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OECD COMMUNICATIONS OUTLOOK 2001 Telecommunications

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OECD COMMUNICATIONS OUTLOOK 2001 Telecommunications OECD COMMUNICATIONS OUTLOOK 2001 Telecommunications Country: ITALY Date completed: 27.09.2000 1 TELECOMMUNICATIONS - REGULATORY ISSUES Market Structure and Regulatory Status (Questions 1 -10) 1. Please provide details of the regulation of communication infrastructure, including the public switched telecommunication network (PSTN), provision in your country. Infrastructure provision for following Regulatory Status (e.g. Number of licensed service monopoly, duopoly, operators (2000) certain number, fully open to any applicant) Fixed PSTN (Local, National and International) Fully open 100 (June 1st) Network infrastructure capacity (Includes only Fully open 22 (June 1st) companies not licensed to provide voice services) (*) Analogue Cellular Mobile (e.g. NMT etc.) Monopoly – phase out in 1 2005 – users are 2,7 mn. i.e. 8% of the total and decreasing steadily Digital Cellular Mobile (e.g. GSM, PCS etc.) Certain number according to 4 frequency availability Wireless local loop (fixed wireless) Certain number according to Licenses to be granted frequency availability end 2000 IMT-2000 Operators (i.e. UMTS and 3rd Certain number according to 5 Licenses to be granted Generation) frequency availability (Nov 2000) one of which (max 5) to a new entrant * In Italy there are three types of licences: 1) voice telephony services; 2) network installation and provision; 3) network installation with the sole purpose of voice telephony provision. No 2 and 3 are included under network infrastructure capacity. 2. Please provide details for the major public telecommunication operator (PTO) of public switched telecommunication services in your country. (PTOs are state and privately owned entities providing public switched telecommunication services over their own infrastructure) Name of PTO PTO Ownership Status (2000) (e.g. state owned/privately owned) If a balance of ownership exists please indicate the share (%) held by the government Telecom Italia Privately owned (Tecnost S.P.A. 55,02%, Bank Of Italy 1,14% Treasury Ministry 3,46%, , employees 0,36%, Financial investors and stock market 40,02%) (as at 29.02 2000, source: Annual Report 1999) Infostrada Privately owned by Omnistrada (100% Mannesmann) (Source: Web site June 2000) Albacom Privately owned - Albacom Holdings 45,5% (British Telecom 50,5% - BNL 49,5%), ENI 35%, Mediaset 19,5% (Source: web site June 2000) Tiscali Privately owned (Renato Soru 61,22%, Andala 8,01%, Kiwi Fund 8,01%, market 22,76% (Source: web site financial information) 2 Wind Was: 51% Enel (energy utility) 49% FT/ DT Gmbh (50% France Telecom, 50% Deutsche Telekom) (as of 30 June 2000) – DT left its stake to Enel: now (Sept 2000) is: Enel 56,3%; FT 43,7%. Telecom Italia Mobile Telecom Italia 52,46%, financial investors and market 31,05%, stock market 16,49% (as at 31.12.1999, source: Annual Report 1999) Omnitel – Pronto Italia Privately owned by Omnitel Sistemi Radiocellulari S.P.A. 70% (OliMan HoldingB.V. 36,6%, Bell Atlantic 23,1% Air Touch Europe B.V 21,6%, Cellular Communications International Inc. 10,3%, Mannesmann Eurokom GmbHn 8,3%, Others 0,1%) and Pronto Italia SpA 30% (as at 31.12.1999, source: Annual Report 1999) BLU Autostrade (32%), British Telecom (20%) Distacom (9%), Edizione Holding (9%), Mediaset (9%), BNL (7%), Italgas(7%),Gruppo Caltagirone (Palatinus) (7%) 3. Please provide details of market share for the largest PTO in the following categories. The largest PTO’s share End 1998 End 1999 Local Access: % of access lines 100% Ca. 100% Local Access: % of local calls 100% Ca. 100% - but in Sept 2000 over 22 operators are offering local calls to business customer (over 18 to residential customer as well) via carrier selection; 13 operators have signed Carrier Preselection contracts National Long Distance (% of total minutes)1 Ca. 97% Ca. 93% International (% of total outgoing MiTT) Ca. 86% Ca. 68% Internet Subscribers2 3.100.000(*) 8.200.000 (*) TIN 1.990.000 subs (**) 4.095.000 subs (***) 1. If % of minutes is not available, please indicate the % of revenue 2. If share of subscribers is not available, please indicate number of Internet subscribers for the PTO. (*) – in terms of users - Source: IDC, June 2000. Other estimates from Bocconi University and Censis put the figure respectively at 8.5 mln and 9mln in June 2000. (**) – TIN Is the ISP owned by the incumbent - Source: Telecom Italia Annual Reports (***) - TIN, Infostrada, Tiscali and Wind subscribers – Sources: Annual reports and press release 4. Please provide details of the number of subscribers by cellular and PCN mobile communication operators. Name of Operator Number of Subscribers (End 1999) 1. TIM - TACS 3.300.000 (2,7 Mn. Sept 2000) 2. TIM - GSM 14.900.000 3. Omnitel 10.418.000 4. Wind 1.450.000 Source: Mobile Communications 3 5. Please provide a description of the most significant recent policy changes affecting the provision of telecommunications services, as well as any draft laws, or regulatory proposals to be implemented