market (chapter 4) In October 2006, the mobile telephony penetration rate was 96.2%, seven points below the weighted average for the European Union countries. With a rate of growth lower than that observed in the Union, Switzerland has lost ground since 2004, a time at which it still enjoyed a slight advantage, with a penetration rate of 86.7% compared to 84.6% for its neighbours. At present, Switzerland is in the bottom third of the league table. Seventeen countries have achieved a penetration rate greater than 100%; the highest rate is that of Luxembourg, at 170.6%. France has the lowest penetration rate at 82.3%. Out of a total of 7.22 million mobile telephone users in Switzerland, 42% have opted for a pre-payment card and 58% have taken out a contract. We note that in the European Union, the split between these two forms of payment is in precisely the inverse ratio (60% pre-payment cards and 40% contracts). This seems to indicate that Swiss users attach greater importance to being able to use their mobile telephone without any barriers, even if this is not always the most attractive option in financial terms. This may also explain the irrational inclination of some consumers who do not want to go back on a choice they made in the past2. In July 2006, five operators were using a second-generation mobile network in Switzerland – Swisscom Mobile, Sunrise, Orange, Tele2 and In&Phone. This is an unusual number, since in the European Union the number of operators using a second-generation network varies between two and four. In order to better measure the possible choices they offer consumers, it is important to consider also the number of mobile service providers who market offerings without having their own network3. In Switzerland, it is therefore appropriate to add to the five providers mentioned above the offerings marketed by the following brands: M-Budget Mobile, CoopMobile, Cablecom, Yallo and MobilzoneNet. As far as the number of operators offerings mobile services without operating their own networks is concerned, the data are incomplete within the Union. However, it has to be stated that in certain countries there is a plethora of offerings; the United Kingdom holds the record for offerings – 70 – and the Netherlands has 60. Nevertheless, in order for competition to operate fairly, achieving a high figure does not represent a goal in itself. Starting from the fact that the multiplicity of information and possible choices may induce a degree of paralysis in consumers’ ability to make an analysis, it is therefore preferable to aim for an optimal, rather than maximal, number of players. Despite a number of players on the mobile services market which is quite satisfactory compared with Switzerland’s neighbouring countries, the competitive situation which prevails in Switzerland does exhibit certain particular traits. Thus we note that Switzerland, just behind Cyprus and Slovenia, is the country in which the historic operator has the highest market share, measured as a percentage of the number of users. Swisscom Mobile, in fact, can be proud of the fact that it has a 63.2% market share. This figure falls way outside the European average, which is 39.4%. This unfailing attachment of Swiss users to their historic operator is all the more surprising as the prices it charges are far from being the most attractive on the market. We should also mention that the distribution of market shares between the historic operator and its competitors has remained steady since 2004, both in Switzerland and in the European Union countries. It therefore seems that the market has reached a certain degree of consolidation.

2 This is what is termed the endowment effect in behaviourist economics. 3 These operators use a virtual mobile network or resell network operators’ services.

Extract from the 12th EU implementation report extended to include Switzerland - 6 In another context, using a mobile telephone in Switzerland is systematically more expensive than in the European Union. Indeed, for the three baskets under consideration – baskets for low, medium and high users – the cost of consumption is still clearly above the average European values. The difference in costs between Switzerland and the Union vary from 5.9 euros per month (low usage basket) to 21.0 euros (high usage basket), excluding VAT.

Number portability (chapter 5) Number portability, i.e. the possibility of changing operator whilst keeping one’s telephone number, plays an important part in the market in that it facilitates competition by reducing the obstacles for users who want to use the services of alternative operators. On 31 December 2005, a total of 79,127 fixed-network numbers had been ported in the previous year4, an increase of 32.4% on the previous year (59,750). It is worth noting that most of the customers requesting number portability are those who have concluded a contract with cable operators. In Switzerland, the price charged by the historic operator to its competitors for number portability is particularly high, not to say excessive. Indeed with a VAT-exclusive amount of 19.72 euros, this price is twice as high as that charged on average in the European Union countries. Nor has this fact escaped the attention of Cablecom, the country’s main cable operator, which lodged an application for a decision by ComCom in the autumn of 2004. In its verdict, delivered on 3 July 2006, ComCom called on Swisscom to reduce the prices it was charging for porting individually allocated numbers on the fixed network from CHF 31 to CHF 17.65 for the year 2004, to CHF 15.15 for 2005 and to 11.90 for 2006. Since Swisscom appealed against this decision to the Federal Court, it was not possible to implement the price reduction in 2006. However, once ComCom’s decision had been confirmed by the Federal Court in January 2007, it was possible to bridge the gap which separated Switzerland from its neighbours in 2007. As far as the mobile networks are concerned, there were 99,072 numbers ported as of 31 December 20053, representing an increase of 50.6% on the previous year (65,799). Here too, the price charged by the Swiss historic operator is relatively high in comparison with the Union countries. The proof is that the weighted European average is 12.3 euros as against 18.45 euros for Switzerland, i.e. 50.0% higher. Only two countries have higher prices, namely Germany and Ireland.

Broadband access and prices (chapter 6) In 2006, the obligation of the operator occupying a dominant position in the market to provide its competitors with fully unbundled access to the local loop, shared access to the local loop and bitstream access was still not enshrined in the Swiss Law on Telecommunications5. In this context, new entrants in the market who wish to provide broadband services to the retail market are obliged either to invest in building their own infrastructures or to resell a wholesale service purchased from the historic operator. Since the wholesale market is minimal in Switzerland, it has not been possible to make comparisons with Switzerland’s neighbouring countries. Consequently, the analysis which is developed in this report relates only to the retail market for broadband connections. Given its diminutive size, Switzerland is a small market within the European Union. With 1,950,000 broadband connections, it represents 2.6% of the European volume.

4 The international comparison relates to the month of October 2006. Since the data are not available for this month in Switzerland, the values applicable to 31 December 2005 have been quoted for the year 2006. 5 Since parliament adopted the amendment to the Law on Telecommunications on 24 March 2006, the situation has changed as of 1 April 2007, the date when the said amendment entered into force. Henceforth, the law provides for fully unbundled access to the copper wire of the operator occupying a dominant positions as well as bitstream access for a period limited to four years.

7 - Extract from the 12th EU implementation report extended to include Switzerland Reflecting the trend in most European countries, the Swiss broadband market exhibited a moderate growth rate compared with previous years – an increase of 23% between October 2005 and October 2006. The fall in the rate of growth is explained essentially by the fact that the distribution of the service has reached a certain threshold and the market has become more mature. In October 2006, Switzerland had a broadband connection penetration rate of 26.0% (measured per inhabitant), putting it in the leading group, on a par with Finland and just behind the Netherlands (29.8%) and Denmark (29.4%). Note that these rates are much higher than the European average, which is 15.7%. In these circumstances, it is therefore not surprising that the countries which are catching up have higher growth rates. Of the 1,950,000 broadband connections in Switzerland, 67% are ADSL connections and 33% are cable modem connections. As for the other access technologies6, these have not been considered in Switzerland, given the marginal role they play. Despite a spread of access technologies which is rather more balanced than the European average – 82% DSL access and 18% access using other technologies in the Union – it has to be said that cable is constantly losing ground in Switzerland. Whilst the two technologies were on an equal footing in July 2003, since then ADSL has continued to strengthen its position. Between 2005 and 2006, this technology gained three points, increasing from 64 to 67% of total broadband connections. This development, however, is not specific to Switzerland, as it is occurring in the majority of the Union countries. It is probably explained by the fact the DSL technology has essentially been rolled out from the historic operator’s network, whilst the development of alternative technologies is the result of a multitude of operators who generally have smaller networks at their disposal. Thus in Switzerland ADSL technology is mainly controlled by Swisscom, whereas high-speed internet provision via a cable modem is supplied by some fifty operators, the largest of which is Cablecom. The historic operator therefore has a national network at its disposal and a large customer base via the provision of telephone connections; this gives it an undeniable advantage in terms of both coverage of the service and the return on marketing costs. If one examines the current split of the retail market between the historic operator (or its subsidiary) and the new entrants in the market, one sees that the situation which prevails in Switzerland is more or less similar to that in the European Union countries. Thus in 2006 45% of broadband connections were provided directly by Bluewin to end users, whilst on average 48% of high-speed connections were provided by the historic operator in the Union countries. This ratio, which seems balanced, does, however, conceal a more complex reality. If fact, it is useful to consider that over the years the historic operator has continued to win market share (28% in 2003, 36% in 2004 and 41% in 2005) and that the majority of operators offering high-speed internet services via DSL technology restrict themselves to reselling a service bought from the historic operator, which considerably limits their possibilities of intervening in the value production chain. Thus if we take the number of high-speed connections provided directly by Bluewin to end users and add the number of DSL connections marketed on the wholesale market, it is clear that the weight of the historic operator in the total high-speed market is not 45.4% but 66.9%. If one applies the same approach to the European Union countries, in only three, namely Germany, the United Kingdom and Malta, does the historic operator’s market share jump by more than 20 points.

Fixed telephony prices (chapter 7) As far as the basic telephone connection (i.e. analogue connection) is concerned, a separate analysis has been carried out for the monthly price paid by an individual (including VAT) and that which a business has to pay (excluding VAT). In fact, many countries impose a differentiated tariff, unlike the situation in Switzerland. We note that Switzerland was for many years one of the most expensive countries in Europe in terms of connection prices. After the reordering of tariffs by most of the Union countries, this gap has since closed7. Indeed, the price of a connection paid by a Swiss business today is equivalent to the

6 For example: satellite, optical fibre, PLC, leased lines, 3G, etc. 7 Since January 1995, the monthly charge for an analogue connection, net of VAT, has not changed in Switzerland.

Extract from the 12th EU implementation report extended to include Switzerland - 8 weighted average for the European Union (14.9 euros and 14.8 euros respectively) and only one euro separates the price paid by private individual (16.1 euros in Switzerland and 15.0 in the Union). In 2000, the gap between Switzerland and the Union was still 3.1 euros in the first case and 4.4 euros in the second. From the viewpoint of local call charges, Switzerland is clearly at a disadvantage compared with other countries. For example, for a three-minute call, only Belgium has a higher price. For a ten-minute call, Switzerland is in 23rd place, just in front of the Czech Republic, Belgium and Slovakia. We should point out that this situation is clearly attributable to the introduction in spring 2002 of a single national charge, independent of distance. On the other hand, in the national call segment of the market, the situation is distinctly more positive, since the cost for a Swiss user making a national call of three and ten minutes duration respectively is well below the weighted European average. Finally, with regard to the cost of international calls, Switzerland is in an exceptional position. Indeed, if one considers the costs of the baskets for international calls (one basket for private individuals and one for businesses), only the Cypriot historic operator charges lower prices. Furthermore, the prices charged in Switzerland are considerably below the European average. Despite the substantial drop in prices in Switzerland since liberalisation, it has to be admitted that competition has not yet had the effect of levelling the cost of calls. Thus if one compares the historic operator with its main competitor, it is clear that the cost of a national call using Sunrise is 19.4% lower for a three-minute call and 9.4% lower for a ten-minute call. Even with regard to international calls, where prices are already extremely low in Switzerland, it is possible to make savings of 12.5 to 28.6% depending on the call destinations. Although Sunrise is Swisscom’s main competitor, this does not, however, mean that it is the cheapest. Swiss users can therefore make even greater savings, if they wish, depending on the duration and destination of their calls. In 2006, therefore, Switzerland was in a quite satisfactory situation with regard to fixed telephony prices. With the exception of the price of local calls, all the market segments examined exhibit values equivalent to (e.g. connection) or distinctly lower than the European average. It should also be pointed out that the identical billing of a national call, whatever the distance, heavily penalises Switzerland when the cost of different consumer basket is calculated. Thus for the five 2006 baskets considered by the OECD8, Switzerland is always between 19th and 23rd place among the countries of the European continent (EU25 + CH). This poor showing is explained in part by the major role played by local calls in the make-up of the baskets9.

Retail leased line charges (chapter 8) With regard to the leased line offering on the retail market, Switzerland is characterised by almost complete opacity. In addition to Swisscom, which is in all probability the only operator benefiting from national coverage, only a handful of players are active in the market. Most of the time, the price charged between the operator and the end user is the result of negotiation and may therefore vary from one case to the next. Thus the rare information which can be gleaned is hardly representative. Due to the lack of information, the comparisons made with the European Union member countries are the exception in this report. In fact, they relate only to 64 kb/s and 2 Mb/s connections, which are likely to become more and more obsolete as the high-speed market evolves. In addition, since the values presented are hardly representative, no attempt has been made, in the circumstances, to draw out the lessons of chapter 8 of the present report.

8 Baskets for low residential users, average residential users, high residential users, the self-employed working at home, and small and medium-sized businesses. 9 Depending on the baskets, between 68% and 77% of national calls are made within a radius of less than 10 km.

9 - Extract from the 12th EU implementation report extended to include Switzerland

Extract from the 12th EU implementation report extended to include Switzerland - 10

ANNEX 2

MARKET OVERVIEW

11 - Extract from the 12th EU implementation report extended to include Switzerland SOURCES OF DATA PRESENTED IN THIS ANNEX Figures in sections 1 (fixed market), 2 (consumers’ choice of fixed operators), 3 (public network interconnection), 4 (mobile subscribers and operators), 5 (number portability) and 6 (prices for LLU) were provided by the National Regulatory Authorities (NRAs) in response to a questionnaire on regulatory market data sent by the Commission in July 2006. Data on mobile subscribers (section 4) refer to October 2006 and come from the NRAs unless otherwise specified. Data in section 6 on broadband access are provided by the NRAs and the national ministries through the Electronic Communications Committee (COCOM). Data have been collected since July 2002 three times a year, in January, June and October. The figures in this report refer to 1 October 2006 unless otherwise specified. Information in sections 7and 8 (PSTN and retail leased lines prices) and partly in section 4 (mobile tariffs) is taken from a study carried out for the Commission by Teligen, Harris Interactive UK. These data are collected from primary sources (i.e. directly from the incumbent operators and new entrants) and checked by the NRAs. All NRAs, with the exception of Ireland, Italy, Latvia, Slovenia and Poland provided comments and approved these data. A validation meeting with representatives from NRAs took place in November 2006. Furthermore, a draft version of the charts in this annex (excluding section 7, 8 and 4.4) was distributed to the NRAs before this report was finalised.

Extract from the 12th EU implementation report extended to include Switzerland - 12 TABLE OF CONTENTS

1. FIXED MARKET ...... 15 1.1. PLAYERS IN THE FIXED MARKET ...... 15 1.2. INCUMBENTS’ MARKET SHARE IN THE FIXED VOICE TELEPHONY MARKET ...... 20 2. CONSUMERS’ CHOICE OF FIXED OPERATORS ...... 29

2.1. PERCENTAGE OF SUBSCRIBERS ACTUALLY USING AN ALTERNATIVE PROVIDER OTHER THAN THE INCUMBENT...... 29 2.2. FACILITIES USED BY NEW ENTRANTS FOR THE PROVISION OF VOICE TELEPHONY ...... 32 3. PUBLIC NETWORK INTERCONNECTION ...... 35 3.1. CALL TERMINATION ON INCUMBENT'S FIXED NETWORK...... 35 3.2. CALL TERMINATION ON ALTERNATIVE OPERATORS' FIXED NETWORKS...... 39 3.3. CALL TERMINATION ON MOBILE NETWORKS ...... 40 3.4. LEASED LINES INTERCONNECTION CHARGES ...... 45 4. MOBILE MARKET ...... 49 4.1. MOBILE PENETRATION ...... 49 4.2. PLAYERS IN THE MOBILE MARKET...... 53 4.3. MOBILE OPERATORS’ MARKET SHARES...... 55 4.4. MOBILE TARIFFS ...... 58 5. NUMBER PORTABILITY...... 68 5.1. FIXED NUMBER PORTABILITY...... 68 5.2. MOBILE NUMBER PORTABILITY ...... 69 6. BROADBAND ACCESS AND PRICING ...... 71 6.1. BROADBAND ACCESS DEFINITIONS...... 71 6.2. WHOLESALE ACCESS ...... 72 6.3. RETAIL BROADBAND ACCESS...... 74 6.4. PRICES FOR UNBUNDLED LOCAL LOOP...... 86 7. PUBLIC VOICE TELEPHONY TARIFFS...... 90 7.1. CHARGING SYSTEM...... 90 7.2. MONTHLY RENTAL CHARGED BY THE INCUMBENT OPERATORS...... 93 7.3. AVERAGE MONTHLY EXPENDITURE (COMPOSITE CALL BASKET)...... 96 7.4. PRICE OF FIXED NATIONAL CALLS BY THE INCUMBENT OPERATOR ...... 103 7.5. TREND OF THE BASKET FOR FIXED NATIONAL CALLS (NATIONAL BASKET) ...... 107 7.6. PRICE OF FIXED NATIONAL CALLS BY ALTERNATIVE OPERATORS...... 108 7.7 INCUMBENT OPERATOR PRICE FOR AN AVERAGE FIXED INTERNATIONAL CALL (INTERNATIONAL CALL BASKET) ...... 110 7.8. INCUMBENT OPERATOR PRICE OF CALLS TO EU, JAPAN, USA...... 113 7.9. ALTERNATIVE OPERATORS’ PRICE FOR FIXED INTERNATIONAL CALLS ...... 116 8. LEASED LINES RETAIL TARIFFS ...... 119 8.1. INCUMBENTS' NATIONAL LEASED LINES ...... 119 8.2. NATIONAL LEASED LINES PRICE TRENDS (1 AUGUST 1998 - 1 SEPTEMBER 2006)...... 126 8.3. INTERNATIONAL LEASED LINES PRICES ...... 129 8.4. INTERNATIONAL LEASED LINES PRICE TRENDS (1 AUGUST 1998 - 1 SEPTEMBER 2006) ...... 134 8.5. EXCHANGE RATE USED (EXCEPT TARIFFS)...... 135 8.6. EXCHANGE RATE USED FOR TARIFF (ON THE MOBILE TARIFF - SECTION 4, PUBLIC VOICE TELEPHONY TARIFFS - SECTION 7 AND LEASED LINE TARIFFS - SECTION 8)...... 135 8.7. POPULATION ...... 136

13 - Extract from the 12th EU implementation report extended to include Switzerland 9. OECD TELECOMMUNICATIONS BASKET DEFINITIONS ...... 137 9.1. NATIONAL PSTN BASKET...... 137 9.2. INTERNATIONAL PSTN BASKET...... 138 9.3. COMPOSITE NATIONAL – INTERNATIONAL BASKET...... 138 9.4. NEW OECD BASKETS FOR PSTN 2006...... 139 9.5. OECD MOBILE BASKETS 2002 ...... 140 9.6. NEW OECD MOBILE BASKETS 2006 ...... 142

Extract from the 12th EU implementation report extended to include Switzerland - 14 1. FIXED MARKET

This section looks at the number of fixed telecommunications operators (fixed voice telephony and network services) and at the level of competition in the fixed market. It includes data on the number of fixed network operators and public fixed voice telephony operators authorised to provide public voice telephony and to operate a public network at July 2006. The estimated number of players actually active in the fixed market and the incumbents’ market shares in the fixed voice telephony market have also been shown. Data on the number of operators refer to July 2006, while data on the incumbents’ market shares in the fixed voice telephony market refer to the end of 2005. Information have been provided by national regulatory authorities.

1.1. Players in the fixed market Under the new regulatory framework for electronic communications, operators are only subject to a general authorization regime. Undertakings may be required to submit a notification but may not be required to obtain an explicit decision or any other administrative act. Granting of individual rights of use is required only for scarce resources such as radio spectrum or numbers. Given the above, the database set up by the national authorities may be very different across the Member States and may include a variety of operators: fixed network operators, service providers, voice over IP services, cable operators as well as wireless local loop, and mobile and satellite operators for the fixed part of their networks and services. Some Member States are now not able to provide detailed information on the number and types of services provided by the operators that may include other services in addition to public telephony and/or public network services. Therefore, the figures on the number of operators should be considered only as estimates. Furthermore, in some Member States the figure for 2006 is not comparable with the previous implementation reports given the change in the authorization regime. The figures do not take into account operators acting as resellers or offering services based exclusively on pre-paid cards. The figures include cable TV operators that also provide voice telephony or network services. Concerning the operators providing voice over IP services, they are excluded in Belgium, Czech Republic, Greece, Cyprus, Luxembourg, Hungary, Poland, and included in Estonia, France, Latvia, Malta, Austria, Portugal and Sweden. In Belgium, Ireland, Lithuania VoIP operators are included only if they provide a PATS10-like service. No information is available for Denmark, Spain, Italy, The Netherlands, Slovakia and Finland. In Germany and United Kingdom some VoIP operators might be included. While it is difficult to measure the exact difference since 2005, data shows that there has been an increase in the number of operators authorised to provided fixed services, even if to a lower extent than in previous years. Around 50% of the authorised operators were actually providing services as of July 2006. As of December 2005 the total number of major competing operators (i.e. operators that along with the incumbent operator have a combined market share of around 90% of the global telephony market) in the EU is around 94. Only in seven Member States there are five or more major competing operators. In six new Member States, competition is still at an early stage with the incumbents' retaining more than 90% of the market and a low level of competiton mainly concentrated in the international calls market. Data on the number of operators were provided by the national regulatory authorities and refer to July 2006. Data on the number of major competing players refer to December 2005.

10 PATS = Publicly Available Telephone Service as opposed to ECS (Electronic Communication Services) operators who have less obligations (number portability, authorizations).

15 - Extract from the 12th EU implementation report extended to include Switzerland Figure 1

Estimated number of fixed operators in EU

3000 2846

2495 2500

2141 2166 1981 2000

1608

1500

1000 2004 2005 2006

Public voice telephony Public network The figure for public network operators does not include Denmark (for both 2005 and 2006) and the number of public network operators for Czech Republic in 2006 refers to 2005.

1.1.1. Public fixed network operators The chart below shows the estimated number of network operators. Public network operators are defined as operators that install, manage and operate a telecommunications transmission network to provide public telephony services or public network services in the whole national territory, whatever the geographical scope of the service. In Austria, the following figure includes also all operators either owning proprietary infrastructure and/or using local loop unbundling (LLU) and operators offering leased line services over proprietary infrastructure. As of July 2006 there were a total of around 2800 network operators in the EU. In some countries data are not comparable with previous reports due to a change in the national data collection or to different figures provided by NRAs. In Switzerland, there were 130 telecommunication services providers holding a license11 as of 30 June 2006 and therefore authorized to operate a public network. Taking into account its small size, Switzerland has a relatively high value, which puts it in the ninth position in the European table.

11 We have implicitly assumed that the category “operators authorised to operate a public network and to provide public telephone services” corresponded, in Switzerland’s case, to licensed operators. According to the legislation, valid on the date considered in the report, operators subject to the licensing regime are those independently operating an extensive part of the telecommunications installations (art. 4, para. 1 of the Law on Telecommunications).

Extract from the 12th EU implementation report extended to include Switzerland - 16 Figure 2 Estimated number of authorised public fixed network operators (July 2006) - Total EU: 2847

700 633

600

500 484

423 400

307 300 253 223 232 196 200 130 88 100 72 47 45 43 43 47 40 37 31 26 15 15 24 9 5 2 0 BE CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI SE UK CH

Czech Republic: Data are not comparable with other countries and with previous report (the authorization regime has been fundamentally changed in May 2005). Denmark: Data are not available due to the fact that there is neither a licensing requirement nor a central register of operators. Greece, Austria: Data are not comparable with previous reports because of a change in the national authorization regime. Spain: 340 out of 423 network cable operators are local cable operators. Finland: 39 network operators are local incumbents out of which 32 belong to the Finnet Group, 2 to the Elisa Group, 2 others to TeliaSonera and 3 operate outside of these groups. France: Of the 307 operators declared, 199 wireless local loop operators are in a test phase. Netherlands: Data refer to 31 December 2005. Sweden: NRA's estimated values. United Kingdom: The figure corresponds to the number of companies recorded in the voluntary register for communications providers. Figure refers to October 2006.

1.1.2. Public fixed voice telephony operators Public fixed voice telephony is defined as a service available to the public for the direct transport on a commercial basis of real-time speech via the public switched network, such that any user can use equipment connected to a network termination point at a fixed location to communicate with another user of equipment connected to another termination point. Voice telephony could be provided by operators on an own self-operated network or on a leased network (including LLU). In the first case, the operator provides voice telephony over a network fully controlled, operated and (wholly or partially) owned by it; in the second case the operator operates, controls, manages the transmission capacity leased from another operator, and provides voice telephony through career selection or career pre-selection The definition of service provider may differ from the one used in the national law of individual countries (in some countries non-self operated network operators engage exclusively in reselling activities). Operators offering simple call-back and calling card services as well as operators dealing only with marketing, billing, etc., are excluded. Theoretically, a total of 208 operators are able to offer voice telephony services in the Swiss market (Figure 3). In the European comparison, this puts Switzerland among the countries which have the highest number of providers.

17 - Extract from the 12th EU implementation report extended to include Switzerland Figure 3 Estimated number of authorised public fixed voice telephony operators (July 2006) - Total EU: 2166 400

350 336

300

250 232 208 200 168 153 150 139

107 110 106 97 100 87 81 82 82 57 64 47 50 33 39 38 36 22 21 15 12 2 0 BE CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI SE UK CH

Czech Republic, Germany, Greece: Data are not comparable with previous reports because of a change in the national authorization regime. Denmark: Due to the fact that there is neither a licensing requirement nor a central register of operators, the above figure refers to the number of operators actually offering public voice telephony. Spain: About 80% are local cable operators. Finland: 39 network operators are local incumbents out of which 32 belong to the Finnet Group, 2 to the Elisa Group, 2 others to TeliaSonera and 3 operate outside of these groups. Netherlands: The figure refers to 2005. Austria: Data are not comparable with previous reports because of a change in the national authorization regime. Figure includes also operators actually offering carrier selection (CbC) services. Data as of 31 December 2005. Portugal: The figure includes 3 incumbent subsidiaries. United Kingdom: The figure corresponds to the number of companies recorded in the voluntary register for communications providers. Figure refers to October 2006. The number of operators authorized to offer telephone service only indicates the potential for competition in the market rather than the actual level of competition. For this reason, where possible, the following chart provides an estimate of the number of operators that are active in the market. CATV operators providing public voice services and operators using direct access are included. Figures do not distinguish between local and national operators. Furthermore, some operators only offer international calls, while others also offer national and local calls. Figures represent the maximum number of active operators in each country irrespective of the type of services they are actually providing. Figures for some countries are not comparable with previous reports due to different data provided by NRAs. Figure 4 shows, that Switzerland, with 60 active providers, belongs to the leading countries. In comparison with figure 3 one can conclude that only approximately 29% of the authorized operators actively offer voice telephony services in the Swiss market.

Extract from the 12th EU implementation report extended to include Switzerland - 18 Figure 4

Estimated number of operators actually offering public voice telephony (July 2006) - Total EU: 1110 140

120

100

80 2 2 60 13 12 6 10

40 81 78 70 66 62 60 54 43 42

20 41 41 35 25 19 16 15 14 12 12 9 8 1 0 6 BE CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI SE UK CH

th Spain: Data are not comparable with 11 Implementation Report . Netherlands: Data refer to 31 December 2005. th Austria: Data are not comparable with 11 Implementation Report and refer to 31December 2005. Portugal: The figure includes 3 incumbent subsidiaries. United Kingdom: The figure corresponds to the number of companies recorded in the voluntary register for communications providers. Figure refers to October 2006.

Many new entrants concentrate their business on specific segments of the market or limit their activity to local areas, thus having a limited impact on the national market as a whole. To get an idea of the number of main players that are effectively competing with the incumbent at national level, the following chart shows, for each country, the number of operators that had a combined market share, based on revenues, of 90% on the total voice telephony market (all types of calls12). In December 2005 only seven countries had five or more major competing operators (including the incumbent) with such a combined market share. These figures give an idea of the number of major players operating in each national market, although in many cases competition is largely asymmetric, with incumbents continuing to hold a strong position. This situation can be observed in the new Member States, where the fixed incumbent still dominates the fixed voice market.

In the Swiss fixed network voice telephony market, six providers share at least 90% of the market. This places Switzerland in the countries which have the highest number of providers, at the same level as Spain and Austria but clearly behind Germany, the United Kingdom, Sweden, Belgium, and Denmark, each with at least seven operators.

12 Local calls to internet, local phone calls, long-distance and international calls as well as calls to mobile

19 - Extract from the 12th EU implementation report extended to include Switzerland Figure 5 Number of players in the fixed telephony market in terms of retail revenues (including the incumbent, Dec. 2005 )

12 11

10 10 9

8

6 6 6 6 5 5

44 4 4 4 44 4 3 3

2 2 2 2 111 1 11

0 BE CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI SE UK CH Operators that along with the incumbent operator have a combined market share of 90% of the voice telephony market Germany, Ireland: Figures are NRA's estimates. Denmark, Netherlands, Slovenia: Data are based on minutes of traffic. Finland: The figure includes the major operator groups only.

1.2. Incumbents’ market share in the fixed voice telephony market This section shows the incumbents’ market share in the fixed voice telephony markets on the basis of both retail revenues and outgoing minutes of traffic. Where possible, figures for local, long-distance, international calls, calls to mobile and calls to internet are shown. It has to be noted that in Switzerland local and long-distance calls data have no longer been collected since 2003 due to the introduction of the closed numbering plan in March 2002. Since that date, the historic operator has applied a new charging system which offers only one tariff, regardless of distance. We therefore decided to display for 2003 and the following years an aggregated indicator which combines local and long-distance calls. Not all Member States collect separate figures for all types of data, and split between the various markets is not always available. Figures in this section have been provided by NRAs, also for Switzerland, and refer to December 2005, except for United Kingdom (March 2006). Where available, later values have been provided in the notes. Market share based on retail revenues exclusively refers to revenues from call markets and does not include any access revenue. Apart from Denmark, Spain, Cyprus and United Kingdom, traffic/revenues generated from calling cards are excluded from the market definition. The market definition for Greece and Austria includes calling cards for international calls based on volume of traffic (both countries) and for the international calls based on revenues (only Austria). Traffic/revenues from public payphones are not excluded in Czech Rep., Denmark, Estonia, Spain, Greece (for international calls on volume of traffic) Latvia, Luxembourg, Austria, Portugal, Sweden (for international calls). It is excluded in all the remaining countries. No information is available for The Netherlands, Slovenia, Slovakia and Finland. Traffic/revenues from calling shops are not excluded in Czech Rep., Greece, France, United Kingdom. It is excluded in the remaining countries, except for Germany, Sweden, Italy, The Netherlands, Slovenia, Slovakia and Finland where no information is available.

Extract from the 12th EU implementation report extended to include Switzerland - 20 Peer-to-peer VoIP traffic/revenues is excluded in all countries. No information is available for Germany, Sweden, Italy, The Netherlands, Slovenia, Slovakia and Finland. Managed VoIP (VoIP calls over broadband) traffic/revenues are included in Belgium, Denmark, Estonia, Latvia, Lithuania, Austria and Portugal. It is excluded in the remaining countries, except Germany, Sweden, The Netherlands, Slovenia, Slovakia, Finland and United Kingdom where no information is available. 1.2.1. EU average incumbents' market share The following charts show the trend for the Swiss incumbent’s market share and for the EU weighted average of the incumbents’ market share in the major segments of the voice telephony market since 2003. Given that data were not available for all countries and for all types of calls, the EU average should be considered as indicative. In particular, the overall fixed telephony market share in term of revenues in 2004 and 2005 is an average of countries that represent 93% and 95% of the EU population respectively, while data for 2003 represent only 89.6% of the EU population. Market share data based on volume of traffic for 2004 and 2005 represent 97% and 100% of EU population respectively, while the data for 2003 are based only on a number of countries representing 78% of the EU population. The market share of the Swiss incumbent based on retail revenues and on the volume of traffic is to some extent smaller than the weighted average of the EU incumbents’ market share (at the end of 2005 the difference of about 7 and 5 percentage points respectively). Figure 6 CH and EU incumbents' average market share on the voice telephony market (all type of calls) 75%

71% 70.9% 70.3% 67.7% 67% 65.8% 66.0% 63.1% 63.9% 63% 60.6%

59.2% 59% 59.9% 60.3% 58.5%

55% Dec. 2003 Dec. 2004 Dec. 2005

EU - by retail revenues EU - by volume of traffic CH - by retail revenues CH - by volume of traffic

Considering the incumbents’ average market shares based on revenues, one can notice that Switzerland stands below the European average for all segments indicated (Figures 7 and 7a). The Swiss new entrants show up to 10 points market share lead in the national call segment, a 3 point benefit in the fixed to mobile one, and a 9 point advantage if the international market is considered.

21 - Extract from the 12th EU implementation report extended to include Switzerland Figure 7 EU25 incumbents' average market share on the voice telephony market (based on market shares of revenues) 80% 75.8% 75% 73.2% 70.6% 71.8% 70% 68.8% 69.2% 67.0% 65% 65.1% 62.9% 62.2% 60% 58.7% 56.7% 55%

50%

45% Dec. 2003 Dec. 2004 Dec. 2005 Local calls Long-distance calls Calls to mobile International calls Source: Commission services based on NRA data.

The figure for the local calls market is an average of countries that represent more than 91% of the EU population for all the period considered; data for long distance calls represent between 95% and 96% of the EU population for the period considered; data for calls to mobile represent around 97% for the period 2004-2005 and 95% in 2003; data for international calls represent between 97% and 98% of the EU population for the period considered. Figure 7a

CH incumbents' average market share on the voice telephony market (based on market shares of revenues) 80%

75%

70% 65.7% 65% 62.6% 61.9% 61.5% 60% 61.9% 59.4%

55%

50% 51.0% 48.4% 48.0% 45% Dec. 2003 Dec. 2004 Dec. 2005 Local and long-distance calls International calls Calls to mobile Source: Commission services based on NRA data. 1.2.2. Incumbent's overall market share in each Member State The following chart shows the incumbents’ market share in the overall fixed market by retail revenues and by minutes of outgoing traffic. All types of calls are included: local calls (local phone calls and local calls to internet), long distance, international calls and calls to mobile networks. Market share based on retail revenues does not include any access revenue.

Extract from the 12th EU implementation report extended to include Switzerland - 22 Internet local calls are not included in the Swiss data. With 59.2% of market share expressed in minutes and with 58.5% in terms of revenue, Swisscom is the historic operator which has the fourth lowest position after Austria, UK and Germany. Figure 8 Incumbents' market share in the fixed telephony market (all types of calls) (Dec. 2005)

100% % % % % 0 .2 % . .0 3 % . 9 .4% 1 90% .0 .3% 7 . 99 9 99 % % 9 5 % 96 2 96 6 . 95 .1% 9 . .3 0 91 91 80% 9 89 .0% % .3% % % 8 85 % . % .0 4 .2 % 82 9 . % .9

70% 7 7 .0 79 .2 % 78 .0% .0% 7 % % 0 75 0 . 75 6 % .5% 74 . 74 74 . % % 4 % 0 % 0 3 . % % 1 71 . 7 . 0 60% 7 69 7 .3 . 6 .1 .1 6 % 6 66 % % 65 65 64 64 5 .2 0 . % . % 8 8 50% % % 59 .0 .6 5 5 9 .7 . 55 54 1 52 5 40% % 0 . 44 30%

20%

10%

0% BE CZ DK DE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI UK CH

By retail revenue By volume of traffic

Denmark, Spain, Greece (international calls based on volume of traffic), Cyprus, Austria (international calls), United Kingdom: Market definitions include traffic/revenues generated from calling cards. Belgium, Ireland, Italy: Data are not comparable with previous reports due to a change in the national data collection. Estonia, Sweden: Data are confidential. Denmark: Incumbent's market share by minutes of traffic in the first half-year 2006 is 64.13%. Germany: Figures are NRA's estimates. Hungary: Figures are NRA's estimates and refer to 5 fixed local incumbent operators. The Netherlands: Figures are very rough NRA's estimates (extrapolation from 2004 data). Portugal: Retail revenues do not include dial-up internet revenues. United Kingdom: Data as of 31 March 2006.

1.2.3. Incumbent's market share in the different segments of the national market The following two charts show the incumbents’ market share in the local, long-distance and international calls market by retail revenues and by minutes of outgoing traffic. The local calls market includes both local phone calls and local calls to internet. As already explained, local and long-distance market shares in terms of revenues are no longer analysed in the case of Switzerland. In comparison with the other European incumbents, at the end of 2005, in terms of revenues (Figure 9), Swisscom’s international call market share is lower than in most european countries. The sole exceptions are the market shares for international calls in Germany, Italy, and the Netherlands. A little bit different situation prevails in the case of market shares based on minutes (Figure 10): in this case seven countries - Austria, Finland, the Netherlands, Belgium, Spain, Ireland, and Germany - have a lower market share in the international calls segments. If we look at the incumbent’s market shares in terms of traffic (Figure 10), we can compare Switzerland in the local and long-distance call segments. Figure 10 shows us that the situation of Switzerland is relatively competitive since Switzerland is situated below the European average for both segments. However, countries like Germany or the United Kingdom demonstrate that new entrants’ market shares can be significantly increased.

23 - Extract from the 12th EU implementation report extended to include Switzerland Figure 9 Incumbents' market share in the local, long distance and international market (by retail revenues-Dec. 2005) 100% % % % % 0 % 7 0 0 % % . .7% . .0% . 0. .0 0 .9% 9 9 9 9 . . 9 90% 99 9 99 9 6 % 10 98 97 97 9 0 % . % % 2 .9 % 8 9 .0% % . .4 0 . 80% 89 .0 88 87 87 .0% % .6% 86 % % 85 0 . .8% 5 % 83 82 % . .4 % % % .7% 7 % 8 .5 8 % 80 0 0 0 79 70% . % . . . 7 7 % 2 77 % .6 . .1% 5 % 76 3 .2 75 . % % % 7 75 75 .8 % 73 .7 1 73 3 2 73 % . .3 72 . 7 .1 70 4 8 % % 69

60% . % 6 68 68 67 .0 .0 .1 .0% % 65 % .9% 63 63 % .9 62 62 .0 9 .0% 0 5 50% . % 58 58 6 57 .7% .1 5 % .3% % 0 52 52 . % .8 40% 50 .0 48 46 % 45 .0 30% 39

20%

10%

0% BE CZ DE EL ES FR IE IT CY LV LT HU MT NL AT PL PT SI SK UK CH Local calls (all) Long-distance calls International calls

Data for local call include local phone calls and calls to the internet. Belgium, Malta, Luxembourg, The Netherlands, Slovenia: There is no distinction between local and long-distance calls: figures refer to national calls to fixed numbers. Belgium, Ireland, Italy: Data are not comparable with previous reports due to a change in the national data collection. Denmark, Estonia, Cyprus (national calls), Luxembourg, Sweden, Finland: Data are confidential or not available. Spain, Cyprus, Austria (international calls), United Kingdom: Market definitions include traffic/revenues generated from calling cards. Germany: Figures are NRA's estimates. France: There is no distinction between local and long-distance calls (calls are only national). The split between different calls is based on NRA's estimates. Hungary: Figures are NRA's estimates and refer to 5 fixed local incumbent operators. The Netherlands: Figures are very rough NRA's estimates (extrapolation from 2004 data). Austria: Data for long distance calls are not strictly comparable with other countries because it includes also local phone calls. Data from previous reports on local and long distance calls are not comparable due to the change in the national data collection. Portugal: Data for long distance calls are not strictly comparable with other countries because it includes also all local calls. United Kingdom: Data as of 31 March 2006. Data for local calls to internet include some voice traffic.

