KPN announced agreements with Tele2 and M7 Group over access to its DSL network. The new commercial agreements run for seven years and cover respectively Vula (Virtual Unbundled Local Access) and WBA (Wholesale Broadband Access) services. Tele2 welcomed the new deal with the incumbent carrier, which will allow Tele2 to offer speeds of up to 100 Mbps to its broadband customers. KPN is still talking to Vodafone on a similar agreement.
The new agreements are an alternative to the regulated MDF access to the passive network. The Vula service will act as KPN's reference offer to the market. The commercial agreements did not involve the regulator ACM, which left the operators to negotiate an agreement as part of its unbundled access decision first published last October. The wholesale agreements must still be vetted by the regulator to ensure standard guarantees such as transparency and non-discrimination are met; KPN said it expects the regulator to clear the agreements soon.
A new offer on wholesale access was needed due to KPN's introduction of vectoring and pair bonding on the VDSL network, which will support speeds of up to 100 and 200 Mbps respectively. These techniques offer higher speeds, but are not compatible with the current forms of unbundled access. As a result of the Vula offer, Tele2 will gain access to the faster connections, while providing its own internet, TV and fixed-line services to customers, allowing it still to differentiate its offering. The company said it expects to start migrating broadband customers to the new Vula platform from December.
Online: new TV services
The new WBA agreement also ensure players such as M7's Online can still offer broadband services. M7's agreement offers less room for product differentiation, as it is does not have full control over the content of the IP signal. It does allow the company to buy in wholesale a TV service. M7, the parent company of Online, said on its website that Online will introduce an IPTV service. The short 'coming soon' message does not provide any further details. Online already offers an interactive TV service.
Vodafone: wait and see
Vodafone said in an initial response that it was pleased to see Tele2, M7 and KPN had reached agreement on access to the copper network. The company said it expects KPN to provide soon further details of the negotiated deal, so that Vodafone can also reach an agreement with KPN in the near term. At that point, the ACM can start working on phasing out the existing form of access (MDF), Vodafone said.
The ACM said it would also wait to study the agreements, noting it does not comment on bilateral agreements. Its aim from the start has been to develop a services offering that will be available for all wholesale customers. Once such an offer is in place, the ACM will extend its regulation of KPN under the unbundled access decision for three years. It's still unclear to what extent KPN's proposals will apply.
KPN is in the process of upgrading a large number of street cabinets with active equipment for vectoring. It aims to offer 85 percent of households on its network access to 100 Mbps by the end of 2016. The roll-out is proceeding on a city or regional basis, starting in areas with a favourable topology; addresses in outlying areas with not receive the upgrade. The investment in faster speeds on the copper network comes as KPN scales back investment at Reggefiber, its FTTH operator.
