Infrastructure for eInclusion – Regulation and Policy Initiatives Marianne Røgeberg Ministry of Transport and Communication Norway

Ministry of Transport and Communication Norway 2Baltic IT&T Riga April 7th 2005 Overall Objective - An Information Society For All Pro-competitive Regulatory Framework Pro-competitive Regulatory Framework Accessibility, Security and Infrastructure Accessibility, Security and Infrastructure Research and Development Research and Development Skills and Education Skills and Education High Quality Content High Quality Content A Forward-looking Public Sector A Forward-looking Public Sector

Ministry of Transport and Communication Norway 3Baltic IT&T Riga April 7th 2005 Regulatory Framework Transposition of EU-directives complete in Norway Transposition of EU-directives complete in Norway New Act on Electronic Communications into force 25. July 2003 New Act on Electronic Communications into force 25. July 2003 Access to Affordable High-Quality Products and Services by Promoting Competition Access to Affordable High-Quality Products and Services by Promoting Competition Technological Neutrality Technological Neutrality Scope: All Electronic Networks And Services Scope: All Electronic Networks And Services Secondary Legislation in Place (Feb 2004) Secondary Legislation in Place (Feb 2004)

Ministry of Transport and Communication Norway 4Baltic IT&T Riga April 7th 2005 Telecommunications Sector Important Role in the Economy: Technological Diffusion and Productivity Important Role in the Economy: Technological Diffusion and Productivity 2004: No OECD Country with Fixed-Line Monopoly. Norwegian Market Fully Liberalised in : No OECD Country with Fixed-Line Monopoly. Norwegian Market Fully Liberalised in 1998 Sector Emerging from Financial Setback Sector Emerging from Financial Setback Competition Intensifying in Most Markets Competition Intensifying in Most Markets Continued Need for Sector-specific Regulation to Ensure Competition in all Market Segments Continued Need for Sector-specific Regulation to Ensure Competition in all Market Segments

Ministry of Transport and Communication Norway 5Baltic IT&T Riga April 7th 2005 NRA Market Analysis Analyse Relevant Markets (1-18) to Identify Operators with Significant Market Power. All but one (17 – wholesale international roaming) Finalised Analyse Relevant Markets (1-18) to Identify Operators with Significant Market Power. All but one (17 – wholesale international roaming) Finalised Draft Decisions on Remedies on National Consultations Summer/Early Autumn Draft Decisions on Remedies on National Consultations Summer/Early Autumn Decisions based on EEA consultation End of Year Decisions based on EEA consultation End of Year Incumbent – Telenor – SMP in all but two markets (entry-barriers, market share) Incumbent – Telenor – SMP in all but two markets (entry-barriers, market share)

Ministry of Transport and Communication Norway 6Baltic IT&T Riga April 7th 2005 Specific Developments Broadband Broadband Fixed and Mobile Telephony Fixed and Mobile Telephony Voice over IP Voice over IP Spectrum Management Spectrum Management Privacy and Security Privacy and Security

Ministry of Transport and Communication Norway 7Baltic IT&T Riga April 7th 2005 Broadband Roll-out Political Aim: Marked-Driven Roll-out in All Parts of the Country Political Aim: Marked-Driven Roll-out in All Parts of the Country Rapid Increase in Take-up Rapid Increase in Take-up 116 Operators (2004) 116 Operators (2004) 23% Penetration Rate (2004) 23% Penetration Rate (2004) Accessibility Expected to Reach % by end of 2005 Accessibility Expected to Reach % by end of 2005

Ministry of Transport and Communication Norway 8Baltic IT&T Riga April 7th 2005 Technology Platforms

Ministry of Transport and Communication Norway 9Baltic IT&T Riga April 7th 2005 Broadband Roll-out No Public Funding for Infrastructure No Public Funding for Infrastructure Support for Local Administrations to Stimulate Demand Support for Local Administrations to Stimulate Demand Broadband Access for All Primary Schools, Libraries and Local Administrations 2005 Broadband Access for All Primary Schools, Libraries and Local Administrations 2005 Increasing Supply in Rural Areas Increasing Supply in Rural Areas Competition not Satisfactory (Telenor SMP in Market 11 and 12) Competition not Satisfactory (Telenor SMP in Market 11 and 12) Appropriate Remedies to be Considered Appropriate Remedies to be Considered

Ministry of Transport and Communication Norway 10Baltic IT&T Riga April 7th 2005 Fixed Telephony Declining Market (Value, Revenues, Subscriptions) Declining Market (Value, Revenues, Subscriptions) New Entrants, Carrier Selection, Price Competition New Entrants, Carrier Selection, Price Competition Fall in Time-Metered Traffic – Substitution to VoIP and Always On Broadband Fall in Time-Metered Traffic – Substitution to VoIP and Always On Broadband Telenor SMP in All Fixed Line Markets (1-6) Telenor SMP in All Fixed Line Markets (1-6) Appropriate Remedies to be Considered by the end of 2005 Appropriate Remedies to be Considered by the end of 2005

