Telenor is the incumbent telecom operator in Norway, with a history of more than 150 years. Telenor’s service portfolio includes fixed and mobile telephony, broadband and datacom services for residential and business customers, as well as a broad range of wholesale services.
Last updated June 2012
Telenor Norway’s main legal entities are Telenor Norge AS, Datametrix AS and Canal Digital Kabel TV AS. In January 2010, Telenor Mobil AS (mobile operations) and Telenor Telecom Solutions AS (fixed line operations) were merged into one company named Telenor Norge AS.
The electronic communications sector in Norway is regulated through both sector-specific and general laws and regulations. Although not a European Union (EU) member, Norway is required, as a member of the European Economic Area (the EEA), to adhere to the EU’s regulatory framework to the extent that EU directives are adopted by the EEA pursuant to the Agreement on the European Economic Area. The Electronic Communication Act (the ECA) and regulations adopted pursuant to the ECA implement the EU regulatory framework for the electronic communications sector in Norway. The competent regulatory authority in Norway is the Norwegian Post and Telecommunications Authority (the NPT).
Telenor is the leading provider of mobile communications in Norway. As at 31 March 2012, Telenor had 3.2 million mobile subscriptions in Norway, of which around 78% were contract subscriptions. As at 31 March 2012, the mobile penetration and number of inhabitants in Norway were 117% and 5.0 million, respectively. According to the NPT, the unique mobile user penetration is estimated to be 96%. Telenor provides fixed line telecommunication solutions to residential and business customers. The service portfolio includes Public Switched Telephone Network (PSTN) and Integrated Services Digital Network (ISDN) fixed line telephony services, broadband telephony or Voice over Internet Protocol (VoIP) services, Internet access via PSTN/ISDN, Digital Subscriber Lines (DSLs), fibre to the home (FTTH) and through hybrid fibre coax (HFC). In addition, Telenor provides leased lines, integrated voice and data telecommunications and access and network services to the business market. As at 31 March 2012, Telenor had 1 million fixed telephony subscriptions (including VoIP) and 861,000 broadband subscriptions (including HFC). The fixed broadband household penetration in Norway is estimated to be around 71% as at 31 March 2012.
In addition to its retail offerings, Telenor provides a wide range of interconnection and capacity services, including leased lines, in the Norwegian wholesale market. The interconnection and capacity services enable other network operators, Internet service providers and other service providers to connect to Telenor’s network or use Telenor’s infrastructure in order to facilitate their own service offerings. Telenor also provides international operators with transit and capacity services for international voice and data traffic into or through Norway. Telenor provides wholesale line rental (PSTN and ISDN) and DSL wholesale (“bit stream”) to other operators and service providers. Furthermore, Telenor provides local loop unbundling (full and shared access to the local copper loop), which enables other operators to provide end users with broadband. Telenor also provides TV services over fibre and coax networks.
Canal Digital Kabel TV is the leading cable TV distributor in Norway and delivers triple play services (pay-TV, broadband and telephony) to around 500,000 Norwegian households. The company offers more than 100 different TV-channels in analogue, digital, HD and/or 3D quality, Internet speed up to 100 Mbps and VoIP. Canal Digital uses both HFC and FTTH infrastructure. The customer base is a combination of individual and multiple housing units.
Network and licences
For the provision of mobile communication services in Norway, Telenor holds two 900 MHz licences and one 1800 MHz licence. The 900 MHz licences expire in 2013 and 2017, respectively, while the 1800 MHz licence expired in March 2010. These licences, originally authorised for Global System for Mobile communication (GSM)-based services only, were made technology neutral in 2010, thereby enabling the use of Universal Mobile Telecommunications System (UMTS) 900. A final discussion on the coexistence between UMTS 900 and GSM-R, however, put severe restrictions on the roll-out of UMTS 900 by the regulatory authorities until the second quarter of 2011. In 2009, Telenor filed its interest for renewal of the 1800 MHz licence. In July 2009, the Ministry of Transport and Communication (the Ministry) announced that there were no other applicants for this particular spectrum, and confirmed that a new spectrum licence would be issued to Telenor. Up to summer 2009, more than half of the 1800 MHz band had been vacant, but during fall 2009 and winter 2010 applications had been filed for resources in this vacant part of the band to such an extent that there is now excess demand. The regulatory authorities have announced that there will be an auction of frequencies in this vacant part of the band, and this auction is proposed to be held together with the auction of the spectrum in the 800 MHz-band (the digital dividend). In a letter in March 2010, the Ministry announced that it wanted to coordinate the upcoming auction and the issuance of Telenor’s renewed spectrum licence. Therefore, the Ministry decided to postpone the issuance of this renewed spectrum licence until issues regarding the spectral position of the spectrum licences in general were clarified. The existing licence was therefore extended until the auction of the 1800 Mhz licences has been conducted. Telenor’s GSM network currently covers 99.9% of Norway’s population and 87.4% of the geographical area.
