|Issue:||Latin America I 1998|
|Topic:||Liberalisation of the Telecommunications Market in Sweden|
|Author:||The Ministry of Transport and Communications|
Connect-World is delighted to showcase Sweden, which is the world’s most telephone-intensive country with almost 99% of its population having access to a telephone. To ensure the functioning of the already liberalised sector, Sweden introduced a Telecommunications Act in 1993, which placed the regulatory powers under a new, independent regulatory authority. This article explains how the telecommunications services market has been unburdened by regulation; and highlights some of the most important points of the new Act.
Until 1st July, 1993 no specific regulation of telecommunications services in Sweden existed. Televerket, the former sole provider, had formal monopoly rights on service provision. It had a monopoly on connecting terminal equipment however, therefore it was a de facto monopoly provider of services. As the connection monopoly was gradually lifted during the 1980’s, competitors had free access to the parts of the telecommunications services market that were unburdened by regulation. To ensure the functioning of the already liberalised sector, a Telecommunications Act was introduced, in July 1993. On the day the Act came into force, Televerket, a public enterprise, was transformed into the Government-owned joint stock share company Telia AB. The remaining regulatory powers of Televerket were transferred to the new, independent regulatory authority, the National Post and Telecom Agency. With 68 lines per 100 inhabitants, Sweden is the world’s most telephone intensive country. Almost 99% of the population of Sweden has access to a telephone. At the same time, call prices are among the lowest in the world. Furthermore, Sweden is also at the top of the list in terms of the number of mobile telephone subscribers per capita. In January 1997, there were 28 subscriptions per 100 inhabitants. The corresponding figures for the US, UK and France were 17, 12 and 4 respectively. Sweden’s prices are also relatively low in this sector. It is estimated that every fourth Swede has access to the Internet at home or at work and that 10% of the population use the Internet at least once per week. Only the US and neighbouring Nordic countries have such widespread use. Benefits of Competition In 1996, the Government started to review the existing regulation. The purpose of the review was to access the experience of the 3 years that had passed since the Telecommunications Act came into force, and analyse it in the light of the rapid developments in technology, market conditions and international relations. Another reason for the review was the need to adapt some parts of the regulation to the legislation that is developing within the European Union. Among the most important conclusions drawn from the past 3 years is that competition has developed particularly in the mobile, long distance and international telephony sectors. This competition has led to new services and lower prices. Rapid technological development has also led to ever increasing integration with services such as voice, video and data communications. Local telephony has not been exposed to the same degree of competition as international telephony. The difficulties of bringing about effective competition in this area are a consequence of Telia’s control of the access network, i.e. the cables connecting individual subscribers. New Telecom Act Since 1st July, 1997 Sweden has had a new Telecom Act. Some changes have been made to the 1993 Act, especially regarding the interconnection regime as this was one of its weak points. Up till now the National Post and Telecom Agency has only been able to intervene through mediation which resulted in lengthy negotiations between Telia and its counterparts. According to the new Act, the Agency has obtained extended powers, and the most important points of the new Act are elaborated here. Affordable Price Some clarifications have been made in the telecommunications policy objectives. One of the main objectives is that everyone should, from his or her permanent residence or regular business location, have access to telephony services within a public network at an affordable price. This objective means that the responsibility of the State for telephony services is made transparent and delimited from other kinds of telecommunication service. One difference in relation to the previous services is the supplementary provision ‘at an affordable price’. The price referred to is the price for consumers. Price Cap Up to 30th June 1997, end-user tariffs have been regulated by means of a price cap. The purpose of the price cap was primarily to protect domestic subscribers against too-rapid increases of call charges in connection with the enforcement of the Telecommunications Act. Consequently, in the new Act the former price cap has been lifted and replaced by a price limit on fixed charges. All other prices should be defined by the market. General Obligation A general obligation is placed on all operators to notify their intention to supply telephony, mobile and other telecommunications services, and network capacity. Notification, however, will not involve any advance approval of operators. Interconnection Special requirements are placed on operators with significant market power with regard to interconnection. They are obliged, among other things, to prove that interconnection fees are cost-based and to meet all reasonable demands for interconnection with their own networks. The obligation that interconnection fees for telephony services should be cost-based, which currently applies to fixed-network operators, should be extended to mobile telephone operators with significant power in the interconnection market. The National Post and Telecom Agency may, at the request of either party concerned, set a time limit for the conclusion of interconnection negotiations. The Agency must make the decision necessary for interconnection within 6 months, to be effected at the request of either party. Conclusion Developments in the telecommunications field since the introduction of the Telecommunications Act have resulted in further advantages to consumers. More than 30 licences have been issued by the National Post and Telecom Agency and, in addition to this, a great number of small operators have been established.