Extract from the 12th EU implementation report extended to include Switzerland - 24 Figure 10 Incumbents' market share in the local, long distance and international market (by volume of traffic-Dec. 2005)

100% % % % % % % % 7 % 0 % .7 . 5 0 ,0% . 1 . % .0 . 0.0 9 .5% 9 .6 5 0 90% 8 99 9 . % . 65 9 98 98 9 10 97 0 5 96 . % 47% 97 % 9 . % 2 .8 % 2 % .0 9 .9

80% 9 % .2 .0 88 88 .3% 0 % 86 .6% . % % 85 85 .6 % 83 9 82 .9 . 82 % % .2

70% 7 79 % 6 .4 % 6 77 7 . % 1 .0% . 7 % 2 % .0 74 . % % .6% 73 2 9 73 .5% . % . 72 8 9 % .8 71 . 8 0 60% 70 6 .4% . .0% % 7 6 % 68 6 % 67 . .1% 5 7 66 6 . 6 3 .3 65 6 65 . 6 % % 63 % 61 % 61 0 6 60 .3 .

50% . .2 6 .9% % % 5 .0% 56 55 % % .7 .5% .2 54 53 % 52 .7 .7 .0% 50 50 50 40% % % .0 47 47 % 47 .7 .9 % 0 45 . 0 42 % . 41 .4% % 0

30% 40 % . 38 37 .0 9 . .0% 35 33 31 20% 31

10%

0% BE CZ DK DE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI UK CH

Local calls (all) Long distance calls International calls

Belgium, Cyprus, Malta, Luxembourg, The Netherlands, Slovenia: There is no distinction between local and long-distance calls: figures refer to national calls to fixed numbers. Estonia, Sweden: Data are confidential. Denmark: Data for local and long-distance calls are not available. Germany: Figures are NRA's estimates. France: There is no distinction between local and long-distance calls (calls are only national). The split between different calls are based on NRA's estimates. Belgium, Ireland, Italy: Data are not comparable with previous reports due to a change in the national data collection. Hungary: Figures are NRA's estimates and refer to 5 fixed local incumbent operators. The Netherlands: Figures are very rough NRA's estimates (extrapolation from 2004 data). Austria: Data for long distance calls are not strictly comparable with other countries because it includes also local phone calls. Data from previous reports on local and long distance calls are not comparable due to a change in the national data collection. Portugal: Data for long distance are not strictly comparable with other countries because it includes also local phone calls. International calls market share as of September 2006 is 76.8%. Finland: Figures are NRA's estimates. United Kingdom: Data as of 31 March 2006. Data for local calls to internet include some voice traffic.

Figure 11 shows the market shares in terms of minutes and revenue for calls from the incumbent’s fixed network to a mobile network. With 55.7% of market shares expressed in minutes, Swisscom positioned itself in the leading quarter of historic operators which possess the lowest market shares. Swisscom’s market share in terms of minutes is slightly lower than the one for revenue (59.4%). These values place Swisscom on the fourth place behind Austria, Germany, and the United Kingdom.

25 - Extract from the 12th EU implementation report extended to include Switzerland Figure 11 Incumbents' market share in the calls to mobile market (Dec. 2005)

100% % % % 0 0% 1 . . .9 0 0. % % 9 0 5 90% 5 9 % 98 . . 1 10 % 4 .7 9 94 .9 1 .0% 9 % %

80% 89 .9% 89 7 . .4 3 .5% 84 8 % 83 81 2 . 70% % % 6 0 % % % . .9% % 7 % .0 % % 0 9 3 % .1 . 9 . .4 3 0 . 7 72 % % % % . % . .0% 0 72 9 .5 6 4 8 0 70 8 7 6 . .5 60% .5 . 69 % . .0% 68 6 .9% 6 68 5 67 5 0 5 . 6 65 65 6 6 65 % 63 .4% % 62 9 .0

50% .7 5 % 7 % % 1 5 6 % . . 55 .0 1 .0 52 % 5 40% 51 49 .4 44 30%

20%

10%

0% BE CZ DE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK UK CH

By retail revenues By volume of traffic

Belgium, Ireland, Italy: Data are not comparable with previous reports due to a change in the national data collection. Denmark, Estonia, Sweden: Data are confidential or not available. Germany: Figures are NRA's estimates. Hungary: Figures refer to 5 fixed local incumbent operators. Figures are NRA estimates. The Netherlands: Figures are very rough NRA's estimates (extrapolation from 2004 data). Finland: The market for fixed-to-mobile is based on carrier pre-selection. United Kingdom: Data as of 31 March 2006.

1.2.4. Incumbents' market share in the local calls market The following charts show the incumbents’ market share in the local calls market by retail revenues and by minutes of outgoing traffic. Where possible, separate figures for local phone calls and local calls to internet are provided. The data on local phone calls are not available for Switzerland, therefore only the incumbent’s market share for local international calls in terms of revenues was indicated. The market share level for local Internet calls of the Swiss new entrants is high compared to the european countries (39%). This places Switzerland on the second place behind Germany. If we consider the market share of the Swiss new entrants based on the volume of trafic (Figure 13), the situation for local calls to Internet (37.6%) as well as for local phone calls (35.6%) looks quite similar. Switzerland places itself in the leading quarter among the European countries.

Extract from the 12th EU implementation report extended to include Switzerland - 26 Figure 12 Incumbents' market share in the local market (by retail revenues- Dec. 2005)

100% % % % 0 0 0 0% 0% 0% 0% % . . . 2% 9% 8 0 0 0 . 0 0 0

90% 99.7% 99.6% 99. 99. 99. 99. % 98. 1 1 1 100.0% 97.4% 97.0% 96. 96 0 1% % . 94.0% 6 92.5% 0 92.0% 91. 0% % 80% 9 % 8 87. 87.3% . 1 . 85. 84.3% 83.0% 82 5% 5% 0% 81 2%

70% 80.0% % 78.5% 78.4% 78.4% 8% 3 76. 76. . 76. . 75. 75.0% 75.0% 1 73.7% 7 60% 71 69.0% 68.3% 67.3% 66.0% 9% 64.8% % 62.6% 0 61.0% .

50% 59. 57.5% 56 40%

30% 38.0% 20%

10%

0% BE CZ DE EL ES FR IE IT LV LT HU MT NL AT PL SI SK UK CH

Local calls to Internet Local phone calls Local calls (all)

Local calls to internet include calls to both geographic and non-geographic numbers. Except to Ireland and Lithuania, local calls to Internet exclude flat tariffs. Belgium, Malta, Luxembourg, The Netherlands, Slovenia: There is no distinction between local and long-distance calls: figures refer to national calls to fixed numbers. Spain, United Kingdom: Market definitions include traffic/revenues generated from calling cards. Denmark, Estonia, Cyprus, Luxemburg, Portugal, Finland, Sweden: Data are confidential or not available. Belgium, Ireland, Italy: Data are not comparable with previous reports due to a change in the national data collection. Germany: Figures are NRA's estimates. France: The split between different types of calls are based on NRA's estimates. Data on local calls to the Internet refer to "pay as you go" calls billed to the subscriber by the operator. They do not include "internet access package" fees. Italy: No separate figures are available for local calls to internet and local phone calls. Hungary: Figures are NRA's estimates and refer to 5 fixed local incumbent operators. The Netherlands: Figures are very rough NRA's estimates (extrapolation from 2004 data). Austria: No figure available for local phone calls. United Kingdom: Data as of 31 March 2006. Data for local calls to internet include some voice traffic.

27 - Extract from the 12th EU implementation report extended to include Switzerland Figure 13 Incumbents' market share in the local market (by volume of traffic- Dec. 2005)

100% % % % % % % 0 0 0 0 1% 0 . . . % 3% 2 . . % 0 0 0 2 9 3% . 0 0 0 90% 0 99.7% 99.3% 99. 9 99.0% 99.0% 99.0% 98.5% 6 98. 98 98.0% 1 1 1 100. 97.5% 0% 96.3% 9 95. 0% 95. % 92. 0

80% 90. % 87.3% 0% 8 85.2% 85.1% 85. . 9% 83.0% 0 82.6% 82. 2% % % 8

70% 0% 79.3% 1 8 7% 3% . . . 77. % 76. 76.0% 3 3 % 0% 75. 6 . 74 7 7 2 73. 73.0% 72.6% . 0 2% 71.3% 71.3% 71.0% % 70.6% 0% 7

60% % 69. 7% 6 68 . 4 67.1% 66.8% . 66. 65. 2 64.4% 63. 63 6

50% 0% 58.0% 56.3% 55. 51.4%

40% 49.8% 0%

30% 40.

20% 26.0% 10%

0% BE CZ DE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI UK CH

Local calls to Internet Local phone calls Local calls (all)

Local calls to internet include call to both geographic and non-geographic numbers. Except to Ireland and Lithuania, local calls to internet exclude flat tariffs. Belgium, Cyprus, Malta, Luxembourg, The Netherlands, Slovenia: There is no distinction between local and long-distance calls: figures refer to national calls to fixed numbers. Denmark, Estonia, Sweden: Data are confidential or not available. Belgium Ireland, Italy: Data are not comparable with previous reports due to a change in the national data collection. Germany: Figures are NRA's estimates. France: The split between different calls is based on NRA's estimates. Hungary: Figures are NRA's estimates and refer to 5 fixed local incumbent operators. The Netherlands: Figures are very rough NRA's estimates (extrapolation from 2004 data). Austria: No separate figures available for local phone calls. Portugal: Data for local phone calls are not available. Local calls to internet market share as of September 2006 is 92.4%. Finland: Data are NRA's estimates. United Kingdom: Data as of 31 March 2006. Data for local calls to internet include some voice traffic.

Extract from the 12th EU implementation report extended to include Switzerland - 28 2. CONSUMERS’ CHOICE OF FIXED OPERATORS

This section analyses the fixed voice telephony market from the point of view of consumers. It gives information on the percentage of subscribers using an alternative provider other than the incumbent (for phone services and direct access) and the facilities used by alternative operators for the provision of voice telephony. The data presented below have been provided by the national regulatory authorities and, unless otherwise indicated, report the position as of July 2006. Figures for countries not included in the charts are not available and are not always comparable with those published in previous reports due to changes in the methodologies and/or in the classifications used by the Member States. Furthermore, separate data for type of calls are not available in a number of Member States. Information on consumers’ use of alternative providers is unavailable in a number of new Member States. For these reasons the figures presented in this section should be considered as indicative.

2.1. Percentage of subscribers actually using an alternative provider other than the incumbent

Incumbents’ customers have the possibility of using an alternative provider, either by dialling a call-by-call prefix (carrier selection, CS) or by choosing to route all calls by default to the network of an alternative operator (carrier pre-selection, CPS). The use of an alternative operator through carrier selection/carrier pre-selection does not exclude the possibility of also using the incumbent’s services. Direct access is also available to users through alternative operators’ proprietary wireline/wireless access or through unbundled local loops leased from the incumbent. The following chart shows the percentage of EU subscribers (residential and business) using an alternative provider for local, long distance and international calls and for direct access.13

As of July 2006, more than 32% of EU subscribers used an alternative provider to route international calls, 28% for long distance calls and 24% for local calls. At the same time, direct access from alternative providers was used by 10.4% of EU subscribers. Since last year, the percentage of subscribers using an alternative provider has significantly grown for international calls and direct access. The trend of the EU average should be considered as indicative, since not all data are available for all Member States.

For the last five years, about one in three consumers was making use of the services of alternative providers to make local/long-distance or international calls in Switzerland. The absolute values for Switzerland regarding international calls are a little bit higher than the European average. In regard to local/long-distance calls, Switzerland is about 10 points higher than the weighted European average. The picture is different for direct connections: due to a lack of unbundling possibilities and a still young market for alternative access structures able to transmit voice traffic, about 94.6% of connections are offered by the incumbent.

13 The methodology for the calculation of the percentage of subscribers (residential + business) actually using a provider other than the incumbent operator for local calls is the following: [X = sum of all alternative operators' subscribers (residential + business) with CPS contract + sum of all alternative operators' subscribers (residential + business) with direct access for voice telephony (ULL and proprietary infrastructure)]/[total number of residential + business subscribers of the incumbent and new entrants, with a standard/party/group telephone lines access. Direct telephone line access provided by an alternative operator can either be through proprietary infrastructure or full ULL (active lines)]. The same calculation applied for long distance and international calls, with the addition to [50% of all alternative operators' subscribers (residential and business) with CS contract] to the nominator (top number). It should be noted that in many Member States calls are only national and the methodology for long distance is the same as for local calls. The percentage of subscribers actually using a provider other than the incumbent for direct access is calculated as the total number of subscribers with direct access, fully ULL connection or with a cable access owned by an alternative operator.

29 - Extract from the 12th EU implementation report extended to include Switzerland Figure 14

EU subscribers using an alternative provider

40%

35% 27.5% 32.2% 30% 27.3% 27.7% 25% 26.0% 27.4% 23.6% 20% 18.0% 22.4% 15%

10% 10.4% 6.1% 5% 7.9%

0% July 2004 Sept. 2005 Sept. 2006

Local calls International calls Direct access Long-distance calls Source: Commission services based on NRA data. Data are not comparable with previous implementation reports due to different figures reported by NRAs. The trend is indicative since not all data are available for all countries. Data for local calls refer to 78% of EU population in 2004, 92% in 2005 and 94% in 2006. Similarly, data on long-distance and international calls in 2004 refer, respectively, to 75% and 78% of EU population while in 2005 and 2006 both type of calls refers to 74% and 76%. Data on direct access refer to 79% of EU population in 2004, 89% in 2005 and 91% in 2006.

Figure 14a

CH subscribers using an alternative provider

40% 35.0% 36.2% 35% 34.6% 33.6% 31.5% 30% 32.6%

25%

20%

15%

10%

5% 2.7% 5.4% 0.6% 0% July 2004 Sept. 2005 Sept. 2006

Local calls/Long-distance calls International calls Direct access Source: Commission services based on NRA data. Source for Switzerland: OFCOM Switzerland. Note: status end 2003 for the figure representing 2004, status end 2004 for the figure representing 2005, and status end 2005 for the figure representing 2006.

Extract from the 12th EU implementation report extended to include Switzerland - 30 The following charts illustrate the percentage of subscribers using an alternative provider for voice telephony services through carrier selection and/or carrier pre-selection and/or direct access. Where available, separate figures for local and long-distance/international calls are given.

Figures for some countries are not comparable with 11th Implementation Report due to a change in the national data collection or to different data provided by NRAs.

Figure 15 Subscribers using an alternative provider for voice telephony services, July 2006 60% % 58 50% 45%

39% 40% 36% 36% 35% 32.5% % 31% 32% % 6 3 30% 36 2525%% 24% 24% 23% 21% %

20% % 23 22 14% 13% 10%

% 4% 5% % 4 . .4% % .8% .6% .2% .8% 7% 1.2% 1% 7.7 5% 19 21 30 33 0% 21 16 25 1% 4% BE DK DE EE EL ES FR IE IT CY LT LU HU MT AT PL PT SI SK FI SE UK CH

Local calls Long distance International calls

Belgium: Data are not comparable with previous report due to a change in the national data collection. Czech Republic, Latvia, Netherlands: No data available. Denmark, Sweden, Belgium, Ireland, Cyprus, Austria, Poland, Slovakia, Sweden, United Kingdom: Data provided by NRAs do not distinguish between different types of calls. Estonia, Belgium, Cyprus, Luxemburg, Slovenia, Malta, Ireland: Calls are only national (there is no distinction between local calls and long- distance calls). Greece: Data refer to 31 December 2005. Austria: Figure includes only share of carrier pre-selection; data refer to 31 December 2005. Finland: Estimated value. United Kingdom: The figures exclude indirect access. Source for Switzerland: OFCOM Switzerland. Data refer to the year 2005.

31 - Extract from the 12th EU implementation report extended to include Switzerland Figure 16

Subscribers using an alternative provider for direct access, July 2006

30%

25.56% 25%

21.00% 20%

15.20% 15% 13.92%

10.50% 9.20% 10% 9.00% 8.00%7.60% 7.80%

5.00% 5.40% 5% 3.30% 3.61% 1.90%2.00% 1.10% 0.09% 0.17% 0% 0% 0% 0% BE DK DE EE EL ES FR IT CY LT LU HU MT AT PL PT SI SK FI SE UK CH

Direct access EU average July 2006

Direct access is the total number of subscribers with direct access, fully LLU connection or with a cable access owned by an alternative operator. Czech Republic, Latvia, Netherlands, Ireland: No data available. Greece: Data are not comparable with 11th Implementation Report. Malta: No alternative operator. Austria: Data refer to 31 December 2005. United Kingdom: The figure excludes wholesale line rental. Source for Switzerland: OFCOM Switzerland. Data refer to the year 2005.

2.2. Facilities used by new entrants for the provision of voice telephony This section provides information on the facilities used by new entrants to offer voice telephony, particularly to residential users. Data have been provided by the national regulatory authorities and refer to July 2006, except for Switzerland (year 2005). Alternative operators can route users to their network either through a carrier selection system (CS), whereby a user dials a prefix on a call-by-call basis, or by carrier pre-selection (CPS), where the user’s calls are routed to the new entrants’ network on an automatic basis. New entrants can also provide voice services via direct access to users (through proprietary wire/wireless access or through unbundled local loops leased from the incumbent). These facilities are not mutually exclusive and very often the same operator uses all three at the same time depending on the type of customers (business or residential), the type of services (local or long-distance/international calls), the geographical area, the availability of LLU, etc. The following figures should therefore be read separately and not aggregated as country totals. The following two charts show the number of operators using carrier selection and/or carrier pre-selection by Member State for July 2006. Where possible, separate figures for types of calls are given; in the other cases separate data were not available or operators do not differentiate the data by type of calls. In a number of countries operators do not differentiate between local and national calls. Figures for some countries are not comparable with 11th Implementation Report due to a change in the national data collection or to different data provided by NRAs. The charts also present an estimate of the number of operators using carrier selection and/or carrier pre-selection as a percentage of the number of active alternative operators (excluding the incumbent). The figures do not show to what extent the operators are offering services to residential and/or business users, nation-wide or only in local areas, in some cases it is not possible to discern whether operators offer all types of calls or only long-distance and international calls.

Extract from the 12th EU implementation report extended to include Switzerland - 32 As of 1 July 2006, 46% of EU alternative operators offered the voice telephone service through carrier selection and 39% used carrier pre-selection. In Switzerland, according to Figure 17, there are 25 alternative operators offering CS commercially; this corresponds to about 41.7% of the providers actually offering public voice telephony service. Taking in consideration the number of alternative operators having access to CS, Switzerland is in the first quarter of the league table. Figure 17 Number of alternative operators using carrier selection (CS) as a % of active alternative operators, July 2006 120 100% 100% 100% 87% 88% 83% 90% 80%

100 ors 80% erat p o

67% . 65% 70%

63% 71% alt

ng CS 80 ve i t

usi 60%

55% c a 48% rators

60 50% % of 42% a s ope 38% 37% 36% e 40% 33%

40 27% g CS a 27% n 30% i 24% s ternativ u l . p 14% 20% o

20 ve i

8% at n

5% 10% r

2% e 1 4 Number of a 0% 4

2 0% 7 Alt 13 20 17 18 49 13 25 15 0 5 13 5 0 68 6 6 5 10 25 38 1 0 10 0% t t t t t t c IE n n n n n n EL PT AT EE ES LU NL FR SK BE HU UK CH DK MT I I I I lo Loc Loc FI Y SI E LT I CZ I DE CY FI C LT Loc D Alternative op. using CS Alt. op. using CS as % of active alt. op.

Italy, Latvia, Poland, Sweden: Data not available. Malta: No alternative operators. Portugal: Data are not comparable with 11th Implementation Report. There are 9 alternative operators in Portugal, of which 6 are providing CS and CPS to residential customers. Slovenia: National carrier selection is available since October 2006. Source for Switzerland: OFCOM Switzerland. Data refer to the year 2005.

33 - Extract from the 12th EU implementation report extended to include Switzerland The situation with CPS appears similar (Figure 18): 38 operators are active in the market; this corresponds to about 63.3% of all active operators. Only three countries have a higher number of alternative operators using CPS, namely Germany, Sweden and Austria.

Figure 18 Number of alternative operators using carrier pre-selection (CPS) as a % of active operators, July 100 2006 110% 100% 103% 100% 100% s 87% 88% r 90% o 80 80% at er 74% 80% ve op i ng CPS 66% 67% 64% 63% 70% act

usi 60%

60 . t

60% al of rators 50% 42% a % ope 40 38% t. 36% l 40% 31% 31% CPS as

of a 21%

r 24% 24% 22% 23% 30% 20 17% using

20% .

Numbe 9% 7% 8% op 0% . t 3% 0% 2% 10% l A 1 0 1 1 0 13 20 19 27 55 13 24 27 12 35 4 5 3 7 14 24 53 24 6 4 0 1 10 40 20 38 0% . t t t t t IT IE n n n n n st EL PL PT AT EE ES SE FR LU NL BE SK HU DK UK CH MT I I I I FI SI LT Int CZ I DE CY FI Loc LT Loc DE Loc CY Loc ong-di l / Loc I S Alternative operators using CPS Alternative op.using CPS as % of alt. active operators

Greece, Austria: Data refer to 31 December 2005. Latvia: Data not available. Malta: No alternative operators. Finland, Portugal: Data are not comparable with 11th Implementation Report. United Kingdom: The decrease since a year ago has been the consequence of mergers between operators. Source for Switzerland: OFCOM Switzerland. Data refer to the year 2005.

Extract from the 12th EU implementation report extended to include Switzerland - 34 3. PUBLIC NETWORK INTERCONNECTION

3.1. Call termination on incumbent's fixed network This section analyses the interconnection charges for call termination on the incumbent’s fixed network. The figures show the charges per minute based on the first three minutes of a call at peak-time, VAT excluded. The figures may have been approved by the NRA or simply agreed between operators, where the legal framework does not require NRA approval. The following chart shows the EU weighted average for the interconnection charges since 2004 for local level, single and double transit. The exchange rates for 2006 have been applied to the years 2004-2005 for the non euro-zone countries. Since July 2004, the EU weighted average charge for call termination on the incumbent fixed networks has decreased by 6.5 % for local level, by 8.5% for single transit and by 10% for double transit. Among this generalised downward trend, the major changes since last year have occurred in Malta (-32%) for all levels, in Poland (-25%), Hungary (-26%) and Slovakia (-24%) for single transit, and in Hungary (-26%), Slovakia (-24.3%), and Poland (- 24%) for double transit call termination. Interconnection charges, for most of the new Member States, are still higher than those for EU15. Figure 19

Fixed-to-fixed interconnection charges EU25 weighted average (euro-cents) 2.00

1.61 1.50 1.39

1.25 0.94 1.00 1.01 0.86 0.66 0.57 0.50 0.61

0.00 July 2004 October 2005 October 2006

Local level Single transit Double transit Source: Commission services based on NRA data.

Figure 19a shows the same evolution (2004-2006), but for Switzerland. During the period in question, interconnection charges for double transit fell by 20.5%, i.e. slightly less than in the Union countries on average (22.4%). As far as single transit charges are concerned, there have been slight changes in Switzerland, a reduction of 7.3% as against 14.9% for the Union. In 2006, in comparison to 2005, the differences between the prices charged on average in the Union countries and the prices charged in Switzerland decreased substantially, but was nevertheless considerable. Thus the price of double transit is 12% higher in Switzerland and single transit is 17.4% higher. It should be mentioned once again that in Switzerland there are no local termination charges. This means that an operator wishing to terminate a call in a third-party network must pay a regional interconnection charge at least (cf. single transit).

35 - Extract from the 12th EU implementation report extended to include Switzerland Figure 19a

Fixed-to-fixed interconnection charges CH (euro-cents) 2.00

1.76 1.64

1.50 1.40

1.09 1.00 1.01 1.05

0.50

0.00 July 2004 October 2005 October 2006

Single transit Double transit Source: Commission services based on NRA data. Source for Switzerland: Swisscom Price Manual up to and including Version 6.55. Note: In Switzerland, single transit relates to regional call termination and double transit refers to national call termination. Local transit is not offered in Switzerland and is therefore not considered.

The following three charts show the interconnection charges for local level, single and double transit as of October 2005 and 2006. When one examines Figure 20, it is apparent that the situation differs greatly between countries. In fact, only six countries – the United Kingdom, Cyprus, Denmark, Italy, France and Germany – have, in 2006, local interconnection charges lower than the weighted European averages. It should be noted that there are no local interconnection charges in Switzerland. Figure 20 Interconnection charges for call termination on incumbents' fixed network (peak time) Local level - EU average: 0,57 €-cents

3.0

2.5

2.0 nute r mi 1.5 pe nts ce - € 1.0

0.5 24 31 40 46 52 53 58 59 63 64 65 65 66 67 71 75 82 82 89 06 18 49 89 60 0.0 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 1. 1. 1. 1. 2. UK CY DK IT DE FR EL IE PL PT BE HU SE ES NL SI EE AT LU CZ SK FI MT LT

October 2005 October 2006 EU average Oct. 2006

Spain: Half of total interconnection traffic is carried out via capacity based interconnection for which the price is significantly lower

Extract from the 12th EU implementation report extended to include Switzerland - 36 France, Belgium, Spain: Price does not take account of IC linking fee Latvia: Interconnection at local level not offered. Hungary: Prices refer to the main incumbent operator Matav Malta: Only one level of interconnection exists. Luxemburg: Local level coincides with single transit. Finland: Value refers to an average among 43 SMP operators. Charges vary between 1,261€cents/min - 1.999€cents/min. Note: Local transit is not offered in Switzerland and is therefore not considered. Figure 21 shows the 2006 interconnection charges for single transit and illustrates the change which occurred between 2005 and 2006. Like previous year, Switzerland places itself above the EU average (+ 17.8%) and takes 16th place among the other European countries in 2006, before Slovenia and behind Spain and France. At the other end of the scale, Sweden and the United Kingdom have the cheapest charges, which are well below the European average. Figure 21 Interconnection charges for call termination on incumbents' fixed network (peak time) Single transit - EU average: 0,86 €-cents

4.0

3.5

3.0

2.5 nute r mi 2.0 pe nts ce

- 1.5 €

1.0

0.5 34 40 50 62 83 83 86 88 89 89 90 90 91 93 00 00 04 05 15 28 34 49 53 89 50 01 0.0 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 1. 1. 1. 1. 1. 1. 1. 1. 1. 1. 3. 1. UK SE CY DK IT HU EL DE IE LU BE NL PL PT ES FR SI EE LV AT CZ FI SK MT LT CH

October 2005 October 2006 EU average Oct. 2006

Spain: Half of total interconnection traffic is carried out via capacity based interconnection for which the price is significantly lower France, Belgium, Spain: Price does not take account of an annual linking fee. Lithuania: The national IC includes single and double transit. Hungary: Prices refer to the main incumbent operator Matav. Malta: Only one level of interconnection exists. Finland: Value refers to an average among 43 SMP operators. Charges vary between 1,261€cents/min - 1.999€cents/min. Luxemburg: Local level coincides with single transit. Source for Switzerland: Swisscom Price Manual up to and including Version 6.55. Note: In Switzerland, single transit relates to regional call termination.

37 - Extract from the 12th EU implementation report extended to include Switzerland Figure 22 shows that the double transit charge in Switzerland (1.40 €-cents) was above the weighted EU24 average in 2006 (+11.6%). However, there are seven countries where the prices charged are higher than in Switzerland. Specifically, in decreasing price order, these are Latvia, Austria, Slovakia, Malta, Slovenia, Czech Republic, and finally Portugal. The United Kingdom and Sweden are at the other end of the scale. There are five countries in which the price drops below the 1 €-cent mark (only two in 2004). Figure 22 Interconnection charges for call termination on incumbents' fixed network (peak time) Double transit - EU average: 1,25 €-cents

4.0

3.5

3.0

nute 2.5 mi r

2.0 nts pe

€-ce 1.5

1.0

0.5 65 69 72 88 95 10 12 15 17 18 25 33 36 36 39 44 59 67 89 07 25 50 40 0.0 0. 0. 0. 0. 0. 1. 1. 1. 1. 1. 1. 1. 1. 1. 1. 1. 1. 1. 1. 2. 2. 3. 1. UK CY SE DK HU EL BE LV LU IE FR PL DE IT ES PT CZ SI MT SK AT LT CH

Oct. 05 Oct. 06 EU average Oct 2006

Czech Republic: Price in place till 2 May 2006. Prices are currently not regulated. Estonia, Finland: Data are not available Spain: Half of total interconnection traffic is carried out via capacity based interconnection for which the price is significantly lower France, Belgium, Spain: Price does not take account of annual linking fee. Lithuania, Luxemburg: Double transit does not exist. There is a national IC including single and double transit. Hungary: Prices refer to the main incumbent operator Matav The Netherlands: Data are not available, price not regulate Source for Switzerland: Swisscom Price Manual up to and including Version 6.55. Note: In Switzerland, double transit refers to national call termination

Extract from the 12th EU implementation report extended to include Switzerland - 38 3.2. Call termination on alternative operators' fixed networks

Figure 23 I.C. charges for call termination on main alternative operators fixed networks (peak) in €-cents, October 2006

SE-all alt. op. (all levels) 0.67 SE-TDC Song (all levels) 1.12 SK all op. D 8.60 SK all op. S 5.94 SK all op. L 3.60 PT D (Novis) 2.62 PT D (Oni) 1.18 PT Max S (Novis) 1.50 PT Min S (Oni) 0.87 PT L (ONI) 0.94 PL-Telefonia D.- D 1.33 PL-Telefonia D.- S 0.91 PL-Telefonia D.- L 0.63 AT all op. S 1.28 NL all op. S 1.17 NL all op.L 0.92 LT average all op D,S 3.50 LT average all op. L 2.60 IT all op. S 1.54 IE-L max (Verison) 1.04 IE- L min (Magnet) 0.30 DE all op. D 1.53 DE all op. S 1.05 DE all op. L 0.69 FR all op. L 1.11 ES all op. D 1.39 ES all op. S 1.00 ES all op. L 0.67 EL-S max (Teldome) 2.05 EL- S min (Tellas ) 1.16 CZ all op. D 1.34 CZ all op. L 1.06 BE- Verizon D 1.65 BE- Verizon S 1.24 BE- Telenet D 6.45 BE- Telenet, Versatel S 6.23

€-cents per minute 012345678910

Legend: L: Local level; S: Single transit; D: Double transit Max./Min.= Maximum/Minimum Alt. Op.= Alternative operators

39 - Extract from the 12th EU implementation report extended to include Switzerland Cyprus, Luxemburg, Hungary, Slovenia, Finland, United Kingdom: Data are not available. Estonia, Denmark: Data are confidential. France: Price does not take account of annual linking fee. Data refer to IC charges for geographic number. Malta: No alternative fixed operators. Germany: For 32 alternative network operators a uniform tariff for termination services has been imposed on the basis of a dispute settlement. Data for Switzerland are not available.

3.3. Call termination on mobile networks This section presents the per-minute interconnection charges for fixed call termination on the networks of mobile operators based on the first three minutes of a call at peak rate. Where available charges for call termination on the networks of 3G operators and service providers (MVNO and resellers) have been included. Charges are for calls originated in the same countries In the following charts information is shown for 88 mobile operators in the EU (representing almost 100% of the EU mobile market) and for 3 mobile operators in Switzerland. Following the analysis of the market for mobile call termination, mobile network operators have been notified as having Significant Market Power (SMP) on their mobile network. For this reason the split between SMP and non SMP operators used in the previous report is no longer applicable. It should also be noted that not all SMP mobile operators have been imposed remedies on termination charges. Apart from Ireland, Slovenia and Finland, termination charges are applied for both fixed and mobile calls (no information are available for Germany). Where available, information on mobile-to-mobile termination rate have been indicated in the notes. Data have been collected by the NRAs, and refer to 1 October 2006.

3.3.1. EU and national average The following chart shows the trend in the (weighted) average fixed-to-mobile termination charges for all mobile operators in the EU and in Switzerland since July 2004. The national averages for all mobile operators in each Member States are weighted average charges based on the number of subscribers and the termination rate of each operator at 1 October 2006. Where available, data for 3G operators and service providers have been taken into account. The 2006 exchange rates have been applied to the non euro-zone countries for previous years. The trend shows that termination charges have continued to decrease and at October 2006 the EU average termination charge was 9% lower than one year before (-21.8% respect July 2004). The most significant reductions have occurred in France (-24%). Reduction of around 20% has taken place in Denmark, Austria, Portugal, and Sweden. In Germany, Greece, Spain, Luxembourg, Hungary, The Netherlands, Slovenia and Sweden there have been reductions from 11% to 17%. The average mobile termination charge has increased in the United Kingdom (+9.2%). Despite the continuing decline, termination charges remain on average more than 9 times higher than the fixed interconnection charges (double transit). Differences between 10 and 14 times the double fixed interconnection charges are found in Belgium, Denmark, Greece, Ireland, Luxembourg, Hungary, Poland, Slovenia, Sweden, and United Kingdom. In 2006 the average price that the Swiss operators charged for the call termination on mobile networks was about 32% higher than the European average. There was a significant decrease (28.3%) in the interconnection charges in Switzerland in the period of July 2004-October 2005, and just a little price reduction between October 2005 and October 2006. The strong decrease between 2004 and 2005 is due to Swisscom and Sunrise. Swisscom led the way by dramatically reducing its mobile termination charge in July 2005 by 40%, Sunrise followed in August by reducing its termination charge by 19%. Orange did the same but only in January 2006 with a reduction of 11%, and then once again in July 2006 (-9%). It has to be noted that Swisscom demands the lowest termination charges (Figure 26).

Extract from the 12th EU implementation report extended to include Switzerland - 40 Figure 24

Interconnection charges for call termination on mobile networks (national average) CH and EU average Oct. 2006: 11,4 €-cents

25

22.14

20 15.86

te 15 14.58 15.05 nu i m

r

pe 12.53 11.40 10 nts e c - €

5

0 July 2004 October 2005 October 2006

CH EU

Figures are not comparable with previous reports, because of different data reported by NRAs for 2005 and 2004 When one examines Figure 25, which gives a more comparable image, it must be stated that the mobile telephony operators active in the Swiss market demand prices which are among the highest. In the European comparison, there are only four countries in which charges are higher in 2006 (Estonia, Poland, Belgium and Slovenia). Fifteen out of twenty-five countries are below the European average; the cheapest price is charged in Cyprus (2.25 €-cents). Figure 25 Interconnection charges for call termination on mobile networks (national average) EU average Oct. 2006: 11,4 €-cents

20

18

16

14 e t

u 12

min 10 .91 9 0 0 18 per 6 49 4 4 4 5 . . . s 8 .00 . 4 t 6 6 .53 .

8 00 5 .05 16. 1 . 16 1 .86 n 5 3 16 6 4 1 5 .19 4 15 1 0 48 .82 4 3 4 7 15 1 .53 3 2 . . . 1 97 9 7 ce 5 5 . 4 4 3 14 3 . 3 .68 . 3 8 . . 13 .17 13.6 13 9 1 1 2 1 2 7 48 2 4 3 2 €- 7 5 12. 3 3 12 . . .37 9 6 .36 1 1 0 1 .00 . 1 12 5 5 4 4 12 1 . . 1 11.9 . . 0 11. 1 11 11 11 0 1 11 1 2 10.7 16 10 9 10 10 1 9 9.8 7 6 10.1 . 3 . 8 9. 9.09 8 3 8

4 3 8. . 7.9 7 6.9 2 5 2 2 . 2.2 2 0 BE CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI SE UK CH

Okt 05 Okt 06 EU average (Oct. 06) Figures might not be comparable with previous reports, because of different data reported by NRAs for 2005 and 2004. Where possible, 3G operators and MVNO/resellers have been taken into account. In Ireland, The Netherlands, Finland, the figures for 2005 and 2006 do not refer to the same operators. Belgium: New interconnection charges are applied from November 2006. The new national average will be 11.78 €-cents. Germany: New interconnection charges are applied from November 2006. The new national average will be 9.1 €-cents. Estonia: Charges for two operators may change depending on the volume of calls (below or above 3 million minutes per month). In the chart the second option is presented France: Mainland operators only. Overseas operators not included.

41 - Extract from the 12th EU implementation report extended to include Switzerland Poland: New interconnection charges are applied from 15 October 2006. The new national average will be 11.78 €-cents. Finland: Fixed to mobile charges only apply when the call is made through a prefix code or carrier pre-selection. In other cases, local operators determine the local network charges and mobile operators determine the mobile call charges. Source for Switzerland: Swisscom Price Manual up to and including Version 6.55.

3.3.2. Mobile operators' termination charges The following charts show the individual fixed-to-mobile interconnection charges for 85 mobile operators in the EU (88 with Switzerland). Apart from Cyprus which represents an exception (2.15 € cents) the lowest charge is found in Finland (6.8 € cents) whereas the highest charge is found in Belgium at 20.27 € cents (almost three times that of the cheapest).

