The Hungarian Communications Market Developments and ...

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The Hungarian Communications Market Developments and Regulation between 2004 and 2008 Related market Frequency of the application Regulated service providers Regulatory means Hungarian regulation Market analysis 1 Hungarian regulation Market analysis 2 Broadband Internet market Typical means Incumbent service providers Bitstream access at least on two network levels (local, ATM or IP) + + Additional means Incumbent service providers Mobile market Typical means Network service providers Additional means Network service providers Bitstream access on ATM level Price regulation of bitstream access Bitstream access in the case of alternative infrastructures – – + + – – Naked DSL offer – + Regulated termination rates Establishment of glide path to reach regulated MTR Regulator elaborates its own cost model + + – + - + Accounting separation + + In the case of fixed telephone services, the Hungarian regulation, as compared to overall European practise, is less rigorous. From among the typical regulatory means, NHH does not apply three (the obligation of wholesale line rental, regulation of retail traffic tariffs, regulation of wholesale rates of alternative service providers). At the same time, in the second round of market analysis, regulation became more rigorous, as indicated by the introduction of the prohibition relating to the undue discrimination of subscribers and the switchover from the LLU cost calculation to the LRIC method. In the case of regulation relating to the broadband market, NHH applies both typical means: i.e. the specification of the bitstream access and its price regulation. In addition to fixed telephone services, the regulation of unbundled access of the local loop also has an influence on the broadband market. NHH, in this case, also imposed the typical obligation of cost-based provision of access. Moreover, it also imposed an additional means, the obligation of ensuring naked DSL. In sum, it seems that the Hungarian regulation, as compared to typical European practice, is slightly stricter. Figure 4.26: Fixed termination rates – local interconnection (2007) Eurocent/ minute 3.0 2.5 2.0 1.5 1.0 0.5 0.0 UK CY DK IT EL EE DE FR IE EU27 PT SE BE PL ES HU NL LU SI SK AT RO CZ BG MT FI LT Source: EU Implementation Report 13
70 71 The implementation of the regulation relating to mobile services in Hungary may be considered typical. Yet, the regulation of termination rates in all of Europe follows a homogeneous practice (costbased and glide path approach), with certain additional elements (symmetric rates, regulator’s own cost model). In addition to the selection of the adequate regulatory means, the application and realisation of the regulation is of key importance for the operation of the market. In this respect, regulated wholesale prices have an important role. The obligation of cost-based price regulation is ineffective if the prices cannot be really pushed down to a cost-based level. In 2007, the average price of fixed termination rates in the European Union was 0.57 cent locally, 0.87 cent at a regional level (single transit), and 1.12 cents in the case of national interconnection. The Hungarian price is slightly higher in the case of local access (0.71 cent), the regional price is roughly the same (0.91 cent), and the national interconnection price is somewhat lower than the average (1.05 cents). In 2007, the all-inclusive average price of the LLU calculated for one month in the EU was EUR 11.28 in the case of full unbundled access and EUR 4.51 in the case of shared access to the local loop. While prices varied mostly between EUR 8 and 12 for full unbundled access to the local loop, in the case of shared access, we can find considerably lower (in Belgium and Netherlands the value is about EUR 2) and also higher prices, as compared to the average. The Hungarian prices, in the case of full unbundled access to the local loop is somewhat below the EU average (EUR 10.5), with the price of shared access to the local loop being significantly higher (EUR 6.16). If we take only the monthly price of unbundled access to the local loop into consideration, in the case of full unbundled access, the Hungarian price complies with the EU average (EUR 9.54), but the price of shared access is higher (EUR 6.16 in contrast with the EU average of EUR 4.5). Figure 4.27: Fixed termination rates – double transit (2007) Eurocent/ minute 4 3 2 1 0 SE UK CY DK NL IE EL HU BE EU27 LV IT FR MT RO PL PT DE ES SI SK AT BG LT Source: EU Implementation Report 13 Figure 4.28: Aggregated price of full unbundled access to the local loop for one month (2007) Euro 20 16 12 8 4 0 EE IT NL EL LV DK PT SI CY RO HU FR SE MT EU27 BE ES DE AT LT PL SK LU UK BG FI CZ IE Source: EU Implementation Report 13
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1 1 The Hungarian Communications Ma
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CONTENTS Contents 1. NHH’s role i
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02 03 years. This year one of NHH
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04 05 NHH’s role in the regulatio
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06 07 affected parties have failed
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08 09 Figure 1.1: NHH’s regulator
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10 11 Key areas of regulation for t
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12 13 2.1 Changes in institutional
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14 15 Market analysis decisions of
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16 17 Decision Round 1 Year Round 2
Page 21 and 22: 18 19 purposes of WMAN, which was c
Page 23 and 24: 20 21 sional knowledge but also for
Page 25 and 26: 22 23 There is the possibility of p
Page 27 and 28: 24 25 lution is well demonstrated b
Page 29 and 30: 26 27 surveillance activity. Servic
Page 31 and 32: 28 29 a member of the Council of Ad
Page 33 and 34: 30 31 Electronic communications is
Page 35 and 36: 32 33 Figure 3.5: Monthly average t
Page 37 and 38: 34 35 Fixed location services In Hu
Page 39 and 40: 36 37 Figure 3.11: Changes in the n
Page 41 and 42: 38 39 Figure 3.15: Changes in the n
Page 43 and 44: 40 41 Figure 3.18: Cable television
Page 45 and 46: 42 43 Results and influence of mark
Page 47 and 48: 44 45 hindered on the retail side,
Page 49 and 50: 46 47 Figure 4.2: Voice traffic sha
Page 51 and 52: 48 49 gated price index) above the
Page 53 and 54: 50 51 Figure 4.8: Monthly spending
Page 55 and 56: 52 53 the Board imposed the obligat
Page 57 and 58: 54 55 Figure 4.10: Sales of ADSL se
Page 59 and 60: 56 57 stimulation regarding the dev
Page 61 and 62: 58 59 Figure 4.14: Broadband penetr
Page 63 and 64: 60 61 The OECD study also contains
Page 65 and 66: 62 63 postponed to the distant futu
Page 67 and 68: 64 65 mately introduced EU level re
Page 69 and 70: 66 67 According to the obligation i
Page 71: 68 69 4.5 Regulatory means applied
Page 75 and 76: 72 73 Epilogue Today, electronic co
Page 77 and 78: 74 75 28 The full unbundled access
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