Ministry of Transport and Communication Norway 11Baltic IT&T Riga April 7th 2005 Mobile telephony Main Driver in the Electronic Communications Markets – Turnover Exceed Fixed Tlph Main Driver in the Electronic Communications Markets – Turnover Exceed Fixed Tlph Total Revenues Up 8.4% % Traffic Growth Last Year, up from 14% Total Revenues Up 8.4% % Traffic Growth Last Year, up from 14% SMS Major Part of Traffic Proportion, MMS on the Increase (160% ) SMS Major Part of Traffic Proportion, MMS on the Increase (160% ) Telenor SMP in Market 15, All Operators SMP in Market 16 Telenor SMP in Market 15, All Operators SMP in Market 16 NetCom and Telenor Only Network Operators. Combined GSM Market Share 84% - Decreasing NetCom and Telenor Only Network Operators. Combined GSM Market Share 84% - Decreasing Number Portability Dec 2001 – Changed Operator in 2004 Number Portability Dec 2001 – Changed Operator in 2004

Ministry of Transport and Communication Norway 12Baltic IT&T Riga April 7th 2005 Mobile Penetration Rates

Ministry of Transport and Communication Norway 13Baltic IT&T Riga April 7th 2005 Mobile Traffic

Ministry of Transport and Communication Norway 14Baltic IT&T Riga April 7th G 4 Operators Licenced in 2000 after Beauty Contest 4 Operators Licenced in 2000 after Beauty Contest 2 Commercial UMTS Networks launched, by Telenor and NetCom recently 2 Commercial UMTS Networks launched, by Telenor and NetCom recently Hi3G Access Norway (Licenced 2003) to launch this year Hi3G Access Norway (Licenced 2003) to launch this year CDMA: NMT Awarded Licence in the 450- band Last Year CDMA: NMT Awarded Licence in the 450- band Last Year

Ministry of Transport and Communication Norway 15Baltic IT&T Riga April 7th 2005 Voice over IP First Commercial Offerings Launched 2004 First Commercial Offerings Launched 2004 Today More than 40 Operators, Customers Today More than 40 Operators, Customers Main Driver in the Broadband Market Main Driver in the Broadband Market Increased Pressure on Traditional Carriers Increased Pressure on Traditional Carriers TV over DSL – New Opportunities TV over DSL – New Opportunities

Ministry of Transport and Communication Norway 16Baltic IT&T Riga April 7th 2005 Voice over IP – Regulatory Issues Future Regulation under Consideration Future Regulation under Consideration Balance Needs of Industry and Consumers Balance Needs of Industry and Consumers Calls to Emergency Services/Caller Location, Geographical Portability Main Challenges Calls to Emergency Services/Caller Location, Geographical Portability Main Challenges National Work by NRA in Light of ERG Common Position and EC Initiatives (Light Touch Regulation) National Work by NRA in Light of ERG Common Position and EC Initiatives (Light Touch Regulation)

Ministry of Transport and Communication Norway 17Baltic IT&T Riga April 7th 2005 Radio Spectrum Harmonised Management Across EEA Essential to an Internal Market for Electronic Communications Harmonised Management Across EEA Essential to an Internal Market for Electronic Communications Secondary Trading Provides Opportunities for New Innovative Technologies and Services in Europe Secondary Trading Provides Opportunities for New Innovative Technologies and Services in Europe National Legislation Opens Up For Spectrum Trading, in line with Framework Directive and RSD National Legislation Opens Up For Spectrum Trading, in line with Framework Directive and RSD Safeguards for Public Interests Must be in Place Safeguards for Public Interests Must be in Place

Ministry of Transport and Communication Norway 18Baltic IT&T Riga April 7th 2005 Regulatory Outlook Main Challenges: Develop Competition in All Segments while Safeguarding Consumers (USO) Main Challenges: Develop Competition in All Segments while Safeguarding Consumers (USO) New Technological Developments to be Taken into Account New Technological Developments to be Taken into Account Revision of Regulatory Framework by 2006 in line with EC Revision of Directives for Electronic Communications Revision of Regulatory Framework by 2006 in line with EC Revision of Directives for Electronic Communications Regulatory Challenges: Scope (USO) – Convergence, Sector Specific vs Competition Regulation Regulatory Challenges: Scope (USO) – Convergence, Sector Specific vs Competition Regulation