Strategisk Agenda 2009_eng

8/8/2019 Strategisk Agenda 2009_eng

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Report number

PTS-ER-2008:19Date

30/09/2008

Strategic Agenda 2009


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Report number

PTS-ER-2008:19

Registration number

08-265/23

ISSN

1650-9862

Post- och Telestyrelsen

Box 5398SE-102 49 StockholmSweden+46 (0)8-678 55 00

[email protected]


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Foreword

The Swedish Post and Telecom

Agency (PTS) has collectiveresponsibility within the postaland electronic communicationssectors, i.e., telecommunications,IT and radio. PTSs vision is foreveryone in Sweden to have accessto efficient, affordable and securecommunication services.

This is PTSs first strategic agenda. In the agenda, we report on the areas wewill prioritise in 2009, what we want to achieve and how we will go about

achieving it.

We are also making assessments for the slightly longer term (2010-12). PTSsstrategic agenda will be adjusted annually, according to the impact of themeasures that PTS has taken and the revised assessments of future trends inthe market.

PTS shall be a modern, efficient, competent and active agency that conducts itsactivity based on the citizens needs and interests in the postal and electroniccommunications sectors. PTSs assessments in the strategic agenda aretherefore based on a continuous, internal and external dialogue on the trends

we can see in the business environment and the challenges facing PTS. Themarket players have a particularly important role in this dialogue. PTStherefore welcomes communication from the market players on importanttrends and direct feedback on the agencys measures.

Marianne TreschowDirector-General


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Contents

Foreword 3Summary 61 What is the strategic agenda? 81.1 Why a strategic agenda? 81.2 Structure of the strategic agenda 81.2.1 Initial values for the strategic agenda 81.2.2 PTSs hierarchy of objectives 91.2.3 Priority areas 101.3 Further challenges for the authorities 121.4 International issues 122 PTSs mission, vision and overall goals 132.1 Political goals 132.2 PTSs vision 132.3 PTSs overall goals 133

Market development 15

3.1 Focus on the consumer 153.2 Introduction of the LEK 163.3 The first obligation decisions 173.4 The first spectrum auction, regulatory uncertainty and the storm Gudrun 183.5 A broadband strategy is prepared for Sweden 193.6 Competition and accessibility in the broadband area 203.7 Second-generation obligation decisions are prepared 203.8 Summing up and looking to the future 214 Analysis of the business environmen t 244.1 About PTSs work to analyse the business environment 244.2 Important trends and uncertainties 264.2.1 TREND 1: Different kinds of operators compete with the same services 264.2.2 TREND 2: The climate issue greater focus and tangible measures 274.2.3 TREND 3: More equal treatment in the access network 284.2.4 TREND 4: Penetration of mobile broadband 294.2.5 TREND 5: Migration from copper to fibre 294.2.6 TREND 6: Greater harmonisation in the EU 304.2.7 TREND 7: Mobility everywhere 314.2.8 TREND 8: Spectrum on low bands is liberalised 314.2.9 TREND 9: Greater freedom on the spectrum market 324.2.10TREND 10: New challenges in the area of security 324.2.11UNCERTAINTY 1: More parallel establishment of fibre 334.2.12UNCERTAINTY 2: The Government procures wireless coverage 345 PTSs strategic orientation 2009 355.1 PTSs orientation goals 2009 355.2 Priority areas 2009 375.2.1 AREA 1: Liberalisation of spectrum management 385.2.2 AREA 2: Greater access to IT infrastructure 395.2.3 AREA 3: Equal treatment for access to TeliaSoneras access network 415.2.4 AREA 4: Work towards a long-term vision for interconnection 425.2.5 AREA 5: Promoting security on All-IP networks 445.2.6 AREA 6: Greater financial supervision of the postal sector 456 PTSs strategic orientation 2010-12 476.1 Priority areas for 2010-12 476.2 PTSs resource and competence requirements for 2010-12 48Glossary 51


