Updated: August 2013
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 2013, Telenor had 3.2 million mobile subscriptions in Norway, of which around 80% were contract subscriptions. As at 31 March 2013, the mobile penetration (SIM cards) and number of inhabitants in Norway were 114% and 5.1 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 2013, Telenor had 885,000 fixed telephony subscriptions (including VoIP) and 868,000 broadband subscriptions (including HFC). The fixed broadband household penetration in Norway is estimated to be around 76% as at 31 March 2013.
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 the following spectrum licences:
- In the 900 MHz band:
- One licence comprising 2 x 5 MHz that expires in 2013.
- One licence comprising 2 x 10 MHz that expires in 2017.
- In the 1800 MHz band:
- One licence comprising 2 x 10 MHz that expired in March 2010, but which has been repeatedly prolonged. The Ministry has confirmed that the frequency resources of this licence will be renewed free of charge when the idle spectrum in the band has been auctioned (see below).
- One intermediate licence comprising 2 x 10 MHz, valid until the 1800 MHz spectrum auction is due in December 2013 (see below).
- In the 2 GHz band:
- One licence comprising 2 x 20 MHz that expires in 2033.
- In the 2.6 GHz band:
- One licence comprising 2 x 40 MHz that expires in 2023.
All the above bands are either opened or close to being opened for 2G, 3G or 4G services.
Much attention has been paid during the last four years on the future awarding of spectrum in the 800 MHz band in Norway (the ‘digital dividend’). Due to the slow speed of the process of deciding upon spectrum awarding principles, the Ministry and NPT now have to arrange an auction in both the 800 MHz, the 900 MHz and the 1800 MHz bands. The auction, which is due to be held in December 2013, will comprise the following spectrum elements:
- In the 800 MHz band, 2 x 30 MHz will be auctioned with a spectrum cap of 2 x 10 MHz. A “coverage block” of 2 x 10 MHz placed in the middle of the band may be acquired by a company committing itself to coverage of 98% of the population or more.
- In the 900 MHz band, 3 blocks of 2 x 5 MHz will be auctioned. The spectrum cap has been defined in such a way that no operator may possess more than 2 x 15 MHz after the auction.
- In the 1800 MHz band, 2 x 55 MHz will be auctioned. A spectrum cap has been defined in such a way that no operator may possess more than 2 x 20 MHz after the auction. A restructuring of the frequency band dependent upon the outcome of the auction has been announced.
The above licences apply to the Norwegian mainland. In addition, Telenor holds the following licences applying to Spitsbergen:
- In the 2 GHz band:
- One license comprising 2 x 20 MHz that expires in 2033.
- In the 2.6 GHz band:
- One license comprising 2 x 20 MHz that expires in 2023.
Telenor is the market leader in all segments of the telecom industry in Norway, based on the NPT’s report for 2012 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 GSM, UMTS and LTE licences. As at 31 March 2013, Telenor’s estimated mobile voice subscription market share was 50%. NetCom’s mobile voice subscription market share was estimated at 25%, including the wholly owned service provider Chess.
Tele2 is the third largest operator with a subscription market share of around 20%, and holds both GSM and UMTS licences through the infrastructure company Mobile Norway together with Network Norway, which they acquired in August 2011. Through Network Norway, Tele2 control mobile service providers like MyCall and OneCall.
Ventelo, 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.
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 2013, Telenor’s estimated mobile broadband large screen subscription market share was 57%. Telenor’s main competitors in the mobile broadband segment are NetCom and ICE, with estimated large screen market shares of 20% and 13%, 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 2013, Telenor estimated its market share of fixed-line telephony subscriptions (including VoIP) to be 65%. Telenor’s main competitors within fixed-line telephony are VoIP operators Altibox, Lyse (together with its partners) and Telio, and mainly [POTS] operators Ventelo and Tele2.
Telenor’s fixed-line broadband market share in Norway, including broadband subscriptions offered by Telenor’s cable operator Canal Digital, was estimated by Telenor to be 46% as at 31 March 2013. Canal Digital has a market share of Internet access provided through cable TV (coax) of approximately 52%.
Telenor’s largest competitor in terms of subscriptions is the DSL provider NextGenTel, which was acquired by VoIP provider Telio in December 2012. Telio is estimated to have a market share of around 9%. The cable operator Get and the DSL operator Ventelo have an estimated broadband market share of around 11% and 5%, respectively. NPT statistics show that there are 148 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. Altibox, Lyse, together with its partners, is estimated to have around 15% of the broadband subscriptions market as at 31 March 2013.
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. However, from 1 January 2013 symmetrical termination rates of 0.16 NOK per minute were introduced across all mobile operators in Norway.
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/Short Messaging Service (SMS) and data activity) and cost-oriented prices for co-location. The NPT has notified Telenor that they are going to conduct a new three-criteria-test evaluation during 2013, thus evaluating if the existing ex-ante remedies are still needed.
Telenor is 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. The NPT has run a project to identify the LRIC cost levels of fixed network interconnection and has notified Telenor that it will update the LRIC calculation during 2013.
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. 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.
While fibre based local loops are 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 also in FTTH projects. The price caps for full and shared access to copper access lines are NOK 95 and NOK 54 per month, respectively. NPT has run a project to identify LRIC cost levels for unbundled access to the local loop, but no decision has been taken as to whether the price regulation will be changed to an LRIC based approach. The NPT has notified Telenor that they are going to finalise a new decision related to regulation of the local loop unbundling and broadband access markets during 2013. It has been proposed that an access obligation to fibre infrastructure in FTTH deployments and a decrease in the current price cap for copper access lines should be imposed.
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.
There is a lack of regulation on burying cables and pipes in public ground and different obligations among sectors (including electricity, water and gas companies) if cables and pipes have to be moved. The Ministry has carried out a consultancy study (by Sintef) concerning new proposals for regulation. A new regulation is expected to come into force in 2013.
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 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.