Extract from the 12th EU implementation report extended to include Switzerland - 42 Figure 26

I.C. charges for call termination on mobile networks (peak) in €-cents, October 2006

CY-CYTA 2.2 CY- Areeba 3.1 FI-Sonera 6.8 SE-TeliaSonera, Tele2, Telenor 6.9 UK-O2;Vodafone 8.3 SE-Hi3G Access 8.3 AT-Mobilkom 8.3 FI-Elisa Oy (Radiolinja) 8.4 LV-LMT, Tele 2 8.9 UK-Orange;T-Mobile 9.3 FR-Orange, SFR 9.5 HU-Westel 9.8 FI-Finnet Verkot Oy 10.0 LT-Bite, Omnitel, Tele 2 10.4 CZ-Cesky Mobil, Eurotel Praha, T-Mobile 10.6 AT-T-Mobile; Tele.ring 10.7 HU-Pannon 10.7 SK-Orange, T-Mobile 10.8 MT-Vodafone 10.8 DE-Eplus, O2 11.0 NL-KPN Mobile, Vodafone 11.0 PT-TMN, Vodafone, Optimus 11.0 IT-TIM, Vodafone 11.2 FR-Bouygues Tlc 11.2 DK-TDC Mobile, Sonofon, TeliaSonera 11.3 AT-One 11.3 ES-Telefonica Mov. Esp. 11.5 ES- Vodafone Esp 11.7

€-cents per minute 0 5 10 15 20 25

43 - Extract from the 12th EU implementation report extended to include Switzerland I.C. charges for call termination on mobile networks (peak) in €-cents, October 2006

HU-Vodafone 11.8 EL-Cosmote, Vodafone 12.0 MT-Mobisle Comm. 12.2 NL - Tele2, Telfort, Orange, T-Mobile 12.4 DE-T-Mobil, Vodafone 12.4 EL- TIM Hellas 12.5 BE-Proximus 12.5 CH-Swisscom 12.7 LU- EPT, Tele2 12.8 IT-Wind 12.9 IE-Vodafone, O2 12.9 FI-Alands Mobitelefon AB 13.0 ES-Retevision Movil 13.1 DK-H3G 13.8 LU-Voxmobil 14.0 SI-Mobitel 14.9 AT-Hutchison 16.0 EE-EMT, Elisa 16.0 UK-3UK 16.2 IE-Meteor 16.4 PL-Centertel, Polkomtel, Polska Telef., Cyfrowa 16.5 BE-Mobistar 16.6 EL-Q Telecom 17.0 EE-Tele2 17.3 IE-H3G 17.8 IT-H3G 18.8 CH-Orange 19.1 CH-Sunrise 19.1 SI-Si.mobil 19.4 BE-Base 20.3

€-cents per minute 0 5 10 15 20 25

Belgium: From 23 November 2006 mobile termination rate are the following: 9.67 €-cents for Proximus, 13.6 €-cents for Mobistar and 13.37 €-

Extract from the 12th EU implementation report extended to include Switzerland - 44 cents for Base. Czech Republic: The prices are valid since 2 May 2006. Germany: Data refer to fixed-to-mobile. No information available concerning mobile to-mobile. From 23 November 2006 mobile termination rate are the following: 8.78 €-cents for T-Mobile and Vodafone, 9.94 €-cents for E-plus and O2. Estonia: Data refer to fixed-to-mobile. Termination charge from mobile network to EMTS is 12.9€cents/min for Elisa (no information available for EMT and Tele2). Charges in the chart for Elisa and EMT refer to call volume over 3 million minutes per month. Charges for smaller volumes are higher: 17.58 €-cents/min for EMT and 10.11 €-cents/min for Elisa. Spain: Prices in the chart are valid from 16 October 2006 to March 2007. Ireland: Data refer to fixed-to-mobile. Termination charges from mobile network are the following: 13.4 €-cents for O2; 13.33 €-cents for Vodafone; 16.36 €-cents for Meteor; 17.78 €-cents for H3G. Poland: Prices valid up to 15 October 2006. Mobile termination rate after 15 October 2006 will be 1.17 €-cents for all operators. Slovenia: Data refer to fixed-to-mobile. Termination charges from mobile network are the following: 0.1 €-cents for Si.mobil and 0.07 €-cents for Mobiltel. Finland: Fixed to mobile charges only apply when the call is made through a prefix code or carrier pre-selection. Source for Switzerland: Swisscom Price Manual Version 6.55.

3.4. Leased lines interconnection charges This section shows the monthly rental and the one-off charges for short-distance leased lines (local ends, excluding VAT), up to 2 and 5 km, provided by the incumbent operator to other interconnected operators. The distance refers to the radial distance between the customer local end leased line and the point of interconnection. It should be noted that in some cases data include the handover costs, while in other cases these costs are excluded. National Regulatory Authorities have provided these figures through the questionnaire for the 12th Implementation Report. Unless otherwise indicated; figures indicate the position in October 2006. Note that in Switzerland, Swisscom negotiates prices on a case-by-case basis with its clients. In the absence of official data, it is therefore not possible to include Switzerland in Figures 27 to 32. Compared to last year, the prices for monthly rentals (all capacities) have decreased in several countries (France, Spain), whereas the highest price is in Slovenia (231€ for 64kbit/5km distance: 3828 € for 34Mbit/5km) and the cheapest price can be found in Greece, Portugal and UK (between 34 and 37 € for 64 Kbit capacity). One-off charges for leased lines have remained stable in 6 countries (Belgium, Germany, France, Ireland, Austria and Portugal); in Greece, the increase in price compared to last year was spectacular (close to 200% for 64Kbit and more than 100% for 2Mbit lines) whereas in Denmark, the price drop was above 90% for the 2Mbit/sec circuit compared to last year. The cheapest monthly fee is to be found in Cyprus (between 32 and 77 € for 2 Mbit). The highest one-off fee price is in Latvia for 2 Mbit (3261 €) while the lowest price in this capacity can be found in Lithuania: 291 € compared to 1196 € last year. Looking at higher speed leased lines (34Mbit/sec), one-off fee is significantly high in Denmark.

45 - Extract from the 12th EU implementation report extended to include Switzerland 3.4.1. 64 Kbit/sec part circuit Figure 27 Monthly rental for leased line 64 Kbit/s part circuit, October 2006 EU weighted average 2 Km: 116 € EU weighted average 5 Km: 124 € 250

225 1 23 200

175 1 17 h

150 164 t 3 mon 125 14 €- 132

100 122 0 99 10 75 93 88 80

76 74 73

72 71

69 67 67 65

63 62

50 49 49 45 45 42 40 40 37 36 36 34 34 25 34

BE DK DE EE EL ES FR IE IT LT LU NL AT PL PT SI FI SE UK 2km euro 06 5km euro 06 Czech Republic, Latvia, Malta: Service not offered. Germany: Price authorized as of 1 November 2006. Prices are lower with long-term contracts. France: Data refer to local leased lines. Cyprus, Hungary, Slovakia: Data are not available. Lithuania: End circuit not offered, price refers to wholesale leased lines. Luxemburg: Minimum price for 5km circuits (62 € to 80 €). The Netherlands: For 64kbit there is no local service offer. Only a regional service offer is available. Austria: Hand-over for STM1 (Synchronous Transfer Mode–1) is not included (624.75 €). Finland: Prices are the average of three local incumbent operators. Figure 28

One-off charge for leased line 64 Kbit/s part circuit, October 2006

2 000

1 800

1 600

1 400

1 200 5 € 1 20

1 000 9 3 9 800 1 020

1 5 3 74

600 7 0 4

0 4 62 660

4 6 7

9 0 5

400 5 5

4 2 1

4 4 4

37

32 2

200 350

3

255

2

BE DK DE EL ES FR IE IT LV LT LU NL AT PL PT FI UK

Czech Republic, Malta: Service not offered. Denmark: Price shown is for a 2km trunk segment. The one-off price for 5km trunk segment is 1274 €. Germany: Price authorised as of 1 November 2006. Estonia, Cyprus, Sweden, Slovenia, Slovakia: Data not available. Lithuania: End circuit not offered, price refers to wholesale leased lines. Austria: Price for a one-year contract. Otherwise price is 700 €. Finland: Prices are the average of three local incumbent operators.

Extract from the 12th EU implementation report extended to include Switzerland - 46 3.4.2. 2 Mbit/s part circuit Figure 29 Monthly rental for leased line 2 Mbit/s part circuit, October 2006 EU weighted average 2 Km: 334€, 5 Km: 367€

900

800 815

700

600 h 566 500 2 nt 566 2

5 mo

490 473 0 €-

400 43 410

7

300 353 350 33 350

5 5 7 7 4 278 2 26 4 27

200 7 249

5 239 2 253

230 21 215

223

20 203 0

203

5 5 5 5 186 6

100 1 151 167 14 14

14 14 4 99 114 77 89 8 84 32

BE CZ DK DE EE EL ES FR IE IT CY LT LU NL AT PL PT SI FI SE UK 2km euro 06 5km euro 06 Germany: Price authorized as of 1 November 2006. Latvia, Malta: Service not offered. Lithuania: End circuit service not offered, price refers to wholesale trunk segment. Luxemburg: Minimum price for 5km circuits (253 € to 359 €). Hungary, Slovakia: Data are not available. The Netherlands: For 2Mbit/s there is no km-dependent charge. The service is offered at a standard charge from the end-user location to the local exchange office. Austria: Hand-over for STM1 (Synchronous Transfer Mode–1) is not included (624.75 €). Finland: Prices are the average of three local incumbent operators.

Figure 30 One-off charge for leased line 2 Mbit/s part circuit, October 2006

3 500

3 000 3 261

2 854

2 500 2 514

2 000 € 2 107

1 500 1 487

1 000 1 107 1 105

928

8 825 809

750 750

500 738 68

636

398 373

290

BE CZ DK DE EL ES FR IE IT LV LT LU NL AT PL PT FI UK

Germany: Price authorized as of 1 November 2006. Estonia, Cyprus, Hungary, Slovenia, Sweden: Data are not available. Latvia, Malta: Service not offered. Lithuania: End circuit service is not offered, price refers to wholesale trunk segment. Austria: One-off price is 750 € for a one-year contract; otherwise 1500 €. Finland: Prices are the average of three local incumbent operators.

47 - Extract from the 12th EU implementation report extended to include Switzerland 3.4.3. 34 Mbit/s part circuit

Figure 31 Monthly rental for leased line 34 Mbit/s part circuit, October 2006 EU weighted average 2 Km: 1481 €, 5 Km: 1671 €

4 000 828

3 500 3

3 000 5 7 312 h 0

2 500 2 92 t

260

€-mon 2 000 204 7 47 2 20 915 96 2 021 1

1 95

1 500 731 7 17 1 3 1 800

444 424 1 5 1 1 000 1 1143 1 256 3 959 924 1 827

79

59 500 743

69 677 721 6 688

620

596

519 481 292

329

BE DK DE EE EL ES FR IE IT CY LT LU AT PL PT SI FI SE UK

2km euro 5 km Germany: Price authorized as of 1 November 2006. France: Price is for high populated area. Otherwise is 771,2 €. Latvia, Czech Republic, Malta: Service not offered. Lithuania: End circuit service is not offered, price refers to wholesale trunk segment. Luxemburg: Minimum price for 5km circuits (1143 € to 1271 €). Hungary, Slovakia: Data not available. The Netherlands: Price is unknown, not regulated. Austria: Hand-over for STM1 (Synchronous Transfer Mode–1) is not included (624.75 €). Finland: Prices are the average of three local incumbent operators.

Figure 32

One-off charge for leased line 34 Mbit/s part circuit, October 2006

30 000 1 7 8

25 000 23

20 000

€ 15 000

10 000 2 0 6 03

0 5 00 0 9 1

7 2

5 000 6 0 3 00 2 47

0 4 8 2 50 2 44 281

2 8 1 89 1 58 1 40

1 75

7 1 00

6

BE DK DE EL ES FR IE IT LT LU AT PL PT FI UK

Germany: Price authorized as of 1 November 2006. Estonia, Cyprus, Hungary, Sweden, The Netherlands, Slovenia, Slovakia: Data are not available. Latvia, Czech Republic, Malta: Service not offered. Lithuania: End circuit service is not offered, price refers to wholesale trunk segment. Austria: One-off price is 750 € for a one-year contract; otherwise 1500 €. Finland: Prices are the average of three local incumbent operators.

Extract from the 12th EU implementation report extended to include Switzerland - 48 4. MOBILE MARKET

This section provides information on the number of mobile subscribers and the penetration rate for mobile telephony services. It also shows the number of both mobile network operators and mobile service providers as well as the market share of the main players in each Member State and in Switzerland.

4.1. Mobile penetration This section provides information on the number of mobile subscribers and the penetration rate for mobile telephony services in each Member State. The growth in the penetration rate since 2004 is also shown. Where available, data have been provided by the National Regulatory Authorities (NRAs). Where data were either not available or confidential, figures are estimates from the “European Mobile Communications” database. The EU average is a weighted average. It should be noted that operators and regulators use different methods to count the number of subscribers. Some regulators distinguish between the overall number of mobile subscribers and the number of active subscribers. The table indicates where this information is available. Some operators consider the total number of users that have made or received a call or sent an SMS in the last 9 or 6 months, whereas others only consider the active users of the last 3 months. This has an impact on the penetration rate, especially in small countries The chart below displays the number of mobile subscribers in the EU between 2004 and 2006. In October 2006 there were around 479 million mobile subscribers, with an increased of more than 42 million since October 2005 (+9.5%). Penetration rate is above 103% of EU population (+8.2 percentage points since last year). Figure 33

Mobile subscribers penetration in EU (2G and 3G)

600 120% 103.2% 500 95.0% 100% 84.6%

s 400 80% te er b n ra scri io t a sub

300 60% tr

9 ne of e n o p i l U l i 478.3 E 200 36.68 40% M 4 386.61

100 20%

0 0% Oct. 2004 Oct. 2005 Oct. 2006 EU subscribers EU penetration rate Where available, data include 2G and 3G mobile network operators' subscribers as well as mobile service providers' subscribers. Data are not comparable with previous reports (updated figures for previous years have been provided by some NRAs). Figure 33a shows the evolution in the mobile telephony market in Switzerland. In the period between October 2004 and October 2006 there was noted an increase of 787'515 in the number of mobile subscriptions (12.24%). The growth of the penetration rate in the same period made about 9.42%. The higher growth rate since October 2005 can be explained by the introduction of new no-frill offers by resellers that appeared in the mobile market in 2005 and 2006 (see also figure 38).

49 - Extract from the 12th EU implementation report extended to include Switzerland Figure 33a

Mobile subscribers penetration in CH (2G and 3G)

10 120%

96.2% 100% 8 86.7% 88.8% s r 80% te e a ib r r 6 n c o i t bs a u s

60% tr

f ne e n o

4 p io ll 9 CH 7.22 40% Mi 6.62 6.3

2 20%

0 0% Oct. 2004 Oct. 2005 Oct. 2006

CH subscribers CH penetration rate

Source for Switzerland: OFCOM Switzerland. The following chart shows the absolute number of mobile subscribers in each Member States (columns) and the penetration rate (dots), measured as the number of subscribers per 100 inhabitants. Where available figures include 2G and 3G subscribers for both mobile network operators and mobile service providers. Penetration rate is above 100% in 17 Member States; Italy (134%), Latvia (123%), and Lithuania (133%) have the highest values (apart from Luxembourg where the value (171%) is significantly lower if trans-national commuters are added to the national population). Malta (83%), France (82%) and Slovakia (86%) have the lowest penetration rates and are the only countries which had not exceeded 90%. The mobile telephony penetration rate in Switzerland, at 96.2%, was 7 percentage points smaller than the average for the European Union countries. More specifically, Switzerland was in 19th position among EU25 countries. Measured in terms of consumers, the largest markets are in Germany, Italy and the United Kingdom. Together, the users in these three countries make up 47% of the subscribers counted in the member countries of the Union. Switzerland, with its 7.2 million users, naturally belongs to the group of countries characterized by a low volume of users in absolute terms.

Extract from the 12th EU implementation report extended to include Switzerland - 50 Figure 34 Mobile subscribers and penetration rate, October 2006

90 180% 83.1 171% 78.2 80 160%

134% 133% 70 65.4 140% 123% 119% 113% 114% 113% 60 110% 108% 109% 120% ers 104% 105% 104% 104% 102% e 101% 100% t 49.8 95% 96% a

92% r scrib 90% 50 91% 100% n

b 86% o i u 44.6 82% 83% at s f 40 80% tr n o 34.8 ne pe illio

m 30 60%

20 17.2 40% 12.1 11.1 11.9 9.6 9.6 8.9 9.2 10 5.6 5.5 7.2 20% 4.5 2.8 4.6 4.6 1.5 0.9 0.8 0.3 1.8 0% BE CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI SE UK CH Mobile subscribers Penetration rate Where available, data include 2G and 3G mobile network operators' subscribers as well as mobile service providers' subscribers. Data are not comparable with previous reports (updated figures for previous years have been provided by some NRAs). Belgium: Data refer to January 2006. Germany: Data as of 1 July 2006. Ireland: Figures for one operator are taken by Mobile Communications Europe and refer to June 2006. France: Figures refer to national market (mainland France and overseas departments). Penetration rate for mainland France is 79.3%. Luxembourg: Data refer to 1 July 2006. Penetration rate is significantly lower if trans-national commuters are added to the national population. Netherland: Figures are NRA's estimates. Slovakia: Data for some competitors refer to June 2006. United Kingdom: Service providers are excluded, data refer to 1 January 2006. Source for Switzerland: OFCOM Switzerland.

The following chart displays for each Member State the growth of the mobile penetration rate between October 2005 and October 2006, unless otherwise indicated. Penetration rate has grown significantly in Poland (+20 percentage points (p.p.)), Italy and Lithuania (around +15 p.p.), Cyprus (+13.7 p.p.), Luxembourg, Estonia and Ireland (+11 p.p.). The growth rate of the mobile penetration in Switzerland, observed annually from 1998 to date, was strong primarily in the first three years (rate varying between 12.7 and 24.4%). Since 2001, development has slowed down markedly, indicating that a degree of saturation of the market is approaching. In the period of October 2004 – October 2005 the Swiss market showed the lowest growth rate (2.1%). However, between October 2005 and October 2006 the penetration rate increased by 7.4%, reaching the mark of 96.2%.

51 - Extract from the 12th EU implementation report extended to include Switzerland Figure 35

Mobile penetration rate (and growth) 2005-2006 180%

160%

140%

120%

100% 6% % 0. 4 80% . 9 17 5 % 1 9 . % % 3% % % 7 5 3 2 . . 6% % 3. 5% . . % %

60% % % 133.8% 132 % 8 9% % % % 8 3% 5 5 1 0 0% 6% % 2 . 2% 3 % 2 1 7 7 . % 0 . . 12 1 1 . % . . . 6 % 5 5 1 118.6% % 4 0 % 3. 117 % 2% . 3 % 2. 2 % 1% . 1 1 1 07. 8 0 . 0 113. 2 113.3% 9% 0 112. . 1 0 9 3 9 0 110.0% 8 . 0 1 8 109.0% % % 0 1 . 0 7 . 0 . 1 . 105. 3 104. 1 104. 10 3% 99.8% 9 1 % 2 10 1 9 6 4 1 100 0 1 9 9 1 96. 8 % 8 95. . . 9 9 9 91.

40% 91.1% 90.2% 9 8 89. . 8 0 8 0 0 86.1% 83.0% 82. 4 8 8 7 71. 20%

0% BE CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI SE UK CH Penetration rate Oct. 2005 Penetration rate Oct. 2006 Data are not always comparable with previous reports (data have been updated by NRAs). Belgium: Data refer to July 2005 and January 2006. France: Figures refer to national market (mainland France and overseas departments). Ireland: Figures for one operator are taken by Mobile Communications Europe and refer to June 2006. Luxembourg: Data refer to 1 July 2006. Penetration rate is significantly lower if trans-national commuters are added to the national population. Netherland: Figures are NRA's estimates. Slovakia: Data for some competitors refer to June 2006. United Kingdom: Service providers are excluded; data for 2006 refer to 1 January. Source for Switzerland: OFCOM Switzerland. The following chart shows, for each Member State split between post-paid and pre-paid subscribers. At EU level, almost 60% of subscribers use a pre-paid system. In four countries pre-paid subscribers are more than 70% and in Italy and Malta they are more than 90%. In Switzerland, 42% of subscribers have chosen the pre-paid system at the regarded date. Figure 36 Mobile subscribers: prepaid and monthly paid (October 2006) EU average: prepaid: 59,8% - monthly paid: 39,8%

100% 8% 9% 90% 20% 24% % 34% 34% 34% 80% 35% 37% 37% 39 41% 43% % 48% 49% 49% 49% 53% 55

70% 56% 58% 59% 61% 63% 60% % 82

50% 93% 92% 91% 40% % 80 76% % 66% 66% 66% 30% 65% 63 63% 61% 59% 57% % 52% 52% 51% 51% % 47% 45%

20% 44 42% 41% 39 33% 10% 18%

0% 7%

BE CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI SE UK CH

Prepaid Monthly paid

Extract from the 12th EU implementation report extended to include Switzerland - 52 Luxembourg, Malta, Austria: Data are confidential or not available from NRAs. For these countries, the figures in the chart are estimates from Mobile Communications Europe and refer to June 2006. Belgium: Data refer to January 2006. France: Figures refer to mainland France (overseas departments are excluded). Ireland: Figures for one operator have been taken by Mobile Communications Europe and refer to June 2006. The Netherlands: Figures are NRA's estimates. Source for Switzerland: OFCOM Switzerland.

4.2. Players in the mobile market This section shows the number of mobile licenses granted in each Member State and in Switzerland for the provision of mobile services (2G/3G mobile network operators and mobile service providers). License for analogue mobile service are not phased out in Sweden (phasing out: 31-12-2007) and in Poland (phasing out: 17-12-2016). Data have been provided by the national regulatory authorities and refer to the situation in July 2006. The following chart shows the number of mobile network operators licensed to provide digital mobile services (second-generation). The number of operators indicates the real magnitude of the choice of operators for customers of digital mobile services, since very often operators have licenses for both GSM 900 and DCS 1800. Mobile network operators have been identified as having only GSM 900 or only DCS 1800 frequencies, or both (in which case they have usually been granted a GSM 900 license which has subsequently been extended to the DCS 1800 band). In Switzerland, five providers were operationally active in this market in July 2006. These were Swisscom Mobile, Sunrise, Orange, In&Phone and Tele2 which all operate a network. The licenses of Tele2 and In&Phone were granted in February 2004 by the Communications Commission (ComCom) in the 1800 MHz frequency. Tele2 operates its own regional network (in Zurich), while In&Phone provides national services to business clients only. If we consider Figure 37, we can see that in all the countries considered, the number of operators with frequencies available and operating a network varies between two (Slovakia and Cyprus) and five (Switzerland). Figure 37 2.G Mobile Network Operators, July 2006

6

5

4 3 3 2 3 3 2 4 4 4 3 33333 33 3 33 3 33 3 3 1 2 22 2 2 1 1

0 BE CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI SE UK CH

Operators with DCS or GSM license only Operators with GSM and DCS licenses

France: Mobile national operators for mainland France only. Overseas departments are excluded. Source for Switzerland: OFCOM Switzerland. Information on mobile service providers has been included where available (without distinction between local and national coverage). Mobile service providers are defined as mobile virtual network operators or enhanced service providers or simple resellers. Whereas the number of 2.G operators (79) has remained virtually unchanged, mobile service providers are increasingly entering the market and as of July 2006 they were 290, 76 more than one year ago.

53 - Extract from the 12th EU implementation report extended to include Switzerland It can be noted, however, that many of those are currently inactive. In Switzerland, new alternative operators have been appearing since 2005 as resellers. They should be considered as telecommunication services providers (according to the EU definition) even if they do not provided value added services. The arrival of new reseller providers should be interpreted as an increase of competition in the mobile market. These resellers offer in general prepaid services, but not only, and are using the Swisscom, Sunrise and Orange mobile networks. Swisscom has a partnership with M-Budget Mobile. Sunrise has one with CablecomMobile and commercialised a new brand named Yallo. Orange has an agreement with CoopMobile as well as MobilezoneNet. Figure 38

Mobile service providers (July 2006) 80

70

60

50

40 70 30 60

20 30 10 20 22 14 4 15 11 12 2 2 10 8 7 5 0 BE DK DE EE ES FR LV LT LU NL AT SI FI SE UK CH

Belgium: Resellers of MVNO's are excluded. Germany: Data refer only to main service providers. Estonia: 7 active resellers. Spain: No active service providers at July 2006. France: Service providers for mainland France only. Overseas departments are excluded. Lithuania: 8 out of 14 service providers are active. Four of them provide services through their own brand and four are simple resellers. The Netherlands: About 50 service providers are providing commercial services. Slovenia: One service provider is not active. Portugal: The figure refers to simple resellers (one reseller is not active). United Kingdom: Data on service providers is an estimate. Source for Switzerland: OFCOM Switzerland.

The following two figures indicate the number of UMTS licenses granted in each Member State and the status of the launch of 3G services: trial (tests with a closed group of selected users) or commercial (fully commercial services open to any users at standard tariffs). In December 2000, the Communications Commission awarded four UMTS licenses to Swisscom Mobile, Orange, TDC Switzerland (cf. Sunrise) and 3G Mobile (Telefonica), which was considered to be a new entrant. On the chosen date (July 2006), tree of them were offering UMTS fully commercial services to Swiss consumers. These are Swisscom Mobile, TDC Switzerland (cf. Sunrise), and Orange. Swiss UMTS operators were obliged by their license conditions to achieve 50% of 3G network population coverage in the country before the end of 2004. 3G Mobile (Telefonica) did not meet the condition. In March 2006, the Federal Communications Commission revoked Telefonica’s UMTS license. This measure was forced on the Commission as 3G Mobile was not utilizing its license and was not fulfilling the coverage conditions.

Extract from the 12th EU implementation report extended to include Switzerland - 54 Figure 39 UMTS licenses, July 2006

6

5 1 1

4 111 1 1 1

3 1 1 1 2 4 3 4 4 4 3 333 33 3 3 333 333 3 1 2 2 2 22 2

0 BE CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI SE UK CH

Operators with UMTS and GSM/DCS licenses Operators with UMTS license only

Slovenia: Figure includes 2 UMTS licenses granted in September 2006. Finland: Figure includes 1 local UMTS license. Source for Switzerland: OFCOM Switzerland.

Figure 40

UMTS operators offering commercial services, July 2006

7

6

5

4

3 3 5 2 2 4 4 4 4 3 33 3 13 33 33 3 1 2 2 2 2 2 111 1 1 1 0 BE CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI SE UK CH Trial Commercial Denmark: Figure includes one operator that launched the service on 27th September 2006. Finland: Figure includes 1 local UMTS license. Source for Switzerland: OFCOM Switzerland.

4.3. Mobile operators’ market shares The following charts present the market shares, based on subscribers, of the leading operator, the main competitor and the other competitors in the mobile market. Operators’ market shares have been calculated for the overall mobile market (including DCS 1800/GSM 900 and UMTS subscribers).

55 - Extract from the 12th EU implementation report extended to include Switzerland Data concerning market shares are based on the data supplied by the NRAs except for Czech Republic, Estonia, Greece, France, Luxembourg, Hungary and Sweden where they are confidential. Data for these countries are estimates from European Mobile Communications and refer to June 2006. In Cyprus one operator largely dominates the market with a share of more than 90%. In Slovenia the leading operator retains more than 70% of the market and in Slovakia it controls 56%. In 12 Member States the leading operators have between 40% and 50%. The lowest market share of the leading operator is in the United Kingdom, with 26%. EU average has been weighted using mobile subscribers for each country. At EU level, the market share of the leading operator and the main competitors has slightly decreased to the benefit of the small competitors, in particular mobile service providers. After Cyprus and Slovenia, Switzerland is the third country in which the subsidiary of the historic operator has the largest market share. This rate, which is 63.21%, is very well above the European average (39.4%). Moreover, the Swiss historic operator has even enforced his leading position on the market in the observed period. Two other operators, Sunrise and Orange, have a market share which is a little bit more than 18%. In 2006 Orange was considered as the main competitor, but in the previous years Sunrise had a slightly stronger market position. Figure 41

EU average mobile operators' market share

65%

60%

55%

50%

45% 39.8% 40.0% 40% 39.4%

35% 32.1% 31.2% 28.6% 30% 27.5% 32.0% 25% 28.5%

20%

15% 2004 2005 2006

Leading operator Main competitor Other competitors

Extract from the 12th EU implementation report extended to include Switzerland - 56 Figure 41a

CH average mobile operators' market share

65%

60% 63.0% 63.2% 61.3% 55%

50%

45%

40%

35%

30%

25% 21.2% 19.0% 18.5% 20% 17.5% 15% 18.0% 18.2% 2004 2005 2006

Leading operator Main competitor Other competitors

Source for Switzerland: OFCOM Switzerland.

Figure 42

Mobile market share based on subscribers, October 2006

100% % 29% 3 % % % 6 6. % 7% % 35% 56% . 3 48% 56 . 9. 22% .9 05 % 1% 4

90% 8 .34 42 5 . 3% 03% 1 5% 1 65% .9 16 % 17. 17. 2% 18. 75% 19. .2 23% 19 .44 . 20 .3 21. 23 24. .0 8 25. % .53 27 27 82% 2 29. 29 .

80% % 32 7 88 22 3 86% 63 72% 43. 55% 47. 48. %

70% 50. % % % 22% 18. % % .59 56 64 35 53% 33. . 95% 28 78 84% 39 % 4 . 35. 60% 74% 61% 36. 38. % . 3 9 4% 33. 33. 17% 2 29. 3 .14 .6 3 22. .62 56% 35 32. 76% 30

50% 35 95% 34. 7% 33. .3 26. % 89% 90

40% % 8 41 19. 1 . 23. 21% 71

30% % 12% % 4% % % . % % 63. 1 .1 6 4 8% .22 2% 8% % % 16 % 88 3 5 1 06% 30 1% % 1 1 . . .8 .2 23% 1 % .6 52 51 6 6 2 20% .1 . . 3% 48. . 46. 94 46 46 46. 08% 45 45. 45 44 . .23 43. .2 47% 41 40 40 6 7% 39 36. 3 35 34 .8 10% 31. 25

0% BE CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI SE UK CH

Leading operator Main competitor Others competitors

Data for Czech Republic, Estonia, Greece, France, Luxembourg, Hungary, and Sweden are confidential. Data for these countries are estimates from European Mobile Communications and refer to June 2006. Belgium: Data refer to January 2006.

57 - Extract from the 12th EU implementation report extended to include Switzerland Germany: Data as of 1 July 2006. Ireland: Figures for one operator (included in "other competitors") are taken by Mobile Communications Europe and refer to June 2006. Luxembourg: Data refer to 1 July 2006. Netherland: Figures are NRA's estimates. Slovakia: Data for some competitors refer to June 2006. United Kingdom: Service providers are excluded, data refer to 1 January 2006. Source for Switzerland: OFCOM Switzerland.

4.4. Mobile Tariffs 1. The analysis of national (as opposed to roaming) mobile services is based on the OECD baskets for digital mobile services. Due to significant changes in usage patterns, the OECD baskets have been redefined with effect from August 2002. These baskets contain an SMS element, they include calls to several mobile networks, and they do not cover international calls. There are 3 different baskets, based on low, medium and high usage levels. All packages analysed in this study are Post-Paid packages. Some of the main properties of the "2002 OECD" baskets are: Low usage basket with: 25 outgoing calls per month + 30 SMS messages 42% of calls are to fixed line phones, 58% to mobile phones, Medium usage basket with: 75 outgoing calls per month + 35 SMS messages 36% of calls are to fixed line phones, 64% to mobile phones, High usage basket with: 150 outgoing calls per month + 42 SMS messages 40% of calls are to fixed line phones, 60% to mobile phones. Each basket also has a unique definition of time of day distribution and call duration, and includes the monthly rental, and any registration charges distributed over 3 years. The two most prominent operators in each country are covered (except for Switzerland – six operators), based on available subscriber numbers. All relevant packages from each operator are considered, but the final results presented here only show the cheapest package for each basket. The asterisk (*) behind the package name means that the package name and its structure have changed between 2005 and 2006. The package chosen at any time is the cheapest package from that provider for the usage profile in question. This may give rise to significant price changes over time. The balance of fixed and usage in the mobile baskets varies considerably between countries, as the preferred packages in some countries contain a lot of calling time included in the fixed charge. A full description of the methodology can be found at the end of this report. 2. In order to show a price trend, the "2002 OECD" baskets have been used. Mobile services from 2002 till 2006 are used. The graphs will show the average price development for the EU countries, using a simple average across all member countries per year. The averages cover the cheapest package from the same mobile operators. From 2004 the EU10 countries are also included. 3. OECD baskets have undergone another revision that resulted in a new set of baskets at the beginning of 2006. Similar to the PSTN baskets the mobile baskets were also updated with current traffic weights and volumes. The changes are significant enough to prohibit the use of the new baskets with old data. The results for 2006 with using the new baskets are presented below. The principles of the new baskets are the same as before, with 3 baskets for low, medium and high usage. The main differences between the old "2002 OECD" and the new "2006 OECD" baskets are: Low usage basket with: 30 outgoing calls per month + 33 SMS messages 22% of calls are to fixed line phones, 70% to mobile phones, 8% to voicemail, Medium usage basket with: 65 outgoing calls per month + 50 SMS messages

Extract from the 12th EU implementation report extended to include Switzerland - 58 21% of calls are to fixed line phones, 72% to mobile phones, 7% to voicemail, High usage basket with: 140 outgoing calls per month + 55 SMS messages 20% of calls are to fixed line phones, 73% to mobile phones, 7% to voicemail, and: -Inclusion of MMS in the basket, -Both MMS and SMS are separated for peak and off-peak times, and on-net and off-net destinations, -Voicemail is included in the baskets, -Off-net calls can be directed to several networks, -The methodology for calculating the effects of allowances has been improved. -The names of the tariff packages used in the basket analysis is found in the table below.

59 - Extract from the 12th EU implementation report extended to include Switzerland 4.4.1. Old OECD basket Figure 43 Low usage mobile basket

UK, T-Mobile, Flext 20 * 29.66 UK, O2, Anytime £20 + 50% extra minutes for life * 29.66 Ireland, Vodafone, Perfect Fit 30 25.39 Switzerland, Cablecom, Mobile Connect * 24.62 Switzerland, Swisscom, Natel Basic Liberty * 23.86 Switzerland, Orange, Optima 30 21.73 Switzerland, Mobilezone, Mobilezonenet - Fair Value * 21.70 Malta, Vodafone Malta, Lite * 21.62 Greece, Vodafone, Vodafone 10 * 20.90 Italy, Vodafone, Vodafone Easy 20.46 Malta, Go, Go Together * 20.39 Portugal, Vodafone, Plano Best 20.00 Ireland, O2, Active Life 40 * 20.00 France, Orange, Forfait M6 19.90€ * 19.90 Greece, Cosmote, Basic SMS 30 * 19.38 Italy, TIM, TIM Unica 10 * 19.01 Netherlands, KPN, Mobiel WebBundel Small * 18.50 France, SFR, Le Compte 18€ * 18.00 Germany, Vodafone, SMS-Generation * 17.86 Austria, T-Mobile, Relax 50 * 17.11 Netherlands, Vodafone, Vodafone 12.50 16.78 2006 Germany, T-Mobile, Relax 50 Relax SMS 40 * 15.69 Spain, Vodafone, Contrato Vitamina Mensajes Al 50% * 15.52 2005 Hungary, T-Mobile, Relax 100 * 14.88 Spain, MoviStar, Contrato Empresas Tramos Horarios * 14.13 Poland, Era, Classic 70 14.03 Belgium, Mobistar, BestDeal * 13.79 Switzerland, Sunrise, Relax Libero * 13.63 Portugal, TMN, Plano Pos Pago 12.34 Belgium, Proximus, Smile Anytime All Networks €5 Messaging Pack €3 * 12.28 Austria, Mobilkom, A1 Xcite Easy * 12.27 Sweden, Teliamobile, Telia Mobil kväll & helg * 12.25 Czech, T-Mobile, T 30 11.81 Latvia, LMT, Call me * 11.56 Czech, O2, Start * 11.51 Slovenia, Si.mobil Vodafone, Orto Smart * 11.25 Slovenia, Mobitel, Uniform * 10.06 Switzerland, Tele2, Tele2 Mobile Classique * 10.05 Hungary, Pannon, Pannon 50 * 10.02 Slovakia, T-Mobile, 20+20Viac * 9.54 Slovakia, Orange, Pausal 199 Sk * 8.91 Luxembourg, LuxGSM, LIGHT * 8.60 Poland, Orange, Twój Plan 10 * 8.48 Estonia, Tele2 Estonia, Senior * 8.24 Estonia, Eesti Mobiltelefon, Profipluss * 7.61 Finland, Sonera, Netto 7.52 Sweden, Tele 2 Comviq, Comviq.net * 7.49 Finland, Elisa, Oiva * 7.37 Luxembourg, Tango, Knock-out 7.20 Lithuania, Omnitel, Mano 6.95 Denmark, Sonofon, Debillos 6.93 Denmark, TDC Mobil, Mixit Regning 6.73 Lithuania, Tele2, Studentas * 5.79 Latvia, Tele2 Latvia, Brivais * 4.73

0 5 10 15 20 25 30 35 40 Euro per month

Entries with an asterisk (*) after the name have changed the package name and structure since last year.