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Figures

Figure 1 Initial values for the strategic orientation 9Figure 2 PTSs hierarchy of goals and objectives 10Figure 3 PTSs hierarchy of goals and objectives incl. priority areas 11Figure 4 Penetration of wire-based broadband in EU countries 16Figure 5 xDSL-based access as a share of total Internet access 18Figure 6 Number of subscriptions (thousands) for IP-based telephony 23Figure 7 PTSs business environment map 24Figure 8 Priority areas, time axis 48


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Summary

In the strategic agenda, PTS (The Swedish Post and Telecom Agency) makes acollective, overall evaluation of the big challenges facing the postal and

electronic communications sectors.

PTS will prioritise six areas in 2009. This is a limited number of areas in whichthere is a clear need for increased efforts by the authority and in which theincreased efforts are expected to have major positive effects.

Liberalisation of spectrum management

This area covers lowered entry barriers and measures to facilitate technologyand market development by formulating conditions for using and liberalisingfrequencies. One important objective for 2009 is for market players to haveaccess to more spectrum than last year, on terms that are technology and

service neutral.

Greater access to IT infrastructure

This area covers access to broadband as well as fixed and mobile telephony.An important objective for 2009 is for PTSs financing solution for access totelephony and functional Internet access to be accepted by the SwedishGovernment and Parliament.

Equal treatment for access to TeliaSoneras access network

This area involves using existing tools to make TeliaSonera treat all marketplayers that use the companys access network in the same way as it treats its

own end-user organisation. One important objective for 2009 is forTeliaSonera not to have competitive advantages, to the extent it does today, inthe end-user market due to a lack of equal treatment at wholesale level.

Work towards a long-term vision for interconnection

This area includes PTS supporting the introduction of new business modelswhen the Internet and traditional telecommunications become one. Animportant objective for 2009 is smaller differences in interconnection pricesbetween fixed and mobile networks.

Promote security in all-IP networks

This area covers supervisory measures and measures for increased cooperationbetween market players with regard to IP-based networks and services. Animportant objective for 2009 is that the crisis management function betweenoperators including Internet service providers shall be developed.

Greater financial supervision of the postal sector

This area covers more complex financial supervision of the postal sector, dueto the merger between the Swedish and Danish postal services. An important


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objective for 2009 is for Postens (the Swedish postal service) pricing tocomply with the regulatory framework.


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The Swedish Post and Telecom Agency PTS 8

1 What is the strategic agenda?

1.1 Why a strategic agenda?

In the strategic agenda, PTS makes a collective, overall evaluation of the majorchallenges facing the postal and electronic communications sectors, identifiesthe agencys strategic orientation for 2009 and makes strategic assessments forthe years 2010-12.

PTS plans to develop a strategic agenda annually.

There are four main reasons for PTS publishing a strategic agenda:

The agenda shall provide the orientationof PTSs activity and ensurethat PTSs work leads to the activitys goals and objectives and isrooted in events in the business environment.

The agenda shall describe thepriorityareas within which PTS needs toincrease its efforts.

The agenda shall make it easier tofollow up the measures taken in thepriority areas.

The agenda shall increase the transparencyfor and dialogue with staff,market players and employers by clarifying PTSs strategic orientation.

The strategic agenda is aimed at both internal and external target groups. PTSsassessments are based on continuous, internal and external dialogue on trendsin the business environment and challenges facing PTS. The market playershave a particularly important role in this dialogue.

PTS has presented its work on the agenda and invited discussion on the agendaat meetings with representatives of the electronic communications and postalindustries. PTS has also submitted the strategic agenda to interested parties forcomment.

1.2 Structure of the strategic agenda

1.2.1 Initial values for the strategic agenda

PTSs strategic orientation starts out from:

1. The agencys mission(condensed into PTSs vision and overall goals)2. The market developmentthat PTS has observed (including the impact of

the measures PTS has taken)3. The trends that can be discerned for the future of the business

environment


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These three initial values are described in Sections 2-4.

