17th APDC Congress – Incumbent and alternative operators differ on the impact of regulation on investment

Sapo opens laboratory at the University of Aveiro

The panel dedicated to Regulation Challenges at the 17th APDC Congress once again brought to the stage the difference in vision between incumbent operators and new telecommunications operators, represented by the European sector associations, ETNO and ECTA. Divided over the new regulatory framework and the need to regulate the market more or less, the two presidents of the two agencies pointed out barriers to investment in the new networks.

Alfredo Acebal, chairman of ETNO’s advisory board and at the same time director of Telefónica’s regulation department, again shared the growth numbers of users and communications traffic in the coming years, already presented yesterday by António Viana Baptista, president of the operator. According to Alfredo Acebal, digital information will multiply by six between 2006 and 2010 and reach 988 Exabytes, which creates a major challenge for the operators’ networks.

For this very reason, this official defends investment in networks, but admits that operators need more certainty to create new alternative networks and implement new generation networks.

Clearly opposing the functional separation of networks, the president of ETNO says that it discourages the development of new alternative networks, which can lead to loss of efficiency and recreate a de facto monopoly in the access network.

In an opposite view, Innocenzo Genna, president of ECTA, defends the importance of regulation in the markets as a way to encourage the entry of new operators who streamline services and invest in networks and force incumbent operators to be more dynamic.

One of the points that most divided new entrants was in fact the question of investment. While Alfredo Acebal claims that the new operators do not invest in networks and are merely sellers of services based on networks created by incumbents, having a privileged position because they are defended by the regulators that guarantee them a comfortable margin, Innocenzo Genna believes that they are the investments of the new operators that generate a virtuous circle for dynamizing the market.

Divided between the two different views, José Amado da Silva, president of Anacom, regulator of the Portuguese communications market, admits that there are still many issues that make the regulator’s work unclear and is opposed to some of the most recent decisions on the part of EC, especially those that seek to limit the independence of national regulators, a position that it claims to be shared by its peers in the Member States.

Anacom’s president also draws attention to some of the problems that the regulator faces, namely in relation to the lack of instruments to act in certain situations, such as when companies have cross-shareholdings and which have effective power to block a potential competitor. Already on the sidelines of the presentation José Amado da Silva admitted that he could be talking about PT and PT Multimédia.

Related News:

2007-12-04 – 17th APDC Congress – Convergence implies investment and capacity to develop tailor-made services

2007-12-04 – 17th APDC Congress – Sócrates says that PT Multimédia’s spin-off should be used to benefit the sector