Telenor Norway

Telenor is the incumbent telecom operator in Norway, with a history of more than 150 years. Telenor’s service portfolio includes fixed-line and mobile telephony, broadband and datacom services for residential and business customers, as well as a broad range of wholesale services. Telenor Norway’s main legal entities are Telenor Norge AS, Datametrix AS and Canal Digital Kabel TV AS.

Updated: June 2015

Telenor is the incumbent telecom operator in Norway, with a history of more than 150 years. Telenor’s service portfolio includes fixed-line and mobile telephony, broadband, TV and datacom services for residential and business customers, as well as a broad range of wholesale services. Telenor Norway’s main legal entities are Telenor Norge AS, Datametrix AS and Canal Digital Kabel TV 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 Communications Authority (the NKOM).

Telenor is the leading provider of mobile communications in Norway. As at 31 March 2015, Telenor had 3.2 million mobile subscriptions in Norway, of which around 84% were contract subscriptions. As at 31 March 2015, the mobile penetration (SIM cards) and number of inhabitants in Norway were 124% and 5.2 million, respectively. 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 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 2015, Telenor had 677,000 fixed telephony subscriptions (including VoIP) and 855,000 broadband subscriptions (including HFC). The fixed broadband household penetration in Norway is estimated to be around 78% as at 31 March 2015.

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 and fibre 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 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 currently holds the following spectrum licences:

  • In the 800 MHz band:
  • One licence comprising 2 x 10 MHz that expires in 2033.
  • In the 900 MHz band:
  • One licence comprising 2 x 5 MHz that expires in 2033.
  • One licence comprising 2 x 10 MHz that expires in 2017.
  • In the 1800 MHz band:
  • One licence comprising 2 x 10 MHz that expires in 2028.
  • One licence comprising 2 x 10 MHz that expires in 2033.
  • In the 2.1 GHz band:
  • One licence comprising 2 x 20 MHz that expires in 2032.
  • In the 2.6 GHz band:
  • One licence comprising 2 x 40 MHz that expires in 2022.

All the above licences are technology neutral and opened for 2G, 3G or 4G services.

The above licences apply to the Norwegian mainland. In addition, Telenor holds the following licences applying to Spitsbergen:

  • In the 800 MHz band:
  • One licence comprising 2 x 20 MHz that expires in 2033.
  • In the 900 MHz band:
    • One licence comprising 2 x 10 MHz that expires in 2017 (same licence as above).
  • In the 1800 MHz band:
    • One licence comprising 2 x 20 MHz that expires in 2033.
  • In the 2 GHz band:
    • One licence comprising 2 x 20 MHz that expires in 2032.
  • In the 2.6 GHz band:
  • One licence comprising 2 x 20 MHz that expires in 2022.

Competition 

Telenor is the market leader in all segments of the telecoms industry in Norway, based on the NKOM’s report for the first half of 2014 on the Norwegian telecommunications market. The competitive arena is different in the various sectors and is thus commented on separately.

Telenor and TeliaSonera are the largest mobile operators in Norway, each holding GSM, UMTS and LTE licences. As at 31 March 2015, Telenor’s estimated mobile voice subscription market share was 50%. Teliasonera’s mobile voice subscription market share was estimated at 39%, consisting of the brands Netcom, Chess, Tele2, Onecall and MyCall. TeliaSonera acquired Tele2 in Q1 2015.

Phonero, which is owned by the private equity company EQT, operates as a mobile virtual network operator (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 15 smaller service providers in the Norwegian mobile market.

Nordisk Mobiltelefon Norway AS, operating under the brand ICE, currently deploys a Nordic Mobile Telephony (NMT) 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, which also acquired licences for 2 x 10MHz in the 800MHz band, 2 x 5MHz in the 900 band and 2 x 20 MHz in the 1800 MHz band in the 4G spectrum auction that took place in December 2013. The acquisition of these licences, combined with the aquisition of Tele2, will result in a new, third mobile network in Norway, which is expected to operate under the brand ICE.

Telenor launched its mobile broadband services in November 2007. Telenor’s mobile broadband services are internet access either through a PC dongle with a separate subscription attached, or through the mobile phone subscription with data included, or paid for on a “pay as you go” basis or with a supplementary subscription. As at 31 March 2015, Telenor’s estimated mobile broadband large screen subscription market share was 53%. Telenor’s main competitors in the mobile broadband segment are Teliasonera and ICE, with estimated large screen market shares of 22% and 14%, respectively.