Figure 1 Initial values for the strategic orientation

PTSsstrategic

orientation

Businessenviron-

ment

Mission

Marketdevelop-

ment

PTSsstrategic

orientation

Businessenviron-

ment

Mission

Marketdevelop-

ment

PTSs strategic agenda will be reviewed annually to take account of the impactof PTSs measures and revised assessments of future trends in the market.

1.2.2 PTSs hierarchy of objectives

Figure 2 presents the hierarchy of objectives that the agency is working with toachieve its vision. The vision is a desirable future state.

The strategic agenda will show that in 2009, PTS will work towards fouroverall goals, nine orientation goals and fourteen performance objectives(limited to the priority areas). The overall goals are presented in Section 2.3,the orientation goals in Section 5.1 and the performance objectives in Section5.2.

The highest level in the hierarchy consists ofoverall goals. These state PTSs

overall orientation and cover the activities of the whole agency. The overallgoals are characterised by long-term stability.

The next level is the so-called orientation goals, which are an important part ofPTSs strategic orientation. The orientation goals break down the overall goals.

The orientation goals are reviewed annually in connection with the productionof the agenda.


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The lowest objective level is PTSsperformance objectives. The performanceobjectives break down PTSs overall goals and orientation goals. Unlike overalland orientation goals, the performance objectives shall be measurable.Measurable performance objectives are a requirement for the agency tosystematically follow up the activity. The strategic agenda only presents theperformance objectives that have been set for the areas that PTS hasprioritised for the following year. All the agencys performance objectives willbe found in PTSs detailed activity plan.

Figure 2 PTSs hierarchy of goals and objectives

Vision

Overall goals (4)

Orientationgoals (9)

Performanceobjectives (14)

Everyone in Sweden shall haveaccess to efficient, affordable andsecure communications services.Vision

Overall goals (4)

Orientationgoals (9)

Performanceobjectives (14)

Everyone in Sweden shall haveaccess to efficient, affordable andsecure communications services.

1.2.3 Priority areas

In the strategic agenda, PTS gives a limited number of priority areas in whichthere is a clear need for the agency to increase its efforts and in which theincreased efforts are expected to have big positive impact.

One priority area is linked to all levels: overall goals, orientation goals andperformance objectives. The area liberalisation of spectrum management hasthe following links:

Overall goal: Efficient use of resources Orientation goal: Spectrum and numbers should be used in a more

market-oriented and flexible way.


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Performance objective: Market players should have access to morespectrum than last year, on terms that are technology and serviceneutral.

Figure 3 PTSs hierarchy of goals and objectives incl. priorityareas

Vision

Overall goals

Orientationgoals

Performanceobjectives


Priorityareas (6)

Vision

Overall goals

Orientationgoals

Performanceobjectives


Priorityareas (6)

It should be pointed out, however, that efforts in one area often have impacton the work towards more than one objective. In the example above, theefforts can be expected to have positive impact on the work towards objectives

aimed at competition and accessibility issues.The section describing PTSs strategic orientation for 2009 shows the agencysorientation goalsandpriority areasand the link between them. The description ofthe priority area also shows PTSs performance objectives for the area, and themeasures that will be taken to achieve these performance objectives.


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1.3 Further challenges for the authoritiesIn addition to the areas that PTS has prioritised in this agenda, there are anumber of issues and areas that require efforts by all authorities, largely as aresult of the Governments demands on the authorities. These are issues thatare already high on PTSs agenda, and the agency will need to commitresources to dealing with them. Important issues of this nature are PTSs workto develop e-administration and simplify regulations for companies,preparations ahead of Swedens presidency of the EU Council during thesecond half of 2009, and continuing its work in the area of the environment.PTS believes it has an important role to play on all these issues and that the

work will have a positive impact. A well-developed e-administration, for

example, will simplify matters for consumers and companies, make theagencys work more efficient and further improve its quality.

