In 2017, Orange Belgium played an important role in stimulating competition on the Belgian market by offering mobile and convergent propositions at the sharpest price. However, a substantial improvement of the cable regulation is needed to ensure sustainable competition to the benefit of the consumers.
Proven success as a convergent player, but…
For many years now, Belgian customers have been suffering from a lack of competition in the internet & TV market, characterised by high retail tariffs with regular price increases. Orange’s internet and TV offer (‘Love), launched in the first half of 2016, marked a quantum leap in the market dynamic by offering consumers a qualitative alternative at an attractive price. With an eye on its future growth, Orange Belgium invested a lot of resources in its convergent positioning and the evolution of its Love offer. The convergent customer base grew to 103,000 customers by year-end: even surpassing the 100,000 milestone target.
And convergence remains a strategic focus at Orange Belgium, as the company confirms a mid-term target of 10% broadband market share. In order to turn Orange’s cable business break-even in the coming years, Orange Belgium is actively working on improving its efficiency and calling upon the regulators to substantially and quickly improve the regulated financial and operational conditions for cable wholesale access. Sustainable competition in fixed services in Belgium can be guaranteed over time only if such improvements are implemented.
Registration of prepaid card users a huge success
In December 2016, anticipating the introduction of the Royal Decree that imposed the identification of prepaid mobile customers by June 2017, Orange started the roll-out of its prepaid identification process for all new and existing customers at the national level. When the government announced its intention to make prepaid registration mandatory, Orange took the lead in developing various prepaid identification processes in all of its points of sale. On 7 June 2017, Orange registered 95% of its active prepaid customer base − best-in-class on the market!
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‘Roam like at home’
In June 2017, the European Union’s roaming regulation was implemented to allow travelling EU citizens to call, text and surf without surcharges in the 28 European Union countries, plus Norway, Iceland and Liechtenstein. This means that, when roaming, Orange customers can use their call minutes, mobile data volume and SMS from their bundle just as if they were in Belgium. Orange went even further by extending the same advantage to its customers in 8 extra territories. So, Orange customers can stay connected anywhere anytime, at no extra cost, in a total of 39 European countries and territories.
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of mobile data used per customer (when spending the summer holiday in the EU)Mobile data usage continues to rise
Total mobile data traffic on the Orange network has increased by 43% year-on-year, and 4G traffic represented 88% of total traffic. Average mobile data usage per customer increased to 1.8 GB/month (1.3 GB a year ago).
Easy Switch enables easy transfer
In July 2017, Easy Switch, an initiative of Telecom Minister Alexander De Croo, went into force, stimulating competition and helping customers to move to the best offer on the market. With Easy Switch, customers of other fixed operators who want to become an Orange Love customer simply contact Orange who organises the change of supplier. Orange handles all of the paperwork, the deactivation of the previous provider, and the installation and activation of Orange Love. Thanks to Easy Switch, the simple, seamless change of fixed operator gives customers peace of mind.
The arrival of 5G on the Belgian market
In its work plan for 2018, the Belgian telecom regulator BIPT has stated that it will communicate its recommendations regarding the introduction of 5G on the Belgian market in the course of 1Q 2018. BIPT has indicated that it intends to run the auctions for the assignment of the 700 MHz and 3.5 GHz, and the re-assignment of the 900 MHz, 1,800 MHz, and 2,100 MHz, by the end of 2018. The start date for the licenses will vary, with the first ones expected to start in the first half of 2019.
A sustainable cable regulation − a major challenge for 2018
Since 2014, when Orange was the only operator to seek regulation of the cable networks, the company has invested over €70 million in the project, creating more than 200 (direct and indirect) jobs. Since the commercial launch of its convergent service in 2016, Orange regularly enhances its Love proposition with new content and features. However, although there is clear market demand for the service − to date, over 100,000 customers have subscribed − the current regulatory conditions render the offer economically unsustainable.
Orange Belgium continues to call upon the regulators to move forward − with a sense of urgency − to improve the financial and operational conditions for cable access. Such improvements are essential to allowing Belgian customers to benefit from effective competition on the fixed internet & TV market.
In early July 2017, the media regulators launched a market consultation regarding their draft TV and broadband market analysis decisions. These draft decisions comprehensively address and illustrate how the retail markets for fixed broadband and TV services lack effective competition. The decisions identify the cable operators and Proximus as having significant market power on the various wholesale markets, and outline the operational and financial remedies that are required to address the market’s failure to be competitive.
Orange Belgium welcomes the operational improvements put forward in the context of the regulation of the cable networks. These will allow more effective operations and further quality of service improvements for the end-users. Regarding the wholesale charges, the current retail-minus methodology has proven to be very complex and ineffective. Orange Belgium asks that the wholesale prices be based on a cost-plus methodology as used in other markets. It is Orange’s considered opinion that such an approach will indicate that the wholesale costs currently charged by the cable operators should decrease by an amount of up to €10 per customer per month.
In October 2017, the Brussels Court of Appeal annulled the wholesale price decisions of December 2013 and February 2016 for access to the cable networks, while maintaining the effects of these decisions until 30 April 2018.
Meanwhile, Orange Belgium understands that the telecom and media regulators have continued their work towards finalising the market analysis decisions for the TV and broadband market.
In the next few months, the Belgian Competition Authority and the European Commission will be notified. The BIPT work plan for 2018 states that a final decision should be ready in the course of 2Q 2018.
Apart from the cable network regulation − which is an absolute short- and medium-term requirement to provide high-speed fixed internet access and TV service for operators that do not have a dense fixed network − Orange Belgium continues to follow up and to consider its options regarding other fixed market evolutions (for instance, in the context of FTTH developments).
