Türk Telekom s Regulatory Challenges

Transcription

1 Türk Telekom s Regulatory Challenges Eva Kalman Advancing in Telecommunications Regulation 1 st Black Sea and Caspian Regulatory Conference Istanbul, 25/05/2006

2 The Turkish telecommunications market is fully liberalized Type of authorization Number of players Fixed concession agreement GSM concession agreements Class A long distance telephony licenses (carrier pre-selection) Class B&C long distance telephony licenses (carrier & call by call selection) Authorization agreements Fixed data transmission licenses Infrastructure authorizations , more to come soon General authorizations (ISP) 70 Satellite telecommunications services licenses 30 Satellite platform services licenses 3 GMPCS licenses 8 PMR/PAMR licenses 52

3 The number of players is expected to increase in the forthcoming months According to its 2006 work plan, the Telecommunications Authority (TA) may grant shortly : 3 G licenses MVNO licenses Broadband wireless access services operator licenses Fixed telecommunications services operator licenses Cable TV licenses Terrestrial digital platform operator licenses

4 Türk Telekom s competitors benefit from extensive rights in term of access to its infrastructure Call by call selection : available since July 04 Carrier selection : first contracts signed in March 06 Carrier pre-selection : negotiations in progress Resale ADSL offer : Turkey is one of the very few European countries where such an offer is available Bit-stream offer : negotiations in progress Local loop unbundling : TT s reference offer, including full and shared access, was submitted to the TA in September 05 Co-location : TT provides co-location services in its buildings and masts to third party operators Facility sharing : according to the Turkish regulatory framework, TT has the obligation to give access to its masts and ducts

5 Türk Telekom s interconnection rates are in line with the Eastern European average 5.0 cents/min Bulgaria Croatia Czech Republic Hungary Lithuania Poland Romania Slovakia Turkey Single tandem Double tandem Source : Cullen International, 04/06 Even though the surface & the number of subscribers covered by the TT s interconnection services are larger than in other Eastern European countries

6 And so are its proposed LLU monthly fees /month Bulgaria Croatia Czech Republic Hungary Lithuania Poland Romania Slovakia Turkey LLU full monthly fee LLU shared monthly fee Source : Cullen International, 04/06 In particular, when compared with those applicable in the larger Eastern European countries

7 While Türk Telekom s basic residential monthly rental fee is well below the Eastern European average 14 /month, VAT incl Bulgaria Croatia Czech Republic Hungary Lithuania Poland Romania Slovakia Turkey Source : Detecon, 05/06

8 And leads to a huge access deficit As a matter of fact : Approximately 98% of TT s subscribers pay a monthly rental fee well below the monthly cost of access Nearly half of these customers benefit from the minimum monthly rental fee (3.3, excl. taxes) that can be entirely used for communications (on-net and off-net) The other half pays the basic monthly rental fee A tariff rebalancing aiming to bring the rental fee into line with the monthly cost of access appears problematic in a context of strong fixed by mobile substitution All the more so, that the number of mobile subscribers is significantly higher than the one of fixed subscribers and on-net mobile tariffs are heavily subsidized

9 Universal service (1/2) The scope of universal service includes : Fixed access and telephony Payphones Directory services Emergency calls Basic Internet Safety services for maritime transportation TT s concession agreement designates TT as the universal service provider In addition, the concession agreement establishes the obligation for TT to provide : Payphones to health, educational, administrative, legal & military institutions, sports, tourism & business centres, airports, rail & bus stations, social facilities, non-governmental organizations, etc. Free of charge emergency calls Free of charge directory (paper copy) to all subscribers

10 Universal service (2/2) As of today : The net cost of USO has not been calculated The contribution of Turkish operators (with the exception of GSM operators for which a specific measure has been established) to the universal service fund represents 1% of their annual net sales revenues (including interconnection and access revenues) independently of the cost of USO No mechanisms for compensating universal service providers have been defined An extension of the scope of universal service is envisaged

11 Tariff control In the EU, tariff control applies to wholesale markets mainly and only the retail markets for services included in the universal service and for the minimum set of leased lines are submitted to such a control The great majority of TT s retail and all of its wholesale tariffs are subject to approval from the Telecommunications Authority This latter approach leads to delays in the implementation of new tariffs and to disproportionate obligations in terms of data collection

12 Facility sharing According to the EU regulatory framework facility sharing agreements should be voluntary and facility sharing can be made mandatory only after a public consultation and once that it has been demonstrated that no viable alternatives exist to the concerned physical co-location, duct, building, mast, antenna and antenna system sharing The Ordinance on Access and Interconnection and the Communiqué on Facility Sharing empower the TA to impose a facility sharing obligation on operators and to determine costorientated tariffs for facility sharing The imposition of such obligations on TT is all the more disproportionate that alternative operators benefit from the same conditions as TT in terms of access to rights of way

13 Problems form an important part of our lives. They are placed in our path for us to overcome them, not to be overcome by them. We must master them, not let them master us. R. G. Derrick