1.4 International issues

International issues are an important part of PTSs activity and most of theissues it handles are by nature transnational and require continuousinternational cooperation. PTSs strategic orientation must therefore be seen aspart of a bigger, international picture. One example is the strategic work that iscurrently under way at government level ahead of Swedens presidency of theEU in the second half of 2009. There is a requirement to produce a newEuropean strategy for the information society after 2010 (the time horizon for

the current strategy). Sweden will be a driving force in this process. PTSsupports this strategic initiative and wants to be a leading player in Swedens

work.


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2 PTSs mission, vision andoverall goals

2.1 Political goals

PTS receives its mission from the Government. Themission is formulated in different contexts and forms,for example, in PTSs instruction and the annual letterof appropriation. PTS organises its activity to meetthe needs and guidelines expressed by the Government. An importantguideline is the Governments goals for the policy areas in which PTS works.

PTSs activity falls mainly in the policy area of IT, electronic communicationsand postal services.1 The Governments goal for this area is formulated asfollows:

Secure and easily accessible communications supplied primarily through themarket, and a broad range of services to make everyday life easier forhouseholds and companies throughout Sweden.

2.2 PTSs vision

A vision expresses a desirable future state. PTSs vision is: Everyone inSweden should have access to efficient, affordable and secure communication

services.

PTSs view is that in a functioning market the players provide a large numberof communication services that make everyday life easier for households andcompanies throughout Sweden. The market for communication services shallbe characterised by sustainable competition, efficient use of resources andsecure communications. This leads to long-term consumer benefit. PTS worksto create good conditions for a functioning market and intervenes when thereare failings.

2.3 PTSs overall goals

PTSs overall goals express the agencys view on which parameters areimportant to work with in order to meet the political goals, as well as PTSsown vision for the market.

1 PTS is also active in the policy area of Crisis Management for Society. The Governments objective forthis policy area is to reduce the risk and consequences of serious disturbances, crises and accidents. Ifsuch an event should occur, the lives of men, women and children and their personal safety and healthshall be secured, and damage to property and the environment shall be prevented or limited. Theobjective also includes working to reduce suffering and damage from serious accidents and catastrophesin other countries.

PTSstrategiskainriktning Omvrld

utveckling

PTSsstrategic

orientationBusiness

Mission

Marketdevelop-

ment

environ-ment


utveckling

PTSsstrategic

orientationBusiness

Mission

Marketdevelop-

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PTSs overall goals are:

Long-term consumer benefit Long-term sustainable competition Efficient use of resources Secure communications

Conflicts of goals can arise in certain situations. When this happens PTS willprioritise the alternative that is considered to have the greatest positive impacton long-term consumer benefit.

PTSs vision and overall goals are characterised by long-term stability. It is

important that market players and other interested parties are familiar with theoverall guidelines of the agencys activity and that these stand up well to achanging business environment.


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3 Market development

3.1 Focus on the consumer

PTSs activity has long been characterised by theinsight that all regulation of electroniccommunications and postal services shall ultimatelybenefit the consumer. The introduction of theSwedish Electronic Communications Act (LEK)gave the agency an opportunity to promote consumer interests using a numberof tools. In addition to the different forms of market regulation described indetail below, information to consumers is an important tool. The betterinformed and aware consumers are, the greater the chances that they will beactive in the market and choose the services that best suit them. Activeconsumers are important for the continuation of positive impact from the

work to promote competition and good security. In this context, it is worthmentioning that for the past few years the Swedish Consumer Bureau for

Telecom and Internet (KTIB) has also carried out work on consumerinformation concerned with electronic communications.

