TDC Group Annual Report 2011(6,4MB) - TDC Annual Report 2011

Regulation
Overview
The summary below describes the regulatory framework in
the telecommunications industry in the EU, and Denmark in
particular. It is intended to provide a general outline of the
most relevant telecom regulations applicable to TDC’s
operations in Denmark and is not intended to be a
comprehensive description of such regulations.
The regulatory framework
European Union
Regulatory framework
The European regulatory framework requires EU Member
States to impose certain obligations on providers
designated as having Significant Market Power. These
obligations are intended to be proportionate to the market
failure found in a market where one participant, or more,
has Significant Market Power. The regulatory framework is
supplemented by the 'Significant Market Power
Recommendation' from the EU Commission on relevant
product and service markets. The Recommendation defines
seven specific markets and concerns the identification of
product and service markets in which regulatory obligations
can be imposed on providers designated as having
Significant Market Power.
International roaming
EU mobile providers have to comply with a number of
obligations stated in the EU Roaming Regulation, such as
maximum charges relating to wholesale and retail prices for
voice, SMS and data. The EU Roaming Regulation has
reduced the level of the roaming charges, which in some
areas has had a negative impact on TDC’s revenue and
earnings. A new EU Roaming Regulation is expected to be
adopted in the first half of 2012.
Denmark
Denmark has fully implemented the European regulatory
Framework. The Danish regulation regarding operation of
electronic communications networks and provision of
electronic communications services is extensive. The
Danish Tele Act is the main legal act in the Danish
regulatory framework and contains the overall regulation
regarding end-user aspects, universal services obligations,
numbering aspects and interconnection.
TDC Group Annual Report 2011
Regulation of providers with Significant Market Power
Market analyses
According to the Danish Tele Act, the DBA is required to
conduct market analyses on a regular basis for the purpose
of assessing whether individual markets are sufficiently
competitive. In markets where the DBA has identified a lack
of sufficient competition, it designates one or more
providers as having Significant Market Power.
The DBA is required to impose on providers with
Significant Market Power one or more of the
following obligations:
• meeting all reasonable requests for access to
interconnection
• non-discrimination
• transparency in connection with interconnection and
new interconnection products
• accounting separation
• functional separation
TDC does not expect to be subject to obligations of
functional separation. As part of the non-discrimination
obligation, DBA can require Significant Market Power
providers to apply a stand-still period when the provider is
introducing new or amended wholesale products.
In certain circumstances and subject to prior consultation
with the EU Commission and with the EU Commission’s
consent, the DBA may impose other obligations than the
above-mentioned on providers with Significant Market
Power.
The DBA has designated TDC as Significant Market Power
provider within all seven markets and has designated TDC
as Significant Market Power provider in the wholesale
market for SMS termination. TDC is therefore subject to all
the Significant Market Power obligations listed above except
for functional separation.
Where TDC is subject to the Significant Market Power
obligation of price control, the LRAIC method is the pricing
method generally used. The EU Commission has
recommended a change of the LRAIC method for calculating
wholesale termination rates in both landline and mobile
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