19.01.2011
The monitoring of pricing in the wholesale broadband market in 2010: FICORA forced to intervene in unreasonable wholesale pricing
In 2010, the monitoring of broadband markets was raised as the highest priority among FICORA's monitoring duties. During the year, FICORA investigated the pricing of eight telecom operators in the wholesale broadband market, or, in other words, the price level of local loop charges telecom operators charge one another, and detected flaws and problems in the pricing of several telecom operators.
In 2010, FICORA issued a decision on the pricing of wholesale broadband market to a total of five operators. The pricing of four of these was considered to be against the Communications Market Act as well as unreasonable. FICORA maintained that the rates of DNA Oy complied with the Communications Market Act once the company cut its prices during the handling. The investigation of the pricing of Kokkolan Puhelin Oy was terminated as the company notified that it was going to cut its prices during the handling. In 2010, yet another 11 telecom operators cut their pricing due to FICORA's other monitoring procedures.
In 2011, FICORA will again launch the analysis of the competitive situation in the local loop market. FICORA's previous analysis of the local loop market dates from the years 2008-2009. The analysis aims at ensuring that the obligations imposed on telecom operators in the local loop market are sufficient.
The objective of the provisions is to prevent operators with significant market power from enjoying a monopolistic pricing capability, promote competition and thereby ensure versatile and reasonably-priced telecom services for citizens.
Further information:
Mikko Kaplas, Senior Adviser, tel. +358 9 6966 627, +358 40 744 6627
Jenni Koskinen, Communications Market Specialist, tel. + 358 9 6966 250, tel. +358 40 766 5250
A local loop means a part of a telecommunications network used for providing broadband subscriptions to end-customers. When an operator carries out activities outside its own operating area, it must lease part of a local loop from the operating area's telecom operator. The sound pricing of the local loop market is a prerequisite for telecom operators to be able to compete in each other's operating areas and thus be able to provide inexpensive broadband services to consumers.