An important issue for large parts of PTSs activity concerns consumer accessto different kinds of infrastructure and services. It is clear that accessibility isan important issue when it comes to electronic communications, and postal

and payment services. Broadband access by citizens is often described as animportant ingredient of future social progress. It can be confirmed here thatthe Swedish market has seen positive growth and that Sweden is still in a goodposition from an international perspective. Figure 4 below shows that Swedenis in fourth place for broadband penetration (wire-based broadband) amongEU countries.2

2 COM(2008) 199 final. Preparing Europes digital future, i2010 Mid-Term Review.


utveckling

PTSsstrategic

orientationBusiness

Mission

Marketdevelop-ment

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PTSsstrategic

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Figure 4 Penetration of w ire-based broadband in EU countries

An important part of PTSs model for strategic control consists of studying thepast. The overall growth of the market in previous years is described belowfrom PTSs perspective. A broad look at the past is necessary to form a pictureof where the needs for increased efforts by the agency will be greatest in thefuture.3

3.2 Introduction of the LEK

A natural starting point for a broad look back is therefore the time of theintroduction of the Swedish Electronic Communications Act (LEK). This law

was introduced in 2003 and involved a big change for the market players andthe regulator. The basic idea of the LEK is that regulation should be more

flexible. The law therefore contains fewer general obligations for operatorsthan the previous legislation did. Instead, the regulator shall tailor obligationsin decisions, if required, to deal with problems of competition or look afterconsumer interests.

3 In this strategic agenda, PTS does not conduct a strict follow-up of the performance achieved by theagency in the past year. A more systematic follow-up of the performance that have been achieved will bepossible in the future, as the authority introduced a new system for follow-up in 2008.

EU Broadband penetration rate (January 2008)

7.6%8.4%8.8%9.1%9.8%

13.7%13.8%14.2%14.6%15.0%

16.1%16.9%17.1%17.3%

17.4%18.3%

21.2%

23.3%23.8%

25.4%25.6%25.7%

31.2%34.2%34.6%

35.6%

20.0%19.0%

0%

5%

10%

15%

20%

25%

30%

35%

40%

BG PL SK EL RO LT CYHU CZ LV PT MT IT SI IE ES AT EU27EE FR DE LU BE UK SE NL FI DK

January 07

Data for FR, NL, AT, EE and LT refer to October


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With the new law, PTS, like other European regulators, was given the task ofanalysing electronic communications markets. If necessary, the agency willintroduce obligations for players with significant market power, with the aim ofpromoting effective competition. The change also increased the demands forsystematic and continuous analysis of the markets to ensure that regulationreally does meet existing requirements. It is about not over-regulating, whichcan disrupt the market and hamper incentives for effective investment. It isalso about not under-regulating, which can lead to the regulation not beingpowerful enough to deal with competitive problems due to one or moreoperators having significant market power.

In PTSs annual report for 2003, the new law was included naturally as one ofthe agencys important issues for the financial year. The agency also confirmedthat many market reports pointed to the metal-based access network as a keyto future broadband development. The metal-based access network was alsothe focus of the analyses of markets in electronic communications that wereintroduced in 2003. Another issue that attracted the agencys attention was thesetting up of the European Radio Spectrum Group (RSPG). Discussions onspectrum trade as well as the switch-off of analogue terrestrial networks for TVbroadcasts began in the group in 2003. Other issues raised by PTS were theopportunities offered by new technology for services for disabled persons andthe setting up of Swedens IT Incidence Centre (Sitic).

3.3 The first obligation decisions

In 2004, PTS took the first decisions on competition-promoting obligationsfor operators with significant market power according to LEK. The decisionsapplied to the markets for fixed interconnection and mobile termination, whichare so important to the market as a whole, as well as to regulation in the formof LLUB and bitstream access aimed at allowing a higher degree ofcompetition based on access by alternative operators to TeliaSoneras metal-based access network. The market growth PTS had observed supported suchregulation, as broadband continued to grow via the metal-based access network(xDSL) to become the clearly dominant form of broadband connection. Since

2000, the share of Internet access based on a broadband connection hasincreased at the expense of the share of access based on dial-up connections.The share of xDSL-based access has continued to grow quite significantlyduring the same period (see Figure 5 below4). It is worth noting the break inthe trend that occurred between 2006 and 2007 the reason for this lies in therapid growth of mobile broadband during this period.

