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Netherlands - Market Intelligence Report
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Market Intelligence Reports provide an invaluable mix of vital market data and background information, including telecoms regulation. The Netherlands' telecommunications market was fully-opened to competition from July 1, 1997, although it was not until December 1998 that a new Telecommunications Law came into force that definitively set guidelines for the new regime. However, it still took several years for the industry regulator, Onafhankelijke Post en Telecommunicatie Auroriteit (OPTA), to resolve difficulties competitors had in interconnecting with the national network of incumbent Royal KPN NV. Consequently, a number of potential new entrants left the market as quickly as they had arrived. There was also some delay in introducing a revised Telecommunications Act that specifically dealt with regulation of open network provision and identification of operators with significant market power (SMP) in 18 key retail and wholesale markets. The new Act entered into force in May 2004, but it took until the end of 2005 for OPTA to complete its analyses of the Dutch market. All decisions regarding the specific markets analysed for SMP took effect on January 1, 2006. However, more than 60 appeals were lodged by interested parties and OPTA had to investigate these while preparing to begin fresh market analyses in 2007. In the meantime, KPN took advantage of the comparatively lax regulatory regime by acquiring several of the more potent alternative operators that had been competing with it for telephony and Internet customers. Among its acquisitions were fixed-line operator Enertel (May 2006), mobile operator Telfort (August 2005), and ISPs CistroN (January 2005), Freeler (February 2005), hcc!net (September 2005), Attingo (January 2006), Speedlinq (March 2006), and Demon Netherlands (June 2006). At the time of wrting, KPN was negotiating the purchase of the assets of Tiscali Netherlands, having already acquired many of its broadband customers under an earlier agreement. Nevertheless, a viable alternative national operator is beginning to emerge, following consolidation in the cable TV sector. Private equity company Warburg Pincus acquired Multikabel for €515 million in late-2005/early-2006, then teamed up with another private equity group, Cinven, to acquire Casema Kabeltelevisie for €2,100 million. With European Commission (EC) approval being granted in September 2006, Warburg Pincus and Cinven effectively took joint control of Multikabel and Casema. Then, in January 2007, Cinven and Warburg Pincus acquired the cable TV assets of Essent Kabelkom. Combined, the three companies serve over 3.3 million customers with TV, telephony, and Internet access services; they also serve around 55% of the national cable TV market. There is one other privately-owned cable that is large enough to significantly increase the Cinven/Warburg Pincus group's hold on the market, but no further acquisitions had been announced at the time of writing. The group also competes with Liberty Global Inc-owned UPC Netherlands, itself a major force in the fixed-line sector. Having acquired Telfort, KPN Mobile Netherlands has consolidated its grip on the Dutch mobile communications market; it accounted for 45.4% of all 15.652 million subscribers at the end of March 2007, leaving second-placed Vodafone with 24.8%. The rest of the market is fought over by T-Mobile Netherlands, a subsidiary of Deutsche Telekom, and Orange Netherlands, a subsidiary of France Telecom. Most recently, however, it was reported that France Telecom was considering selling Orange Netherlands to T-Mobile. Based on their March 2007 results, the combined entity would control 29.9% of the market. A formal offer for Orange had not been made at the time of writing, and it may yet be that KPN Mobile or Vodafone will step in to offer a counter-bid in order to protect their market shares.
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