Extract from the 12th EU implementation report extended to include Switzerland - 60 Figure 44 Medium usage mobile basket

Malta, Go, Go Together * 50.99 Germany, Vodafone, Wochenend 100 SMS 40 * 50.66 Switzerland, Swisscom, Natel Swiss Liberty * 49.93 Switzerland, Cablecom, Mobile Connect * 47.93 Italy, TIM, TIM Unica 10 * 45.43 Switzerland, Orange, Optima 100 Option SMS 45.39 Malta, Vodafone Malta, Active * 44.25 Ireland, Vodafone, Perfect Fit 100 Talk 300 Add On * 43.55 Italy, Vodafone, Valore * 43.01 France, Orange, Forfait M6 28.90€ * 40.44 Switzerland, Mobilezone, Mobilezonenet - Fair Value * 38.71 Belgium, Proximus, Freestyle Classic €25 * 38.22 Switzerland, Sunrise, Relax Libero * 37.52 Spain, MoviStar, Contrato Empresas Tramos Horarios * 37.38 UK, O2, Anytime £25 + 50% extra minutes for life * 37.08 Belgium, Mobistar, BestDeal Mobistar Home * 36.26 Austria, T-Mobile, Relax 200 * 36.11 Greece, Vodafone, Vodafone 100 * 36.03 Czech, O2, Silver * 36.00 Spain, Vodafone, Contrato Autonomos 10 35.80 Ireland, O2, Active Life 150 * 35.00 2006 France, SFR, Le Compte 35€ * 35.00 Germany, T-Mobile, Relax 200 Relax SMS 40 * 34.69 2005 Portugal, Vodafone, Plano Best Aditivo SMS 30 * 32.25 Portugal, TMN, Plano Pos Pago Pakot 60 SMS * 32.00 Greece, Cosmote, Cosmote 120 SMS 30 * 31.66 Austria, Mobilkom, A1 Xcite Easy * 31.14 Czech, T-Mobile, T 160 * 29.94 UK, T-Mobile, Flext 20 * 29.66 Netherlands, KPN, Mobiel WebBundel Medium * 28.50 Slovakia, T-Mobile, 100Viac 28.25 Poland, Orange, Firma 100 * 27.78 Netherlands, Vodafone, Vodafone 27.50 * 27.50 Switzerland, Tele2, Tele2 Mobile Classique * 26.41 Slovenia, Si.mobil Vodafone, Orto Smart * 26.39 Slovenia, Mobitel, Uniform * 25.92 Luxembourg, LuxGSM, LIGHT * 23.45 Denmark, TDC Mobil, Mixit Regning 22.65 Sweden, Teliamobile, Telia Mobil till vänner * 22.63 Hungary, T-Mobile, Relax 100 * 22.47 Estonia, Eesti Mobiltelefon, Profipluss * 22.08 Slovakia, Orange, Pausal 50 + SMS * 21.46 Estonia, Tele2 Estonia, Extra 200 * 20.84 Poland, Era, Komfort Komfort 120 20.08 Luxembourg, Tango, Knock-out 19.08 Hungary, Pannon, Pannon 150 * 17.87 Lithuania, Omnitel, Kalbek * 17.44 Latvia, LMT, Formula 8 * 17.31 Finland, Sonera, Netto 16.67 Finland, Elisa, Oiva * 16.52 Sweden, Tele 2 Comviq, Comviq Knock-Out 16.16 Latvia, Tele2 Latvia, Brivais * 12.57 Lithuania, Tele2, Studentas * 12.41 Denmark, Sonofon, Kvantum 99 11.98

0 10203040506070 Euro per month

Entries with an asterisk (*) after the name have changed the package name and structure since last year.

61 - Extract from the 12th EU implementation report extended to include Switzerland Figure 45 High usage mobile basket

Malta, Go, Go Together * 97.03 Switzerland, Orange, Advanced Unlimited Option SMS * 84.03 Switzerland, Cablecom, Mobile Connect * 80.13 Germany, Vodafone, Wochenend 200 SMS 40 * 79.56 Switzerland, Swisscom, Natel Swiss Liberty SMS Option 50 79.43 Malta, Vodafone Malta, Extra * 79.42 Spain, MoviStar, Contrato Empresas 60 * 72.67 Italy, Vodafone, Vodafone Five Personal * 71.07 Spain, Vodafone, Contrato Autonomos 10 69.51 Ireland, Vodafone, Perfect Fit 200 Talk 300 Add On * 69.27 France, Orange, Forfait Classique 6h * 68.99 Switzerland, Mobilezone, Mobilezonenet - Fair Value * 63.12 Czech, O2, Gold * 61.41 Ireland, O2, Active Life 250 Evening & Weekend * 57.50 Greece, Cosmote, Cosmote 240 55.60 Italy, TIM, Tutto Relax * 55.16 Germany, T-Mobile, Relax 400 Relax SMS 40 * 55.07 Slovakia, T-Mobile, 200Viac 53.00 Switzerland, Tele2, Tele2 Mobile Classique * 52.58 France, SFR, Essentiel 4H +50% en plus * 52.52 Greece, Vodafone, Vodafone 300 * 52.46 2006 Poland, Orange, Firma 200 * 50.49 Netherlands, Vodafone, Vodafone 50.00 * 50.00 2005 Portugal, Vodafone, Plano Best500 * 49.50 Portugal, TMN, Plano Extra Pos Pago * 49.50 Slovakia, Orange, Pausal 90 + SMS * 49.08 Slovenia, Mobitel, Uniform * 48.36 Belgium, Mobistar, BestDeal Mobistar Home * 48.10 Czech, T-Mobile, T 300 * 46.90 Denmark, TDC Mobil, Mixit Regning * 46.59 Switzerland, Sunrise, Relax Super * 45.43 Belgium, Proximus, Smile Anytime All Networks €100 Mess. €3 * 44.80 Austria, T-Mobile, Relax 400 44.51 UK, T-Mobile, Flext 30 * 44.50 UK, O2, Anytime £30 + 50% extra minutes for life * 44.50 Estonia, Eesti Mobiltelefon, Company * 42.59 Luxembourg, LuxGSM, COOL * 42.44 Estonia, Tele2 Estonia, Extra 200 * 40.55 Netherlands, KPN, Mobiel WebBundel Large * 40.51 Slovenia, Si.mobil Vodafone, Smart III * 39.77 Poland, Era, Komfort Komfort 120 39.68 Luxembourg, Tango, Knock-out 38.61 Lithuania, Omnitel, Kalbek * 36.58 Sweden, Teliamobile, Telia Mobil till vänner * 36.22 Hungary, T-Mobile, Relax 250 * 33.70 Latvia, LMT, Formula 8 * 33.61 Sweden, Tele 2 Comviq, Comviq Kompis * 30.53 Finland, Sonera, Netto 30.40 Finland, Elisa, Oiva * 30.25 Lithuania, Tele2, Studentas * 26.67 Denmark, Sonofon, Kvantum 199 24.99 Latvia, Tele2 Latvia, Brivais * 24.32 Hungary, Pannon, Pannon 300 * 24.19 Austria, Mobilkom, A1 Xcite Easy * 59.19

0 20406080100120 Euro per month

Entries with an asterisk (*) after the name have changed the package name and structure since last year

Extract from the 12th EU implementation report extended to include Switzerland - 62 4.4.2. Simple average across all mobile operators The simple national average for Switzerland is calculated on the basis of the data for three leading mobile operators (Swisscom, Orange, and Sunrise). These values are considerably higher than the European average and this regardless of the usage level and the year considered. Figure 46 Simple average across all mobile operators covered Low usage basket 28 24.59 23.01 24

T 19.74

VA 20 ng i

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12 13.84 onth i m 8 per

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0 2004 2005 2006

CH EU25 Figure 47 Simple average across all mobile operators covered Medium usage basket 64 54.76 56 47.13 T 48 44.28 VA ng i 40 ud cl

n 32 36.64 32.84 29.01 onth i 24 m per 16 o r u E 8

0 2004 2005 2006

CH EU25

63 - Extract from the 12th EU implementation report extended to include Switzerland Figure 48

Simple average across all mobile operators covered High usage basket 100 89.09 90 76.89 80 T 69.63

VA 70 ng i 60

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cl 57.59 n 50 48.61 40 onth i m 30 per

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0 2004 2005 2006

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Extract from the 12th EU implementation report extended to include Switzerland - 64 4.4.3. New 2006 OECD basket Figure 49 Low usage basket

UK, T-Mobile, Flext 20 29.66 UK, O2, Anytime £20 + 50% extra minutes for life 29.66 Switzerland, Cablecom, Mobile Connect 28.48 Ireland, Vodafone, Perfect Fit 30 27.72 Switzerland, Swisscom, Natel Basic Liberty 26.95 Switzerland, Orange, Optima 30 Option SMS 24.50 Malta, Vodafone Malta, Lite 23.91 Switzerland, Mobilezone, Mobilezonenet - Fair Value 23.39 Italy, Vodafone, Vodafone Easy 23.32 Greece, Vodafone, Vodafone 10 22.98 Germany, Vodafone, SMS-Generation 22.62 Malta, Go, Go Together 22.51 Italy, TIM, TIM Menu Family + Tutti TIM Weekend Option 21.72 Ireland, O2, Active Life 40 21.57 Greece, Cosmote, Cosmote 60 SMS 30 20.88 Portugal, Vodafone, Plano Best 20.00 France, Orange, Forfait M6 19.90€ 19.90 Netherlands, KPN, Mobiel WebBundel Small 18.50 Austria, T-Mobile, Relax 50 18.10 France, SFR, Le Compte 18€ 18.00 Spain, Vodafone, Contrato Vitamina Mensajes Al 50% 17.81 2006 Netherlands, Vodafone, Vodafone 17.50 17.50 Spain, MoviStar, Contrato Empresas Tramos Horarios 16.34 Switzerland, Sunrise, Relax Libero 16.32 Germany, T-Mobile, Relax 50 Relax SMS 40 15.95 Hungary, T-Mobile, Relax 100 15.52 Belgium, Mobistar, BestDeal 15.41 Sweden, Teliamobile, Telia Mobil till vänner 14.49 Poland, Era, Classic 70 14.39 Belgium, Proximus, Smile Anytime All Networks €5 Messaging Pack €3 14.30 Austria, Mobilkom, A1 Xcite Easy 14.27 Portugal, TMN, Plano Pos Pago 13.91 Czech, T-Mobile, T 30 13.51 Czech, O2, Start 12.77 Slovakia, T-Mobile, 20+20Viac 11.79 Latvia, LMT, Formula 8 11.66 Slovenia, Mobitel, Uniform 10.99 Hungary, Pannon, Pannon 50 10.93 Slovenia, Si.mobil Vodafone, Orto Smart 10.68 Slovakia, Orange, Pausal 299 Sk 10.61 Switzerland, Tele2, Tele2 Mobile Classique 9.90 Luxembourg, LuxGSM, LIGHT 9.82 Poland, Orange, Twój Plan 10 9.65 Estonia, Tele2 Estonia, Senior 9.46 Cyprus, CYTA, Lite 9.08 Finland, Sonera, Netto 8.74 Estonia, Eesti Mobiltelefon, Profipluss 8.72 Finland, Elisa, Oiva 8.41 Luxembourg, Tango, Knock-out 8.33 Lithuania, Omnitel, Mano 8.00 Denmark, TDC Mobil, Mixit Regning 7.82 Sweden, Tele 2 Comviq, Comviq Knock-Out 7.67 Denmark, Sonofon, Kvantum 99 7.00 Lithuania, Tele2, Studentas 5.79 Latvia, Tele2 Latvia, Brivais 5.50

0 5 10 15 20 25 30 35 Euro per month

65 - Extract from the 12th EU implementation report extended to include Switzerland Figure 50 Medium usage basket

Switzerland, Cablecom, Mobile Connect 47.06 Switzerland, Swisscom, Natel Basic Liberty SMS Option 50 46.55 Germany, Vodafone, Vodafone 100 SMS 40euro 46.21 Malta, Vodafone Malta, Active 42.75 Malta, Go, Go Together 42.72 Italy, TIM, TIM Menu Family + Tutti TIM Weekend Option 41.82 Italy, Vodafone, Valore 40.29 Ireland, Vodafone, Perfect Fit 100 38.78 UK, O2, Anytime £25 + 50% extra minutes for life 37.08 Switzerland, Orange, Optima 100 Option SMS 36.73 Switzerland, Mobilezone, Mobilezonenet - Fair Value 36.10 Ireland, O2, Active Life 150 35.17 Switzerland, Sunrise, Relax Libero 34.18 Spain, MoviStar, Contrato Empresas Tramos Horarios 33.45 Spain, Vodafone, Contrato Autonomos 10 33.26 Austria, T-Mobile, Relax 100 31.88 Belgium, Proximus, Freestyle Classic €25 31.72 Belgium, Mobistar, BestDeal 31.44 France, Orange, Forfait M6 28.90€ 31.03 Germany, T-Mobile, Relax 100 Relax SMS 40 30.90 France, SFR, Le Compte 25€ 30.78 2006 UK, T-Mobile, Flext 20 29.66 Greece, Vodafone, Vodafone 100 SMS 50 28.93 Czech, O2, Start 28.58 Netherlands, KPN, Mobiel WebBundel Medium 28.50 Czech, T-Mobile, T 80 28.38 Austria, Mobilkom, A1 Xcite Easy 27.99 Greece, Cosmote, Cosmote 120 SMS 30 27.71 Portugal, Vodafone, Plano Best Aditivo SMS 30 27.71 Netherlands, Vodafone, Vodafone 22.50 26.42 Portugal, TMN, Plano Pos Pago Pakot 60 SMS 26.17 Slovakia, T-Mobile, 20+20Viac 24.14 Poland, Orange, Firma 100 22.75 Slovenia, Mobitel, Uniform 21.75 Slovakia, Orange, Pausal 50 + SMS 20.97 Sweden, Teliamobile, Telia Mobil till vänner 20.81 Switzerland, Tele2, Tele2 Mobile Classique 20.31 Hungary, Pannon, Pannon 150 20.00 Slovenia, Si.mobil Vodafone, Orto Smart 19.14 Hungary, T-Mobile, Relax 100 19.10 Luxembourg, LuxGSM, LIGHT 18.95 Estonia, Eesti Mobiltelefon, Profipluss 18.86 Estonia, Tele2 Estonia, Extra 200 18.52 Latvia, LMT, Formula 8 18.09 Denmark, TDC Mobil, Mixit Regning 18.06 Cyprus, CYTA, Lite 17.77 Poland, Era, Classic 70 Bis 16.31 Luxembourg, Tango, Knock-out 15.96 Finland, Sonera, Max 15.71 Finland, Elisa, Aito 14.99 Sweden, Tele 2 Comviq, Comviq Knock-Out 14.88 Lithuania, Omnitel, Kalbek 11.87 Latvia, Tele2 Latvia, Brivais 11.47 Lithuania, Tele2, Studentas 9.36 Denmark, Sonofon, Kvantum 99 8.50

0 5 10 15 20 25 30 35 40 45 50 Euro per month

Extract from the 12th EU implementation report extended to include Switzerland - 66 Figure 51

High usage basket

Switzerland, Cablecom, Mobile Connect 80.11 Malta, Go, Go Together 79.40 Switzerland, Swisscom, Natel Swiss Liberty SMS Option 50 76.83 Germany, Vodafone, Vodafone 200 SMS 40 75.29 Malta, Vodafone Malta, Extra 70.81 Switzerland, Orange, Optima 200 Option SMS 69.12 Italy, Vodafone, Valore 66.93 Ireland, Vodafone, Perfect Fit 200 65.94 Spain, MoviStar, Contrato Empresas Tramos Horarios Modulo Numeros Movistar 63.87 Spain, Vodafone, Contrato Autonomos 10 63.33 Switzerland, Mobilezone, Mobilezonenet - Fair Value 57.67 Italy, TIM, Tutto Relax 55.76 France, Orange, Forfait Classique 4h 54.79 Germany, T-Mobile, Relax 200 Relax SMS 40 52.81 Belgium, Mobistar, Free 51.00 Austria, Mobilkom, A1 Xcite Easy 50.61 Czech, O2, Gold 49.98 Ireland, O2, Active Life 150 Evening & Weekend 49.79 Portugal, TMN, Plano Extra Pos Pago 49.50 Portugal, Vodafone, Plano Best500 49.50 Greece, Vodafone, Vodafone 200 SMS 50 48.21 2006 Austria, T-Mobile, Relax 200 47.26 Belgium, Proximus, Smile Anytime All Networks €100 Messaging Pack €3 47.22 Switzerland, Sunrise, Relax Super 46.98 France, SFR, Essentiel 3H +50% en plus 46.54 Czech, T-Mobile, T 160 44.94 UK, O2, Anytime £30 + 50% extra minutes for life 44.50 Slovakia, T-Mobile, 200Viac 43.92 Netherlands, Vodafone, Vodafone 35.00 43.84 Greece, Cosmote, Cosmote 240 SMS 60 41.78 Poland, Orange, Firma 200 41.12 Slovenia, Mobitel, Pension Plus 40.21 Slovakia, Orange, Pausal 90 + SMS 39.53 Netherlands, KPN, Mobiel WebBundel Large 38.50 Switzerland, Tele2, Tele2 Mobile Classique 37.35 UK, T-Mobile, Flext 25 37.08 Denmark, TDC Mobil, Mixit Regning 36.93 Latvia, LMT, Formula 8 36.04 Estonia, Eesti Mobiltelefon, Profipluss 35.80 Luxembourg, LuxGSM, LIGHT 35.45 Slovenia, Si.mobil Vodafone, Smart III 34.97 Estonia, Tele2 Estonia, Extra 200 33.78 Cyprus, CYTA, Lite 33.36 Poland, Era, Komfort Komfort 120 33.26 Sweden, Teliamobile, Telia Mobil till vänner 31.68 Luxembourg, Tango, Knock-out 29.53 Hungary, T-Mobile, Relax 250 28.06 Finland, Sonera, Max 27.04 Sweden, Tele 2 Comviq, Comviq Kompis 25.70 Finland, Elisa, Aito 25.00 Hungary, Pannon, Pannon 300 24.90 Lithuania, Omnitel, Kalbek 23.07 Latvia, Tele2 Latvia, Brivais 20.76 Lithuania, Tele2, Studentas 18.63 Denmark, Sonofon, Kvantum 199 17.58

0 102030405060708090 Euro per month

67 - Extract from the 12th EU implementation report extended to include Switzerland 5. NUMBER PORTABILITY

5.1. Fixed number portability Fixed number portability enables fixed subscribers to retain their number when they move from one operator to another. Figures are not always strictly comparable between Member States, due to the fact that repeated portings are included (i.e. the figures indicate the number of transactions) in Belgium, Czech Republic, Denmark, Estonia, Ireland; Cyprus, Latvia, Lithuania, France, Greece, Sweden, while they are excluded (i.e. the figures indicate the numbers currently ported) in Spain, Italy, Luxembourg, Hungary, Austria, Portugal., Poland. (There is no information available for Germany, The Netherlands, Malta, Slovenia, Slovakia and Finland). Furthermore, portability of non-geographical numbers has been taken into account only in some Member States. Fixed number portability has continued to play an important role in encouraging competition. As of October 2006, more than 15 million subscribers in 23 Member States have ported their number since the introduction of this possibility (7 million from October 2005 and October 2006). Apart form the countries that have introduced number portability only during 2006, there has been significant growth in the amount of fixed numbers ported in France, The Netherlands and Sweden. Since the introduction of number portability in Switzerland in 2000, there was noted an annual increase in the ported numbers. At the end of 2005 the proportion of ported numbers made about 1.48% of the total number of fixed telephony subscriptions. Between 2003 and 2005 an increase of 162% of ported numbers in absolute terms occurred. Prices for fixed number portability refer to the amount charged by the incumbent to the recipient operators for porting one telephone geographic number (excluding VAT). This price may vary depending on a number of factors. In some countries the price for a non - geographic number is different. Where available, information on price for non-geographic number portability is added in the footnote. According to the data at our disposal for 23 Member States, the EU weighted average price for a fixed number ported is 9.32 €. Prices in the Czech Republic, Ireland, Austria and Finland are significantly higher than the EU average, while in 7 Member States (Belgium, Denmark, Germany, Latvia, Hungary, Netherlands and Slovenia) prices are below 10 €. The fixed number portability is free of charge in Lithuania and less than 2 € in Estonia and the United Kingdom. Since October 2005 a significant decrease in the price for number portability has occurred in the Czech Republic (-63%), France (-33%), Hungary (-40%), Netherlands (-34%) and Sweden (-29%). Over the same period the price has increased in Italy by 7%. The price in Switzerland is rather high (19.72 €). Only in four european countries – Austria, Ireland, Czech Republic and Finland - do incumbents charge even more for number portability. Figure 52 Fixed ported numbers and price per number ported

2 750 30 37.4 2 500

2 250 ) s 5 d ) 8. 2 000 € san d ( 182 u e

20 t o

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1 500 b 5 r 0 o m 0 . u 02. 2 3. 4 s p n

1 250 27 r 9 er 111 2500 b pe 6. 2422. 290.

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1 000 92 c u i r N 10 P 750 7 . 1 .

500 428 399 9 . 8 1 1 9 0 7

250 . . . 158 . 0 . 103. 7 0 4 7 79. 63 60 60 43 10 5. 6. 4. 3. 0 BE CZ DK EE EL ES FR IE IT CY LV LT LU HU NL AT PT SI FI SE CH August 2004 October 2005 October 2006 Price per number ported (Oct. 06)

Extract from the 12th EU implementation report extended to include Switzerland - 68 The figures indicate the total fixed number ported up to each year. Belgium: Figures refer to 1 January 2006. Price refers to simple installation. Czech Republic: Fixed telephony ported numbers are represented. The price refers to one single telephone number porting. Price for comprehensive order is 99.15 €. Denmark: Figures refer to 30 June 2006. Germany: Data for geographic numbers not available. France: The price includes a fix cost of 8.72 € per request; price for more than one number is then lower. Price for non-geographic numbers varies between 90 € and 320 €. Ireland: Prices are for a single line. Price falls to 3,69 € per line for orders above 100 lines. Cyprus: Non-geographic numbers are excluded. Lithuania: Numbers are ported free of charge. Malta, Slovakia: Fixed number portability not in place. Netherlands: Price varies between 2 € and 8 €. Poland: Information not available. Finland: The price is an average of 39 SMP operators, as prices vary from 10 € to 30 €. Sweden: The price for ported non-geographic numbers is 14 €. United Kingdom. Data are not available for numbers ported. Price for porting geographic numbers varies between 0.74 € and 39.97 €. Source for Switzerland: OFCOM Switzerland, operators. The data for August 2004, October 2005 and 2006 refer respectively to the whole year 2003, 2004 and 2005. 5.2. Mobile number portability Mobile number portability enables mobile subscribers to retain their number when they move from one operator to another. The numbers ported are not always strictly comparable between Member States, because repeated portings are included (i.e. the figures indicate the number of transactions) in Belgium, Czech Republic, Denmark, Estonia, Ireland; Cyprus, Latvia, Lithuania, France, Greece, Austria, Finland, Sweden, while they are excluded (i.e. the figures indicate the numbers currently ported) in Spain, Italy, Luxembourg, Hungary, Portugal, Poland (there is no information available for Malta, Germany, Netherlands, Slovenia, Slovakia and United Kingdom). The mobile ported numbers have increased significantly during the past period (almost +6.3 million) and as of October 2006 31.4 million subscribers in 24 Member States have ported their number since the introduction of this possibility (data not available for United Kingdom). Apart from the countries that have introduced number portability only during 2006, there has been significant growth in the amount of mobile numbers ported in France, Austria, Greece, Ireland and Luxembourg. The highest percentage of mobile number ported over the total mobile subscribers is found in Finland (over 64%) and Denmark (32%). Spain and Sweden have over 20%, while Belgium, Ireland, Italy and Netherlands have ported between 10% and 16% of the existing mobile numbers. Most of the new Member States show a very low level of numbers ported compared to the total of mobile subscribers due to the late introduction of number portability. The percentage of mobile number ported is also quite low in Luxembourg (3.4%) and in Germany, Greece, France, Portugal and Austria (not higher than 1.9%). The mobile number portability was introduced in Switzerland in 2000. During the year 2002 there were 118’113 numbers ported. This represents a maximum annual value since the introduction of the service. During the period of 2002-2004 a decrease of 44% in demand occurred. This case is unique in Europe. In 2005 there was noted once again an increased interest in the use of this service. 99’072 mobile users have retained their number when they moved to another operator. The proportion of ported numbers made about 1.45% of the total number of mobile telephony subscriptions. Prices for fixed number portability refer to the amount charged by the incumbent to the recipient operators for porting one mobile number (excluding VAT). According to the data at our disposal for 17 Member States, the EU weighted average price for a mobile number ported is 12.3 €. Prices in Germany, Ireland and Sweden are significantly higher than the EU average (more than 20 €), while in Spain and Lithuania it is free of charge and costs less than 2 € in Sweden. Since October 2005 a significant decrease in the price for a number ported has occurred in Sweden and in the Netherlands.

The Swiss incumbent operator charges 18.45 euro per mobile number ported. This price is high in comparison with the European weighted average. Only in Germany and Ireland operators charge even more for the mobile number portability.

69 - Extract from the 12th EU implementation report extended to include Switzerland Figure 53 Mobile ported numbers and price of mobile number portability, October 2006

10 000 000 00 25 61

9 000 000 94000

8 000 000 80217 20 ) €

7 000 000 ( ed ed rt rt o o 6 000 000 15 er p b ers p b 5 000 000 m m 00 nu Nu 4 000 000 10 34870 ice per r 44 P 3 000 000 00 57 0000 20200 181 2 000 000 18000 5 4214 14197 7000 2 101 54 72 25 90000 1 000 000 83 6 00 80 60 29877 3703 16870 1411 1 1072 1066 99072 95071 93500 26083 18983 18013 1 55 19 48 0 BE CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI SE CH

October 2004 October 2005 October 2006 Price per number ported (Oct. 06) Belgium, Czech Republic, Latvia, Hungary, Netherlands, Portugal, Slovakia: Missing data are not available. Belgium, Czech Republic: Price is currently subject of appeals or part of a dispute. Spain, Lithuania: Numbers are ported free of charge. Latvia: Number portability is available for post-paid contract only. Malta: Price in the chart refers to post-paid contracts. Price for porting of a single mobile prepaid number is 9,32 €. Austria: Figure for price refers to the maximum value of 8,21 €. Finland: Price vary from 5 € to 12 €. United Kingdom: No information available. Source for Switzerland: OFCOM Switzerland, operators. The data for August 2004, October 2005 and 2006 refer respectively to the whole year 2003, 2004 and 2005.

Figure 54

% of mobile numbers ported over total mobile subscribers (Oct. 2006)

70.0% 64.0%

60.0%

50.0%

40.0% % 3 32. 30.0% % % 9 . 1 . 21 21 % 5

20.0% . 15 % % 14.8% 5 3 . . 10 10 %

10.0% 2 % 6. 4 % % % 8% 3. 3 2 8 8% 2.4% 1.9% 1. 1.6% 1.5% 1.4% 1. 1. 0.9% 0. 0. 0.7% 0.6% 0.1% 0.0% 0.04% BE CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI SE CH

Source for Switzerland: OFCOM Switzerland, operators. The data for October 2006 refer to the whole year 2005.

Extract from the 12th EU implementation report extended to include Switzerland - 70 6. BROADBAND ACCESS AND PRICING

6.1. Broadband access definitions This section provides data on the number and type of broadband lines supplied by both incumbent operators and new entrants in the EU and in Switzerland. It also contains information on access lines provided by means of alternative technologies such as wireless access (WLL), satellite and cable modems. Information has been provided by the national regulatory authorities through the ONP COM02-18 questionnaire on data for local broadband access. Given the rapid developments in this sector, it has been agreed with NRAs to update the ONP questionnaire on a regular basis in January, July and October. Unless otherwise stated, the data below refer to the market situation at 1 October 2006. The definitions used in the charts and data below are as follows: - Fully unbundled lines: Fully unbundled lines supplied to other operators, excluding experimental lines. In the case of full unbundling, a copper pair is rented to a third party for its exclusive use. As fully unbundled lines (ULL) supplied by the incumbent operator to the new entrants could in principle be used for services other than broadband, the total number of ULL for access to internet will be lower than the total number of ULL. - Shared access lines supplied by the incumbent to new entrants: Shared access lines supplied to other operators, excluding experimental lines. In the case of shared access, the incumbent continues to provide telephony service, while the new entrant delivers high-speed data services over that same local loop. - Bitstream access: Supplied to new entrants. Bitstream access refers to the situation where the incumbent installs a high-speed access link to the customer premises and then makes this access link available to third parties, to enable them to provide high-speed services to customers. Bitstream depends in part on the PSTN and may include other networks such as the ATM network. Bitstream access is a wholesale product that consists of the provision of transmission capacity in such a way as to allow new entrants to offer their own, value-added services to their clients. The incumbent may also provide transmission services to its competitor, to carry traffic to a 'higher' level in the network hierarchy where new entrants may already have a broadband point of presence. - Simple resale: In contrast to bitstream access, simple resale occurs where the new entrant receives and sells on to end users - with no possibility of value added features to the DSL part of the service - a product that is commercially similar to the DSL product provided by the incumbent to its own retail customers, irrespective of the ISP service that may be packaged with it. Resale offers are not a substitute for bitstream access because they do not allow new entrants to differentiate their services from those of the incumbent (i.e. where the new entrant simply resells the end- to-end service provided to him by the incumbent on a wholesale basis). - Incumbent's DSL lines: Provided to end users by the incumbent, its subsidiaries or partners (for example an associated company such as a joint venture providing ISP services), - WLL: Internet broadband connections by means of wireless local loop (sometimes referred to as fixed wireless access), - Cable modem: Internet broadband connections by means of cable TV access, - L.L.: Internet broadband connections by means of dedicated capacity (Leased Lines) provided over metallic copper pairs, including tail ends or partial circuits. “Incumbent's leased lines” includes only retail lines and excludes lines provided to other operators. “New entrants' leased lines” includes all retail lines provided to end users, even if based on wholesale lines supplied by the incumbent. - Other categories: Internet broadband connections by means of 3G, satellite, fibre optic, powerline communications, other. The figures relating to Switzerland include ADSL and cable modem connections only. The other means of accessing the internet have not been considered, due to the lack of information in our possession. However, the quantitative importance of these other types of access represents a negligible proportion of the overall broadband market. - Retail access: Access provided to end users. - Incumbents are defined as the organisations enjoying special and exclusive rights or de facto monopoly for provision of voice telephony services before liberalisation, regardless of the role played in the provision of access by

71 - Extract from the 12th EU implementation report extended to include Switzerland means of technologies alternative to the PSTN. - “New entrants” refers to alternative telecommunications operators, as well as internet service providers (ISPs). - Broadband capacity: Capacity equal to, or higher than, 144 Kbit/s.

6.2. Wholesale access This section shows the availability of wholesale access lines supplied by incumbent operators to new entrants. Separate figures are provided for fully unbundled lines, shared access and bitstream access. Data from the New Member States are included when available. As can be seen from the table at the end of this section, data are not always available, especially as regards wholesale lines. The table below shows the number of agreements between operators for ULL, shared access, bitstream and resale as at 1 October 2003, 2004, 2005 and 2006.

Table 1 Number of agreements for full ULL, shared access, bitstream access and resale, 2003-2006. N. of agreements on fully N. of agreements on N. of agreements on N. agreements on resale unbundled lines shared lines Bitstream access lines

Oct. 03 Oct. 04 Oct. 05 Oct. 06 Oct. 03 Oct. 04 Oct. 05 Oct. 06 Oct. 03 Oct. 04 Oct. 05 Oct. 06 Oct. 03 Oct. 04 Oct. 05 Oct. 06

BE 8 8 8 9 8 8 8 9 10 11 11 13 22 25 27 18 CZ 0 4 4 5 0 2 4 5 0 0 n.a. 23 0 21 19 DK 13 17 17 21 4 10 6 8 9 10 11 13 0 0 10 10 DE 81 86 99 101 7 9 16 17 0 0 3 5 0 8 n.a. 24 EE 0 7 n.a. 7 0 0 0 0 21 3 1 EL 7 11 12 13 0 1 1 6 0 8 10 15 0 0 ES 9 11 13 16 9 11 12 13 37 30 30 30 n.a. n.a. n.a. 2 FR 9 13 21 9 13 21 5 5 5 20 20 20 IE 1 3 3 5 1 3 3 5 2 8 9 11 - 0 IT 31 27 26 27 2 4 6 9 150 211 234 250 0 0 CY 0 n.a. 2 0 n.a. 2 0 n.a. n.a. n.a. n.a. LV 0 0 2 2 0 1 2 2 0 0 11 11 0 11 LT 0 0 1 0 0 0 17 16 12 0 0 LU 2 3 3 5 2 3 4 5 0 0 1 4 5 7 HU 0 2 6 6 0 0 1 5 0 18 17 20 0 0 MT 0 0 0 0 0 0 0 16 19 11 NL 12 12 10 10 12 12 10 10 1 1 1 5 0 0 AT 17 20 26 0 20 26 38 38 38 . 0 0 PL 0 0 0 0 0 0 0 0 0 0 0 4 0 0 0 0 PT 2 2 2 4 n.a. 1 1 1 8 9 8 8 0 0 SI 0 0 3 0 1 3 3 0 4 10 13 0 0 3 4 SK 0 0 0 0 0 0 0 0 12 FI n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. SE 74 116 122 n.a. 74 116 122 n.a. 26 26 26 n.a. 12 n.a. n.a. n.a. UK 57 59 44 55 7 12 22 31 n.a. 28 49 28 602 801 780 591 EU 325 401 418 291 135 227 268 130 286 424 489 461 678 909 884 679 CH* 0 0 0 0 0 0 0 0 0 0 0 0 29** 28 30 23** * Note that the 30 competing operators have in turn concluded reselling agreements with other providers. ** as of February 2004 *** as of May 2007 Figure 55 shows the distribution of wholesale access lines supplied by the incumbent operators to new entrants. There has been a huge surge of 58.36% in wholesale unbundled local loops (fully unbundled lines and shared access lines), from 8.77 million in October 2005 to more than 13.89 million, in October 2006, representing 7.53% of the PSTN lines in the EU25. This increase comprises approximately 4.13 million fully unbundled lines and 0.98 million shared access lines. The number of shared access lines increased from 3 558 205 to 4 541 045 lines, while fully unbundled lines went up from 5 212 691 to a remarkable 9 348 125. Resale grew by 6 175 487 lines, which represent 123.64% growth since October 2005, while the number of wholesale bitstream access lines slightly declined.

Extract from the 12th EU implementation report extended to include Switzerland - 72 Fully unbundled lines and shared lines, as well as bitstream access, have not been implemented in Switzerland in the period concerned. This is why the figures for Switzerland in the three charts below are equal to “0”. Figure 55

Availability of wholesale access in the EU TOTAL: 30 192 760 Incumbent's PSTN activated main lines (million): 179 048 580

9 348 125 11 170 825

12 000 000

10 000 000

5 212 691 4 541 045 5 132 765 8 000 000 4 994 893 6 000 000 3 558 205 5 153 440

4 000 000 3 094 945 2 814 201 1 534 956 2 000 000 2 635 742 1 843 121 272 803 916 987 2006 2005 Fully 1 776 931 Shared access 2004 unbundled Bitstream lines Resale 2003 lines access

Fully unbundled lines Shared access lines Bitstream access Resale

Figure 56 EU wholesale fully unbundled lines by Member State

375 000 DE not to FR not to IT not to scale 336 321 scale scale Value: Value: Value: 4 300 000 1 584 853 1 826 000 300 000 264 160 269 577

225 000

172 079 162 368 161 219 150 000

107 000 90 835

75 000

17 772 18 825 7 192 7 752 10 178 4 214 933 279 6 350 218

BE CZ DK DE EE EL ES FR IE IT CY LT LU HU NL AT PT SI FI SE UK CH October 2005 October 2006

Data for Austria as of July 2006. Source for Switzerland: OFCOM Switzerland.

73 - Extract from the 12th EU implementation report extended to include Switzerland Figure 57 EU wholesale shared access broadband lines by Member State

600 000 FR not to UK not to scale 532 400 scale Value: Value: 1 928 280 677 160 500 000

438 484

400 000 376 000

342 000

300 000

200 000

84 901 100 000 76 428 43 000

17 715 8 641 6 491 5 711 1 066 2 102 2 554 107 3

BE CZ DK DE EL ES FR IE IT CY LU HU NL AT PT SI FI SE UK CH October 2005 October 2006 Data for Austria as of July 2006. Source for Switzerland: OFCOM Switzerland.

Figure 58 EU wholesale bitstream access broadband lines by Member State

1 200 000 FR not to scale Value: 1 075 000 1 617 996 730 1 000 000

800 000

600 000

404 241 400 000

252 254

200 000 118 583 142 20 2 117 965 89 197 86 962 85 224 62 769 60 408 19 634 1 300 885 2 388

BE CZ DK DE EL ES FR IE IT LV LT HU AT PT SI FI UK CH October 2005 October 2006

Data for Austria as of July 2006. Spain: A sharp decline generally due to a change in the counting methodology. Source for Switzerland: OFCOM Switzerland.

6.3. Retail broadband access This section provides information on the deployment of broadband access lines by incumbents (and their subsidiaries or partners) and by new entrants (alternative telecom operators or Internet Service Providers) to end-users. Internet broadband access can be provided by different means: DSL lines, wireless local loop (WLL), cable TV access (cable modem), dedicated leased lines and other access (like satellite, fibre optic, powerline communications,

Extract from the 12th EU implementation report extended to include Switzerland - 74 etc.). New entrants’ DSL lines can be provided to end users by means of fully unbundled or shared access lines, bitstream access or resale. In some Member States, new entrants have started rolling out parallel DSL networks. In all the charts below on fixed broadband retail lines the data refer to 1 October 2006. In some cases only estimates are available. The charts below only include fixed broadband lines. Figure 59 shows the total number of broadband access lines for each Member State and in Switzerland, provided by both incumbents and new entrants, and including all types of fixed broadband connections. In October 2006, Switzerland had 1’950’000 broadband lines (active customers). Note that 1’305’000 customers are connected using ADSL technology and 645’000 are connected by cable modem. In the international comparison, Switzerland is on a par with countries such as Poland and Denmark, i.e. in the company of countries with a low proportion of the European market (about 2.6% of the European market for Switzerland). Figure 59 CH and EU broadband lines by Member State, October 2006

16 000 000

14 000 000 13'485'800 12'324'391

12 000 000 11'920'638

10 000 000

8 000 000 8'010'593

6 000 000 6'074'991 4'867'522

4 000 000 87 5 2'295'675 82 2'220'850 67' 9 1'950'000 2 3 53

1'727'211

2 000 000 1'595'390 51 6 1'424'024 1' 1'310'096 67' 89 3' 984'279 8 566 8 69' ' ' 43 3 315'275 252'928 231'324 233'512 212'883 90'581 56 49

MT CY LU LV EE SK SI LT EL IE HU CZ AT FI PT DK PL SE BE NL ES IT FR UK DE CH DSL lines Other technologies (cable, satellite, wireless local loop, PLC, FTTH) Data for Austria as of July 2006. The estimate of the Austrian NRA for October 2006 is 1 357 405 lines. According to Danish NRA 25.900 new entrants' cable and 37.747 new entrants' other (LAN) lines, provided by non-profit user associations should be added, even though the associations are themselves end-users. Source for Switzerland: Swisscom, Swisscable; OFCOM Switzerland estimations (cable modem services). Note: Leased line, optical fibre, PLC, satellite, WLL, etc. services are not included. Only ADSL and cable modem services are taken into account.

