Tele2 Netherlands, Online.nl renew commitment to fixed broadband

Monday 20 July 2015 | 15:56 CET | Market Commentary
The largest alternative broadband providers in the Netherlands, Tele2 and Online.nl (through its parent M7 Group), have signed wholesale agreements for continued access to KPN's copper network. Both agreements run for seven years, underlining the intentions of Tele2 and Online.nl to continue their activities on the fixed market despite their decreasing broadband customer numbers.

Tele2 has negotiated a virtual unbundling agreement (Vula), enabling the operator to use KPN's new VDSL technologies like vectoring and pair bonding. These enable broadband speeds up to 100 Mbps via the copper network. At the same time, Tele2 keeps responsibility for its own internet, TV and fixed telephony services, enabling the provider to differentiate its offer from KPN and other DSL providers. Online.nl has chosen the wholesale offering (WBA), which limits the provider to reselling existing internet, TV and fixed telephony services, with much less room for differentiation from other providers.

For now, these agreements end speculation over the future of Tele2 and Online.nl on the Dutch fixed market. Both providers have chosen a long-term strategy for remaining active on the fixed market, with Tele2 not excluding a combination with its own LTE network.

The largest challenger on the Dutch fixed market, Vodafone is missing in these agreements. Vodafone said in an initial response that it will wait until the details of the agreements are known before negotiating its own deal with KPN. If the Vula agreement between Tele2 and KPN is approved by Dutch regulator ACM as the reference offer for these services, Vodafone seems to have maneuvered itself into a take it or leave it situation. Time will tell if that is the case.

Today's agreements are good news for Dutch consumers as they will continue to have a choice on the Dutch broadband, TV and fixed telephony markets from a range of providers. It has also become clear that DSL as a broadband technology remains competitive with coax and fibre networks. At the same time, Online.nl has become a little more attractive for possible buyers, as the agreement with KPN adds clarity and certainty to the future profile of the provider.

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