Updated: June 2016
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 and Datametrix 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 2016, Telenor had 3.1 million mobile subscriptions in Norway, of which around 86% were contract subscriptions and for the most part bundles including voice, SMS and data. As at 31 March 2016, the mobile penetration (SIM cards) and number of inhabitants in Norway were 112% and 5.2 million, respectively. Telenor markets mobile subscriptions under the brand names Telenor, Talkmore, Djuice and Dipper. 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 2016, Telenor had 600,000 fixed telephony subscriptions (including VoIP) and 853,000 broadband subscriptions (including HFC). The fixed broadband household penetration in Norway is estimated to be around 80% as at 31 March 2016.
In addition to its retail offerings, Telenor provides a wide range of interconnection and carrier services, including leased lines, to the Norwegian wholesale market. The wholesale interconnect and carrier 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 transmission 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 to other operators and service providers. Furthermore, Telenor provides local loop unbundling (full and shared access to the local copper and fibre loop), which enables other operators to provide end users with broadband. Telenor also provides TV services over fibre and coax networks and markets the services under the brand names Telenor and Canal Digital.
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 2015 on the Norwegian telecommunications market. The competitive arena is different in the various sectors and is thus commented on separately.
Telenor and Telia are the largest mobile operators in Norway. As at 31 March 2016, Telenor’s estimated mobile voice subscription market share was 50%. Telia’s mobile voice subscription market share was estimated at 37%, including all sub-brands. The third mobile network operator is ICE, with an estimated market share of 2%, owned by the American company Access Industries. All three operators have a complete set of frequencies, in addition, ICE has a Nordic Mobile Telephony (NMT) 450 licence to offer mobile broadband services based on Code Division Multiple Access (CDMA) technology.
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 3%. In addition to the above mentioned operators there are currently around 15 smaller service providers in the Norwegian mobile market.
As at 31 March 2016, based on NKOM data, Telenor estimated its market share of fixed-line telephony subscriptions (including VoIP) to be 60%. Telenor’s main competitors within fixed-line telephony are VoIP operators Altibox, Lyse (together with its partners) and NextGenTel, and mainly PSTN operator Phonero.
Telenor’s fixed-line broadband market share in Norway was, based on NKOM data, estimated by Telenor to be 42% as at 31 March 2016.
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 Lyse (together with partners), which has approximately a 18% 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 17%. 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 7%.
As of 1 January 2013, symmetrical termination rates of 0.16 NOK per minute were introduced across all mobile operators providing mobile termination services 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.
22 January 2016, NKOM published a decision implying full roll-back from 1 January 2017 of all regulatory requirements on Telenor regarding fixed telephony, except for fixed call termination. However, until 1 January 2017, Telenor remains obliged to provide fixed carrier selection and carrier pre-selection, as well as wholesale line rental for PSTN/ISDN products.. Telenor, and all other fixed network operators, are still designated as operators with SMP in the wholesale market for call termination in the fixed network. The 22 January 2016 decision reduced the maximum fixed net interconnection price for all fixed net operators from 2.3 øre to 0.6 øre based on a pure LRIC model. The new termination rate came into force on 1 April 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. For fibre based access non-discrimination is enforced by accounting separation obligations between Telenor’s internal wholesale and retail business areas and a margin squeeze test based on a model developed by NKOM.. 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 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 proactively gives input on guides/regulations on technical trenching requirements and regime for public fees – rejecting unreasonable requests.