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Consultation: 12/117 Internal Use Only ` Market Review Retail Access to the Public Telephone Network at a Fixed Location for Residential and Non Residential Customers All responses to this consultation should be clearly marked:- ―Reference: Submission re Market Review – Retail Access to the Public Telephone Network at a Fixed Location for Residential and Non Residential Customers, ComReg 12/117‖ and sent by post, facsimile, or e-mail, to arrive on or before 17:00 on 21 December 2012, to: Claire Kelly Commission for Communications Regulation Irish Life Centre Abbey Street Freepost Dublin 1 Ireland Ph: +353-1-8049600 Fax: +353-1-804 9680 Email: [email protected] Please note ComReg will publish all respondents‘ submissions with the Response to this Consultation, subject to the provisions of ComReg‘s guidelines on the treatment of confidential information – ComReg 05/24. Consultation and Draft Decision Reference: ComReg 12/117 Date: 26/10/2012 An Coimisiún um Rialáil Cumarsáide Commission for Communications Regulation Abbey Court Irish Life Centre Lower Abbey Street Dublin 1 Ireland Telephone +353 1 804 9600 Fax +353 1 804 9680 Email [email protected] Web www.comreg.ie Legal Disclaimer This Consultation Paper is not a binding legal document and also does not contain legal, commercial, financial, technical or other advice. The Commission for Communications Regulation (―ComReg‖) is not bound by it, nor does it necessarily set out ComReg‘s final or definitive position on particular matters. To the extent that there might be any inconsistency between the contents of this document and the due exercise by ComReg of its functions and powers, and the carrying out by it of its duties and the achievement of relevant objectives under law, such contents are without prejudice to the legal position of ComReg. Inappropriate reliance ought not therefore to be placed on the contents of this document. Redacted Information Please note that this is a non-confidential version of the Consultation Paper. Certain information within the paper has been redacted for reasons of confidentiality and commercial sensitivity, with such redactions indicated by the symbol . Content Section Page 1 Introduction ...................................................................................................... 7 2 Executive Summary ...................................................................................... 19 3 Retail Market Structure and Trends .............................................................. 29 4 Market Definition ........................................................................................... 58 5 Competition Analysis and Assessment of Significant Market Power .......... 145 6 Remedies .................................................................................................... 190 7 Regulatory Impact Assessment .................................................................. 228 8 Next Steps ................................................................................................... 254 Appendix Section Page Appendix 1: Market Research 2012 .................................................................. 255 Appendix 2: Other SMP criteria considered ...................................................... 256 Appendix 3: Draft Decision Instrument .............................................................. 257 Appendix 4: Glossary of terms .......................................................................... 265 Appendix 5: Consultation Questions ................................................................. 267 Table of Figures Section Page Table 1 Summary of proposals market definition, SMP and remedies ........... 21 Figure 1 Non-Eircom fixed telephony access lines ......................................... 36 Figure 2 Total CPS and SB-WLR (PSTN and ISDN) ...................................... 37 Figure 3 Evolution LLU Lines .......................................................................... 38 Figure 4 Household Device Access ................................................................ 40 Figure 5 Fixed Retail Connections by Technology .......................................... 41 Figure 6 Evolution PSTN, ISDN Lines, Cable voices subscriptions and other managed VOIP ................................................................................................ 42 Figure 7 Cable telephony subscriptions (UPC) ............................................... 44 Figure 8 Internet Subscriptions by Type ......................................................... 45 Figure 9 Broadband Subscriptions by platform ............................................... 46 Figure 10 Frequency of usage of fixed voice, mobile voice and unmanaged VoIP services .................................................................................................. 47 Figure 11 Fixed Market Retail Subscriptions by single play, double play or triple-play ......................................................................................................... 49 Figure 12 Prevalence of bundles among consumers ...................................... 50 Figure 13 Share of originating voice calls ....................................................... 51 Figure 14 Voice traffic on fixed & mobile Networks ......................................... 52 Figure 15 EU Household Survey 2012: Overall Telephone Access ............... 53 Figure 16 Household Telephony type ............................................................. 54 Figure 17 CPI: Mobile & Fixed Telephony [] ............................................... 55 Figure 18 Fixed and mobile voice traffic trends, 2007–2011 .......................... 68 Figure 19 Percentage of FVA connections purchased with broadband and FVA on standalone basis ................................................................................ 73 Figure 20 Standalone FVA and bundled FVA subscriptions, Q4 2011 [] .... 75 Table 2 Share of Subscriptions: Households and Business ........................... 83 Table 3 Price and non-price characteristics of standard residential and business products ........................................................................................... 89 Table 4 Eircom Retail Pricing – Narrowband Services ................................... 95 Table 5 Analysis demand-side substitution ..................................................... 96 Table 6 Selection of alternative FVA products .............................................. 108 Figure 21 UPC Voice Telephony, PSTN, ISDN Narrowband Subscriptions, Q3'09 to Q2'12 .............................................................................................. 110 Figure 22 Platform used by businesses for broadband ................................. 121 Figure 23 Household Survey Snapshot of FVA Market Shares by Location 137 Figure 24 LLVA market shares of FVA subscriptions Q1‘10 - Q2‘12 [] .... 151 Figure 25 Retail FVA subscribers (PSTN, ISDN BRA, managed VOIP) by FSP [] ................................................................................................................ 152 Table 7 Evolution of PSTN and ISDN BRA line rental and connection prices ....................................................................................................................... 156 Figure 26 Evolution of SB-WLR and LLU Q1 2007 - Q 1 2012 ..................... 168 Figure 27 Evolution HLVA Market Size and Market Share ........................... 177 Table 8 Market Share Resellers of SB-WLR ISDN PRA and FRA [] ........ 178 Figure 28 Broadband subscription by subscription type ............................... 180 Table 9 Evolution of ISDN FRA and PRA line rental and connection prices 180 Figure 29 Ladder of investment..................................................................... 234 Figure 30 Monthly Tariffs ............................................................................... 240 Retail fixed voice access market ComReg 12/117 Chapter 1 1 Introduction 1.1 As part of its duties under the European Framework for Electronic Communications,1 the Commission for Communications Regulation (―ComReg‖), like all other national regulatory authorities (―NRAs‖) across the EU, is required to carry out periodic reviews of relevant electronic communications markets. 1.2 Consistent with ComReg‘s regulatory role to review certain electronic communications markets, this Consultation Paper presents ComReg‘s preliminary views on its analysis of the retail market for access to the public telephone network at a fixed location for residential and non residential customers2 (referred to for convenience in this Consultation Paper as the Fixed Voice Access (FVA) market(s)). The European Commission has described this market in general terms as the retail market for provision of a connection or access (at a fixed location or address) to the public telephone network for the purpose of making and/or receiving telephone calls and related services, such as, fax and dial-up3 internet access.4 Broadband has superseded dial-up internet access as a means of accessing internet services and therefore a review of connection or access (at a fixed location or address) to the public telephone network for the purpose of making and/or receiving voice calls is the primary focus of this Consultation Paper. 1 European Commission, Revised European Framework for Electronic Communications, 18 December 2009, http://ec.europa.eu/information_society/policy/ecomm/index_en.htm 2 Corresponding to Market 1 listed in the Commission Recommendation 2007/879/EC of 17 December
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