Summary
The study carried out for the Monopolies Commission provides an analysis of the intensity of competition in the German telecommunications sector 18 months after full liberalisation. The following markets have been included in the study:
consumer markets for long-distance and local calls, fixed access and mobile services
carrier markets for origination and termination services in the fixed telephone network, termination services in the mobile network, access to unbundled subscriber lines and leased lines.
Consumer markets
The market for long-distance calls is characterized by a high intensity of competition as is demonstrated by the number and market share of new entrants, the low barriers to entry (a consequence of regulation), the decrease of prices and the network extension of new competitors. In order to preserve the degree of competition achieved, two factors remain paramount: First, competitors must have access to interconnection, preselection and billing services of Deutsche Telekom at a cost-based price. Second, bundling of services by Deutsche Telekom, combined with optional tariffs and turnover rebates, must not be offered in forms that restrain competition.
In contrast, markets for local calls and access provide a mixed picture. Whereas business customer markets are relatively competitive, mass customer markets exhibit a low degree of competition at this point of time, as is revealed by the duopoly structure in many regions, the barriers-to-entry, and the low intensity of price competition. However, it can be expected that alternative access technologies will intensify competition in the future.
The market for mobile telephony has been becoming more competitive, particularly in the private customer segment. In turn, business customers enjoyed a lesser degree of competition due to the lack of number portability. Future competitive impulses will come from the introduction of new data services and mobile multimedia applications.
Carrier markets
Access to interconnection, unbundled subscriber lines and leased lines is of particular importance for making end customer markets more competitive. Regulatory intervention so far played a central role. For some carrier services markets, there is a potential for more competition that in fact could substitute regulatory intervention in the medium or longer term. This is particularly valid for national termination services as well as national leased lines. In contrast, local interconnection as well as access or unbundled subscriber lines will remain bottleneck resources requiring regulation.
(Only German language version available)
