BEREC REPORT ON IMPACT OF FIXED-MOBILE ... - berec - Europa

BoR (11) 54
If the network operators do pursue a one stop shop strategy, it will be important for
each fixed/mobile operator not to cannibalise their own fixed/mobile segment. One of
the ways in which operators may seek to ensure there is no cannibalisation of other
products in their portfolio is to follow a strategy whereby certain products are aimed at
certain parts of the market. For example, a network operator with both a fixed and a
mobile network may aim fixed and mobile voice at different value segments (e.g. low
value vs. premium segment).
Furthermore, NRAs should consider in their analysis of substitution the existence of
aggressive strategies of integrated mobile/fixed network operators to gain critical mass
in the market (e. g. strong promotion programmes for new customers). Such market
strategies could have a significant influence on customer’s loyalty to its existing
network operator as well as their preferred way to communicate (fixed vs. mobile
voice/broadband). These strategies may also create more or less temporary changes
in the adoption of different technologies and networks by the end users.
The effects of substitution may be higher in a market structure dominated by stand-
alone fixed/mobile network operators, whereas complementary effects may be more
probable within a market of bundled offers by integrated fixed/mobile network
operators. Therefore market structure and market strategy of fixed/mobile operators
and their competitors could be essential for a further analysis of substitutability.
Questionnaire results
The results of the questionnaire show that most NRAs consider that an analysis of
market structure and market strategy is relevant or even a key parameter in assessing
FMS for both voice and broadband. About one half of NRAs have already considered it
when looking at retail market definition for broadband and about one third of NRAs
when looking at retail market definition for voice. Only a small minority of NRAs
consider that any kind of cooperation between fixed/mobile operators and the level of
competition in the fixed/mobile segment are not applicable. As far as the existence of
an aggressive market strategy by a network operator is concerned one half of NRAs
believe this is relevant but not essential whereas the other half of NRAs consider this
either as not applicable or a key parameter.
6.3. Analysis of bundled offers
When NRAs analyse FMS it may be important to consider whether there are
differences in the bundles of fixed services and mobile services offered which could
affect substitutability between the two.
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