On 1 December 2004, Telenor became the first Norwegian mobile operator to offer UMTS-based services in the 2.1 GHz band, and the UMTS network has been upgraded to High Speed Packet Access (HSPA). As of April 2012, Telenor’s UMTS coverage was 87.4% of the population and
22.4% of the geographical area. The UMTS licence in the 2.1 GHz band expires in December 2012, and interest for renewal of this licence has been filed.
In November 2007, Telenor acquired a 4G licence comprising 80 MHz in the 2.6 MHz band, which is valid for 15 years.
The Norwegian authorities have announced that the digital dividend (the 800 MHz band) will be subject to auction on a technology neutral basis in 2012. A public consultation on licence conditions and auction principles was published on 5 April 2011.
In October 2011, Telenor finalized the replacement of its entire set of mobile network equipment in Norway, creating a flexible and cost efficient platform for mobile services. Existing equipment was replaced by new equipment across technology generations and frequency bands, as well as multi-base stations for 2G/GSM, 3G/UMTS and 4G/Long Term Evolution (LTE). The change of equipment vendors also entailed digitisation, with the entire wireless network and core network migrated to an IP-based platform.
Telenor is the market leader in all segments of the telecom industry in Norway, based on the NPT’s report for 2010 on the Norwegian telecommunications market. The competitive arena is different in the various sectors and is thus commented on separately.
Telenor and NetCom, a wholly-owned subsidiary of TeliaSonera, are the largest mobile operators in Norway, each holding both GSM and UMTS licences. As at 31 March 2012, Telenor’s estimated mobile voice subscription market share was 49%. NetCom’s mobile voice subscription market share was estimated at 26%, including the wholly owned service provider Chess. Tele2 is the third largest operator with a subscription market share of around 19% and has gained access to both GSM and UMTS licences in Norway by establishing an infrastructure company (Mobile Norway) together with Network Norway.
In 2006, Network Norway purchased a GSM licence, issued in 2001, from Harald A. Møller. Network Norway started to build its own mobile network during 2007, and has a national roaming agreement with Telenor. During late 2007 and early 2008, Network Norway acquired several mobile service providers, including among others Lebara, OneCall and Ipea. Network Norway’s subscription market share was estimated to be 6% as at 31 March 2012. In August 2011 Tele2 acquired Network Norway.
Ventelo, which is owned by the private equity company EQT, operates as a MVNO in Telenor’s network, and has a subscription market share of around 2%. In addition to the above mentioned operators there are currently around 20 smaller service providers in the Norwegian mobile market.
Telenor launched its mobile broadband services in November 2007. Telenor’s mobile broadband services are mainly Internet access either through a PC dongle with a separate SIM card subscription attached, or through the existing voice SIM subscription on a “pay as you go” basis or with a supplementary subscription on the same SIM card. As at 31 March 2012, Telenor’s estimated mobile broadband large screen subscription market share was 55%. Telenor’s main competitors in the mobile broadband segment are NetCom and ICE, with estimated large screen market shares of 23% and 12%, respectively. Nordisk Mobiltelefon Norway AS, operating under the brand ICE, deploys an NMT (Nordic Mobile Telephony) 450 licence to offer mobile broadband services based on Code Division Multiple Access (CDMA) technology. In late February 2009, ICE was purchased by the American company Access Industries.
As at 31 March 2012, Telenor estimated its market share of fixed telephony subscriptions (including VoIP) to be 65%. Telenor’s main competitors within fixed telephony are Ventelo and Tele2, with estimated market shares of 7% and 6%, respectively.
Telenor’s fixed broadband market share in Norway, including broadband subscriptions offered by Telenor’s cable operator Canal Digital, was estimated by Telenor to be 48% as at 31 March 2012. Canal Digital has a market share of Internet access provided through cable TV (coax) of approximately 53%.
Telenor’s largest competitor in terms of subscriptions is the DSL provider NextGenTel, which, after the acquisition of Tele2’s broadband customers, is estimated to have a market share of around 11%. The cable operator Get and the DSL operator Ventelo have an estimated broadband market share of around 10% and 4%, respectively. NPT statistics show that there are 152 providers competing in the broadband market. In particular, local power utilities have built substantial FTTH infrastructure over recent years, offering triple play services packages (fixed telephony, Internet and TV) and capturing a significant share of market growth. Altibox, together with its partners, is estimated to have around 11% of the broadband subscriptions market as at 31 March 2012.
