Ofcom outlines conclusions following review of fixed narrowband market

27 Sep 2013

UK telecoms regulator Ofcom has published a final statement on its fixed narrowband market review, which it launched in February 2013.

As previously reported by CommsUpdate, with the watchdog’s previous examination of such services having produced publications in September 2009, February 2010 and July 2011, under its latest proposals it was seeking to regulate and promote competition in fixed line telephone calls for the three year period from October 2013 to September 2016. ‘Fixed narrowband telephony services’, including retail services, in particular voice telephone calls, and wholesale services such as call origination and call termination, offered between communication providers (CPs) were to be examined.

Having considered submissions from interested parties, in outlining its conclusions Ofcom said that it believed the fixed voice retail calls markets in the United Kingdom (excluding the Hull area) remain effectively competitive, with no company holding a position of significant market power (SMP). In the Hull area, meanwhile, it has argued that although KCOM’s market share remains high both in retail residential and in retail business fixed calls, it believes that ‘ex post competition law is sufficient to address any competition concerns at the retail level’. As such, it has confirmed it will remove all remaining ex ante regulation in the relevant markets at the retail level.

Fixed line incumbent BT has, however, been designated as holding SMP in the provision of wholesale call origination in the UK (excluding Hull), and due to this Ofcom will impose access and non-discrimination remedies, while it says a charge control is an appropriate remedy. It is though removing BT’s obligation to offer carrier pre-selection (CPS) and indirect access (IA) where the telco’s retail arm provides the retail access line. For calls to non-geographic numbers, the watchdog has added that BT will be required to provide number translation service (NTS) call origination, until a separate review of these non-geographic calls services is completed and the resulting changes to the regime have been implemented. In the Hull Area, KCOM is said to have SMP in the provision of wholesale call origination, to which end it will be required to provide network access on fair and reasonable terms; Ofcom does not believe, however, that a charge control is required. Similarly to BT in the rest of the UK, KCOM’s obligation to offer CPS and IA where its retail arm provides the retail access line.

Every communications provider in the UK that connects calls to its own customers has, meanwhile, been designated as holding SMP in respect of the market for the supply of wholesale call termination to those numbers. For BT, Ofcom has said it will introduce a range of remedies, including a charge control based on the long-run incremental costs (LRIC) of wholesale call termination. All other providers, including KCOM, will be required to provide access on fair and reasonable terms and conditions, including charges.

The full statement on the review can be found at: http://stakeholders.ofcom.org.uk/binaries/consultations/nmr-2013/statement/Final_Statement.pdf

United Kingdom, BT Group (incl. Openreach), KCOM, Ofcom