75 - Extract from the 12th EU implementation report extended to include Switzerland The following chart presents the number of broadband lines per Member State and Switzerland in October 2005 and October 2006. An examination of Figures 60 reveals that the growth in broadband connections in Switzerland was quite moderate between October 2005 and October 2006 in comparison with previous years (+ 23% for total broadband connections). This situation can also be observed in most of the European Union countries. Almost all the countries saw a significant increase in the number of broadband connections between July 2002 - October 2004, and more moderate one in the observed period. The exception is represented by Latvia, Cyprus, Poland, and Slovakia where broadband connections were introduced in 2004 or even later, and also Greece and Ireland. These countries now enjoy substantial growth in the number of subscribers. It is therefore advisable to be cautious with the growth rates since the countries are not all in the same phase of market development, some being more advanced in their progress along the S-curve and hence showing lower growth rates (consolidation of the market). Figure 60 Total fixed broadband retail lines 0

16 000 000 0 5 8 8 391 3 48

14 000 000 24 0 6 13 3 2 92 1

12 000 000 11 3 10 000 000 9 0 5 1 01 9 8 000 000 8 4 9 2 07 6

6 000 000 67 52 8 4 5 0 7 0 5 1 0 0 4 1 7 6 9

4 000 000 5 6 0 8 2 0 9 7 2 58 2 5 3 29 7 22 4 0 8 9 95 3 5 2 4 2 10 09 3 2 2 72 1 5 59 7 367 1 2 1 3 42 1 7 2 6 0 1 928 2 000 000 1 88 1 3 5 1 1 9 6 984 5 2 1 3 3 5 58 56 19

52 86 212 36 43

31 2 23 23

90 56 53

BE CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI SE UK CH October 2005 October 2006 Data for Austria as of July 2006. According to Danish NRA 25.900 new entrants' cable and 37.747 new entrants' other (LAN) lines, provided by non-profit user associations should be added, even though the associations are themselves end-users. Source for Switzerland: Swisscom, Swisscable; OFCOM Switzerland estimations (cable modem services). Note: Leased line, optical fibre, PLC, satellite, WLL, etc. services are not included. Only ADSL and cable modem services are taken into account. The following two charts show the breakdown of broadband lines according to the two main types of technologies. Figure 61 shows the number of DSL lines. Amongst the technologies other than DSL (Figure 62), cable modem is the most common technology. Other technologies are still marginal, though some (fibre to the home and WLL) are quickly developing. An examination of Figures 61 and 62 shows that the growth in broadband connections in Switzerland was as follows: • + 29% for ADSL broadband connections (Figure 61); • + 13% for cable modem broadband connections (Figure 62). In the most countries DSL access enjoyed higher growth rates than the other means of accessing the internet (CATV, etc.).

Extract from the 12th EU implementation report extended to include Switzerland - 76 Figure 61 Total DSL retail lines

16 000 000 8

14 000 000 3 12 944 300

12 000 000 1 11 260 6

10 000 000 9 335 49

8 000 000 7 673 068

6 000 000 4 792 705

4 000 000 7 000 2 982 560 128 0 4 05 000 8 7

2 000 000 350 2 1 451 1 430 898 1 3 1 300 1 109 389 982 1 892 747 538 248 781 408

441 9 366 318 750 171 467 157 594 155 018 112 996 92 072 82 083 56 2 32 854

BE CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI SE UK CH October 2005 October 2006 Data for Austria as of July 2006. Source for Switzerland: Swisscom. Note: Only ADSL service is taken into account. Figure 62

Total fixed broadband retail lines with technologies other than DSL 3 500 000 900

3 000 000 2 988

2 500 000

2 000 000 1 884 962

286

1 500 000 1 282 3 000

1 000 000 864 777

277 769 850 45 000

660 613 28 6

7 542 295

528 688 541 500

531

427 083 811

500 000 337 525 329 034

3 258 198

160 25 118 328

81 461 114 769 498 75 918 120

20 336

3 30 339 8

BE CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI SE UK CH

October 2005 October 2006

Data for Austria as of July 2006. According to Danish NRA 25.900 new entrants' cable and 37.747 new entrants' other (LAN) lines, provided by non-profit user associations should be added, even though the associations are themselves end-users. Source for Switzerland: Swisscable; OFCOM Switzerland estimations (cable modem services). Note: Leased line, optical fibre, PLC, satellite, WLL, etc. services are not included. Only ADSL and cable modem services are taken into account. The following charts provide information on the national broadband markets according to the technology used and the type of operator. Figure 63 shows that DSL is the predominant technology in the EU. On average, 82% of the EU25 broadband lines use DSL technologies and only in four countries DSL lines represent less than 50% of the overall market.

77 - Extract from the 12th EU implementation report extended to include Switzerland Following the example of Sweden, Slovakia or Slovenia, the broadband access market in Switzerland is split in favour of the DSL technologies (only ADSL technology is considered in the case of Switzerland). As the broadband market develops in Switzerland, this proportion, relatively equal in July 2003, is constantly changing and cable modem technology is losing in growth rates and proportion of customer base. A broader coverage and publicity campaigns launched by the many resellers of the Swisscom wholesale product largely explain this trend. Figure 63 Total fixed broadband retail lines by technology, October 2006

100% % % 9% 6% 4 4 1% 1% 57% 55% 51% 51% 40% 39% 38% 38% 38% 38% 37% 35% 33% 32% 26% 25% 24% 21% 19% 18% 33% 90%

80%

70%

60%

50%

40%

30%

20%

10%

0% 43% 45% 49% 49% 60% 61% 62% 62% 62% 62% 63% 65% 67% 68% 74% 75% 76% 79% 81% 82% 91% 94% 96% 96% 99% 99% 67% LV CZ EE LT AT NL DK MT HU BE PT SE SK SI IE PL UK ES FI EU25 LU FR IT DE EL CY CH DSL Other means Data for Austria as of July 2006. Red line represents the EU average. Source for Switzerland: Swisscom, Swisscable; OFCOM Switzerland estimations (cable modem services). Note: Leased line, optical fibre, PLC, satellite, WLL, etc. services are not included. Only ADSL and cable modem services are taken into account.

With regard to the market share of fixed incumbent operators and new entrants, Figure 64 indicates that, on average, incumbent operators control 48% of broadband lines, which is 2 percentage points less than in October 2005. The proportion of broadband connections held by the retail subsidiary of the historic operator is slightly lower than the European average. In Switzerland, the competing operators had 55% of all broadband connections in October 2006 (however, 72% in July 2003 and 64% in July 2004, 59% in October 2005).

Extract from the 12th EU implementation report extended to include Switzerland - 78 Figure 64 Fixed broadband retail lines market share by operator, October 2006 100% % % % % % % % % % % % % % % % % % % % % % % % % % % 2% 75 63 61 60 60 57 55 53 52 52 51 51 51 49 46 45 44 38 36 34 32 31 31 31 25 55 90%

80%

70%

60%

50%

40%

30%

20%

10% % % % % % % % % % % % % % % % % % % % % % % % % % % %

0% 25 37 39 40 40 43 45 47 48 48 49 49 49 51 54 55 56 62 64 66 68 69 69 69 75 98 45 UK CZ SE AT MT LV NL BE EU25 FR DE IE LT HU EE SI ES DK EL SK IT PL FI PT LU CY CH Incumbents New entrants Data for Austria as of July 2006. Red line represents the EU average. Source for Switzerland: Swisscom, Swisscable; OFCOM Switzerland estimations (cable modem services). Note: Leased line, optical fibre, PLC, satellite, WLL, etc. services are not included. Only ADSL and cable modem services are taken into account.

However, differences in the incumbents' market share depending on whether DSL resale lines are included or not are considerable. In Germany, Luxemmburg, United Kingdom, Malta, and Switzerland these differences are more than 10%, and up to 44%.

Figure 65

Incumbent's Broadband market share excluding/including resale lines by alternative operators October 2006 100%

90% 98.3%

80% 85.7% 70% % % % % % 1 1 4 . . 6 5 .

60% 70.1% 69 69 68.5% 68. 67. 67 66.9% % % 2 63.7% 63.5% . 6 . %

50% 5 59.5% 59 . 57 % % 54 4 0 . . % 51.4% 50.7%

40% 9 49 49.0% . 49 44 44.8% 43.2%

30% 39.7% 36.9%

20%

10%

0% 47.2% 62.3% 48.6% 63.7% 55.8% 48.2% 49.0% 67.5% 75.5% 44.9% 39.7% 69.1% 69.1% 38.9% 24.8% 98.3% 36.9% 54.5% 50.7% 42.9% 49.0% 36.6% 68.5% 65.9% 54.6% 45.4% BE DK DE EL ES FR IE IT LU NL AT PT FI SE UK CY CZ EE HU LV LT MT PL SK SI CH Incumbents no resale Incumbents + DSL resale Data for Austria as of July 2006 Source for Switzerland: Swisscom, Swisscable; OFCOM Switzerland estimations (cable modem services). Note: Leased line, optical fibre, PLC, satellite, WLL, etc. services are not included. Only ADSL and cable modem services are taken into account.

79 - Extract from the 12th EU implementation report extended to include Switzerland Figure 66 presents the market share by operator in the DSL retail market. At EU25 level the fixed incumbent operator provides 57% of DSL lines. In 9 Member States the incumbent operator sells more than 80% of all DSL retail lines. In Switzerland, the ADSL market is split in favour of the historic operator which has 68%, the other 32% of the connections are held by competing operators. In the international comparison, as the result of the constant growth of the incumbent’s market share (from 59% in July 2004 to 64% in October 2005, and to 68% in October 2006), Switzerland is loosing its balanced position as regards the division of the market. Moreover, resale is the only means accessible to the alternative operators, apart from the construction of their own access network, for them to market their own products. However, unlike the possibilities offered by unbundling and bitstream, resale limits the added value which the alternative operator can bring to the value-creation process.

Figure 66

DSL retail lines market share, October 2006 100% % % 9% 3 2 2% 2% 1% 67% 50% 49% 43% 42% 36% 36% 34% 33% 30% 29% 29% 29% 27% 27% 26% 24% 20% 18% 18% 32% 90%

80%

70%

60%

50%

40%

30%

20%

10%

0% 33% 50% 51% 57% 58% 64% 64% 66% 67% 70% 71% 71% 71% 73% 73% 74% 76% 80% 82% 82% 91% 97% 98% 98% 98% 99% 68% UK DE FR EU25 SE EL MT IE AT IT ES FI DK HU NL PT BE SI LU CZ PL EE SK CY LT LV CH Incumbents New entrants Data for Austria as of July 2006. Red line represents the EU average. Source for Switzerland: Swisscom, Swisscable; OFCOM Switzerland estimations (cable modem services). Note: Leased line, optical fibre, PLC, satellite, WLL, etc. services are not included. Only ADSL and cable modem services are taken into account.

The next series of charts provide further information on the trends observed in the three segments analysed previously. As can be seen in figure 67, new entrants are steadily increasing their presence in the overall broadband market, with an average 52% market share against 50% a year ago. This trend is however not uniform, and in 13 countries (Denmark, Estonia, Spain, France, Lithuania, Malta, the Netherlands, Austria, Poland, Finland, Sweden, the United Kingdom, and Switzerland) the fixed incumbent operator has increased its market share. In Switzerland, this situation is explained by the substantial expansion in absolute terms of the number of broadband ADSL connections (greater than the expansion of cable modems). More than half of the connections are held by the subsidiary of the historic operator.

Extract from the 12th EU implementation report extended to include Switzerland - 80 Figure 67

Trends in the fixed broadband retail lines market share: New entrants 100%

90%

80%

70% 75%

60% 63% 63% 61% 60% % 50% 57% 55% 55% 53 52% 52% 51% 51% 51% 40% 49% 46% 45% 44%

30% 38% 36% 34% 32% 31% 31% 31% 20% 25%

10% 2% 0% 52% 40% 35% 26% 48% 55% 41% 30% 24% 57% 61% 22% 33% 64% 75% 0% 60% 47% 47% 43% 58% 73% 37% 18% 38% 50% 59%

E E R I E K Y E U T L K I 5 H EL F IE IT LU NL AT PT F CZ LV L P S B DK D ES S U C E H MT S U2 C E October 2005 October 2006

Data for Austria as of July 2006. Source for Switzerland: Swisscom, Swisscable; OFCOM Switzerland estimations (cable modem services). Note: Leased line, optical fibre, PLC, satellite, WLL, etc. services are not included. Only ADSL and cable modem services are taken into account.

With regard to the trend in the number of DSL lines sold by incumbent operators in the same period, there has been a reduction of 4 percentage points on average, from 61% in October 2005 to 57% in October 2006. Between the two observed periods, the subsidiary of the Swiss historic operator gained 4 points of market share in the ADSL access segment. This upward trend puts it in the minority of the European Union countries, in which the historic operator or its subsidiary has managed to reverse the trend and consolidate its situation. Figure 68

Trends in the DSL retail lines market share: Incumbents 100% 99% 98% 98% 98%

90% 97% 91% 80% 82% 82% 70% 80% 76% 74% 73% 73% 71% 71% 71% % 70% 68%

60% 67% 66 64% 62% 58%

50% 57% 51% 40% 50%

30% 33% 20%

10%

0% 78% 72% 67% 74% 67% 48% 76% 73% 84% 72% 69% 85% 68% 56% 34% 100% 88% 98% 74% 98% 97% 47% 92% 100% 96% 61% 64%

L R IT T FI E K E U 5 H BE DK DE E ES F IE LU NL AT P S U CY CZ E H LV LT MT PL SK SI C EU2

October 2005 October 2006

Data for Austria as of July 2006. Source for Switzerland: Swisscom, Swisscable; OFCOM Switzerland estimations (cable modem services). Note: Leased line, optical fibre, PLC, satellite, WLL, etc. services are not included. Only ADSL and cable modem services are taken into account.

81 - Extract from the 12th EU implementation report extended to include Switzerland As it can be seen in Figure 69, the number of DSL lines has increased in the overall broadband retail market, representing 82% of all broadband lines against 80% in October 2005. However, in a number of countries other technologies have increased at a higher rate. Like the majority of the European Union countries, Switzerland increased the proportion of the number of DSL connections (ADSL only for Switzerland) compared with the total number of activated broadband connections. This is not at all surprising since in Switzerland the growth enjoyed by ADSL in absolute terms is higher than that of cable modems. In the observed period the ADSL market share increased by 3 percentage points. Figure 69

Trends in DSL retail lines as % of total broadband access lines 100% 99% 90% 99% 96% 96% 94% 91% 80% 82% 81% 70% 79% 76% 75% 74% 68% % 60% 67% 67% 65% 63 62% 62% 62% 61% 60% 50% 59% 49% 40% 49% 45% 43% 30%

20%

10%

0% 62% 63% 97% 98% 77% 94% 76% 94% 89% 60% 56% 57% 79% 65% 72% 96% 44% 48% 65% 57% 43% 58% 69% 82% 63% 80% 64%

L R IT T FI E K E U 5 H BE DK DE E ES F IE LU NL AT P S U CY CZ E H LV LT MT PL SK SI C EU2

October 2005 October 2006

Data for Austria as of July 2006. Source for Switzerland: Swisscom, Swisscable; OFCOM Switzerland estimations (cable modem services). Note: Leased line, optical fibre, PLC, satellite, WLL, etc. services are not included. Only ADSL and cable modem services are taken into account.

The following chart shows the penetration rate for broadband lines measured as the total number of broadband lines divided by the total population. The broadband penetration rate varies significantly across Member States ranging from 3.3% in Greece to 29.8% in the Netherlands. In October 2006, the penetration rate of broadband access in Switzerland was one of the highest in Europe (26%), and was equal to the penetration rate in Finland. Only Denmark and the Netherlands had higher rates. Nor is it surprising to note that it is primarily the countries with a low population and a relatively high gross domestic product per capita which are in the lead in terms of broadband penetration.

Extract from the 12th EU implementation report extended to include Switzerland - 82 Figure 70

EU Broadband penetration rate, 1 October 2006 30% % .4% 29.8 29 %

25% 0 . .0% 26 26 .5% 24 % 8 20% . % 21 4 . .7% % 20 0 . 19 19 % 2 % . % 6 .

15% 17 7% 16 16.4 15. % % 9 . .6% % 13 13 .6% 3 13.5 . 12

10% 12 3% % % % 10. % 9.6 9.3 9.3 8.6

5% 7.4% % 3% 4.5 % 4. 3.3 0% EL SK PL CY HU LT LV CZ IE MT SI PT IT ES EU25 DE AT EE FR LU UK BE SE FI DK NL CH

Data for Austria as of July 2006. The estimate of the Austrian NRA for October 2006 is 16.4%. Source for Switzerland: Swisscom, Swisscable; OFCOM Switzerland estimations (cable modem services). Note: Leased line, optical fibre, PLC, satellite, WLL, etc. services are not included. Only ADSL and cable modem services are taken into account.

83 - Extract from the 12th EU implementation report extended to include Switzerland

Availability of wholesale access October 2006 Country Incumbent’s Fully unbundled lines supplied by the Shared access lines supplied by the Wholesale DSL lines supplied PSTN incumbent to new entrants incumbent to new entrants activated Unbundled lines Requested N. of Shared lines Requested No. of Bitstream access Simple resale main lines lines agreements lines agreements No. of lines No. of Resale No. of agreements No. of lines agreements BE 4 147 659 17 772 464 9 17 715 87 9 252 254 13 49 657 18 CZ 2 902 064 7 192 5 8 641 5 62 769 23 DK 3 123 853 90 835 21 84 901 8 89 197 13 19 460 10 DE 38 300 000 4 300 000 101 43 000 17 1 300 5 2 900 000 24 EE 462 000 4 214 77 7 EL 5 401 989 7 752 639 13 5 711 251 6 118 583 15 221 025 ES 15 434 815 336 321 10 000 16 438 484 10 000 13 404 241 30 383 950 2 FR 32 359 000 1 584 853 1 928 280 1 617 023 IE 1 700 000 18 825 699 5 1 066 3 5 86 962 11 IT 21 278 077 1 826 000 44 800 27 342 000 8 300 9 1 075 000 250 CY 410 735 933 971 2 2 3 2 LV 600 000 2 2 885 11 LT 749 233 279 1 2 388 12 LU 224 620 6 350 230 5 102 5 9 227 7 HU 3 243 000 218 232 6 2 554 397 5 142 202 20 n.a. n.a. MT 202 331 11 284 11 NL 6 125 000 264 160 10 532 400 10 confidential 5 AT 2 842 730 162 368 107 117 965 PL 8 487 627 0 0 0 0 0 0 0 4 0 0 PT 3 434 030 172 079 5 561 4 3 1 60 408 8 SI 817 178 10 178 1 801 3 6 491 1 124 3 19 634 13 6 935 4 SK 1 073 987 3 883 12 FI 2 210 088 269 577 76 428 85 224 SE 5 127 000 107 000 n.a. na 376 000 n.a. na na na 130 000 n.a. UK 23 793 553 161 219 55 677 160 31 996 730 28 7 434 959 591 EU15 165 502 414 9 325 111 62 393 265 4 523 357 18 641 113 4 904 887 378 11 148 278 652 EU10 18 948 155 23 014 3 081 26 17 688 1 524 17 227 878 83 22 547 27 EU25 184 450 569 9 348 125 65 474 291 4 541 045 20 165 130 5 132 765 461 11 170 825 679 CH 2 892 000 0 0 0 0 0 0 0 0 419 000 23

Data for Austria as of July 2006. Spain: Please note that the counting methodology for bitstream and resale DSL has changed.

Extract from the 12th EU implementation report extended to include Switzerland - 84

BROADBAND RETAIL LINES, OCTOBER 2006

October 2006 New entrants' DSL lines on PSTN October 2006 Incumbents'access lines by other means New entrants' access lines by other means Own Fiber Fiber Incumbent' networ Shared Bitstream Cable Lease 3 to the Satellit PL Cable Lease to the s DSL lines k Full ULL access access Resale Total WLL modem d lines G home e C Other Total WLL modem d lines 3G home Satellite PLC Total BE 1083397 12672 10984 274188 49657 347501 0 6249 857216 1189 864777 CZ 363382 0 7192 8641 62769 0 78602 0 0 0 0 0 0 0 0 306250 210000 0 22000 4000 45 542295 DK 699794 30 111415 65107 86768 18993 282313 10954 273866 3046 5636 293502 16955 201965 4036 20697 147 98 319781 DE 6500000 3500000 43000 1300 2900000 6444300 51000 3000 54000 428000 50000 9500 487500 EE 109153 1103 2700 0 0 40 3843 1447 0 0 15326 0 0 74 16847 5781 56249 0 23502 0 0 101481 EL 234304 0 7752 5711 118583 0 132046 0 0 896 0 330 0 0 1226 466 0 1131 480 2077 ES 3387955 4679 336321 438484 404241 221025 1404750 n.a. 4222 4222 10588 1245015 14090 1389 1643 3695 1278064 FR 5746532 1584853 1928280 1617023 383950 5514106 0 660000 660000 IE 211897 18825 1066 86962 106853 343 343 62462 46861 5103 114426 IT 5382000 325 945963 306933 1037190 657 2291068 0 0 407 221 25680 0 194 26502 1198 20 4609 222196 83000 311023 CY 55294 933 0 0 0 933 273 22 295 0 40 2 44 LV 91129 139 10 119 675 943 249 249 9831 32004 18122 6677 440 1349 120562 LT 152630 0 0 0 2388 0 2388 0 114 59 1785 1958 23555 61010 1348 19359 158299 LU 67406 5348 102 0 9227 14677 0 743 216 0 959 77 7452 10 0 7539 HU 393274 218 2554 142202 n.a. 144974 4700 40574 1500 n.a. n.a. 0 n.a. 46774 29600 248160 3500 1000 n.a. 0 282260 MT 18269 11284 11284 0 20336 20336 confidenti NL 2186000 264160 532400 al 796560 0 1801962 83000 1884962 AT 520041 143301 101 117965 261367 0 17742 502546 1000 1000 5200 528688 PL 1177224 122904 0 0 0 0 122904 0 272 0 0 0 0 6029 6301 11203 395641 5373 1144 97 0 420782 PT 657913 164936 3 69895 n.a. 234834 n.a. 325482 1049 n.a. n.a. n.a. n.a. 326531 2797 198764 1685 1500 204746 SI 137701 0 10178 6636 9287 7665 33766 0 237 0 182 0 0 0 419 122 78261 0 1935 0 0 81042 SK 153711 0 0 0 0 3883 3883 0 256 256 2800 30761 1082 28343 26 75662 FI 788166 159571 76428 85224 321223 1513 92136 63555 157204 2616 81375 984 100994 SE 838000 n.a. 107000 376000 0 130000 613000 0 0 2000 24000 26000 8000 420000 5000 310000 850 0 743850 UK 3060475 65423 161219 677160 5371214 6275016 0 2500 2980400 6000 2988900 EU15 31363880 70457 7523336 4461759 3899339 9084723 25039614 12467 692227 58614 24221 33575 0 69385 890489 131650 9431576 31750 643865 142640 20977 10497327 EU10 2651767 124007 21360 17841 216765 23547 403520 6396 41083 2143 15567 0 0 7910 73099 389142 1132422 29465 103960 4565 1394 1802763 EU25 34015647 194464 7544696 4479600 4116104 9108270 25443134 18863 733310 60757 39788 33575 0 77295 963588 520792 10563998 61215 747825 147205 22371 1.2E+07 CH 886 000 0 0 0 0 419000 419000 n.a. 0 n.a. 0 n.a. n.a. n.a. n.a. 0 n.a. 645000 n.a. 0 n.a. n.a. n.a. 645000

Data for Austria as of July 2006. According to Danish NRA 25.900 new entrants' cable and 37.747 new entrants' other (LAN) lines, provided by non-profit user associations should be added, even though the associations are themselves end- users. Spain: Please note that the counting methodology for bitstream and resale DSL has changed.

85 - Extract from the 12th EU implementation report extended to include Switzerland 6.4. Prices for unbundled local loop This section illustrates the cost of connection and monthly rental for both full unbundled access and shared access to the loop. Monthly rental and connection fees are presented as well as the total average monthly cost (over three years). It is assumed that the loop is active and it will be used to provide both telephony and DSL services. In some Member States where a whole range of additional one-off costs may exist, are not considered in the chart. These may include cost of co-location, of the cable termination point, installation at the end-user premises, or disconnection, etc. Unless otherwise stated, LLU/SA connection fees include the technical expertise to assess the speed that can be conveyed through and exclude the cost of co-location. Furthermore, charges in Member States may be different in the case of subsequent access. Only the price for a single line is presented here. Data is not always comparable with that of the previous report, due to changes in methodology occurring in some countries. In Switzerland, fully unbundled access and shared access, as well as bitstream access, have not been implemented by the considered date. For this reason, Switzerland will not be included in the comparisons made in this part of the document.

6.4.1. Monthly average total cost

The following charts illustrate the monthly total cost for the full LLU and shared access (connection and monthly fees) based on the assumption that the loop is used for three years. EU average since 2004 is also shown.

Figure 71

Monthly average total cost per full unbundled loop EU average October 2006: 11,51€ 23

20 8 . 19.5

18 18 3 . 16.8 16.7 6 16.5 15 3 1 . 1 . 15.9 5 nth 15.6 5 15.5 1 0 1 15.0 15.0 14.5 .2 13 14. 3 5 . 13.4 1 8 8 . 12.7 . 12.6 12 1 1 1 12.0 . 9 8 1 11.8 1 7 . . 5 5 11.6 11.6 1 . 11.5 . . .5

10 0 0 1 11.1 11.0 0 0 10.9 1 8 10.7 1 6 10.7 10 . 1 1 10 . 3 10.4 9.9 9 9.8 . 10.1 9.6 9 10.0 9 9.1 Euro per mo 8 8.7

5

3

0 BE CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI SE UK October 2005 October 2006 EU average Oct. 2006

Extract from the 12th EU implementation report extended to include Switzerland - 86 Figure 72 Monthly average total cost per shared access EU average October 2006 : 4,53 € 16

14 15.3

12 13.2 h 10 .2 ont 10 1 9.5 m . 9.4 8 r . 9 5 8.8 8 . 8 2 . 8 8.4 8.3 8 8.2 7 pe . 4 . 7 o 7.4 7 7.4 9 r . 6.9 6 u 6 E 8 . 6 . 5.9 5.8 5 5.6 2 5.6 5.6 5.6 5 . 5.2 5 4.9 4 4.8 4 . 0 0 4.4 4 . . 7 . 4 4.0 4 3.8 4 3.7 3 . 2 2 3.6 3.6 . . 3.4 3 3.2 3 3.2 3 3.0 2 3.0

0 1.2 BE CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI SE UK October 2005 October 2006 EU average Oct. 2006

Figure 73

L.L.U. monthly average total cost in EU

16

13.35 14 12.71

11.51 12

10 month 8

5.69 ro per 6 5.12 4.53 Eu

4

2

0 2004 2005 2006

Fully unbundled lines Shared access lines

Figure for 2004 do not include Malta, Poland and Slovakia.

87 - Extract from the 12th EU implementation report extended to include Switzerland 6.4.2. Connection and monthly rental for full unbundled local loop Figure 74 Prices per full unbundled loop - Connection EU average Oct. 2006: 65,93 €

250 9.7 24

200 6 . 9 9.6 6 150 3.2 1 16 0 . 16 o 7 7 155.5 . 4 8 148.2 1 3 0 1 . Eur 136.4 1 1.0

100 2 1 12 85.1 82.1 9 8 0 4 . 5 . 0 . 68.9 0 . . 6 50 . . 9 . 8 0 1 8 7 .3 6 6 . . 5 5 5 58.8 5 58.0 5 57.4 1 5 5 2 9 0 0 5 9 . 53 . 53.4 . 52.5 . 0 51 0 5 5 50.0 50.1 .6 . .0 3 . 9 2 0 5 . 44.6 40 43.8 8 43.1 4 8 . 7 4 4 40.9 . 3 38 3 38 1 3 8 3 33.9 3 31.5 2 0 14.3 BE CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI SE UK

October 2005 October 2006 EU average Oct. 2006

Line test to assess the speed that can be conveyed through is included in all countries except Poland, Austria and Estonia. No information is available for Germany; Slovenia, The Netherlands, Finland and Slovakia. Belgium: Additional costs are charged to the incumbent if a cable termination point is not present. The connection fee for a non-active loop is 47,47 € Ireland: The connection charge becomes lower as the cumulative volume of the order increases (above 20 000 lines). Italy: Price not approved by NRA. The connection fee for a non-active loop is 55,7 €. Austria: Disconnection fees are included. The connection fee for a less than 1 year duration contract is 54.50 €. Poland: Prices applied from 5 October 2006. Price for splitter is not included. Finland: Weighted average of 39 SMP operators providing LLU. Prices vary between 80 € and 202 €. Figure 75 Prices per full unbundled loop - Monthly rental EU average Oct. 2006: 9,67 €

16 1 7 .7 .

14 15. 4 14 1 14.5 14.2 12 12.9 12.7 6 . 3 2 1 . . 9 11.7 1 1 . 1 7 nth . 11.4 11.3 1 11.3 0 1 10 11.2 0 1 10.8 9 9 10.7 10.7 1 10.6 7 7 . 10.6 6 5 . 9. 9 . 9. 9. 9.6 9.6 9 9 0 9.4 . 9.3 7 9.1 r mo 9.0 9 8.9 4 3 .

8 8.7 8. . 8.6 e 8.4 8 8.3 8 8 . 8.1 8.1 p 7.8 7

ro 6 u E 4

2

0 BE CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI SE UK

October 2005 October 2006 EU average Oct. 2006

Italy: Price not approved by NRA. Poland: Prices applied from 5 October 2006. Finland: Weighted average of 39 SMP operators providing LLU. Prices vary between 7.9 € and 21 €.

Extract from the 12th EU implementation report extended to include Switzerland - 88 6.4.3. Connection fees and monthly rental for shared access Figure 76 Prices per shared access - Connection EU average October 2006: 59,72 €

180 3 3 . 8 7 3 178. 160 1 166. 140

120 6 6 . . 1 2 0 0 121 1 .

100 9 o 0 0 0 r 9 109. 1 2 . 6 6 9 100. 100. 2 95. Eu

80 6 2 2 9 90. 8 7 86. 8 82. 81. 81. 80. 78. 9 77. 0 60 73. 7 68. 0 0 0 0 . 65. 0 0 2 . . 8 7 7 4 4 1 6 1 59. . . 5 8 8 58. 5 1 . 4 5 56. 1 1 55. 5 5 . 54. 8 . 0 51. 40 5 5 51. 6 6 50. 50. . 6 48. 4 4 0 0 4 47. 4 2 . 4 9 9 4 8 . 40. 39. 38. 3 3 37. 33. 20 3 4

0 15. BE CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI SE UK

October 2005 October 2006 EU average Oct. 2006

Line test to assess the speed that can be conveying through is included in all countries except Poland and Austria. No information available for Germany; Estonia; Italy, Slovenia; Sweden, the Netherlands and Slovakia. Figures include the cost of the splitter provided by the incumbent apart from Italy, Belgium; Estonia; Latvia and Ireland. In Malta, Portugal, Austria and Ireland, the splitter is provided by alternative operators. No information is available on this cost for Germany; Italy; Cyprus; Lithuania and Sweden. In France and Czech Republic the cost of the splitter is included in the monthly rental. In Slovenia the cost of the splitter is included in the connection fee if the splitter is placed at the collocation facilities. Belgium: Additional costs are charged to the incumbent if existing cable termination point is not present. Estonia: Price for new loops only. Ireland: The connection charge becomes lower as the cumulative volume of the order increases (above 20 000 lines). Italy: Price not yet approved by NRA. Austria: Disconnection fees are included. Poland: Prices applied from 5 October 2006. Finland: Weighted average of 39 SMP operators providing LLU. Prices for the connection fee vary between 60 € and 201.83 €. Figure 77 Prices per shared access - Monthly rental EU average October 2006: 2,88€

12

10 3 10. h t 3 n 8 8. o 7 5 4 7. 7. 7. r m 3 e 6 6. 6 p 6 6 5 5 5 4 4 4 5. 5. 5. 5. 5. 5. 5. 5. 5. ro 7 7 7 7 7 5 u 4. 3 4. 4. 4. 4. 2 4 2 4. 1 E 9 4. 4. 4. 4. 3. 3 3 3 0 0 0 9 9 9 3. 3. 3. 8 7 3. 3. 3. 5 2. 2. 2. 2. 3 3 2.

2 . 1 2. 9 9 9 2. 2 9 8 8 . 2. 6 6 1. 1. 1. 1. 1. 1 1. 1. 7 0 0. BE CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI SE UK

October 2005 October 2006 EU average Oct. 2006

France, Luxembourg: Figures include the cost of the splitter. Poland: Prices applied from 5 October 2006. Slovenia: The cost of the splitter is included in the monthly rental if the splitter is placed at the end-users' premises. Finland: Weighted average of 39 SMP operators providing LLU. Prices for monthly rental vary between 4,31 € and 10,51 €.

89 - Extract from the 12th EU implementation report extended to include Switzerland 7. PUBLIC VOICE TELEPHONY TARIFFS

This section examines the charging system, the line rental charges and the main tariffs for public fixed voice telephony charged by the incumbent operators in each Member State in September 2006. The price trend over the past nine years is also analysed. The incumbent operators are: Belgacom for Belgium, Telefonica O2 for Czech Republic, TDC for Denmark, Deutsche Telekom for Germany, Elion for Estonia, OTE for Greece, Telefonica for Spain, France Telecom for France, Eircom for Ireland, Telecom Italia for Italy, CYTA for Cyprus, Lattelekom for Latvia, Lietuvos Telekomas for Lithuania, P&T Luxembourg for Luxembourg, T-Com for Hungary, Maltacom for Malta, KPN for the Netherlands, Telekom Austria for Austria, Polish Telecom for Poland, Portugal Telecom for Portugal, Telekom Slovenije for Slovenia, Slovak Telecom for Slovakia, TeliaSonera for Finland (formerly Sonera), TeliaSonera for Sweden (formerly Telia), and British Telecom for the United Kingdom. In Switzerland, the historic telecommunications operator is Swisscom. The incumbent operators still retain a large market share, but new entrants are increasingly gaining market share by offering cheaper prices for certain types of calls (usually long-distance (national) or international) or destination. The prices charged by incumbents do not necessarily, therefore, represent the lowest prices available. A comparison between the rates charged by incumbents and alternative operators for a sample of countries is also shown. The figures and information are taken from a study carried out for the Commission by Teligen, Harris Interactive UK. The data are collected from primary sources (i.e. directly from the incumbent operators). NRAs were given the possibility to check these data before finalizing this report. All NRAs, with the exception of Ireland, Italy, Latvia, Slovenia and Poland provided comments and approved these data. Different sets of charges for fixed national voice telephony services are shown in the following sections: - the minimum costs for different types of calls (local, long-distance (national), international calls and calls towards mobile networks), depending on the charging system adopted; - the monthly rental charged by incumbent operators; - the charges for a composite basket of calls (local, long-distance (national), international fixed calls and calls to mobile), that gives an estimate of the average monthly spending by a typical “European business/residential user” for the whole range (national and international) of calls; - the charges for a basket of national calls, that gives an estimate of the average monthly spending by a typical “European business/residential user” for fixed national calls; - the basket of international calls for each country that indicates the average price of a single call from the originating country to all other OECD destinations. In addition, the price of individual calls to specific destinations is also shown. - the price of some individual calls (3- and 10-minute local, long-distance (national) and international calls) at peak time, inclusive of any initial charge. For those countries where unit-based charging is used, the price of a whole unit is calculated. For the various types of calls, a benchmark based on a comparison with US and Japan is also included. For the USA, the prices for national calls are those charged by Verizon (in New York City) and the prices for international calls are those charged by AT&T. For Japan, the national call prices are those charged by NTT and the international call prices are those charged by KDD. The EU average tariffs shown in the charts are weighted average (by population of the Member States).

7.1. Charging system The billing system for public voice telephony services usually comprises two components: an initial charge applied at the beginning of a call and a charge for the remainder of the call (that may not depend on the type of initial charge used).

Extract from the 12th EU implementation report extended to include Switzerland - 90 7.1.1. Initial charges There are different types of charges applied at the beginning of a call, either alone or in combination. The charging method used for the remainder of the call may not depend on the type of initial charge used. The types of charges are: • Call set-up charge raised at the start of the call (when the call is answered). This charge does not offer any call time. Per second or per unit charges apply from the beginning of the call. • Initial charge that is used in the same way as call set-up, but in addition includes a certain number of seconds call time before normal time-based charging starts. • Unit charge in effect works the same way as the initial charge: A full unit is charged at the beginning of the call, providing a certain number of seconds call time until the next unit is charged. Depending on the principle used by the operator (synchronous/ asynchronous) the number of seconds call time in the first unit may be less than the specified unit duration. • Minimum charging is normally used with per second billing, to ensure the operator obtains a minimum revenue per call. If the call duration is short, the actual call charge may be less than the minimum charge. In such cases the minimum charge will be applied. In the calculation of the minimum charge for calls using per second billing it is assumed that the call is terminated as soon as it starts, making the minimum charge for the call equal to any call set-up or defined minimum call charge. If no such additional charges exist, the minimum charge will be zero. 7.1.2. Charging system during the call There are, in principle, 3 ways of charging calls. The fact that most operators tend to publish the duration charges on a per minute basis does not itself indicate which system is used. The 3 principles are: • Real time charging (also known as “per second billing”) allows the cost of the call to be calculated to the exact duration of the call (normally nearest second). A call set-up charge, initial charge or minimum charge may be applied to this structure, in addition to the duration charge. • Unit based charging uses a fixed price unit. The duration of this unit will vary with the destination of the call and time of day. Call duration will always be raised to a multiple of whole units, so the user will nearly always pay for more time than is used. A call set-up charge may be applied to this structure, but is relatively rare. • Fixed period charging uses a variable price, but fixed duration unit. The call is normally charged on a per minute basis, or per 6 seconds. The price for the period will vary with destination and time of day. The charged duration of the call will be raised to a multiple of whole periods. A call set-up charge or initial charge is often implemented in the form of a higher charge for the first minute or period. This initial charge may vary with destination and time of day. The real time charging method can be perceived to be the one fairest to the customer, as he/she will only pay for what is actually used. This does however not guarantee that this method will always give the lowest overall prices. What has happened in some countries is that when going from a unit-based system to real time charging the average per minute price have been kept the same. The cost per call has then often been seen to go up because an additional (and new) call set up charge has been added. Especially medium duration calls may suffer, depending on the price structure before and after the change. But it is no doubt that the real time charging method is more convenient to the user, as it is easier to understand and relate to. The added cost of call set up charges is by some operators offset by a duration allowance per call, making the first part of the call “free” once the call set up charge is levied. This provides a similar mechanism to the minimum charge used by some other operators. In Switzerland the historic operator applies a unit-based charging system (CHF 0.10 for x seconds) for all types of calls.