Like all other operators providing mobile termination services in Norway, Telenor is designated as having significant market power (SMP) in the market for mobile termination. The price regulation imposed on the two largest operators, Telenor and NetCom, has over recent years been different from the price regulation imposed on the other operators. Based on an updated and upgraded Long Run Incremental Cost (LRIC) model, the NPT on 27 September 2010 made a decision regarding the regulation of mobile termination rates from 1 January 2011 until 31 December 2013.The NPT’s decision was appealed by all operators except Ventelo, and the Ministry made a final decision on 11 May 2011. The final decision from the Ministry provides for symmetric termination rates for all mobile operators from 1 January 2013, and the following price cap regulation (NOK, per minute) is imposed:
|1 Jan 2011 -
30 June 2011
|1 July 2011 -
|1 Jan 2012 -
30 June 2011
|1 July 2012 -
31 Dec 2012
|1 Jan 2013 -
31 Dec 2013
Telenor has since 2006 been designated as an SMP operator in the market for mobile access and call origination (Market 15). The European Commission has removed Market 15 from the list of relevant product and service markets, implying that the NPT had to conduct a so-called three-criteria-test for this market in order to justify that ex-ante remedies are still needed. However, on 5 August 2010 the NPT made a decision that extends the regulation. The decision was appealed and confirmed by the Ministry on 6 April 2011. Telenor is designated as an SMP operator and is obliged to provide general access for MVNOs, national roaming, and co-location on non-discriminatory, transparent terms, reporting of accounting separation for both MVNO and national roaming twice a year (separate voice call/SMS and data activity) and cost oriented prices for co-location.
Telenor is designated as an SMP operator in the relevant markets related to fixed telephony, which are still in the EEA list of relevant markets for sector regulation: access to fixed telephony services. Telephony traffic is no longer regulated. The obligation to provide carrier selection and carrier preselection remains in place. Telenor is also subject to general wholesale access obligations for wholesale line rental for PSTN/ISDN products, including the remedies of transparency, and non-discrimination obligations, price regulation (“retail minus”) and cost accounting obligations. Telenor is also designated as an operator with SMP in the wholesale markets for call origination, call termination and transit services in the fixed network. The remedies imposed on Telenor in these three markets include a price cap, cost accounting, non-discrimination, reference offers and transparency. The NPT currently runs a project to identify LRIC cost levels of fixed network interconnection.
Telenor is designated as an SMP operator in the retail leased lines market (capacities up to and including 2 Mbps). Telenor is also designated as an SMP operator in the wholesale markets for terminating segments of leased lines (in Norway these are defined as leased lines with capacity of up to and including 8 Mbps irrespective of location and length) and wholesale trunk segments of leased lines (capacities above 8 Mbps irrespective of length and location, including dark fibre). The prices for retail leased lines up to 2 Mbps and wholesale terminating leased lines must be cost oriented. While there is no explicit price regulation of leased lines above 8 Mbps, Telenor is obliged to meet all reasonable requests for access to these wholesale leased lines and to provide such products on non-discriminatory terms. The non-discrimination obligation is enforced by accounting separation obligations between Telenor’s internal wholesale and retail business areas. Furthermore, Telenor is designated as an SMP operator in the markets for local loop unbundling and wholesale broadband access. The prices of full and shared access are regulated according to a price cap. While there is no explicit price regulation of wholesale broadband access, Telenor is obliged to provide non-discriminatory access to copper-based wholesale broadband products. The non-discrimination obligation is enforced by accounting separation obligations between Telenor’s internal wholesale and retail business areas.
On 3 April 2009, the NPT published new decisions related to the markets for local loop unbundling and wholesale broadband access. While fibre based local loops are now a part of the same market, there are no access obligations to fibre infrastructure in FTTH deployments. There is, however, an obligation to provide access to ducts and pipes in FTTH projects. The price cap for full and shared access to copper access lines was reduced to NOK 95 and NOK 54 per month, respectively. NPT currently runs a project to identify LRIC cost levels for unbundled access to the local loop, but formally no decision has been taken as to whether the price regulation should be changed to an LRIC based approach.
In addition to ex-ante regulatory provisions imposed on SMP operators, the Norwegian government also provides for universal service obligations (USOs) and special service obligations (SSOs) by entering into agreements with Telenor. Telenor is designated as a USO provider and has entered into an agreement with the Norwegian government defining the scope and terms of its USOs (the USO Agreement). The USO Agreement entered into force on 1 September 2004. The regulatory framework for USOs in Norway primarily covers the fixed public telephony service, leased lines and certain data services. Pursuant to the USO Agreement, Telenor is obliged to provide fixed public telephony services at an affordable price to all households and enterprises, while leased lines and data services must remain accessible for all enterprises. The USO Agreement also provides that Telenor is to fulfil its USOs without economic compensation. Telenor has also entered into agreements with the Ministry, pursuant to the ECA, under which Telenor is required to provide certain SSOs, including special defence related services, coastal radio services and services for the arctic islands of Svalbard. The Norwegian government compensates Telenor for the incremental cost of these services both through an annual compensation and on a case by case basis.
The Norwegian Public Roads Administration has completed a public hearing concerning a regulation on burying cables and pipes in public ground. This regulation will, if implemented, involve many additional technical and administrative requirements resulting in considerably higher costs for the operators. As a response to this, several infrastructure companies from different business sectors (i.e. telecom, electricity, water and gas companies) have proposed an alternative regulation to the Public Roads Administration. This regulation would be much more acceptable to the industry.