There are signs that KPN’s competitors would struggle without a regulated migration offer. It is likely that the ACM will end uncertainty by issuing new rules next year
T-Mobile argues it has no time to adjust: T-Mobile in the Netherlands announced last week that it would take legal action against KPN over the plan to phase out its copper network. In February 2020, KPN announced the withdrawal of copper lines by February 2023 at 2m addresses where FTTH is already available. Despite the three-year notice, T-Mobile argues it doesn’t have enough time to migrate its existing customers from KPN’s copper network to fibre.
A risk that consumers will face higher bills and less competition: When KPN announced the phase-out, it also said a pilot withdrawal was underway in six areas. This was completed in April 2021. In these areas T-Mobile has found a worrying outcome. Having had to migrate customers from copper (for which the wholesale rate is about €10 per line) to FTTH (between €20 and €30 per line), T-Mobile passed the price difference on to consumers and said it lost about 40% subscribers by doing so. In the absence of a migration offer from KPN, this issue could occur on a larger scale when 2m customers will be migrated in 2023. On the other hand, T-Mobile has a clear interest in delaying the phase-out. Not only would this delay the decommissioning of DSL equipment – it would also give T-Mobile more time to seek alternatives to KPN’s fibre network, given the recently announced deployments from Delta Fiber and from Open Dutch Fiber (of which T-Mobile is the first major customer).
This is currently a deregulated space, but new rules could be on their way: When KPN announced the phase-out, it was subject to the rules set by the regulator ACM in its analysis of wholesale broadband access markets in 2018. The ACM introduced a 36-month notice for the phase-out, and a 24-month notice for the end-of-sale, thereby leaving a 12-month migration period during which KPN would offer a ‘reasonable alternative’. However, these rules fell away in March 2020, when a tribunal struck down the ACM’s market review effectively deregulating wholesale broadband access. The ACM commenced a new market analysis in July 2021, which could set new rules for the phase-out of KPN’s copper network. The ACM plans to consult on a draft decision during Q4 2021, with a view to finalising it sometime in 2022. But this time it will have to ensure the market review stands up to legal challenges, which overturned the ACM’s decisions several times in the last few years.