91 - Extract from the 12th EU implementation report extended to include Switzerland Figure 78

Minimum cost of local and long-distance calls, incumbent operator

14 .9 .8 5 .5 . 12

12 12 2 .2 12 1 12 2 2 2 . .0 1 11. 11. 1 11 10 .5 10 5 5 8 . 8. 8 0 0 uded . 9 9 8 l . 8. 8 7. 7 5 7. 7.7 3 7. inc 7. 4 4 3 3 . . 6 2 VAT 0 6. 6 6. 6 , 6. 6. nts 2 2 2 . e 0 . 5. 5 5. 8 8 . 5.0 5 4. 4 €-c 4 3 1 1 0 0 . 4. . 4. 4 4 4. 4 4 (60) . 1 1 1 1 3. 3 . . 9 9 . ) 3. 3. 3 3 3.0 2. 2 5 60 (

2 2. 7 7 . 4 1. 1 . 1.4 1 0 0 0 . 0. 0 0. 0 BE CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI SE UK JP USA CH Local calls 2006 Long distance calls 2006 DE, SI: No minimum or set-up charge. Source for Switzerland: OFCOM Switzerland. Figure 79

Minimum cost of a call to a mobile phone, incumbent operator

50

45 .9 45

40

35 0)

30 (6 included ) 25 .1 27 (60 VAT , ) nts

e 20 c (60 - € 60) .6 ( .9 60) ( 18 1 17 15 . 16 .3 .2 60) 2 13 13 10 ( .0 2 11. 2 0 9. 10 9 8. 8. 7. 7.7 4 3 5 7.2 2 6. 6. 0 0 5. 5. 4.8 6 9 7 4.1 4. 3.4 1. 0 2. 1. BE CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI SE UK JP USA CH

DE, SI: No minimum or set-up charge. Source for Switzerland: OFCOM Switzerland. Initial charges for international calls will normally follow similar rules as for national calls. Where unit based charging is used the initial period duration covered by the first unit may change with the destination. In most countries prices are the same for business and residential customers. Differences may occur in Austria, France, the UK and USA.

Extract from the 12th EU implementation report extended to include Switzerland - 92 Figure 80

Minimum cost of an international call 80 MT not to scale Value: 80.3 70 .2 60 64

50 uded .3 cl n 48 i 40 VAT nts,

30 0 . .0 ce - 1 € 3 31

20 .4 6 . 23 .5 .0 20 18 18 .6 8 8 7 . . . 3 2 3 . .3 .2 . 14 10 0 4 4 4 . .0 .0 1 13 2 13 2 0 0 . . . .4 5 . . 1 1 12 12 1 0 0 0 7 7 7 4 1 4 11 11 9. . 1 10 1 10 . 1 10 4 . 7 7. 7. 7 7. 0 7 1 5 8 5 9 4 ...... 6.4 6 4 1 4 1 4.9 0.0 4 2 0.0 4.8 4 0 3 3.4 0.0 2.5 4.0 1.7 4.1 1.5 BE CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI SE UK USA JP CH

Near Distant

DE, EL, SI: No minimum or set-up charge. Source for Switzerland: OFCOM Switzerland.

7.2. Monthly rental charged by the incumbent operators The following charts show the incumbent’s monthly line rental charges for residential and business users in September 2006 and September 2005. In order to reflect the real charges actually paid by users, values are expressed in €, including VAT for residential users and excluding VAT for business users. A number of countries have different rental charges for business and residential customers. In Finland and Japan the monthly rental will depend on where in the country the line is connected. The charges shown are for the capital/most densely populated area. In Switzerland, the monthly charge for an analogue connection (Economy Line) is CHF 25.25, including 7.6% VAT, which corresponds to 16.06€. In 2006, the price charged in Switzerland exceeded the weighted European average by about 1 €. In only four countries is the monthly charge higher than in Switzerland – in ascending order: the United Kingdom, the Netherlands, Luxembourg, and finally Ireland at the top with 24.18 €. With regard to the price of an analogue business line, exclusive of VAT, Switzerland is good placed in the international comparison, since the price charged, 14.93 €, is approximately equal to the weighted average of the 25 Union countries. The Netherlands, Luxembourg, Czech Republic, Austria, Italy, Ireland, the United Kingdom and Cyprus show higher charges than Switzerland.

93 - Extract from the 12th EU implementation report extended to include Switzerland Figure 81

Residential monthly rental 30

25 8 .1 24

20 d 0 e 4 . .16 5 ud l 18 .1 c 1 18 8 5 5 3 8 . 15 9 17 .06 . .9 .9 .5 6 T in .32 16 7 16 .00 15 15 15 57 . 15 15 .25 .95 15 14 37 14. 3 14 €, VA 13 5 7 . .44 13. .13 7 . 0 12 10 12 12 7 11 . 10 4 4 8.4 7.8 66 6 9 89 5 6. 5. 5. 07 5. 5 2 5 5 6 8 5 0 3 6 8 3 2 0 7 7 7 4 6 9 8 7 .1 .6 .9 .9 .1 .2 .9 .4 .1 .1 .9 .5 .3 .7 .7 .3 .5 .4 .0 .9 .1 .5 89 07 66 96 84 81 17 11 15 15 5. 14 15 12 5. 6. 18 12 5. 18 15 12 15 10 7. 11 13 15 6. 12 16 0 13 24 14 BE CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI SE UK USA JP CH Sep 2005 Sep 2006 EU 25 Sep 2006

Source for Switzerland: OFCOM Switzerland. Figure 82

Business monthly rental 40

35 92 34. 30

25 ed d clu 20 5 ex T .3 .98 0 A 9 .20 20 . 19 9 V , 4 19 3 18 . € 0

15 .6 6 17 .0 3 2 . 16 .9 16 3 .17 15 4 .75 7 14 0 1 . .35 .15 4 14 .76 .54 . .4 .4 13 13 13 13 10 8 12 0 12 2 12 12 12 .5 0 4 .1 . 2 9 10 60 10 10 9.2 8. 8. 87 1

5 1 6. 6. 7 9 6 5 0 7 3 0 2 5 6 0 2 8 0 1 5 1 3 3 0 8 5 .1 .4 .7 .7 .9 .1 .1 .0 .5 .1 .2 .9 .0 .9 .1 .4 .3 .1 .6 .9 .1 .9 .2 11 60 87 92 24 14 17 12 13 6. 11 13 12 8. 6. 16 12 13 15 18 10 12 8. 9. 10 12 20 13 16 14 0 13 19 15 BE CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI SE UK USA JP CH Sep 2005 Sep 2006 EU 25 Sep 2006 Source for Switzerland: OFCOM Switzerland. The following charts show the EU weighted average variation in nominal terms of the residential and business monthly line rental charge. Averages for EU25 and EU15 are presented. The same charts have been produced for Switzerland. Since the liberalisation of the telecommunications market, which generally took place in 1998, line prices have gradually increased in the European Union countries. This phenomenon is known as tariff re-adjustment. Its origin lies in the fact that lines were subsidised most of the time by revenue from calls. However, what was possible, or even desirable, in a monopoly is no longer so in a market which

Extract from the 12th EU implementation report extended to include Switzerland - 94 is supposed to function according to the rules of competition, and it became imperative to adapt prices to reflect actual costs. In Switzerland, this kind of re-adjustment is not observed; the only recorded changes were due to increases in VAT (increasing from 6.5% to 7.5% on 1 January 1999 and from 7.5% to 7.6% on 1 January 2001). The VAT in Switzelrand has been maintained at a 7.6% rate untill today. We note that the absence of increases in Switzerland had the positive effect of closing the gap which separated us from our neighbours. Figure 83 Residential rental per month 18

17 16.1 16.1 16.1 16.1 16.1 16.1 16.1 16

15

xcluded 15.0 14.7 T e 14 14.5 A

€, V 13.6 13 13.4

12 12.5

11 11.6

10 Aug 00 Aug 01 Aug 02 Aug 03 Aug 04 Sep 05 Sep 06 EU25 Weighted CH

Source for Switzerland: OFCOM Switzerland. Figure 84

Business rental per month 18

17

16 14.9 14.9 14.9 14.9 14.9 14.9 14.9 15 xcluded 14.8 T e 14

A 14.3 14.3

€, V 13.6 13 13.3

12 12.3 11.8 11

10 Aug 00 Aug 01 Aug 02 Aug 03 Aug 04 Sep 05 Sep 06 EU25 Weighted CH

Source for Switzerland: OFCOM Switzerland.

95 - Extract from the 12th EU implementation report extended to include Switzerland 7.3. Average monthly expenditure (composite call basket) The figures presented in this section are intended to provide an estimate of the average monthly expenditure of a “standard” European consumer (business and residential). The Basket Methodology for Telecommunications Cost Comparison has been devised by the OECD and accepted in most countries as the most stable and neutral method of comparison. The user is assumed to have a contract for the provision of voice telephony services with the incumbent operator, and to use only this operator for all types of calls (local, long-distance (national), international, calls to mobile). Since consumers are making increasing use of call-by-call carrier selection, in particular for specific highly discounted types of calls (i.e. international and long-distance (national)), the figures given below are purely indicative, and do not necessarily reflect the cheapest solution available. The charts below show the average monthly expenditure for standard residential and business users as of September 2006, expressed in €, based on the standard tariffs charged by the incumbent operators (i.e. excluding any discount packages). This means that lower costs can be achieved if the user subscribes to one or more discounted packages. The basket of calls used to estimate average monthly expenditure is the “2000 composite OECD basket” which includes fixed national calls, international calls and calls to mobile networks. The OECD residential/business baskets are defined as follows (on an annual basis): The fixed (i.e. non-recurring) charges include the annual line rental charge plus the charge for the installation of a new line (depreciated over 5 years). Fixed charges for residential users include VAT, while for business users VAT is excluded. The usage charge for residential users refers to a basket of 1.200 national calls to fixed lines, plus 120 calls (with an average duration of 2 minutes) to mobile networks (representing 10% of the number of calls to fixed lines), plus 72 international calls (representing 6% of the number of calls to fixed lines). The usage charges for national calls to fixed lines are calculated with a weighted distribution over 14 distances from 3 to 490 km, at representative times of day (4 calls during the week and 2 during the weekend). The call duration varies from 2.5 to 7 minutes, depending on time and distance. The usage for residential users is weighted towards off-peak hours, and with typically long calls. Only 36% of the calls are within normal business hours; 74% are for distances below 10 km; 9% are for distances above 100 km. The usage charge for business users refers to a basket of 3 600 national calls to fixed lines plus 360 calls (with an average call duration of 2 minutes) to mobile networks, plus 216 international calls. The usage charges for national calls to fixed lines are calculated with a weighted distribution over 14 distances from 3 to 490 km, at representative times of day (4 calls during the week and 2 during the weekend), and with a call duration of 3.5 minutes regardless of time of day and distance. The usage for business users is weighted towards business hours, and with typically short calls. Over 86% of the calls are within normal business hours; 64% are for distances below 10km; 12.5% are for distances above 100 km. A full description of the methodology can be found at the end of this report. There was a revision of the OECD baskets in February 2006. Highlights of the new 2006 OECD baskets are: • 5 new baskets for Low, Medium and High residential usage and business baskets for SOHO and SME usage. • Fixed to Mobile calls now include calls to up to 4 national mobile networks, weighted by subscriber numbers. • A range of tariff packages from the incumbent operator are now included, with automatic selection of the cheapest package for each basket. • Traffic weights and volumes have been updated with recent information. Low usage residential basket The usage charge for low usage residential users refers to a basket of 600 national calls, where 76% (456 calls) are to fixed lines, 19% (114 calls) are to mobile networks, and 5% (30 calls) are to international destinations. The usage charges for national calls to fixed lines are calculated with a weighted distribution over 14 distances from 3 to 490 km, at representative times of day (4 calls during the week and 2 during the weekend). The call duration varies from 3.7 to 7 minutes, depending on time and distance. The usage for residential users is weighted towards off-peak hours,

Extract from the 12th EU implementation report extended to include Switzerland - 96 and with typically long calls. 58% of the calls are within normal business hours; 76% are for distances below 10 km; 7% are for distances above 100 km. Medium usage residential basket The usage charge for low usage residential users refers to a basket of 1200 national calls, where 75% (900 calls) are to fixed lines, 23% (276 calls) are to mobile networks, and 2% (24 calls) are to international destinations. The usage charges for national calls to fixed lines are calculated with a weighted distribution over 14 distances from 3 to 490 km, at representative times of day (4 calls during the week and 2 during the weekend). The call duration varies from 3.7 to 7 minutes, depending on time and distance. The usage for residential users is weighted towards off-peak hours, and with typically long calls. 55% of the calls are within normal business hours; 70% are for distances below 10 km; 11% are for distances above 100 km. High usage residential basket The usage charge for low usage residential users refers to a basket of 2400 national calls, where 65% (1560 calls) are to fixed lines, 31% (744 calls) are to mobile networks, and 4% (96 calls) are to international destinations. The usage charges for national calls to fixed lines are calculated with a weighted distribution over 14 distances from 3 to 490 km, at representative times of day (4 calls during the week and 2 during the weekend). The call duration varies from 3.7 to 7 minutes, depending on time and distance. The usage for residential users is weighted towards off-peak hours, and with typically long calls. 60% of the calls are within normal business hours; 77% are for distances below 10 km; 7% are for distances above 100 km. SOHO business basket The usage charge for low usage residential users refers to a basket of 1800 national calls, where 67% (1206 calls) are to fixed lines, 29% (522 calls) are to mobile networks, and 4% (72 calls) are to international destinations. The usage charges for national calls to fixed lines are calculated with a weighted distribution over 14 distances from 3 to 490 km, at representative times of day (4 calls during the week and 2 during the weekend). The call duration varies from 1.9 to 3.1 minutes, depending on time and distance. The usage for residential users is weighted towards off-peak hours, and with typically long calls. 79% of the calls are within normal business hours; 68% are for distances below 10 km; 12% are for distances above 100 km. SME business basket The usage charge for low usage residential users refers to a basket where 30 users each have 2800 national calls, where 72% (2016 calls) are to fixed lines, 20% (560 calls) are to mobile networks, and 8% (224 calls) are to international destinations. The usage charges for national calls to fixed lines are calculated with a weighted distribution over 14 distances from 3 to 490 km, at representative times of day (4 calls during the week and 2 during the weekend). The call duration varies from 1.9 to 3.1 minutes, depending on time and distance. The usage for residential users is weighted towards off-peak hours, and with typically long calls. 81% of the calls are within normal business hours; 71% are for distances below 10 km; 11% are for distances above 100 km. The different 2006 OECD baskets may select different tariff packages as the cheapest. The revision brought a new element into the baskets, namely the inclusion of more tariff packages for each country. This allows for a comparison of the “standard” package with the “cheapest” package.

7.3.1. 2000 OECD baskets On the basis of the basket established by Teligen, we find that a Swiss residential user pays 37.66 € per month for a standard range of services, almost the same amount as a user in the Netherlands. In 12 European countries the cost of the basket is higher. We also note that Japan, a non-European country considered, is among the least attractive countries, surpassed only by Finland. The same exercise has been carried out for businesses and the results are displayed in Figure 86. The cost of a standard basket of services in Switzerland is 86.72 €. The United Kingdom and, once again, Japan are at the bottom of the table. One extremely interesting fact is that the results for businesses have a greater spread than those for residential users, the cheapest basket being 47.32 € (Estonia) and the most expensive 113.64 € (the United Kingdom) among the EU25 countries. This seems to indicate extremely diverse practices among different countries in terms of product segmentation. In Switzerland, Swisscom does not really differentiate its fixed network offerings depending on whether it is dealing with a residential customer or a business. If there are any special reductions, these are generally the result of negotiations between the operator and the business and are not analysed here.

97 - Extract from the 12th EU implementation report extended to include Switzerland Figure 85

Average monthly expenditure (composite basket) Residential users 50 6

45 3 . 6 9 31.68 8 9 33 . . 2 3 5 3 3 25 4 2 18 . . 40 . 6 . 9 1 28 0 25 26 6 1 9 . 24 1 . 4 4 . . d 1 24.09 . 21 22

35 23.66 0 33 20 0 6 21 18.58 9 . 0 ude . l 3 . 22.80 c 17 17 n 1 30 17 9 1 13.67 5 18.01 . 23.96 . 1 8 3 1 16 . . 23 VAT i

25 20 16 4 2 .

20 8.30 17 month, r

pe 15 €

10

5 9 8 7 8 6 0 7 5 9 5 7 4 5 3 8 3 1 7 6 7 3 4 2 2 1 1 5 6 3 7 6 8 1 9 0 3 3 9 9 7 9 7 0 4 8 5 8 5 ...... 71 11 66 37 73 0 15 6. 12 8. 6. 14 8. 14 19 16 17 17 13 18 18 5. 15 16 17 15 16 15 16 14 25 18 13 15 16 CY EE SI MT LT USA SK SE LU DE AT UK HU NL DK LV EL CZ USA IT ES FR PT PL IE BE JP FI CH LA NY Fixed Usage Source for Switzerland: Teligen T-Basket; OFCOM Switzerland computation. Figure 86

Average monthly expenditure (composite basket) Business users 120 8 36 .9 96. 91

100 9 .2 92 02 86 04 d 7 78. 5 79. 4 70. .3 8 62 .4 7 1

ude 80 .5 l .3 71 4 .0 .3 64 67. c 2 69 .6 73 x 76 67 .7 3 5 49 59 .5 .8 63 3 0 90 54. 59 56 61 .2 .7 53. 6 VAT e 54. 60 90 55 53 .1 80 49. 44 2 42. 6 .8 .8 month, 42 51 20

40 66 40. per 32. €

20 49 80 15 83 15 59 40 89 46 93 44 34 31 46 25 42 55 57 05 00 97 56 66 63 35 66 68 16 81 11. 30. 10. 16. 18. 13. 14. 12. 14. 15. 11. 17. 20. 13. 19. 5. 14. 9. 14. 17. 21. 21. 12. 15. 9. 21. 17. 15. 0 6. USA EE CY SI LU USA SE DE EL DK NL PL MT AT HU CZ LT ES SK PT FR IE IT FI BE LV UK JP CH LA NY Fixed Usage Source for Switzerland: Teligen T-Basket; OFCOM Switzerland computation.

7.3.2. 2006 OECD baskets The residential user pays in Switzerland 29.50 € for a low usage basket (Figure 87), while consumers in seven other European countries pay a higher price, with Ireland at a peak. The Swiss user will pay for this basket more than one in the U.S., but less than a Japanese one. The cost of the medium usage residential basket (Figure 88) in Switzerland (43,10€) is one of the highest in Europe, higher costs being recorded, in increasing order, only in France, Belgium, Ireland and Finland. Moreover, the high charge of 76.63 € for the high usage basket (Figure 89) puts Switzerland on the fourth place, while the top three most expensive countries are, in descending order, Latvia (87.88€) and, again, Belgium and Finland.

Extract from the 12th EU implementation report extended to include Switzerland - 98 Figure 87 OECD baskets for PSTN Low usage residential basket 40

35 4 4 6. 8 .00 .8

30 9 14 0 16 8 9 .87 8. 21 .05 9 4 .13 1 3 5 d 35 . 1 . 1 3 9. 8 e 15 . .6 89 7 14 11 1 12 d 7. . 11 11. 8.9 9. .5 u 13 12 l

25 4 11 c 13 6 .02 n 7. .75 20 T i .35 2 10 A 2 . 1 10 9 V 20 9 .5 10 h, 60 2 9. 14 1 nt 5. o 4. 0 5 m . r 15 25 10 8. pe €

10

5 9 7 9 8 9 1 3 6 0 5 6 8 4 1 5 7 5 7 1 2 7 6 3 1 2 .1 .5 .8 .1 .1 .8 .9 .9 .7 .3 .3 .9 .3 .6 .8 .6 .4 .6 .9 .3 .6 .4 .8 .2 .5 11 66 73 71 8. 15 14 10 6. 12 13 13 17 5. 13 16 18 19 15 15 21 17 17 20 18 15 14 22 15 18 29 16 0 6. MT EE CY USA SK LT SI HU SE USA LV PL DE DK LU IT EL ES UK AT NL CZ FR JP PT FI BE IE CH CA NY Fixed Usage Source for Switzerland: Teligen T-Basket; OFCOM Switzerland computation.

Figure 88 OECD baskets for PSTN Medium usage residential basket 50 0

45 .8 11 31 .97 8 8 16. 2 9 8 .2 .5 25 .4 .2 .9

40 8 27 26 3 .5 5 7 15 23 27 9 .98 . 7 . .1 6 3 24 9 7 33 1 21 6 .1 . 4 . 23 15

d 35 7 .5 . e 11 5 19 16 d 9 21 . 57 16 u l .53 .55 .97 c 12 8 18. 8

n 30 15 .49 22 3 19 . .7 T i 19 24 22 A V

25 .18 .56 h, 20 nt 11 2 o 20 7.3 m r pe € 15

10

5 9 8 9 9 3 2 1 6 2 0 5 3 0 4 7 8 6 7 7 1 3 1 6 2 7 .1 .1 .1 .8 .9 .4 .6 .3 .0 .7 .8 .5 .9 .3 .6 .9 .9 .6 .6 .9 .8 .2 .4 .5 .5 71 11 66 73 15 6. 8. 6. 12 13 10 17 15 21 19 15 20 17 26 23 15 17 5. 15 13 18 26 15 18 29 15 16 0 14 CY USA EE MT LT SI HU SK USA SE ES LU JP DE UK DK NL EL AT LV IT PL CZ PT FR BE IE FI CH CA NY Fixed Usage Source for Switzerland: Teligen T-Basket; OFCOM Switzerland computation.

99 - Extract from the 12th EU implementation report extended to include Switzerland Figure 89 OECD baskets for PSTN High usage residential basket 100

90 5 6 1 . .4

80 82 71 1 .21 2 .1 3 2 3 4 7 39 0 . .02 .88 d .1 70 . 60 7 e .8 .8 9 58 60 65 8 51 d 58 . 32 5 49 u 40 . l 28 c .19 50. 3 38 8 5

n 60 9 4 1 7 1 3 .5 0 58 . . 9 .54 .49 T i 9 . .8 .6 .0 . 45 A 39 28 3 25 31 22 39 37 47 45 V 50 .8 h, 36 nt 7 o 5 40 . m r 27 pe €

30 5 .07 .0 19 16 20

10 9 7 3 4 9 8 6 4 5 0 3 0 1 4 4 7 1 8 4 2 7 6 1 8 6 2 .1 .5 .9 .6 .1 .1 .3 .6 .6 .8 .8 .9 .6 .2 .1 .6 .2 .9 .2 .0 .6 .9 .9 .7 .4 .5 66 11 73 15 0 14 17 17 13 12 19 21 36 28 34 32 21 16 6. 29 17 41 30 22 15 22 13 8. 15 38 15 5. 16 USA CY USA EE HU SI LU SE DE DK UK NL ES SK LT EL AT IE IT CZ JP PT PL MT FR BE FI LV CH CA NY Fixed Usage Source for Switzerland: Teligen T-Basket; OFCOM Switzerland computation. With the monthly charge of 47.31 €, excluding VAT, Switzerland comes on the place five among the most expensive European SOHO business baskets, with Cyprus and the United Kingdom on the top (Figure 90). Figure 90

OECD baskets for PSTN SOHO business basket 60

50 0 6 .3 9 2 10 6 .1 .9 4 26 . 7. 6 .9 3 d 36 27 .4 1 28 e 6 31 3 3 28 9 ud 25. 40 .5 9 6 4 .0 cl 16. .0 9 1 23 0 . 1 .0 6 21 9 .1 . 26 .2 7 29 26 .1 3 5 27 6 22 6 7 0 19 . .0 22 .5 .0 5 17. VAT ex 30 22 18 , 2 6 15 .4 28 h .3 .6 t 0 21 67 9 12 16 21. 16. mon r 20 pe 98

€ 8.

10 37 49 65 15 15 54 83 89 84 70 63 93 44 59 61 55 31 25 06 10 57 62 00 97 08 63 35 81 65 11. 0 11. 6. 13. 18. 10. 5. 18. 16. 12. 17. 14. 18. 15. 11. 13. 10. 14. 20. 19. 27. 20. 17. 19. 21. 12. 42. 24. 15. USA HU EE SK USA SI LT DK LU EL DE MT ES NL PL SE LV PT AT CZ IE BE FR JP IT FI CY UK CH CA NY Fixed Usage Source for Switzerland: Teligen T-Basket; OFCOM Switzerland computation.

Extract from the 12th EU implementation report extended to include Switzerland - 100 Swiss business users pay 1794.96 € for the SME basket (Figure 91), just a little bit more than in France and Portugal, but less than in Belgium, Latvia, the United Kingdom, Italy, and Finland. Figure 91 OECD baskets for PSTN SME business basket 2500 5 .1 7 722 .1

2000 1 5 8 41 .3 .4 724 4. d 1 0 44 e 2 1 43 9 8 5 137 13 .4 . ud 16 .7 66. 2 cl 34 8 67 6 17 21 79 1500 257 8. 17 13 1 6 9 7. 0. 13 69. 0. .7 83 .5 62 14 96 7. 116 103 91 11 VAT ex 35 68 , 52 59 10 h 10 8. 0. t 1. 100 0. 83 75 59 0 69 66 8. 6. 90 6 80 67 64 5. 1000 6 7 . 2. 8. 66 90 mon 35 r 70. 92 17 7 392 pe 24

€ 7. 51 500 0 4 8 0 9 7 3 0 9 7 8 1 9 6 9 3 2 5 2 2 0 6 5 0 5 0 3 4 0 .6 .0 .2 .2 .3 .5 .5 .0 .4 .3 .6 .0 .7 .7 .2 .9 .6 .3 .7 .4 .0 .3 .4 .7 .0 .1 .6 .5 .0 344 341 941 204 834 304 544 505 409 664 636 451 477 407 609 440 577 169 811 436 527 961 318 658 630 389 588 460 0 685 USA ES HU EL EE CY SI USA LU SK DE DK PL NL SE AT MT CZ LT IE PT FR BE LV UK IT FI JP CH CA NY Fixed Usage Source for Switzerland: Teligen T-Basket; OFCOM Switzerland computation.

7.3.3. Comparison of the “Standard” package with the “Cheapest” package The next two figures compare the “Standard” and the “Cheapest” packages for residential and business users. In 13 of the 25 European countries these packages coincide. In Switzerland there is a slight difference between the cheapest and the standard baskets, for both residential and business users. For residential users the “Cheapest” basket is charged with 32.94 €, while the “Standard” basket is 4.72 € more expensive. This difference makes 12.37 € for business users with the price of 74.35 € for the “Cheapest” basket. The biggest variations between the “Cheapest” and “Standard” baskets can be noticed in Spain, over 11 € for residential users, and in Belgium, over 38 € for business users. The “Cheapest” residential basket in Switzerland is below the EU25 average (36.50 €). However, this does not stay true for the cheapest business package, where the charge in Switzerland slightly exceeds the weighted average of the European Union. The highest residential tariff packages are in Finland, while Cyprus appears at the other side of the scale. For the business composite basket, the UK and Japan are the most expensive, while Denmark and Germany have the cheapest business composite baskets.

101 - Extract from the 12th EU implementation report extended to include Switzerland Figure 92

OECD Residential composite basket 50 0 0 9 5 5 . . 45 8 . 7 8 5 4 47 6 46 . .4 6 8 8 1 .33 44 7 . 40 44 3 7 . 7 2 6 0 42 1 0 0 4 3 . 42.38 3 41. 3 42.20 . 8 8 42.16 4 0 8 0 5 . .2 41.36 6 . 3 . .83 .4 9 4 .4 .4 9 0 8 0 40 8 8 .6 .5 39.62 3 5 3

35 . 4 5 39 5 20 3 39.00 38 . 38 8 38 38 8 6 4 8 . 8 37 6 .4 37 3 6 . 36 0 36. 5 3 . 36. . 9 .0 4 3 35.99 3 0 94 4 . 35 6 3 .03 . 34 3 3 .3 30 8 34 5 17 5 00 3 32. 6 2 33 . 32 . 2 .2 32 2 6 0 8 31. 31. 4 3 . 3 . 30 30 3 8 8

25 28. included 2 2 .2 28.42 28.36 5 9 9 26 . 7 4 . 3 3 .

20 2 23.95 2 23 €, VAT 2 15

10

5 00 00 0. 0 0. CY EE SI MT LT USA SK SE LU DE AT UK HU NL DK LV EL CZ USA IT ES FR PT PL IE BE JP FI EU25 CH CA NY Weighted Cheapest Standard EU25 Cheapest Average

Source for Switzerland: Teligen T-Basket; OFCOM Switzerland computation. Figure 93

OECD Business composite basket 120

110 8 3.9 13.64 7 11 3 1

100 5 . .4 104 3 3 90 .30 4 4 8 8 101 . 0 . . 95 2 .0 75 2 1 9 9 9 93.57 9 92 9 1 5 .7 1 0 91 . 1 80 4 . 88. . .09 5 7 .1 0 0 4 . 5 .7 .71 86 8 9 85.50 8 1 85 1 . 3 84 0 .9 83 8 83.06 8 8 ded 3 9 8 81 81 35 8 .

70 43 7 . 78. 3 78 3 4 .2 3 77.18 8 75. 0 8 7 clu . 74. 7 . 74.80 73. 3 73.88 0 9 73 . 9 9 73 7 1 6 . 60 4 69 ex . 3 69.05 67 .4 3 4 68.10 68.12 . 3 64. 6 2 6 .6 6 63 62.31 7 20 7 7 6

50 6 9 59 3 . 6 . .9 78 . .6 2 2 55. 2 €, VAT 1 5 3 52 5 . 52 5 .3 50. 51 1 7 40 70 . 60 4 4 47 4 43. 44.15 30 42.

20

10

0 USA EE CY SI LU USA SE DE EL DK NL PL MT AT HU CZ LT ES SK PT FR IE IT FI BE LV UK JP EU25 CH CA NY Weighted Cheapest Standard EU25 Cheapest Average

Source for Switzerland: Teligen T-Basket; OFCOM Switzerland computation.

Extract from the 12th EU implementation report extended to include Switzerland - 102 7.4. Price of fixed national calls by the incumbent operator 7.4.1. Prices charged by the incumbent operators for individual fixed national calls This section shows the prices charged by the incumbent operators for individual fixed calls (the same call prices apply to business and residential users). For those countries where unit based charging is used, the cost of the amount of full units is calculated. Any call set-up charges, minimum charges and/or call specific duration allowances have been taken into account. Prices refer to peak hours (weekdays 11.00) and are expressed in € including VAT. Except where otherwise specified, the figures refer to September 2006. Prices are indicated for three-minute and ten-minute calls over two distances: 3 km (equivalent to a local call) and 200 km (equivalent to a national call). In several countries the tariff changes at exactly one of these distances: in these cases, the rates for the lower distance band are used. The price of a three-minute call is more affected by the magnitude of the call set-up charge than the price of a ten- minute call. Where different tariff packages exist, the basic, residential package is selected. Otherwise the standard tariff is used. No discount packages are taken into account. The EU average value is the average of the EU countries weighted according to the national population. Whatever the duration of the call (3 or 10 minutes), the prices charged for local calls in Switzerland are clearly above the EU25 weighted average. For a three-minute local call (Figure 94), only Belgium charges a higher price. The situation is slightly different for a ten-minute call (Figure 95), since three countries apply higher tariffs: the Czech Republic, Slovakia, and Belgium (in ascending order). We note that Switzerland’s poor showing is largely attributable to the introduction, in spring 2002, of a single national rate, independent of distance. Following this new method of charging, the price of local calls increased whilst that of national calls decreased. It should also be noted that, in all the countries considered, prices remained stable between 2005 and 2006, with some exceptions (for example, Hungary, Spain, France, and Poland).

With regard to prices charged for national calls (Figures 96 and 97), Switzerland is well placed in the international comparison. Indeed, whatever the call duration, it is ranked at about place nine, with prices coming in clearly below the EU25 weighted average. The lowest prices are in Slovenia, 7.9 €-cents for a three-minute call (19.08 €-cents in Switzerland), and in Cyprus, 21.68 €-cents for a ten-minute call (50.89 €-cents in Switzerland). Italy has the highest charges for three minutes (39.94 €-cents), whereas Slovakia is worst placed for ten minutes (129.15 €-cents). Figure 94

Local call charge, 3 min 25 0

20 8 . 20 6 19.08 9 . 5 17 7 d 0 . 4 e 2 . 8

d 15 16 9 0 16 8 7 15. 7 clu 4 . . n 15.03 0 5 i 14. 14.78 14 4 14 4 3 2 T . 9 8 . A 9 6 13 4 13. 1 1 0 . V . 12 8 12. , 7 . . 12.50 12 12 ts

10 11 11 8 8 cen 59 - 32 2 2 € 9. 9. 9. 9. 8 04 8 8. 7. 5 0 0 8 0 7 9 5 4 5 6 0 8 0 4 6 9 4 5 0 5 4 4 7 7 7 3 8 7 9 8 0 7 8 1 1 9 3 4 02 28 32 59 88 87 28 9. 9. 9. 9. 12. 13. 14. 14. 14. 14. 13. 15. 16. 17. 20. 19. 0 7. 8. 9. 11. 11. 12. 12. 12. 13. 13. SI ES PL LU EL CY EE DE LV IT SE MT NL UK FR DK LT AT IE PT HU FI CZ SK BE CH 2005 2006 EU25 Average Source for Switzerland: OFCOM Switzerland computation.

103 - Extract from the 12th EU implementation report extended to include Switzerland Figure 95

Local call charge, 10 min

70

60 .85 0 2 2 59 . 8 . 57 55

50 9 1 8 . 0 1 . .26 .0 50 50 49 49 0 5 40 . 44 2 1 5 . 8 T included .00 . 91 1 39 .86 39 38 6 .80 . 7 36. 36 1 35 . 35

30 4 4 nts, VA .9 .9 33 .41 ce 30 30 - € 29 1 8 .25 0 6 . .3 7 26 .4

20 1 25 68 . 24 23 6 22 21. .5 18 10 8 7 0 5 1 7 4 4 7 1 6 1 1 0 0 5 0 5 2 0 5 9 8 1 6 9 6 1 3 2 4 0 9 9 1 6 8 9 8 0 5 1 0 2 8 2 8 8 3 0 3 9 ...... 21 22 23 26 29 30 30 30 33 35 36 36 38 39 44 41 49 49 55 57 59 50 0 24 25 28 32 CY IT FI EE MT SI ES SE PL LU EL FR NL LV DK PT LT DE UK HU AT IE CZ BE SK CH

2005 2006 EU25 Average Source for Switzerland: OFCOM Switzerland computation.

Figure 96

National call charge, 3 min

45

40 5 .7 39.94

35 38 0 0 .2 .9 4 35 .1 30 33 7 32.29 32 32.12 .0 uded l c 30 25 5 .6 T in 26 7 A .51 5 .4 24 , V .1 20 0 s 23 .8 22 5 0 20 cent .3 - .7 19.08

€ 15 18 0 17 16.75 .7 5 9 .3 14

10 .1 13.40 13 12 9.32 9.07

5 7.88 5 0 7 0 5 9 0 0 5 0 5 3 1 2 1 0 6 3 3 4 8 .3 .7 .4 .5 .6 .1 .4 .7 .3 .8 .1 .8 .1 .1 .8 .2 .8 .8 .6 .9 .0 01 88 32 9. 13 14 23 24 26 0 7. 9. 12 13 17 18 20 22 28 32 32 33 35 36 36 33 39 19 SI CY EE SE UK DK DE AT NL BE EL PT IE LT FR ES LV CZ FI SK PL HU IT CH 2005 2006 EU25 Average Source for Switzerland: OFCOM Switzerland computation.

Extract from the 12th EU implementation report extended to include Switzerland - 104 Figure 97

National call charge, 10 min 140 5

120 .1 129 7 .7 4 100 114 .1 d 04.42 e 0 0.23 1 d 103 .0 10 9 80 94 .5 inclu 88.50

.69 T 84 81 A 79.36 7 73.80 s, V 60 t .4 0 n 0 65 .0 .2 ce - 9 59 8 0 € 57 .8 55.82 .0 40 .0 50 49 49 44.50 1 36.86 5 .4 6 .2

20 8 29 .4 .6 26 8 0 1 0 8 0 0 7 1 8 0 9 5 6 0 0 6 8 23 6 21 . .3 .4 .5 .0 .2 .0 .4 .4 .4 .0 .8 .2 .8 .0 .8 .3 .6 03.14 12.70 14.77 22.85 08.77 22.78 21 23 29 44 49 57 59 65 83 84 94 1 1 1 1 1 1 50 0 26 36 49 73 79 81 CY EE SI SE DK UK DE NL BE AT PT EL LT IE FR ES FI LV CZ IT SK HU PL CH 2005 2006 EU25 Average Source for Switzerland: OFCOM Switzerland computation. Figure 98 shows the evolution, from 2000 to 2006, of local and national prices for a three-minute call in the European Union countries and in Switzerland. With regard to local call prices, it has to be noticed that they remained somehow stable, in both cases, throughout the period in question. The prices of national calls for a three-minute call, on the other hand, fell in the geographical areas considered. Between 2005 and 2006, the changes were insignificant in Europe and non-existent in Switzerland, the market seeming to have stabilised itself. However, the evolution charted for the Union is smoother because it takes several countries into account. This is also due to the fact that since 2002 Switzerland has had a single price, independent of distance, and this explains why the two curves meet. One can draw more or less the same conclusions from the analysis of the trend in prices for ten-minute calls shown in Figure 99.

105 - Extract from the 12th EU implementation report extended to include Switzerland Figure 98 Local and national call charge, 3 min EU25 and CH 45 41.8

40 37.1 34.3 33.7 35 29.9 30 25.4 25.4 25.3

cluded 25.0 25 T in 19.1 19.1 19.1 19.1 19.1 20 ts, VA 19.1 15 19.1 €-cen 10 12.5 13.0 12.9 12.9 12.7 12.3 13.1 5

0 2000 2001 2002 2003 2004 2005 2006 EU25 - Local call charge, 3 min CH - Local call charge, 3 min EU25 - National call charge, 3 min CH - National call charge, 3 min

Source for Switzerland: OFCOM Switzerland computation. Figure 99

Local and national call charge, 10 min EU25 and CH 140 133.3 116.9 120 107.6 105.6 91.8

ed 100 d 76.3 76.3 76.3 80 73.9 T inclu

60 50.9 50.9 50.9 50.9 50.9 44.5 44.5

€-cents, VA 40 39.1 39.0 38.5 38.8 37.7 35.4 36.5 20

0 2000 2001 2002 2003 2004 2005 2006 EU25 - Local call charge, 10 min CH - Local call charge, 10 min EU25 - National call charge, 10 min CH - National call charge, 10 min Source for Switzerland: OFCOM Switzerland computation.

