Finnish communications watchdog Ficora has suggested that the country’s three largest teleoperators could cap wholesale broadband prices for the next three years.
If adopted, the proposal would see wholesale prices for services provided by Elisa, DNA and Sonera fall by dozens of percentage points.
According to Ficora expert Aleksandra Partanen, the goal of the unprecedented measure is to allow smaller providers to expand into territory dominated by the teleoperator giants.
"Companies as well as consumers want options," she noted.
Tactic aims to increase competition
The three largest operators command nearly 90 percent of fixed broadband connections in Finland. Other providers include cooperatives as well as smaller teleoperators belonging to the Finnet Association, which represents 23 small players in the field.
"The three largest players can use wholesale prices to ensure that other players don’t enter the market."
"We don’t see any other option, since wholesale prices are at an extremely high level. We want to bring competition to the market and proper broadband connections to Finland," Partanen added.
The proposal was sent out to teleoperators and the EU Commission for commenting on Tuesday. Partanen speculated that a maximum price could come into force by summer.
"Legislation has not allowed this before but in some European countries the same practice has been used," said the Ficora specialist.
Difficult to predict impact on consumer prices
According to Ficora, while wholesale prices could fall by tens of percentage points, the impact on prices consumers pay for broadband won’t be seen immediately.
"The goal is for supply to increase and for prices to go down. Consumer prices will fall as a result of any significant reduction in wholesale prices. I cannot predict the final impact on consumer prices," Partanen explained.
According to research conducted last year, Finland had some 1.7 million fixed broadband connections, a three-percent decline from 2014.
Teleoperators Elisa, DNA and Sonera were guarded in their response to the Authority's proposal, which they received only Tuesday. Sonera said that it was still too early for comment, while a DNA representative said that "all regulation that promotes competition is positive".
Elisa's Pasi Vanninen said that while the company had a price cap for fibre optics-based broadband, no such ceiling exists for copper wire connections. As a result connection costs vary depending on location. He added that a cap on wholesale broadband prices would hardly affect monthly prices paid by consumers.
