International conference of regulatory bodies in the field of electronic communications - ROUND TABLE – ( INFOFEST, October 1 st, 2012) Vladimir Skulić Head of Radiocommunications Department 1 Round table - Infofest, October 1st 2012

RATEL Serbia Overview in relation to: –International roaming tariffs –Protection of user rights –Market analysis and regulatory measures –Secondary trading of rights to use radio spectrum –NGN regulation and Net neutrality –Agency independence 2 Round table - Infofest, October 1st 2012

3 International roaming tariffs

Before regulatory intervention –roaming prices were excessive and were not justified by the underlying costs of providing the services –cross-border nature of the international roaming market => the NRAs cannot tackle the problem of high prices at the national level Roaming regulation at EU level –aimed to eliminate the excessive prices and to stimulate competition –Prices fallen, margin slightly fallen but relatively increased, roaming market not competitive yet 4 Round table - Infofest, October 1st 2012

International roaming tariffs European rules –The EU Roaming regulation was adopted in 2007 and introduced caps on roaming prices for phone calls ("Eurotariff") –Revised rules cut phone call prices further down and introduce caps on SMS tariffs ("Euro-SMS tariff") –Consumers are protected by an automatic safeguard against data roaming bill shocks, and caps on data tariffs (“Euro-data tariff”) 5 Round table - Infofest, October 1st 2012

International roaming tariffs Current position of RATEL –IRT are subject to commercial contracts between foreign and local mobile operators –Agency has no powers to regulate IRT –Foreign operator can freely form the prices of roaming services 6 Round table - Infofest, October 1st 2012

International roaming tariffs sample comparisons for Serbia Originating calls 7 Round table - Infofest, October 1st 2012

International roaming tariffs sample comparisons for Serbia Terminating calls and SMS 8 Round table - Infofest, October 1st 2012

International roaming tariffs commercial interest found When there is commercial interest found between Serbian and its partner operator 9 Round table - Infofest, October 1st 2012

International roaming tariffs Only for European Economic Area (EEA) –Caps and other rules started July 1st 2012 are not obligatory for the operators within EEA when they are making contracts with partners outside EEA –Observer states within BEREC started initiative to get EU Commission recommendation to apply the IRT caps on the countries outside EEA, as this is not within the powers of NRA’s 10 Round table - Infofest, October 1st 2012

11 Round table - Infofest, October 1st 2012 Protection of user rights

Basis is in the Electronic Communications Law, Chapter XV –Rules on quality parameters for publicly available electronic communication services and monitoring of electronic communication activity, July 2011 –Analysis of the General Terms on Providing and Using Services in Public Communications Network –User complaints 12 Round table - Infofest, October 1st 2012

Protection of user rights Rules on quality parameters –Defines the services for which the quality parameters are subject to Rules public voice service in public telephone network at a fixed location public services in public mobile communication network public voice service provided over the Internet broadband access media content transmission services –Defines the set of parameters for each service –Defines the minimum value of the quality of service parameters 13 Round table - Infofest, October 1st 2012

Protection of user rights Analysis of General Terms –Clarity of General Terms –Assumption of right without legal basis in the Law –Limitations of the rights of subscriber –Non-compliance with the Law and Rules adopted by Republic Agency for Electronic Communications Operators submitted their General Terms Analysis is about to be finalized and further process to be defined 14 Round table - Infofest, October 1st 2012

Protection of user rights Subscribers' Complaints –subscriber may file a complaint to the operator –subscriber whose complaint has been rejected may address the Agency or another authority to mediate Complaints about telecommunications operators can be submitted: –by post office or personally –by –by Internet portal (lately most of complaints) Instructions and advices on how to file the complaint are also given through call centre 15 Round table - Infofest, October 1st 2012

Report on user complaints (1) Total number of complaints Total number of resolved complaints Number of signal quality complaints Number of complaints about service bill amount Number of breach of contract complaints Number of Internet quality complaints Other complaints Round table - Infofest, October 1st 2012