Extract from the 12th EU implementation report extended to include Switzerland - 106 7.5. Trend of the basket for fixed national calls (national basket) Figure 100 EU25 and CH national basket development 63.1 65 63.1 63.1 60.3 60.3 60.3 60 62.0 56.9 57.5

55

53.5 53.9 53.9 53.9 53.9 50 h nt

mo 45 € per 40 34.1 34.1 35 29.2 29.2 29.3 28.8 29.6 30 29.1 29.4 28.8 28.8 28.8 25 28.3 28.2 2000 2001 2002 2003 2004 2005 2006

EU25 - Residential, Incl. VAT CH - Residential, Incl. VAT EU25 - Business, Excl. VAT CH - Business, Excl. VAT

Source for Switzerland: Teligen T-Basket; OFCOM Switzerland computation.

Figure 101 EU25 and CH national basket development 107.8 110 108.0

100 103.0 94.8 93.9 91.4 91.4 86.7 90 96.9 91.8 91.3 80 85.4 83.8 83.1 nth mo

r 70 pe € 60

46.8 46.8 50 42.0 41.5 39.7 39.6 38.5 40 44.8 42.6 39.8 39.6 37.3 37.7 30 36.3 2000 2001 2002 2003 2004 2005 2006

EU25 - Residential, Incl. VAT CH - Residential, Incl. VAT EU25 - Business, Excl. VAT CH - Business, Excl. VAT

Since 2000 all EU25 MS are included except Malta, which is included since 2003. Source for Switzerland: Teligen T-Basket; OFCOM Switzerland computation.

107 - Extract from the 12th EU implementation report extended to include Switzerland 7.6. Price of fixed national calls by alternative operators This section compares the prices charged for public voice telephony services by the incumbent operators and by the largest competitor in each Member State. The tariff packages selected will impact on this comparison, although care has been taken to ensure reasonable comparability. In Switzerland, the comparison was made with Swisscom’s main competitor, Sunrise, which does not automatically mean that it represents the cheapest alternatives available to consumers. The prices are those of October 2006 and correspond to the peak period. If one compares the price of a three-minute local or national call (Figure 102 and Figure 104), Sunrise charges 19% less. The same comparison made for a ten-minute call (Figures 103 and 105) show a 9% difference between the two operators, again in favour of Sunrise. It should be noted that this narrowing of the difference is largely explained by the fact that the two operators do not apply the same charging systems. Swisscom applies a unit-based charging system (CHF 0.10 per x seconds) and Sunrise charges by the second; the results are therefore dependent on the choice of the exact number of minutes on which the comparison is based. In fact, if the number of minutes considered corresponds to the precise moment at which the switch to the next additional unit occurs, Swisscom’s prices are comparatively less attractive. We further note that since Switzerland now has only distance-independent prices, it is not necessary, unlike in other countries, to carry out an analysis which is differentiated according to the distance of the call (local or national). Looking at Figures 102 to 105, there are two more interesting general discoveries to be made. The first is that there are still substantial differences in price between the historic operator and its main competitor, which means that competition has not yet completely homogenised prices. The second lies in the fact that in certain countries the alternative operator charges a higher price than the historic operator (the cases of Latvia, Germany and the United Kingdom). The reality is therefore always more complicated than one might first imagine. Figure 102

3 min local calls, incumbent and competitor's price 25 .7 23 8 8 . . 20 .8 0 20 2 20 .1 19 .0 8 T 1 .0 7 . 2 . 17 .8 15 16 5 .4 16 8 8 .0 .0 8 1 7 7 . . ing VA . . 15 .5 4 4 15 15 14 1 14. 14 1 ud .8 .8 4 14 l 3 .5 2 . . . 9 c .0 3 . 13 13 .8 13 1 .5 13 2 2 13 . 13 12 12 7 .9 6 6 .8 2 . 12 . . .5 .4 1 12. 11 11 nts, In 11 11 11 11

10 11 ce - 3 3 3 1 . € . 9. 9. 9 6 5 9 4 4 0 8. 9 8. 8. 8. 8. 7. 8 6.

5 n.a. . . a a

0 n. n. BE CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI SE UK CH Incumbent, 3 min. Competitor, 3 min.

Source for Switzerland: OFCOM Switzerland computation.

Extract from the 12th EU implementation report extended to include Switzerland - 108 Figure 103 10 min local calls, incumbent and competitor's price

80

70 0 . 71

60 9 . 9 2 7 . .2 5 . 7 .8 5 57 56 55 .9

VAT 50

.9 .1 0 g .3 51 . .0 50 9 50 49 4 49 .1 .0 .5 .2 46 45

40 44 44 5 8 Includin .0 . , .9 9 9 9 . . . 39. 39 38 .8 6 .5 .5 6 .4 .2 37 nts 3 36 3 2 e 35 35 35 35 35 .9 9 30 9 . . 33. 4 €-c 0 0 0 . 6 31 . 0 . 8 .3 3 3 9 . 2 .3 29 28 0 28 28. 27 . .4 26 .5 4 2 25 . 3 .0 .7 2

20 .5 2 .1 n.a. 22 6 22 21 21 . 1 20 . 18 17 10

0 n.a. n.a. BE CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK FI SE UK CH Incumbent, 10 min. Competitor, 10 min.

Source for Switzerland: OFCOM Switzerland computation. Figure 104

3 min. national calls, incumbent and competitor's price 45

40 9 . 7 39 38. 7 35 2 36. . 9 35 n.a. 3 3 33. 1 1 . . 32 32 32. 32.

T 30 1 30. 6 6 . .5 27. ing VA 25 26 5 26 ud l 5 5 . . c 24. 4 2 23 23 . 1 8 8 22. 8 22 . 20 . . 21. a 20 20 20. 1 nts, In n. 4 0 9 7 . 19. ce 18. - 7 18. 17 17. €

15 4 1 16. . 7 . a. 15 15. 4 3 n. 2 14 . 0 2 2 a 13. 13 13. 13. 4 n. 12. 10 12. 11. 3 1 5 9. 9. 9 8. 7. 8 a. 5 6. n.

0 BE CZ DK DE EE EL ES FR IE IT CY LV LT HU NL AT PL PT SI SK FI SE UK CH

Incumbent, 3 min. Competitor, 3 min.

Source for Switzerland: OFCOM Switzerland computation.

109 - Extract from the 12th EU implementation report extended to include Switzerland Figure 105

10 min. national calls, incumbent and competitor's price 140 2

120 129. 8 6 1. 114. 11 4 1 .

100 4. 2 8 10 0. 103 99. 0 10 0 0 94. 92. 92. .2 6 . 88.5 88 80 7 . 84 4 81 ng VAT 8 79. 8 74. 73. 5 5 . 7 60 9 65. 65 Includi 5 0 , 63. . 62. 2 2 € 8 59. 59 57. 57. 9 9 . 55. 1 0 0 . . . 51 1 50. . 5 49 49 49

40 46 44. 44.2 0 9 9 9 5 . 39. 38. 37. 36. 35 4 3 . 3 . 29. 5 28 . 7 5 26 20 a. 5 23 n. . 1 21. 21. . 18 17

0 BE CZ DK DE EE EL ES FR IE IT CY LV LT HU NL AT PL PT SI SK FI SE UK CH

Incumbent, 10 min. Competitor, 10 min.

Source for Switzerland: OFCOM Switzerland computation.

7.7 Incumbent operator price for an average fixed international call (international call basket) The basket of international calls for each country provides an estimate of the average cost of an international call.

For the bas ket comparison of international PSTN call charges, the OECD traffic weight basket methodology is used. The basket calculates an average charge for calls to all OECD destination countries. The residential basket includes VAT. Call charges are weighted between peak and off-peak hours: 25% for peak hours and 75% for off-peak hours. The business basket excludes VAT. Call charges are weighted 75% for peak hours and 25% for off-peak hours. The average price of an international call is lower for business users than for residential users because of the heavier weighting given to three-minute peak-hour calls, which are, on average, cheaper than five-minute off-peak calls, and because VAT is excluded for business users but included for residential users. International call charges vary widely with the destination, and the basket results are based on a weighted average call charge. Traffic weighting is used, as defined by the OECD for the destination weighting, as per the revision in 2000. This method applies a weight to each destination based on the traffic volumes reported on that route (ITU statistics). All tariffs are standard prices from ex-incumbents operators, and both these operators and new entrants may offer lower prices. The EU average value is the average of the EU countries weighted according to the national population. A full description of the methodology can be found at the end of this report. With regard to the price of international calls, Switzerland is in an exceptional position since there is only one country (Cyprus) in which prices are more attractive, either for residential users (Figure 106) or for business (Figure 107). Moreover, the prices charged are well below the weighted European average. For a country such as Switzerland, which is traditionally orientated towards exporting, this situation is encouraging. Japan, with prices which literally go through the roof, is at the other end of the league table.

Extract from the 12th EU implementation report extended to include Switzerland - 110 Figure 106

Average price for an international call, residential users 2.5 1 2.3 18

2.0 2.

ed 1.5 d 45 43 clu 1. 1. n i

T 9 5 1 16 1 1. 1. 1.0 1. €, VA 1 9 0 1. 0.9 7 5 88 8 86 9 0. 0. 0. 0.8 78 76 0 72 0.7 0. 0. 2 0. 0 0.7 8 61 6 0.5 6 5 1 0.6 0. 0. 53 0.5 5 0. 0. 0. 9 36 0.3 0. 28 8 0. 2 39 51 53 58 61 62 64 70 72 76 78 79 82 87 85 89 96 15 16 03 19 23 28 70 16 31 36 0.0 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 1. 1. 1. 1. 1. 1. 1. 2. 2. 0. CY USA SE LU NL AT SI EE DE BE IE ES FR UK CZ DK PT MT FI EL HU IT LT SK PL LV JP CH

2005 2006 EU25 Average

Source for Switzerland: Teligen T-Basket; OFCOM Switzerland computation. Figure 107

Average price for an international call, business users 2.5 0

2.0 1 2. 1

1.5 1.7 cluded 3 3 ex 1. T A 13 V , 1.0 1. € 1 9 3 0. 83 6 0.8 0. 7 6 0. 6 1 61 0. 4 0.5 3 55 0. 0.6 5 4 0. 0. 3 47 0.5 47 46 0 0 4 9 9 4 7 0. 4 0. 4 40 0. 3 3 0. 3 0. 0. 0. 0. 3 0. 0. 0.3 29 0. 0 9 0. 2 20 33 39 40 41 40 43 42 43 47 47 53 54 55 55 61 61 64 73 76 83 84 91 96 32 69 10 2 . 0.0 0 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 1. 1. 2. 0. CY SE LU NL CZ SI FR USA EE DE AT IE DK SK ES BE MT HU PT EL IT PL FI LT UK LV JP CH 2005 2006 EU25 Average Source for Switzerland: Teligen T-Basket; OFCOM Switzerland computation.

111 - Extract from the 12th EU implementation report extended to include Switzerland Figure 108 displays the evolution between 2000 and 2006 of the price of an international call in the European Union countries and Switzerland. In the EU25 countries, prices fell constantly. In Switzerland, on the other hand, the competitive pressure exerted by the new entrants had some very rapid and marked effects between 1998 and 200014; prices fell by almost 80%, regardless of the type of user (business or residential). Since then, the recorded fall has been negligible. Figure 108

EU25 and CH International basket development 1.6 1.54 1.5 1.4 1.23 1.3 1.18 1.2 1.14 1.1 1.0 1.09 0.93 0.92 0.90

ll 0.9 ca 0.8 0.83 € per 0.7 0.80 0.77 0.72 0.6 0.69 0.66 0.5 0.40 0.39 0.39 0.38 0.38 0.36 0.36 0.4 0.3 0.32 0.2 0.31 0.31 0.31 0.31 0.29 0.29 0.1 0.0 2000 2001 2002 2003 2004 2005 2006

EU25 Residential, Incl. VAT CH Residential, Incl. VAT EU25 Business, Excl. VAT CH Business, Excl. VAT

Source for Switzerland: Teligen T-Basket; OFCOM Switzerland computation.

14 Source: OFCOM Switzerland, The Swiss telecommunications market – an international comparison, Extract from the 9th European Union implementation report extended to include Switzerland, Bienne, July 2004, p. 93-94.

Extract from the 12th EU implementation report extended to include Switzerland - 112 7.8. Incumbent operator price of calls to EU, Japan, USA The following two charts show the prices of a 10-minute international call (including VAT) during peak hours (weekday 11.00AM) to four different destinations: Near EU country, Distant EU country, USA and Japan. Figures are expressed in €, including VAT, and they refer to the European incumbent operators and the EU weighted average. The table below summarises the definition of near and distant EU destination countries.

From: Near EU Far EU BE FR EL CZ DE FI DK SE EL DE FR EL EE FI EL EL IT DK ES PT DK FR BE EL IE UK EL IT EL DK CY EL DK LV SE EL LT SE EL LU DE EL HU AT FI MT IT FI NL DE EL AT DE EL PL DE EL PT ES DK SK CZ FI SI AT FI FI SE EL SE DK EL UK FR EL CH DE EL

As far as calls to its direct neihbours (Figure 109) are concerned, it was assumed that Germany was the closest country to Switzerland. It is apparent that in the international comparison a Swiss user pays relatively little to make a ten-minute call to his German counterpart. Only Swedish and Cyprian users enjoy more attractive conditions. Furthermore, the cost in Switzerland is well below the weighted European average. A ten minutes call to Germany made through the incumbent operator costs 0.76 € (CHF 0.12/min). Figure 110 shows the price of a ten-minute call made between each country examined and its most distant neighbor. For Switzerland, this was deemed to be Greece. Once again, the situation turns out to be favorable in Switzerland, since it is in the fifth place in the list of least expensive countries, just behind Cyprus, Luxembourg, Slovenia and Spain. A ten minutes call to Greece will cost 1.59 € or CHF 0.25/min. Figures 111 and 112 show the cost of a ten-minute call to the USA and Japan, respectively. In both cases, it is impossible to find more favorable conditions than those which prevail in Switzerland, except for Cyprus in the case of a call to the USA, as well as Cyprus, Luxembourg and the UK in the case of a call to Japan.

113 - Extract from the 12th EU implementation report extended to include Switzerland Figure 109

10 min. call to near EU country 7.0

6.0 93 5.

5.0 T ing VA

4.0 7 0 4.

€, includ 3.0 7 6 9 9 1 2. 2. 2.8 2 2 3

2.0 2 2. 12 5 2. 0 0 98 2. 9 9 1. 85 1.9 1. 1. 4 1. 5 53 5 7 4 5 3 1. 1. 26 2 23

1.0 1. 1. 1. 1. 3 1. 9 7 6 85 7 . 7 0. 9 8 7 5 3 7 3 4 9 7 0 0 8 7 3 5 2 7 3 9 2 7 1 4 7 3 6 6 0 . 5 0.7 5 6 8 2 3 5 5 5 8 9 9 9 7 9 2 1 2 0 4 5 7 8 7 0 9 7 0. . 0 0 0. 0. 0. 1. 1. 1. 1. 1. 1. 1. 1. 1. 0.0 0. 0. 1. 2. 2. 2. 2. 2. 2. 2. 3. 4. 5. 0. SE CY DK NL EE DE SI LU ES IE MT CZ AT FI BE IT FR HU EL UK SK PT PL LT LV CH

2005 2006 EU25 Weighted

Source for Switzerland: OFCOM Switzerland computation. Figure 110

10 min. call to distant EU country 9.0

8.0 02 8.

7.0 78 6. 6.0 T A V

5.0 uding l 90 c 72 4. n 4.

€, i 4.0 07 87 4. 9 3. 4 48 1 3. 3. 3.0 0 11 1 2 3.2 9 3. 5 3. 1 2. 7 2.8 37 2. 32

2.0 2 8 2. 2. 02 2.1 2.0 2. 9 3 5 6 40 37 1.5 1.

1.0 2 23 1. 1. 1. 1. 6 66 37 53 08 22 46 49 71 43 92 02 10 6 40 05 12 11 21 79 74 87 05 07 90 78 15 59 . 0. 1. 1. 2. 2. 2. 2. 2. 2. 2. 3. 3. 0.0 0 1. 2. 2. 3. 3. 3. 3. 3. 4. 4. 4. 6. 8. 1. CY LU SI ES CZ UK IT FR DE EL BE HU NL SK AT PT EE SE PL IE DK LT FI LV MT CH 2005 2006 EU25 Weighted

Source for Switzerland: OFCOM Switzerland computation.

Extract from the 12th EU implementation report extended to include Switzerland - 114 Figure 111

10 min. call to USA 7.0

6.0 93 5.

5.0 0 T 4.9

ing VA 4.0 7 0 4. 49 €, includ 3.0 3. 11 5 3. 2.8 2 38 2 3 2 2

2.0 2. 2. 13 1 2 2. 0 8 2. 2. 90 9 4 2.0 1. 1.9 1. 6 53 0 7 1. 4 3 1. 3 3 8 2 2 1.0 1. 1. 1. 1. 1.1 85 . 6 76 0 6 7 3 8 0 3 2 1 7 4 0 3 6 6 5 3 0 7 0 0 5 8 8 2 7 7 6 6 . 0. 0 3 5 3 4 9 0 1 9 7 9 9 7 6 8 2 4 7 9 9 0 9 0 1 2 0 4 . 0 1. 1. 1. 2. 2. 2. 3. 3. 2. 3. 4. 5. 0. 0. 0. 1. 1. 1. 1. 1. 2. 1. 2. 2. 2. 4. 0.0 0 CY NL SE DE LU SI ES MT AT IE CZ BE UK IT FR DK EE EL SK PT HU PL LT FI LV CH 2005 2006 EU25 Weighted

Source for Switzerland: OFCOM Switzerland computation. Figure 112

10 min. call to Japan 25.0 0 .6 22 20.0 4 .0 20 T

15.0 ing VA ud l c .69 €, in 12 10.0 08 8 78 9. 8. 8.5 3 52 8 9 70 70

5.0 6 6. 5. 0 5. 5. 20 5. 02 8 5. 5. 4. 0 0 99 80 7 8 6 6 50 49 6 3. 3 4 3. 12 2 9 3. 3. . 3. 3. 9 4 0 7 1. 1. 3 8 2 0 9 2 0 8 8 8 6 0 6 9 2 7 3 0 8 3 8 0 4 0 0 3 1 9 2. . . . . 0.8 4 4 6 4 9 9 5 7 0 5 8 3 9 5 7 0 9 2 6 7 7 9 5 . 1. 3. 3. 6. 5. 7. 8. 8. 9. 12 15 22 1 0.0 0. 1. 2. 3. 3. 4. 4. 5. 5. 5. 5. 5. 20 1. CY LU UK EL SE NL AT SK CZ FR BE ES FI SI LV PL HU DE IE IT DK PT EE MT LT CH 2005 2006 EU25 Weighted

Source for Switzerland: OFCOM Switzerland computation.

115 - Extract from the 12th EU implementation report extended to include Switzerland 7.9. Alternative operators’ price for fixed international calls The equivalent prices for competitor providers in the EU countries are shown in the charts below. One competitor per country has been analyzed. The prices are shown for a 10 minute call, at peak time weekdays. Prices include VAT and are applicable for September 2006. For Switzerland, the comparison was made with the prices charged by Sunrise, Swisscom’s main competitor, which does not necessarily mean that they are the cheapest solutions available on the market. As was shown in the preceding section (7.8), the prices charged in Switzerland are well below the European average and it is extremely rare to find more advantageous conditions. In spite of the very low level of the prices billed by the dominant operator, it is possible for a Swiss user to benefit from the substantial advantages available from the competition. Thus the difference for a ten-minute telephone call with the main alternative operator is: • -12.5% for a call to the nearest neighbour country and to the USA (Figures 113 and 115); • -28.6% to the most distant EU member country (Figure 114).; • -20.2% for a telephone call to Japan (Figure 116). Figure 113 10 min international call to near EU country, incumbent and competitor's price

7.0

6.0

Competitor Incumbent EU25 Avg. Competitor 93 5. 5.0 T

4.0 7 0 ing VA 4.

3.0 4 7 0 1 96 3 €, Includ 8 3. 2.9 2. 7 . 7 2. 2 2 4 2

2.0 2. 2 8 8 12 09 2.3 0 0 5 2. 9 95 . 2. 2. 1 1.9 1. 5 3 1.9 1.9 8 1.8 54 5 6 50 4 . . 45 5 3 3 37 3 1.5 1 1 . 1. 26 1.0 1. 2 2 1. 20 20 0 9 1 1. 5 5 3 1. 1.2 0 1. 1. 5 1. 1. 8 9 6 5 87 0 8 9 7 7 2 7 5 1. . 77 0.9 7 7 74 0.9 0.9 0. 7 5 6 6 0. . 0 . . . 0.7 0. 0. 0. 0. 0 0 0 0 0.6 0.0 0.5 0.5 l i l t t r a a a e a i e r o i ce t te nd t TA TG ise le2 le2 le2 le2 le2 le2 l n c Oni e r NTL Ono U os e llSat atBT g l Elis Wi Net Te Te Te Te Te Te Ar Ca Es Te Volja Ce Sun unika f Forthne u Tele2 lezinke Lietuv om GTS Nex Ne ge ok di a R SE CY DK NL EE DE SI LU ES IE MT CZ AT FI BE IT FR HU EL UK SK PT PL LT LV CH Source for Switzerland: OFCOM Switzerland computation.

Extract from the 12th EU implementation report extended to include Switzerland - 116 Figure 114 10 min international call to distant EU country, incumbent and competitor's price

9.0

8.0 Competitor Incumbent EU25 Avg. Competitor 8.02 7.0 8

6.0 6.7 VAT

g 5.0 0 udin 4.9 l 4.0 4.72 18 07 4 Inc 4. 4. 4.04 7 9 8 €, 3.87 3.

3.0 1 2 21 3.4 3.4 2 1 10 04 0 3 . . 3. 1 8 3. 3 3. 3 71 7 7 2.9 . 2.85 2. 2 2. 2 37

2.0 3 9 2.4 2.45 0 08 2. 2. 02 2.12 2. 2. 5 3 2. 0 5 1.82 . 1.71 40

1.0 3 1.59 8 1.5 1.54 1 23 1.5 . 1 1. 7 6 0 1.37 1.37 1.36 . 1.26 95 95 1 1.20 8 6 1.14 1. 1 0. 0. 0.92 0. 0.0 0. l i l t t r a a a e a i e r o i ce t te nd t TA TG ise le2 le2 le2 le2 le2 le2 l n c Oni e r NTL Ono U os e llSat atBT g l Elis Wi Net Te Te Te Te Te Te Ar Ca Es Te Volja Ce Sun unika f Forthne u Tele2 lezinke Lietuv GTSNex om Ne ge ok di a R CY LU SI ES CZ UK IT FR DE EL BE HU NL SK AT PT EE SE PL IE DK LT FI LV MT CH Source for Switzerland: OFCOM Switzerland computation. Figure 115

10 min international call to USA, incumbent and competitor's price 7.0

6.0 Competitor Incumbent EU25 Avg. Competitor 5.93 5.0 90 4. VAT 4.0 7 g 4.0

3.0 3.49 2 11 Includin 0 5 , 3.18 . 3. € 3 2.8 6 47 38 3 . 3

2.0 2. 2 2. 2 1 8 8 12 2.32 2.22 9 90 2. . 90 2. 2.09 2.0 1 1.9 4 1. 1. 0 64 56 55 7 6 1.71 1. 3 9 1. 1. 1.5 1.53 . 1.0 1.5 8 3 1.40 1.3 1 5 5 0 0 1.23 1.23 1.23 5 99 1.1 1.18 9 9 0 8 6 1. 8 2 6 6 6 7 1. 7 . 0. 0. 0. 6 4 6 4 6 0 . . 0.8 0. 0.7 0.74 0. 0. 0.0 0 0. 0 l i l t t r a a a e a i e r o i ce t te nd t TA TG ise le2 le2 le2 le2 le2 le2 l n c Oni e r NTL Ono U os e llSat atBT g l Elis Wi Net Te Te Te Te Te Te Ar Ca Es Te Volja Ce Sun unika f Forthne u Tele2 lezinke Lietuv GTSNex om Ne ge ok di a R CY NL SE DE LU SI ES MT AT IE CZ BE UK IT FR DK EE EL SK PT HU PL LT FI LV CH Source for Switzerland: OFCOM Switzerland computation.

117 - Extract from the 12th EU implementation report extended to include Switzerland Figure 116

10 min international call to Japan, incumbent and competitor's price 25.0 0 6 .

20.0 22

Competitor Incumbent EU25 Avg. Competitor .04 20

15.0 T A .77 V 14 9 .21 1 6 ing . 3 . d 13 2 12 u l 10.0 1 c n 1 8 08 0 78 . 5 €, I 9. 9 2 9 98 8. 8. 6 4 . 7. 7 7. 52 3 0 0 8 8

5.0 9 0 7 6. 2 50 . 20 2 5. 0 1 . 6 5 5.7 5.6 5.6 80 5. 9 8 5. 5 3 5. 4 5 0 0 . 9 4. 6 0 80 . 2 6 9 6 6 1. 4 49 50 3 . . 6 3 . 3 1 . 5 3. 96 88 . 3 7 0 3. 3. 9 8 7 3 3. 3 09 49 12 08 54 4 3. 3 2 5 4 2. 2. 82 . 2.7 2. 2. 2. 1. 1. 2. 1 1. 1. 1.3 0.0 0. l i t t t r a a a L T el e i a r o ce t t t nd t TG lia ne c S Oni a NT Ono j os ll atB Elis th Ne Wi Tele2 Tele2 Tele2 Tele2 Tele2 Tele2 2UTA v Ar nke u Ca i Es Telene Vol t Cege Sunrise unika z For Tele le Lie GTSNex om k Neuf ge dio a R CY LU UK EL SE NL AT SK CZ FR BE ES FI SI LV PL HU DE IE IT DK PT EE MT LT CH Source for Switzerland: OFCOM Switzerland computation.

Extract from the 12th EU implementation report extended to include Switzerland - 118 8. LEASED LINES RETAIL TARIFFS

This section contains an overview of prices charged by incumbent operators to end users in each Member State (and in some cases in Switzerland) for national and international leased line services as at 1 September 2006. Figures do not cover wholesale prices. Price developments are also analyzed over the period August 2000 - September 2006. The figures and the information are taken from a study carried out by Teligen-HI, United Kingdom for the Commission. Data on standard retail prices charged by incumbent operators have been collected in each country. In Switzerland, the retail leased lines market is characterized by opacity with its origin in the small number of players and the competition in which they engage. Charges do not fall with usage. The sole source of information at our disposal is the Teligen T-Basket product. This product, unfortunately, does not include an analysis as detailed as the one presented in this report, which is why certain markets could not be examined (34Mb/s and 155Mb/s, as well as international leased lines). Teligen obtains information from Swisscom and calls the reader’s attention to the fact that the prices charged by the historic operator are negotiated on a case by case basis. Thus Teligen assumes that the notified prices are an objective reflection of the negotiated prices. One final point: Since February 2004, data that were provided by Swisscom to Teligen are no more delivered. This explains why no data are displayed in 2004 for Switzerland. The only figures that include Switzerland are figures 125a and 126a.

8.1. Incumbents' national leased lines National leased line data is provided for 2005 and 2006. Two distances are covered: 2 km (local circuits), and 200 km. Tariffs are taken from the incumbent operator in each country. Other operators may offer other prices. In order to properly reflect the tariff structures used in some countries, the circuits may be considered in one of two different ways, depending on tariff structure. The one to apply will differ from carrier to carrier. The principles used in this report for calculating the price of a full circuit are: 1: When tariff specifies local tail prices 2: When tariff specifies a single price for the separately, in addition to main circuit. circuit, end to end, including local tails. Local tail length Main circuit length Local tail length Main circuit length 2 km circuit 1 km 0 0 2 km 200 km circuit 2 km 196 km 0 200 km Note: The local tail length is per tail, i.e. there will be 2 such tails with each circuit. Where several tariff options exist depending on type of location, the criteria for choice is as follows: • 2 km circuits are always within a major city (usually the Capital) • 200 km circuits are between a major city and a “minor” city As the definitions vary between countries, the type of tariff option chosen will also vary (see details below). The countries where the price may vary with location or other non-distance related definitions are: Belgium, France, Austria, Finland, Sweden and the United Kingdom. Some operators apply termination charges per local end, without necessarily covering the local tail circuit within that charge. 4 types of circuits are covered: 64 kb/s, 2 Mb/s, 34 Mb/s and 155 Mbit/s. As not all carriers publish tariffs for all these bitrates and all years, there may be some gaps in the information, especially for higher bitrates. Some carriers offer 2 Mb/s circuits as both structured and unstructured. In this analysis only unstructured circuits are included. Also, some carriers offer different types of leased lines, often in the form of “basic circuits” and circuits in a managed network. Only “basic circuits” are included in this analysis, as the managed network services are not comparable between carriers. Lately a few carriers have decided not to publish their prices for some or all types of leased lines. This makes it increasingly difficult to present a full overview of the prices in all 25 EU countries.

119 - Extract from the 12th EU implementation report extended to include Switzerland For the USA the prices of Verizon intra-LATA circuits for New York State have been used. The bitrates of leased lines offered in some countries may be different from the ones found in most EU Member States. Some operators may offer 56 kb/s instead of 64 kb/s, 1.5 Mb/s instead of 2 Mb/s, 45 or 50 Mb/s instead of 34 Mb/s, and 140 or 150 Mb/s instead of 155 Mb/s. Prices shown in the tables and graphs in this section of the report have been adjusted according to the difference in capacity. All prices are presented in EURO per year, excluding VAT. National leased lines prices as at 1 September 2006 The validity dates of the tariffs used in this section are: Valid date Valid date Valid date Belgium 01/06/04 Cyprus 01/01/06 Slovenia 01/12/02 Czech Republic 01/07/06 Latvia 01/06/99 Slovakia 01/09/06 Denmark 01/06/06 Lithuania 27/06/03 Finland Germany 01/07/06 Luxembourg 01/05/06 Sweden Estonia 15/06/06 Hungary 01/01/02 United Kingdom 01/01/04 Greece 03/04/06 Malta 01/12/04 Japan 01/01/05 Spain 15/05/06 Netherlands 01/04/06 USA, Verizon 21/05/05 France 01/08/06 Austria 01/09/01 USA, Pacbell 12/03/03 Ireland 18/06/03 Poland 01/01/00 Italy 01/11/03 Portugal 01/09/06

Belgium: Belgacom has divided its network into 4 levels based on “economic concentration”. The tariffs shown are for circuits within or between level 1 areas, “Very high economic concentration”. Prices for 155 Mb/s shown here are adjusted from prices for 140 Mb/s circuits. Local circuits within an exchange area are priced as a regular circuit of the given distance. Czech Republic: Telefonica O2 defines prices for all bitrates based on the price of a 64 kb/s circuit. Coefficients are given for each bitrate available (up to 2 Mb/s), and the price is the product of the 64 kb/s price and the coefficient.Local circuits are defined as a 0 km circuit. 10 distance zones are defined for circuits with more than 0 km between serving exchanges. There are no incremental charges (i.e. per km). Denmark: TDC divides the leased lines into two categories: Local circuits based on distance bands and whether the two ends are connected to the same exchange or neighboring exchanges. Long distance circuits connected to different exchanges, divided into 4 distance bands. There are no incremental charges (e.g. per km). Prices for 155 Mb/s shown here are adjusted from prices for 140 Mb/s circuits. Germany: Deutsche Telekom offers different types of circuits. In this analysis the “Standard Festverbindungen” is used. Tariffs are divided into: a) Local 1 (same exchange); b) Local 2, up to or above 15 km; c) Long Distance, < 15km, 15 – 50 km, 50 – 150 km, > 150 km. Local 2 and Long distance use incremental (per km) charges. At 34Mb/s and 155 Mb/s access circuit charges apply, with a distance (per km) element. Estonia: Elion divides the leased lines into distance bands of 0 – 6 km, 6 – 10 km, 10 – 20 km, >20 km. Trunk circuits above 20 km use incremental (per km) charges. Local circuits are priced as a regular circuit of the given length. Greece: OTE divides the leased lines into: a) Local circuits, b) Trunk circuits (< 35 km, 35 – 70 km, 70 – 150 km, > 150 km). Trunk circuits use incremental (per km) charges. 64 kb/s charges are for Hellascom service from 2003. Prices for 2004 are those OTE should apply according to the EETT decision of December 2003. Prices have since changed again. Spain: Telefonica strictly divides leased lines according to distance: a) Distance bands: 0 – 4 km, 4 – 20 km, 20 – 70 km, 70 – 300 km, 300 – 500 km, > 500 km. All bands use incremental (per km) charges. Telefonica does not publish prices for 155 Mb/s circuits. Local circuits within an exchange area are priced as a regular circuit of the given distance. France: France Telecom offers leased lines in the products Transfix and Transfix 2.0. Transfix is the basic service, and the one used in this analysis. The tariff is divided into distance bands: 0 – 10 km, 10 – 50 km, 50 – 300 km, > 300 km. 34 and 155 Mb/s divide at 30 km and 100 km instead of 50 km. Prices for 2 Mb/s relate to 2,048 kb/s bit rate. 1,920 and 1,984 have different prices. Prices for 34 and 155 Mb/s circuits relate to circuits with one end in a

Extract from the 12th EU implementation report extended to include Switzerland - 120 major city (zone A), as defined by France Telecom. Local circuits within an exchange area are priced as a circuit of the given distance. Additional definitions apply for higher speed circuits. Ireland: EirCom defins the tariff for leased lines with a local end charge, and main link charges for circuits 0 – 30 km and > 30 km. Local circuits may be made up by 2 local ends, and no main link. Circuits equal to or above 1 Mb/s have a distance incremental charge for local ends over 1.5 km. Italy: All circuits have an access charge per end, and a main link distance related charge per km. Distance bands are 0 – 60 km, 60 – 300 km, and > 300 km. Circuits from 2 Mb/s and above are available with various levels of reduced charges depending on contract period and overall spend. The most basic level is used in this analysis. Local circuits within an exchange area are priced as two access circuits only. Cyprus: CYTA divides the leased lines into: a) Subscriber segment, for access. b) Network segment, between exchanges, at distance bands of 0 – 20 km, 20 – 80 km, > 80 km. Local circuits within an exchange area are priced as two subscriber segments. Latvia: Lattelekom circuits have the same price regardless of distance. Prices are only provided for circuits up to 2 Mb/s. Lithuania: Lietuvos Telekomas distinguish between circuits inside the local exchange area, and those beyond the local exchange area. Luxembourg: P&T Luxembourg divide the leased lines tariff into 4 types of circuits: Same local network, contiguous local network of same nodal sector, same nodal sector or contiguous local networks of different nodal sectors, and non-contiguous local networks of different nodal sectors. This definition relates to the network hierarchy, and not to distance. Distances at 200 km are not possible. Local circuits within an exchange area are priced as a circuit in the same local network. Hungary: Matav applies an access circuit charge for each end of the circuit, and a fixed basic charge and a per km charge for the trunk part. Matav does not publish prices for national circuits, so data have not been updated. Malta: Maltacom has a flat charge regardless of distance, only dependent of bitrate. Netherlands: KPN Telecom offer leased lines as Digital Standard and DigiStream services. Digital Standard is the basic service, and the one used in this analysis. Tariffs are divided into a charge per connecting point and a main link charge. The main link charge is divided into two zones: Up to 50 km with a fixed basic charge and an incremental per km charge, and over 50 km with a fixed basic charge. Prices are in effect capped above 50 km. Local circuits within an exchange area are priced as two access connections plus a short main link of the given distance. OPTA has found that the market for 2 Mb/s circuits is competitive, meaning that prices indicated by KPN are maximum prices, and will normally be used as a basis for negotiating a (lower) price. Austria: Telecom Austria divides the “Digitaler Stromweg” circuits into 2 categories: City-tarif when both ends of the circuit are in category A cities (a defined list of 68 towns and cities), and Normal-tarif when the above does not apply. This analysis used the City-Tarif. The Normal-tarif would in most cases come out more expensive. For the years up to 2000 a different tariff scheme applied, with a different list of towns, and 3 instead of 2 categories. The tariff is based on a charge per local end, and a distance related charge per km. The distance bands vary with bit rate. Local circuits within an exchange area are priced as two access circuits only. Poland: Polish Telecom has no recurring charges related to the access. A basic charge plus a per km charge is applied for the full length of the circuit. Distance bands are divided into 0 – 3 km, 3 – 20 km, 20 – 30 km, 30 – 50 km, 50 – 100 km, 100 – 200 km, over 200 km. Portugal: Portugal Telecom divides the leased line tariff into local access circuit charge, and a main link with a fixed and an incremental charge per km. Distance bands are 0 – 10 km, 10 – 30 km, 30 – 50 km, 50 – 100 km, over 100 km. Local circuits connected to the same exchange will not incur main link charges. Local circuits within an exchange area are priced as two access circuits only. Slovenia: Telekom Slovenije divides the leased line tariffs into 3 distance bands: 0 – 5 km, 5 – 50 km and over 50 km. Each of these bands have a basic price and a per km price. Distance is calculated between serving exchanges. Slovakia: Slovak Telecom defines the leased line tariff in two parts: Local Access and Intercity. The Intercity part is divided into 3 distance bands: 0 – 50 km, 50 – 100 km and over 100 km. Prices are given for the 64 kb/s bitrate. Other bitrates between 9.6 kb/s and 2048 kb/s are calculated based on the 64 kb/s price using a multiplication factor.