in 2000 to 2001. A – IMPLEMENTED General In practical terms the regulator has pursued four main developments: the opening of the network of the incumbent operator; tariff rebalancing, in order to align prices with the cost of services; the allocation of scarce resources such as numbering and frequencies; the promotion of technological innovation and of the convergence of information technology, telecommunications and audiovisual content into one integrated communications system. Important improvements have been achieved in the licensing regime, the completion of tariff re-balancing, the introduction and effective implementation of carrier pre-selection and number portability, and numbering allocation. The NRA has adopted a number of implementing measures aimed at ensuring that the communications market is efficient. The most significant changes in Italian legislation are the Decision on local loop unbundling of March 2000, which is in line with the conclusions of the Lisbon Council of the European Ministries; the adoption (in cooperation with the Ministry of Communications) of the licensing and regulatory framework for UMTS; the Decisions of December 1999 and April 2000 regulating the provision of wholesale ADSL; and the new framework for general authorisations. A Decision was also taken to establish a universal service fund for 1999. Universal service For the first time and with reference to the year 1999, the AGC has acknowledged the need to activate the USO fund, to which several operators will participate to compensate the costs incurred by Telecom Italia in offering non remunerative services across the country. In particular, TI had declared to bear costs in the following areas: geographical non-remunerative areas; non remunerative customers in remunerative areas; non remunerative public telephones directory services. The overall cost for the year 1999 will be Lit. 120,83 Bln, in reference to a cost claimed by TI to be Lit 640 Bln. The operators covering ca 43% of this cost will be TIM, OPI and Infostrada, respectively paying 28,1% (33,96 Bln Lit.), 13,8% (16,67 Bln Lit.), 1% (1,2 Bln Lit.). AGCOM has evaluated the net cost presented by TI and taken into account indirect and market benefits. This activity, in conformity with the provisions contained in national regulation, has been carried out by an independent advisor (a consortium between NERA, WIK and ERCS). In order not to impose an excessive burden on newcomers, AGCOM has set up a threshold for contribution to the fund of 1% of the revenues (fixed and mobile) minus payments for interconnection, leased lines and roaming to other operators. This provision has as a consequence that only operators with a significant market share will contribute to the fund. Furthermore, provisions have been included in the decision which will allow for the introduction of competition in the provision of universal service and will allow to ensure that indirect benefits are properly taken into account. New authorisation regime A general new authorisation regime, simplified and inclusive of satellite services, has been put in place - 4 current authorisation applications are being presented under the new regime to the Ministry of Communications which support the AGC in the process. Carrier selection / preselection Italy was one of the first countries in Europe to implement CS/ CPS also for local calls. Currently (Sept. 2000) over 18 operators are offering local calls over CS to residential customers, several more are offering local calls to business customers. 11 operators have signed (Sept 2000) CPS agreements with the incumbent. More than 120.000 numbers have been transferred to OLOs using CPS. The demand for Number Portability is still very low as OLOs are currently proceeding with the trials for local loop unbundling. MVNOs (Mobile Virtual Network Operators) MVNO operators will not be granted access before 2010, i.e. 8 years after the issue of the licences, so as to allow the licensees to recover the cost of their investments in network infrastructure, licence fees, etc. Tariffs The tariff rebalancing process was completed by AGC in 1999, while the price cap has begun its effect in 2000. Only recently Telecom Italia has partially agreed on delivering the needed data for analysis which might lead to a review of its regulatory system. Cost accounting The evolution of cost accounting methodology (from the historical cost methodology – fully distributed cost) to current costs, and possibly to Long Range Incremental Cost) is being achieved. Leased lines AGC has obtained from Telecom Italia a new set of offers, with an average reduction of 25% on previous prices. The offer is currently under evaluation by AGC. B – DRAFTING OR TRIAL PHASE Rights of way Two rulings are under preparation. One on cabling in urban areas, the other covering backbones. The aim of these rulings is to provide a common national framework to municipalities and road agencies to allow competitive infrastructure implementation. A public consultation will be launched in October 2000 with the aim of introducing the two ruling before the end of the year 2000.
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