Report on user complaints (2) Complaints per service Fixed telephony Mobile telephony CATV ISP Other Round table - Infofest, October 1st 2012

Report on user complaints (3) Lowest percentage of resolved complaints – Service bill amount Most of user complaints in mobile are about service bill amount –Usage of data traffic on smart phones –Agency mediates and has no means to check the amount of traffic shown on the listing Highest percentage of resolved complaints –Signal quality in media content transmission service –Number porting to another operator in mobile 18 Round table - Infofest, October 1st 2012

19 Round table - Infofest, October 1st 2012 Market analysis and regulatory measures

Market analysis and regulatory measures Pursuant to the Law on electronic communications, RATEL carried out the first round of market analysis following EC 2007 Recommendation and BEREC (ERG) Guidelines The whole process of Market Analysis started in Sept. 2010, and ended in Nov is the period of collected and analyzed data 20 Round table - Infofest, October 1st 2012

 The following markets have been analyzed: Market 1 – Retail access to the public telephone network Market 2 - Wholesale call origination on the public fixed network Market 3 - Wholesale call termination on the public fixed network Market 4 - Wholesale unbundled access (including shared or fully unbundled access) to the local loop at a fixed location Market 5 - Wholesale broadband access Market 6 - Wholesale of leased lines Market 7 - Wholesale call termination on public mobile telephone network Market 8 - Media content distribution Market 9 - Retail publicly available telephone services provided at a fixed location 21 Round table - Infofest, October 1st 2012 Market analysis and regulatory measures

Decisions on designating SMP operators in all relevant markets were adopted on 30 November 2011 and Regulatory obligations were imposed All SMP’s published their Reference Offers by May 2012 Agency has received Regulatory reports for 2011 The effects of the regulatory measures taken will be analyzed after the second wave of Regulatory reports is received at the beginning of Round table - Infofest, October 1st 2012

Market 8 Media content distribution Market for media content distribution is not stipulated as relevant under the Serbian Law on Electronic Communications, nor under the European Commission Recommendation Market definitionMarket definition – relevant market includes solely retail market for media contents distribution. Media contents distribution service is a single service regardless of technology (network) deployed (e.g. cable, satellite - DTH, or fixed network - IPTV) Market playersMarket players – 81 media content distributors out of which 76 are cable operators, 3 are DTH and 2 IPTV service providers The three-criteria testThe three-criteria test – having applied the three-criteria test it was found that all three criteria are cumulatively met and that, hence, the retail market for media contents distribution was subjected to ex- ante regulation 23 Round table - Infofest, October 1st 2012

Market 8 Media content distribution - SMP One SMP identified –market share of 50% in terms of revenues and users, which is stable over the past years –having significant advantage over the competition due to a lack of bargaining power of customers, because it provides the service through cable network and satellite –having significant advantages over the competition on the basis of diversification of services and economies of scale, because it is one of the major operators in the Internet market –having significant advantages over the competition on the basis of developed sales network in towns, since it has easy access to end users 24 Round table - Infofest, October 1st 2012

Market 8 Media content distribution - measures Prohibition of excessive pricing Prohibition of barriers to entry or excessive pricing or underpricing such as to limit the competition Prohibition of preferential treatment of an end-user Price control Obligation to obtain a formal approval from NRA for price formulation and price changes for bundled services Individual tariff control measures Cost-oriented prices or benchmarked prices 25 Round table - Infofest, October 1st 2012 Media contents distribution market is rapidly changing, and RATEL will closely monitor the development of potential competition in this market, especially in IPTV segment which is the fast growing in Serbia

26 Round table - Infofest, October 1st 2012 Secondary trading of rights to use radio spectrum

Spectrum trading Spectrum trading is not possible in Serbia Electronic Communications Law Article 93, paragraph 1&3: –The right of use of radio-frequencies granted in the form of an individual licence can neither be renounced, nor leased nor transferred to a third party in any other way Exemptions are takeovers, mergers, etc…, where Agency approval is required –Agency would check if it would lead to the distortion of competition 27 Round table - Infofest, October 1st 2012