121 - Extract from the 12th EU implementation report extended to include Switzerland This factor is different for Local Access and Intercity circuit parts. For example 2048 kb/s has a factor of 4.4 for the Local Access and 5.6 for the Intercity part. Finland: Sonera stopped publishing full 64 kb/s circuit prices in 1998, and has also stopped publishing 2 Mb/s circuit prices. Local circuit charges were divided into 3 categories: Urban area, Rural areas I and II. Definitions of these areas relate to individual locations in the Sonera coverage area. Long distance (main link) charges were also divided into 3 categories: Green, Red and Blue. Green covers the main 5 cities, red a further 28 towns, and Blue the rest of the countries. Distance bands are 0 – 50 km, 50 – 100 km, and > 100 km. Incremental charges per km applied. Sweden: Telia no longer publishes prices for national leased line. Prices below relate to the last published price list. Telia divides their network into 5 categories: Metropolitan green and green for the major cities and towns, red and blue for short distance network in smaller places, and white for rural areas. Circuits are priced according to the portion of the circuit falling into any of these categories on its route. Here the green tariff is assumed, for a circuit between reasonably large towns. The tariff is divided into local circuits and long distance. Long distance circuits will have a separate access link charge per end, and a main link charge. Local circuits are priced in 2 distance bands: 0 – 0.5 km and 0.5 - 3 km. Long distance circuits are priced in the bands 0 – 20 km, 20 – 40 km, and > 40 km. The latter has an incremental per km charge. United Kingdom: BT divides their Kilostream (64 kb/s) and Megastream (2, 34 and 155 Mb/s) tariffs into circuits wholly within City London Zone (0207-area), and circuits with one or both ends outside London. For local circuits within CLZ the main link does not apply since both ends are connected to the same exchange (according to the definition used). The price is calculated as the sum of two local access circuits. Distance bands outside London are < 15 km and > 15 km. Incremental charges per km applies. 8.1.1. 64 Kbit/s Figure 117

Prices for 64kb/s, 2 km circuits

6000 0

5000 40 5, d e

d 4000 u cl ex T A

3000 360 V 3, 883 788 766 761 2, 7 2, 2, 2, 4 r year, 519 1 7 466 e 4 3 2000 2, 2, 2, 235 2, 118 € p 065 2, 052 2, 936 2, 902 2, 1, 1, 668 673 544 547 1, 1, 440

1000 1, 1, 1, 233 200 128 6 104 1, 1, , 1, 1 88 692 0 BE CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT SI SK SE UK USA USA JP NY CA

2005 2006 EU24

Blue line represents EU average=2124 €

Extract from the 12th EU implementation report extended to include Switzerland - 122 Figure 118

Prices for 64kb/s, 200 km circuits

16000

14000 977

12000 13, d e d u 168 ,

cl 10000 11 ex T A 8000 115 V 9, 092 930 907 r year, 6000 792 , 8 , 7, 654 627 , 578 e 6 6 6 6, 6, 16 6, 833 831 6, 720 € p 5, 5, 228 5,

4000 022 5, 800 709 5, 561 456 4, 4, 4, 4, 823 735 3, 3, 224 2000 002 3, 3, 547 0 1, BE CZ DK DE EE EL ES FR IE IT CY LV LT HU NL AT PL PT SI SK SE UK USA USA JP NY CA

2005 2006 EU22

Blue line represents EU average=5759 €

8.1.2. 2 MBit/sec Figure 119

Prices for 2Mb/s, 2 km circuits

25000 0 ,68

20000 22 ed d u

cl 15000 ex 79 2 T , A 15 V 20

, 3 , 32 ar 13 1 10000 , 12 r ye 1 e 4 8 0 8 9,4 € p 1 0 8 33 25 1 8 4 8, 2 8, 5 50 52 9 8, 8 2 1 4 7, 7, 7 55 6 7, 7, 4

5000 5 6, 6, 6 63 1 8 7 5,8 7 8 0 5, 83 5 5 8 0 0 4, 0 1 8 4, 4, 6 5 4,28 0 4 4,0 4 3, 3, 1 3,1 0 2, BE CZ DK DE EE EL ES FR IE IT CY LV LT HU NL AT PL PT SI SK SE UK USA USA JP NY CA

2005 2006 EU24 Blue line represents EU average=7683 €

123 - Extract from the 12th EU implementation report extended to include Switzerland Figure 120

Prices for 2Mb/s, 200 km circuits

80000

70000 328

60000 70, d e d 336 908 u , 58, 6 cl 50000 621 5 ex 53, 137 T A 943 40000 49, 911 537 V 297 45, 43, 43, 43, 450 504 990 39, 39, 345 232 , , r year, , 30000 2 5 5 e 3 3 35 46 31, € p 20000 120 051 27, 100 909 24, 23, 22, 115 657 200 19, 10000 , 6 16, 1 4 8 43 44 693 6, 6, 0 8, BE CZ DK DE EE EL ES FR IE IT CY LV LT HU NL AT PL PT SI SK SE UK USA USA JP NY CA

2005 2006 EU22

Blue line represents EU average=32655 €

8.1.3. 34 Mbit/s Figure 121

Prices for 34 Mb/s, 2 km circuits

60000

50000 340 d 605 , 48,650 e 6 47,476 47, d 40000 4 u 44,919 cl 42,193 40,705 ex T 772 , 6 A 37,076 5 8

30000 3 7 V 35,352 r, 32, 2 30,600 yea 11 r 27,492 e 26,

p 20000 € 945 , 20,302 8 1 10000 18,000 12,653 11,730

0 BE DK DE EE EL ES FR IE IT CY LT LU AT PT SI UK USA USA JP NY CA

2005 2006 EU16

Blue line represents EU average=31814 €

Extract from the 12th EU implementation report extended to include Switzerland - 124 Figure 122

Prices for 34 Mb/s, 200 km circuits

600000

500000 225 505, d e

d 400000 u 255 cl 9, 41 ex T A 300000 V 547 954 305, 240 348 r year, , 2, , 0 e 27

200000 72 264 634 262 458 € p 400 231, 225, 211, 637 194, 100000 167, 981 099 980 637 273 6 , , , , 6, 2 5 7 11 12 112 109 107 108 84, 0 64, BE DK DE EE EL ES FR IE IT CY LT AT PT SI UK USA USA JP NY CA

2005 2006 EU15

Blue line represents EU average=194754 €

8.1.4 . 155 Mbit/s Figure 123

Prices for 140/155 Mb/s, 2 km circuits

160000

140000 9 42 5, 14 120000 6 34 7, d e 12 d 0 u l

100000 00 8, 5 exc 7 10 5 T A 96,

V 80000

r, 00 ,2 04 ,9 r yea 60000 76 e 71 p 790 € , 60 7 5 40000 ,7 50 043 274 00 , , ,0 39 39 36 20000 60 59 ,2 ,4 53 25 ,6 23 0 12 BE DK DE EL FR IE IT CY LT LU AT SI UK JP

2005 2006 EU13

Blue line represents EU average=62548 €

125 - Extract from the 12th EU implementation report extended to include Switzerland Figure 124

Prices for 140/155 Mb/s, 200 km circuits

1400000 9 2

1200000 0 277, 1,

d 1000000 e d u l exc 800000 717 T A 872, V

600000 839 99, year, 6 r e € p 400000 700 800 485, 800 460, 388, 0 200000 2 66 2 0 48 963 36 63 36 114 7 252, 239, 224, 0 144, 144, 194, 119, BE DK DE EL FR IE IT CY LT AT SI UK JP

2005 2006 EU12

Blue line represents EU average=352317 € 8.2. National leased lines price trends (1 august 1998 - 1 september 2006)

Figure 125

EU average price variation since 1998, 64 kb/s

0%

-5%

-10% -13% 8 -17% -15% -18% -18% 199

e -19% c

n -21% -22% -22% si -20% e

g -20% n a -25% -23% % ch -26% -30% -27% -30% -35% -32% -34% -35% -40% 1998 1999 2000 2001 2002 2003 2004 2005 2006

2 km 200 km

Extract from the 12th EU implementation report extended to include Switzerland - 126 Figure 125a

CH average price variation since 1998, 64Kb/s 0% 0% 0% -5%

-10%

98 -15% -20% -20%

ce 19 -20%

ge sin -25%

an -30% -30% -30% % ch

-35% -33% -33%

-40% -43% -43%

-45% 1998 1999 2000 2001 2002 2003 2004 2005

CH, 2 km CH, 200 km

Source for Switzerland: Teligen T-Basket; OFCOM Switzerland computation.

Figure 126

EU average price variation since 1998, 2 Mb/s

0%

-5% -10% -10% -14% -16% -16% -15% 8 -22% -20% -22%

ce 199 -19% -26% n

si -25% -28% e g

an -30% -28% -30% % ch -35% -33% -40%

-41% -45% -45% -45% -50% -46% 1998 1999 2000 2001 2002 2003 2004 2005 2006

2 km 200 km

127 - Extract from the 12th EU implementation report extended to include Switzerland Figure 126a

CH average price variation since 1998, 2 Mb/s

0% 0% -10%

-20%

98 -30%

-33% -33%

ce 19 -40%

-50% -43% -43% ge sin

an -60%

% ch -70%

-80% -89% -89% -90% -90% -90%

-100% 1998 1999 2000 2001 2002 2003 2004 2005

CH, 2 km CH, 200 km

Source for Switzerland: Teligen T-Basket; OFCOM Switzerland computation. Figure 127

EU average price variation since 1998, 34 Mb/s

-2% 0%

-10% -17%

-15% -20% -24%

998 -25% -25% 1 -27%

e -29% c

n -32%

si -30% e g

an -32% -40% % ch

-43% -50% -46% -46%

-52% -52% -52% -60% 1998 1999 2000 2001 2002 2003 2004 2005 2006

2 km 200 km

Extract from the 12th EU implementation report extended to include Switzerland - 128 8.3. International leased lines prices This section examines the standard retail prices (annual rental) for international leased line services (half-circuits in each country) charged by the incumbent operators in each Member State. An analysis of the price development over the period from August 1998 to September 2006 is also included. Three destinations are covered: international half circuits to the nearest EU country (hereafter “near EU”), to the most distant EU country (“far EU”) and to the USA. Three types of circuits are considered: digital 64 Kbit/s, 2 Mbit/s and 34 Mbit/s. Given that price information on 155 Mbit/s international lines is only available for a few Member States, the analysis of these circuits is omitted. The data is presented with the following parameters: • All charges in Euro per year • Excluding VAT • Variable / 1 year contract (shortest term available). • AT&T prices are used for USA

8.3.1. 64 Kbit/s Figure 128

64 kb/s half-circuit prices to Near EU country

45000

40000 7 677 6 , 4 35000 8 , 3 37 d 8 0 e 7 d

30000 , u l 32

exc 25000 T A V

20000 r year, e 3

15000 1 9 , € p 59 16 2 2 8 , 9 , 7

10000 14 18 2 0 1 12 7 6 , 560 ,82 0 40 5 , 9 6 0 5 11 2 10 1 1 5 9, 10, 9 0 9,4 9,0 5000 0 76 2 7,8 5 4 7,33 7,2 6, 7 6,60 0 14 5, 0 4,3 0 4,4 BE CZ DK EE EL ES FR IE IT CY LV LT LU HU MT NL PL PT SI SK UK USA

2005 2006 EU20

Blue line represents EU average=8793 €

129 - Extract from the 12th EU implementation report extended to include Switzerland Figure 129

64 kb/s half-circuit prices to Distant EU country

100000

90000 32 4 80000 , 87

d 70000 e d u l 60000 exc T A

V 50000

8 7 9

40000 , r year, 45 e 1 677 , 8

€ p 30000 ,82 3 35 7 3 2 06 0 4 20000 ,18 8 , , 4 26 ,80 25 1 24 1 3 9 22 , 8 2 8 7 5 8 0 0 7 ,36 52 10000 , 96 18 48 35 7 5 4 1 9 , , 1 0 , 16 ,59 15 ,00 ,00 14, 14, 13 13 12 12 0 8,4 0 8,3 12 12 BE CZ DK EE EL ES FR IE IT CY LV LT LU HU MT NL PL PT SI SK UK USA

2005 2006 EU20

Blue line represents EU average = 12960€

Figure 130

64 kb/s half-circuit prices to USA

90000

80000 68 3 , 83 70000 d e

d 60000 u l 4 ,52 exc

50000 58 T A V

40000 9 89 r year, 4 41, e

30000 ,25 € p 35 6 27 4 4 2 23 , 9 72 4 , 7

20000 , 0 ,00 9 27 , 25 9 25 , 25 24 6 21 61 0 40 3 0 , 0 6 2 10000 ,81 4 , 0 1 , 4 16 6 1 8 15 , ,12 15 0 8 0 14 , 12 12 11 0 8,7 0 0 0 8,8 BE CZ DK EE EL ES FR IE IT CY LV LT LU HU MT NL PL PT SI SK UK USA

2005 2006 EU19

Blue line represents EU average=15166 €

Extract from the 12th EU implementation report extended to include Switzerland - 130 8.3.2. 2 Mbit/s Figure 131

2 Mb/s half-circuit prices to Near EU country

700000

600000 3 2 1,8 62

d 500000 e d u 4 9 0

excl 400000 T 8, A 3 43 V 80

300000 73, 3 r year, e

€ p 200000 1 04 3 , 9 65 8 9,13 4 2 , 100000 180 44 9 16 25 00 4,04 2, 976 0 3 4 6 6 0 2 6 4 , , , 145 42 7,4 41 6 13 13 9 , 2 30 ,48 ,70 ,32 ,97 ,27 ,00 ,01 ,4 11 110 88 0 84 0 62 44 73 59 81 84 75 BE CZ DK EE EL ES FR IE IT CY LV LT LU HU MT NL PL PT SI SK UK USA

2005 2006 EU20

Blue line represents EU average=106379 €

Figure 132

2 Mb/s half-circuit prices to Distant EU country

1400000

1200000 1 5 2,9

d 1000000 1,16 e d u l

exc 800000 T A V

600000 r year, 3 e 6,03 € p 400000 4 9 53 0 6 6 6 0 0 9 8, 6 0 6 3 0 6 0 6 32 4 43 23 20 2 2, 6,9 6,0 0,8 7,0 0,9 9, 1, 4, 5 8 5 14 11 11 10 12 5 12 200000 8 10 15 872 0 8 14 87 0 6 7 5 1, 9 4 2 8, 20 5,6 50, 26 1, 6,62 2 24 24 3,7 8,0 0,2 21 20 16 0 0 17 17 BE CZ DK EE EL ES FR IE IT CY LV LT LU HU MT NL PL PT SI SK UK USA

2005 2006 EU20

Blue line represents EU average=149514 €

131 - Extract from the 12th EU implementation report extended to include Switzerland Figure 133

2 Mb/s half-circuit prices to USA

1200000 2 4

1000000 8,9 1,11 d e

d 800000 u l exc T 7 A 0

V 600000

7 1, 65 r year, e

400000 8 94 € p 56 9 , 5 0 2 7, 629 0 20 5 0 3 2 6 6 4, 0 20 9 7 , 418 4 9 2,3 6,0 8, 18 9,20 5 3, 6, 5 160 35 12 14 2 13 200000 8 11 11 8 1 7 2,4 5 7 5,6 0 4 0 6 25 24 0,8 2,1 8,04 5,2 7,1 0 19 19 17 14 0 0 12 BE CZ DK EE EL ES FR IE IT CY LV LT LU HU MT NL PL PT SI SK UK

2005 2006 EU19

Blue line represents EU average=169384€

8.3.3. 34 Mbit/s Figure 134

34 Mb/s half-circuit prices to Near EU country

1400000

1200000 125 2, 0 26 0 , 4 1 4,

1000000 15 ed 2 , 5 7 d 1 4 u 90 4 4, 8 6, xcl 01 11 4,0 e

1,

T 800000 95 0 A 00 V 00, 600000 1 r year, e 1 € p 5 8

400000 0 1 1,4 5, 50 28 8 8 4 9 0 10 200000 9 0, 85, 2,4 05 30 2 9 , 26 116 0 0 BE CZ DK EE EL ES IE IT LV LT LU NL PT SI

2005 2006 EU13

Blue line represents EU average=853599 €

Extract from the 12th EU implementation report extended to include Switzerland - 132 Figure 135

34 Mb/s half-circuit prices to Distant EU country

1600000 4

1400000 3 2 8 1,30 8, 48 , 1 43

1200000 1, d 8 e 4 d 7 u l 1000000 5,4 29 1,14 exc 68, 0 T , 0 1 A 0

V 800000

1,2 87

r year, 600000 e € p 400000

200000

0 0 CZ EL ES IT NL PT

2005 2006 EU5

Blue line represents EU average= 1222232 €

Figure 136

34 Mb/s half-circuit prices to USA

2500000 6 82 1, 6

2000000 9 27 , 2 9,6 d 2,07 e d u l

1500000 744 4, exc T 64 , A 1 V

1000000 7 9 r year, 2 e 8, 06 € p 1, 600 1,

500000 80

0 0 CZ EL ES IT NL PT

2005 2006 EU6

Blue line represents EU average= 1579538 €

133 - Extract from the 12th EU implementation report extended to include Switzerland 8.4. International leased lines price trends (1 August 1998 - 1 September 2006) Figure 137

Average price variation, 64 kb/s

0% 0%

-10% -20% -15% -15% 98 -20% -20% -21% -21%

e 19 -22% c -26% -26% -26% n

si -30% e

g -33% n a h

c -40% -41%

% -43% -45% -45% -47% -49% -50% -50% -50% -53% -54% -55% -55% -56% -60% 1998 1999 2000 2001 2002 2003 2004 2005 2006

to near EU country to distant EU country to USA

Figure 138

Average price variation, 2 Mb/s

0% 0%

-10% -17% -16% -20% 98 -25% -25% -21% -27% -27% e 19

c -30% n

si -35% -35% -35% e -38% g -40% n a

h -48%

c -50%

-51% -52%

% -50% -50% -52% -52% -52% -53% -58% -58% -60% -58% -59%

-70% 1998 1999 2000 2001 2002 2003 2004 2005 2006

to near EU country to distant EU country to USA

Extract from the 12th EU implementation report extended to include Switzerland - 134 8.5. Exchange rate used (except tariffs). Belgium 1 Czech Republic 0,0353519 Denmark 0,1341094 Germany 1 Estonia 0,0639116 Greece 1 Spain 1 France 1 Ireland 1 Italy 1 Cyprus 1,7340038 Latvia 1,4365752 Lithuania 0,28962 Luxembourg 1 Hungary 0,0036248 Malta 2,329373 Netherlands Austria 1 Poland 0,2537685 Portugal 1 Slovenia 0,0041736 Slovakia 0,0268485 Finland 1 Sweden 0,1072674 UK 1,4830194 CH 0,636124 SOURCE: OJ C196/1 OF 4.10.2006 Source CH: Teligen of 1.08.2006

8.6. Exchange rate used for tariff (on the mobile tariff - section 4, public voice telephony tariffs - section 7 and leased line tariffs - section 8).

Belgium 1 Czech Republic 0,03533 Denmark 0,13404 Germany 1 Estonia 0,06006 Greece 1 Spain 1 France 1 Ireland 1 Italy 1 Cyprus 1,74581 Latvia 1,43287 Lithuania 0,28962 Luxembourg 1 Hungary 0,00358 Malta 2,31965 Netherlands 1 Austria 1

135 - Extract from the 12th EU implementation report extended to include Switzerland Poland 0,25056 Portugal 1 Slovenia 0,00417 Slovakia 0,02647 Finland 1 Sweden 0,10695 UK 1,48324 Japan 0,00665 USA 0,77876 CH 0,636124 Euro rates as of 4 September 2006 PPP rates from Eurostat, 2005 Source for Switzerland: Teligen T-Basket

8.7. Population

2005 2006 BE 10445900 10 511 400 CZ 10220600 10 251 100 DK 5411400 5 427 500 DE 82500800 82 455 800 EE 1347000 1 344 700 EL 11073000 11 122 900 ES 43038000 43 758 300 FR 60561200 62 886 200 IE 4109200 4 209 000 IT 58462400 58 751 700 CY 749200 766 400 LV 2306400 2 294 600 LT 3425300 3 403 300 LU 455000 459 500 HU 10097500 10 076 600 MT 402700 404 400 NL 16305500 16 335 500 AT 8206500 8 265 900 PL 38173800 38 157 100 PT 10529300 10 569 600 SI 1997600 2 003 400 SK 5384800 5 389 200 FI 5236600 5 255 600 SE 9011400 9 047 800 UK 60034500 60 416 200 EU 15 385380700 389 472 900 EU 10 74104900 74 090 800 EU 25 459485600 463563700 CH 7459100 7507300

Source: Eurostat web site as of 1.10.2006

Extract from the 12th EU implementation report extended to include Switzerland - 136 9. OECD TELECOMMUNICATIONS BASKET DEFINITIONS 9.1. National PSTN basket Business basket results exclude VAT. Residential basket results include VAT. Non-recurring charge calculation Weight New line connection charge 50% Same day takeover connection charge 50% The non-recurring charge is calculated as an average between the charge for a new line installation, and the charge for “same day takeover”, i.e. when there is a direct transfer from the previous to the new customer. Valid for both Business and Residential baskets. Non-recurring charge depreciation Weight With normal one-off charge 5 Where connection is a tradable asset 20 Annual rental for the service is included in the basket. Any additional recurring charges (per year) shall also be included (e.g. charges related to the use of specific calling plans). Where the service (or tariff plan) includes a number of “free” calls or minutes, or any other call-related allowance, the value of this allowance is deducted from the usage. The value of the deducted allowance cannot be higher than the usage. Where the tariff clearly specifies that the allowance is related to specific types of calls (e.g. local, international), the usage in question shall only cover the defined type(s) of calls. The number of calls to fixed line phones (i.e. excluding calls to mobile phones) is defined as: Number of national fixed line calls Calls per year Business basket 3567 Residential basket 1215 The national usage will have a weighted distribution over 14 distances. Call charges relevant at each of these distances shall be used. Km 3 7 12 17 22 27 40 75 110 135 175 250 350 490 Bus 53 11 7 4 2.5 3 3.5 3.5 2.5 2 1.5 1.5 1 4 Res 60 14 5 3 1.5 2.5 2.5 2.5 1.5 1.3 1 1 0.8 3.5

Bus = Business basket, Res = Residential basket. All weights in percent of total number of fixed line calls. The national usage will have a weighted distribution over six time and day points. Call charges relevant at each of these time and day points shall be used. Day/Time We 11:00 We 15:00 We 20:00 We 03:00 Sa 11:00 Su 15:00 Bus 45.4 40.6 7 0.8 5.7 0.5 Res 26.3 22.1 25.6 3 10 13

Bus = Business basket, Res = Residential basket. All weights in percent of total number of fixed line calls. We = Weekdays, Sa = Saturdays, Su = Sundays. National call duration will vary with distance and time of day. The charge for each call shall reflect the actual charge for the duration in question, as defined by the tariff. Call setup and minimum charges shall be included. Day/Time Weekday daytime Weekday evenings, nights and weekends Distance 3-12 Km 17-40 Km 40-490 km 3-12 km 17-40 Km 40-490 Km Bus 2.5 3.5 4.5 2.5 3.5 4.5 Res 2.5 3.5 3.5 3.5 6 7

Bus = Business basket, Res = Residential basket. Duration in minutes per call.

137 - Extract from the 12th EU implementation report extended to include Switzerland 9.2. International PSTN basket The international PSTN basket, when used separately, shall reflect the cost of a single call, calculated according to the weighting method described below. No fixed charges are included. Business basket results exclude VAT. Residential basket results include VAT. Call charges for calls to all other OECD Member States shall be used. Peak and off-peak time call charges are used, defined as the highest (most expensive) charge and the lowest (least expensive) charge. Call cost is based on average per minute charge. Call setup charges and/or different charges for first and additional minutes are included. The charges to different destinations are weighted according to the ITU call volume statistics. An average over the latest 5 years of available traffic statistics is used. As there may be gaps in the ITU statistics for certain destinations from some countries, calls on such routes are excluded from the calculation. Call charges are weighted between peak and off-peak: Peak time weight Off-peak time weight Business basket 75.0 % 25.0 % Residential Basket 25.0 % 75.0 % Call duration differ between peak and off-peak time: Peak time Off-peak time Business basket 3 minutes 5 minutes Residential Basket 3 minutes 5 minutes

9.3. Composite national – international basket This basket is based on a combination of the national and international baskets, as described above. The national basket remains unchanged, and the international basket is scaled using a fixed number of international calls. Business basket results exclude VAT. Residential basket results include VAT. The number of calls to fixed line phones (i.e. excluding calls to mobile phones) is defined as: Number of national fixed line calls Calls per year Business basket 3600 Residential basket 1200 The international portion of the basket shall have a number of calls equal to 6% of the national fixed line calls, in addition to the calls defined in the national portion of the basket. International calls per year Business basket 216 Residential basket 72 Calls to mobile phones are added to the basket. The number of calls shall be 10% of the number of national fixed line calls, in addition to the fixed line calls. Calls to mobile phones Calls per year Call duration Business basket 360 2 Residential basket 120 2 Call duration in minutes per call. A weighted distribution over six time and day points is used. Call charges relevant at each of these time and day points shall be used. Day/Time We 11:00 We 15:00 We 20:00 We 03:00 Sa 11:00 Su 15:00 Bus 45.4 40.6 7 0.8 5.7 0.5 Res 14.3 22.1 31.6 3 13 16 Bus = Business basket, Res = Residential basket. All weights in percent of total number of fixed line calls. We = Weekdays, Sa = Saturdays, Su = Sundays.

Extract from the 12th EU implementation report extended to include Switzerland - 138 Call duration will vary with distance and time of day. The charge for each call shall reflect the actual charge for the duration in question, as defined by the tariff. Call setup and minimum charges shall be included. Day/Time Weekday daytime Weekday evenings, nights and weekends Distance 3-12 Km 17-40 Km 40-490 km 3-12 km 17-40 Km 40-490 Km Bus 3.5 3.5 3.5 3.5 3.5 3.5 Res 2.5 3.5 3.5 3.5 6 7 Bus = Business basket, Res = Residential basket. Duration in minutes per call.

9.4. New OECD baskets for PSTN 2006 Number of calls per year Number of calls per year National calls Calls to mobile International calls Total calls OECD Residential basket, Low Usage 456 114 30 600 OECD Residential basket, Medium Usage 900 276 24 1200 OECD Residential basket, High Usage 1560 744 96 2400 OECD Business basket, SOHO 1206 522 72 1800 OECD Business basket, SME 2016 560 224 2800 The SME basket shall also reflect 30 lines and users. Distribution over time Fixed call distribution over time We 11.00 We 15.00 We 20.00 We 03.00 Sa 11.00 Su 15.00 OECD Residential basket, Low Usage 30.2% 28.1% 23.6% 0.9% 8.2% 9.0% OECD Residential basket, Medium Usage 27.5% 28.0% 23.0% 2.0% 8.0% 11.5% OECD Residential basket, High Usage 30.0% 30.4% 20.0% 0.6% 8.5% 10.5% OECD Business basket, SOHO 39.5% 39.3% 7.5% 3.6% 5.5% 4.6% OECD Business basket, SME 40.2% 40.5% 6.5% 3.4% 4.7% 4.7% Mobile call distribution over time We 11.00 We 15.00 We 20.00 We 03.00 Sa 11.00 Su 15.00 OECD Residential basket, Low Usage 28.6% 28.6% 20.5% 0.6% 10.1% 11.6% OECD Residential basket, Medium Usage 29.1% 30.5% 20.5% 0.7% 8.5% 10.7% OECD Residential basket, High Usage 30.0% 30.4% 20.0% 0.6% 8.5% 10.5% OECD Business basket, SOHO 39.5% 39.5% 4.5% 0.3% 9.0% 7.2% OECD Business basket, SME 44.0% 42.0% 1.2% 0.1% 6.3% 6.4% Distribution over distance Fixed call distribution over distance 3 km 7 km 12 km 17 km 22 km 27 km 40 km OECD Residential basket, Low Usage 62.0% 14.5% 5.2% 3.1% 1.6% 2.1% 2.1% OECD Residential basket, Medium Usage 56.7% 13.3% 4.7% 2.8% 1.4% 3.2% 3.2% OECD Residential basket, High Usage 63.0% 14.7% 5.2% 3.1% 1.6% 1.9% 1.9% OECD Business basket, SOHO 55.5% 13.0% 4.6% 2.9% 1.5% 3.3% 3.3% OECD Business basket, SME 57.2% 13.4% 4.9% 3.0% 1.5% 3.0% 3.0% Fixed call distribution over distance 75 km 110 km 135 km 175 km 250 km 350 km 490 km OECD Residential basket, Low Usage 2.1% 1.2% 1.0% 0.8% 0.8% 0.6% 2.9% OECD Residential basket, Medium Usage 3.2% 1.9% 1.6% 1.3% 1.3% 1.0% 4.4% OECD Residential basket, High Usage 1.9% 1.1% 0.9% 0.7% 0.7% 0.6% 2.7% OECD Business basket, SOHO 3.3% 2.0% 1.7% 1.4% 1.4% 1.1% 5.0% OECD Business basket, SME 3.0% 1.8% 1.5% 1.2% 1.2% 0.9% 4.4%

139 - Extract from the 12th EU implementation report extended to include Switzerland Call durations in minutes Call durations 3-22 km We 11.00 We 15.00 We 20.00 We 03.00 Sa 11.00 Su 15.00 OECD Residential basket, Low Usage 3.7 3.7 4.7 4.7 4.5 4.5 OECD Residential basket, Medium Usa 3.7 3.7 4.7 4.7 4.5 4.5 OECD Residential basket, High Usage 3.7 3.7 4.7 4.7 4.5 4.5 OECD Business basket, SOHO 1.9 1.9 2.1 2.1 2.3 2.3 OECD Business basket, SME 1.9 1.9 2.1 2.1 2.3 2.3 Call durations >22 km We 11.00 We 15.00 We 20.00 We 03.00 Sa 11.00 Su 15.00 OECD Residential basket, Low Usage 4.4 4.4 7 7 6.6 6.6 OECD Residential basket, Medium Usa 4.4 4.4 7 7 6.6 6.6 OECD Residential basket, High Usage 4.4 4.4 7 7 6.6 6.6 OECD Business basket, SOHO 2.2 2.2 3 3 3.1 3.1 OECD Business basket, SME 2.2 2.2 3 3 3.1 3.1 Call durations to mobile We 11.00 We 15.00 We 20.00 We 03.00 Sa 11.00 Su 15.00 OECD Business basket, SME 1.8 1.8 2.1 2.1 1.9 1.9 OECD Business basket, SME 1.8 1.8 2.1 2.1 1.9 1.9 OECD Business basket, SME 1.8 1.8 2.1 2.1 1.9 1.9 OECD Residential basket, Low Usage 1.6 1.6 1.7 1.7 1.7 1.7 OECD Residential basket, Medium Usa 1.6 1.6 1.7 1.7 1.7 1.7 International calls International calls Distribution Call duration (minutes) Peak Off-peak Peak Off-peak OECD Residential basket, Low Usage 33% 67% 5.5 7.2 OECD Residential basket, Medium Usa 33% 67% 5.5 7.2 OECD Residential basket, High Usage 33% 67% 5.5 7.2 OECD Business basket, SOHO 80% 20% 2.9 3.9 OECD Business basket, SME 80% 20% 2.9 3.9

9.5. OECD mobile baskets 2002 All baskets will include: Registration or installation charges with 1/3 of the charges, i.e. distributed over 3 years. Monthly rental charges, and any option charges that may apply to the package, or package combination. The three new baskets are: Low user basket. The usage level of this basket is low, with a call volume less than half of that in the Medium user basket. Medium user basket. This basket will have 75 outgoing calls per month. High user basket. The usage level is about twice the Medium user basket. The usage profiles will also include a number of SMS messages per month. Call and message volumes for each basket are: Outgoing calls /month SMS per month Low user 25 30 Medium user 75 35 High user 150 42 The information received showed that there is little difference between the average pre-paid usage and the low user post-paid usage. The low user basket can therefore be used for both pre- and post-paid tariffs, allowing a simple comparison also between the two types. Only national calls are included in the profiles, with 4 different destinations: Local area fixed line calls. This is used to accommodate the tariffs that have separate charges for the local area. When such charges are not available, this proportion of calls is included in the National.

Extract from the 12th EU implementation report extended to include Switzerland - 140 National fixed line calls. This covers all fixed line calls outside the local area, except in cases as noted above. Same network mobile calls (On-net). This includes all calls made to mobiles in the same mobile network as the caller. Other network mobile calls (Off-net). This includes calls to all other mobile networks in the caller’s country. When the charges are different depending on destination network, the market shares based on subscriber numbers are used for weighting the charges. Up to 3 other networks will be considered in each country. Distributions per destination for each basket are: % of total number of Fixed Local area Fixed National area On-net mobile Off-net mobile calls Low user 28.0% 14.0% 40.0% 18.0% Medium user 24.0% 12.0% 43.0% 21.0% High user 26.0% 14.0% 42.0% 18.0% As the information received produced little evidence on the split between local and national fixed line calls, the assumption has been used that the ratio would be 2:1 for local: national, i.e. 67% local and 33% national. This assumption is taken from the averages in fixed baskets, and the scarce information received. Instead of splitting time and day into distinct times and days the following approach will be used: Peak time calls at weekdays, most expensive time during daytime. Off-peak time calls at weekdays, cheapest time before midnight. Weekend time calls, at daytime Sundays. Distributions over time and day for each basket are: % of total number of ToD ToD ToD Weekend calls Peak Off-peak Low user 38.0% 35.0% 27.0% Medium user 47.0% 30.0% 23.0% High user 63.0% 22.0% 15.0% There will be 3 separate call durations: Local and national fixed line calls Same network mobile calls (On-net) Other network mobile calls (Off-net) Call durations for each basket are: Minutes per call Dur Dur Mobile Dur Mobile Fixed National On-net Off-net Low user 1.6 1.4 1.4 Medium user 2.1 1.9 1.9 High user 2.2 2.0 2.1 Any call allowance value included in the monthly rental will be deducted from the usage value once the basket is calculated. The deduction cannot be larger than the actual usage value, i.e. negative usage is not allowed. No transfer of unused value to next month is taken into account. Any inclusive minutes will be deducted from the basket usage before starting the calculation of usage cost. The inclusive minutes are assumed to be used up with the same calling pattern that is described in the basket, i.e. the same peak/off-peak ratio and the same distribution across destinations. Where the inclusive minutes are clearly limited to specific destinations or times of day this will be taken into account. No transfer of unused minutes is taken into account. Any inclusive SMS-messages will be deducted from the basket before starting the calculation of the SMS message cost, up to the number of messages in the basket. For each of the operators covered a set of packages shall be included so that the cheapest package offered by that operator can be calculated for each of the 3 baskets.

141 - Extract from the 12th EU implementation report extended to include Switzerland Multiple operators in each country shall be included, with at least the two operators with highest number of subscribers in each country. The operators included shall have a total market share of at least 50% based on subscriber numbers. Basket results are calculated for a period of one year. 9.6. New OECD mobile baskets 2006 The basket structure remains the same as with the 2002 version of the baskets, with a few new additions. All baskets will include: Registration or installation charges with 1/3 of the charges, i.e. distributed over 3 years. Monthly rental charges, and any option charges that may apply to the package, or package combination. Usage charges for voice calls and SMS and MMS message, as defined by the usage profile. The three baskets are: Low user basket. The usage level of this basket is low, with a call volume less than half of that in the Medium user basket. Medium user basket. This basket will have 65 outgoing calls per month. High user basket. The usage level is about twice the Medium user basket. The usage profiles will also include a number of SMS and MMS messages per month. The number of MMS is low, reflecting a new service with still little use. Call and message volumes for each basket are: Outgoing calls /month SMS per month MMS per month Low user 30 33 0.67 Medium user 65 50 0.67 High user 140 55 1 The information received showed that there is little difference between the average pre-paid usage and the low user post-paid usage. The low user basket can therefore be used for both pre- and post-paid tariffs, allowing a simple comparison also between the two types. Only national calls are included in the profiles, with 5 different destinations: Local area fixed line calls. This is used to accommodate the tariffs that have separate charges for the local area. When such charges are not available, this proportion of calls is included in the National. National fixed line calls. This covers all fixed line calls outside the local area, except in cases as noted above. Same network mobile calls (On-net). This includes all calls made to mobiles in the same mobile network as the caller. Other network mobile calls (Off-net). This includes calls to all other mobile networks in the caller’s country. When the charges are different depending on destination network, the market shares based on subscriber numbers are used for weighting the charges. Up to 3 other networks will be considered in each country. Voicemail calls. This reflects calls made to retrieve voicemail messages from the on-net voicemail service. Distributions per destination for each basket are: % of total Fixed Fixed On-net Off-net Voicemail number of calls Local National mobile mobile

Low user 15% 7% 48% 22% 8% Medium user 14% 7% 48% 24% 7% High user 13% 7% 47% 26% 7% As the information received produced little evidence on the split between local and national fixed line calls, the assumption has been used that the ratio would be 2:1 for local: national, i.e. 67% local and 33% national. This assumption is taken from the averages in fixed baskets, and the scarce information received.

Extract from the 12th EU implementation report extended to include Switzerland - 142 Instead of splitting time and day into distinct times and days the following approach will be used: Peak time calls at weekdays, most expensive time during daytime. Off-peak time calls at weekdays, cheapest time before midnight. Weekend time calls, at daytime Sundays. Distributions over time and day for each basket are: % of total number of ToD Peak ToD Off-peak ToD Weekend calls Low user 48% 25% 27% Medium user 50% 24% 26% High user 60% 19% 21% There will be 4 separate call durations: Local and national fixed line calls Same network mobile calls (On-net) Other network mobile calls (Off-net) Voicemail calls Call durations for each basket are: Minutes per call Dur Fixed Dur Mobile On-net Dur Mobile Off- Dur Voicemail National net Low user 1.5 1.6 1.4 0.8 Medium user 1.8 1.9 1.7 0.8 High user 1.7 1.9 1.8 0.8 Any call allowance value included in the monthly rental will be deducted from the usage value once the basket is calculated. The deduction cannot be larger than the actual usage value, i.e. negative usage is not allowed. No transfer of unused value to next month is taken into account. Any inclusive minutes will be deducted from the basket usage before starting the calculation of usage cost. The inclusive minutes are assumed to be used up with the same calling pattern that is described in the basket, i.e. the same peak/off-peak ratio and the same distribution across destinations. Where the inclusive minutes are clearly limited to specific destinations or times of day this will be taken into account. No transfer of unused minutes is taken into account. Any inclusive SMS- and MMS-messages will be deducted from the basket before starting the calculation of the SMS and MMS message cost, up to the number of messages in the basket. For each of the operators covered a set of packages shall be included so that the cheapest package offered by that operator can be calculated for each of the 3 baskets. Multiple operators in each country shall be included, with at least the two operators with highest number of subscribers in each country. The operators included shall have a total market share of at least 50% based on subscriber numbers. Basket results are calculated for a period of one year.

143 - Extract from the 12th EU implementation report extended to include Switzerland