As at 31 March 2015, based on NKOM data, Telenor estimated its market share of fixed-line telephony subscriptions (including VoIP) to be 61%. Telenor’s main competitors within fixed-line telephony are VoIP operators Altibox, Lyse (together with its partners) and Telio, and mainly PSTN operator Phonero.

Telenor’s fixed-line broadband market share in Norway, including broadband subscriptions offered by Telenor’s cable operator Canal Digital, was, based on NKOM data, estimated by Telenor to be 43% as at 31 March 2015. Canal Digital has a market share of Internet access provided through cable TV (coax) of approximately 50%.

NKOM statistics for 2014 show that there are 150 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-line telephony, internet and TV) and capturing a significant share of market growth. Telenor’s largest competitor in the fixed broadband market is Altibox, Lyse (together with partners), which has approximately a 16% market share. Telenor’s second largest competitor is the cable and fibre operator Get, which was acquired by TDC in 2014, with a market share of approximately 13%. Telenor’s largest competitor in the DSL market is NextGenTel, which was acquired by VoIP provider Telio in December 2012. NextGenTel is estimated to have a market share of approximately 8%.

Regulatory matters 

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 Teliasonera, has over recent years been different from the price regulation imposed on the other operators. However, from 1 January 2013 symmetrical termination rates of 0.16 NOK per minute were introduced across all mobile operators in Norway. On 13 January 2015 NKOM announced that maximum mobile termination rates would be based on the pure LRIC model. NKOM set symmetrical termination rates of NOK 0.083 from 1 July 2015, NOK 0.075 from 1 January 2016, and NOK 0.065 from 1 January 2017.

During Q1 2015, NKOM consulted on the removal of regulation in the fixed telephony retail market. A final decision is expected during Q3 2015. Until then Telenor is still designated as an SMP operator in the relevant markets related to public fixed telephony, which are still in the EEA list of relevant markets for sector regulation: access to public fixed telephony services. The obligation to provide carrier selection and carrier pre-selection 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 and call termination in the fixed network. The remedies imposed on Telenor in these markets include a price cap, cost accounting, non-discrimination, reference offers and transparency. NKOM has run a project to identify the LRIC cost levels of fixed network interconnection. The draft decision, which is expected to come into force, reduces the fixed net interconnection price for all fixed net operators from 2.3 øre to 0.6 øre. New termination rates shall come into force on 1 January 2016.

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). The prices for such services must be cost-oriented. 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.

On 20 January 2015 Telenor was designated as an SMP operator in the markets for wholesale (physical) network infrastructure access (including shared and fully unbundled access) at a fixed location and wholesale broadband access. Telenor is required to provide non-discriminatory access to its FTTH fibre infrastructure and its copper-based infrastructure to other operators. The non-discrimination obligation is enforced by accounting separation obligations between Telenor’s internal wholesale and retail business areas and a margin squeeze model is being developed for the fibre based access. The prices of full and shared access to Telenor’s copper wire network are regulated according to a price cap (NOK 85 for full access) and the prices of copper-based wholesale broadband access are regulated by a cost‑orientated pricing requirement.

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 public fixed telephony service and certain data services. Pursuant to the USO Agreement, Telenor is obliged to provide public fixed telephony services at an affordable price to all households and enterprises, while 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. Both these agreements are currently being renegotiated.

In third quarter 2013 the Ministry of Transport and Communications (MTC) published a new regulation governing the laying of cables and pipes over, under and along public roads, and liability and responsibility for the same. The MTC also published an accompanying guide for the deployment of pipes and cables under main roads and the depth at which they should be set (being 40 cm). The Minister of the MTC has sent a letter to all counties and communities in which he encourages them to adhere to the guidelines not just for main roads but also local and county roads. If soft regulation does not succeed in securing firms’ compliance, the Minister is prepared to introduce additional regulations. Telenor expects these measures to have a positive impact on its business.

The EFTA Surveillance Authority (ESA) and the Norwegian Competition Authority initiated on 4 December 2012 an investigation against Telenor and Telenor Norge AS regarding possible abuse of dominant market position and/or possible anti-competitive practices. The investigation is being carried out pursuant to Articles 53 and 54 of the EEA Agreement and comprises mobile communication services at wholesale and retail level in Norway, including voice, SMS, MMS and data, as well as mobile services sold in bundles that include other products/services. The investigations are ongoing and Telenor is cooperating with the authorities.