28 Round table - Infofest, October 1st 2012 NGN regulation and Net neutrality

NGN regulation and net neutrality RATEL is examining and analyzing the ongoing developments in the regulation of NGN networks in Europe There are no Rules or other Acts published at present 29 Round table - Infofest, October 1st 2012

30 Round table - Infofest, October 1st 2012 Agency independence

By the Law and in practice Agency is independent Electronic Communications Law, Article 7 paragraph 2: –The Agency is functionally and financially independent of government authorities, organizations and entities engaged in the electronic communications sector. Financial independence issue –The newest undergoing Set of financial laws is potentially limiting the financial independence of the Agency ?! 31 Round table - Infofest, October 1st 2012

Agency independence Financial independence issue –The newest undergoing Set of financial laws is potentially limiting the financial independence of the Agency The revenues of the Agency today are the funds generated from the fees and the income generated by the Agency in providing services According to the new set of financial laws it will go via Budget 32 Round table - Infofest, October 1st 2012

Republic Agency for Electronic Communications Višnjićeva Belgrade Republic of Serbia Phone: Fax: Thank you 33 Round table - Infofest, October 1st 2012

34 Round table - Infofest, October 1st 2012 Spare slides

Secondary trading of rights to use radio spectrum RSPG opinion, potential benefits: –facilitating market entry and exit –permitting more rapid redeployment and faster spectrum access for innovators –allowing new technologies to gain access to spectrum more quickly –existing operators could have benefit by selling unused or underused spectrum –Making more flexible use of spectrum –It could be expected to promote competition 35 Round table - Infofest, October 1st 2012

Secondary trading of rights to use radio spectrum RSPG opinion, potential drawbacks relate to: –anti-competitive behavior, –spectrum hoarding, –spectrum fragmentation, –interference control Whether general competition law is sufficient is complex question –market for communication services and market for spectrum itself) –PMR vs IMT 36 Round table - Infofest, October 1st 2012

Secondary trading of rights to use radio spectrum According to Article 9 of the Framework Directive, Member States may make provision for undertakings to transfer rights to use radio frequencies with other undertakings as long as: –there are sufficient safeguards in place to protect the public interest, –ensure transparency and regulatory supervision of such transfers, –provided that competition is not distorted as a result of any such transaction, –where radio spectrum has been harmonised, any such transfer shall not result in change of use of that frequency 37Round table - Infofest, October 1st 2012

Secondary trading of rights to use radio spectrum Expected role of the SMAs: –Establish clear and detailed rules for secondary trading, with clearly defined rights and obligations for all parties involved –observance of competition rules, detect and deal with anti- competitive behaviour, control market failure –provide on-line registries including information on licence conditions, rights and obligations 38Round table - Infofest, October 1st 2012

Secondary trading of rights to use radio spectrum SMA’s should continue: –Protect spectrum rights, police obligations, investigate possible infractions and manage disputes between users by taking binding decisions on them; this role may be expected to increase as a result of the introduction of secondary trading. –Establish levels of acceptable interference and ensure that these levels are not exceeded. –Ensure efficient and effective use of spectrum. This may include preventing hoarding and avoiding excessive spectrum fragmentation. –Continue spectrum harmonisation on an international basis in a way that is sufficiently flexible, technology-neutral and dynamic enough to encourage innovation and competition 39Round table - Infofest, October 1st 2012

Secondary trading of rights to use radio spectrum Practices in Europe: –Widely used: Notification of the intention to trade. Different data requested. –Here and there: Publication of information prior to the transaction. –Widely used: Approval of transaction by NRA. Somewhere only for parts of spectrum (those where auction or public tender took place) –Widely used: Publication of information on the effective transaction. The level of details published is different 40Round table - Infofest, October 1st 2012

Secondary trading of rights to use radio spectrum Experiences: –very different transaction patterns (number of licences and number of transactions) are observed depending on the bands –competition issues may be different in different bands and could be treated specifically –There is still no economical analysis (benefits and drawbacks) done on EU level –Phased introductions –No common rules 41Round table - Infofest, October 1st 2012