Discussion Papers

No. 411: NGA infrastructures, markets and regulatory regimes in selected countries

Authors: Tseveen Gantumur, Ulrich Stumpf

(Full version only available in German)

Summary

With the deployment of a new generation telecommunication network, the question arises whether the existing access regulation of the copper-based networks with the currently applicable regulatory instruments is appropriate. The present study aims firstly at a systematic analysis of the role of access regulation for the market performance in an NGA environment. The NGA market performance is based on (1) the development of the market structure and competition, (2) infrastructure investments in fiber networks, (3) the changes in speed and retail prices of NGA–based services, and (4) the take-up and the adoption of fiber-based network access. Secondly, the study examines how supply and demand side factors such as public funding for broadband, construction costs of NGA networks and the demand for high speed services, especially the use of IPTV services, affect the NGA market outcomes.

The study is based on an integrated analysis of selected countries such as South Korea, Japan, USA and Australia in order to build a differentiated picture of the approaches with regard to the deployment of fiber infrastructure and the related results of the NGA market developments. Consequently, the significance of access regulation as well as of the supply and demand side factors is reflected in a large diversity of NGA market outcomes.

The consideration of the broadband targets and the promotion of broadband in the countries shows that while some countries focus on NGA deployment, the current broadband policy in other countries addresses more closely service providers, contents and platforms. Consequently, the analysis of regulatory approaches shows that all applied approaches have their specific (dis)advantages and are more or less appropriate according to market developments and competitive conditions. Depending on the market circumstances and policy objectives, these obtain another significance that should be weighed against each other.

The study is consistent with the recent empirical evidence that the cable network coverage and more investment in the cable networks have a positive impact on the deployment of FTTx networks in the countries. Furthermore, it occurs that the price effects in different competitive constellations are primarily influenced by the extent of the NGA coverage of each country. The analysis states that, in addition to the widespread availability of high-performance broadband connections, a simultaneous development of NGA networks and high speed services accounts for the prerequisite of the actual demand. It shows that an integrated policy of development of the telecommunications and broadcasting markets is of crucial importance.

Discussion Paper is available for download.

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