4 The figure is based on a compilation of the market data collected annually by PTS for publication inSvensk Telemarknad, on the portalwww.svensktelemarknad.se, etc.


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Figure 5 xDSL-based access as a share of total In ternet access

In its annual report for 2004, the agency also drew attention to the spectrum-related issues of following up licence terms for UMTS and issuing licences for

the 450 MHz band (for which PTS decided to use an auction).

3.4 The first spectrum auction, regulatory uncertaintyand the storm Gudrun

During 2005, the focus remained on a number of spectrum issues. The above-mentioned auction was held and the company Nordisk Mobiltelefon wasawarded a licence for the 450 band. The work to follow up the developmentand expansion of 3G (third-generation mobile telephony) continued and PTS

was instructed by the Government to investigate what spectrum availabilitycould be liberalised in connection with the end of analogue terrestrial TVbroadcasting and for what this spectrum availability could be used.

PTS took further obligation decisions in the market for electroniccommunications. Most of the decisions taken by PTS were appealed against bythe operators. In some cases, it was possible to start applying the regulations,but in the case of the regulation of bitstream access, the county administrativecourt decided to cancel PTSs decision. The cancellation was the start of a longprocess through different courts, which resulted in greater regulatoryuncertainty for the market players. PTS argued that the uncertaintysurrounding the bitstream regulation had an impact on the market that was


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directly contrary to the aim of the regulation. During the year, PTS could alsosee growth in the number of subscriptions for IP-based telephony in Sweden.The requirement for the regulator to work in harmony with the growth of IP-based networks and services and the related development towards convergencebetween networks and services became increasingly evident.

Regulations to remedy the competition problems in the market forbroadcasting transmission services were introduced in 2005, through PTSsdecisions on obligations for the market. The regulations included requirementsfor cost-oriented price regulation for such services. As a direct consequence ofthe regulations, the prices that Sveriges Television (the Swedish Television

Company, SVT) and Sveriges Radio (the Swedish Broadcasting Corporation,SR) pay to Teracom for the broadcasting transmission service were reducedsignificantly.

A change that became very important to consumers was the decision by PTS in2005 according to which TeliaSonera was ordered to give other operators anopportunity to resell subscriptions. At the end of 2007, over a millionsubscribers bought their subscriptions for fixed telephony from an operatorother than TeliaSonera.

On 8-9 January 2005, there was a severe storm in southern Sweden, Gudrun,

which seriously disrupted fixed and mobile telephony. At the time, the LEKsonly requirements were for operational reliability, good function and technicalsecurity for fixed telephony. PTS had proposed changes to the LEK inDecember 2004 for all electronic communications to be covered by therequirements for good function and technical security. The changes werepicked up by the Parliamentary Standing Committee on Transport andCommunication which, after the storm, quickly pushed through the change tothe LEK on 1 July 2005. This means that the provisions cover all publiclyaccessible electronic communication networks and services. PTS began the

work of drawing up general advice in the area, and this was adopted in May2007.

3.5 A broadband strategy is prepared for Sweden

In 2006, PTS began work on producing a proposal for a broadband strategyfor Sweden in light of broadband growth being a key issue to the developmentof the electronic communications market in general. The agency focused its

work on two main aspects: the issue of promoting access to broadband and theissue of promoting competition in the broadband area. In 2006, PTS also hadtwo Government assignments advising of the issue of accessibility in the postaland cashier service sector.


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3.6 Competition and accessibility in the broadband areaIn February 2007, PTS published its proposal for a broadband strategy forSweden. The agency confirmed that there were big shortcomings in thecompetitive situation in the broadband area, despite the competition-promoting regulation that had been decided on by PTS. To sort out theproblems, PTS proposed a new model for equal treatment by operators that

wanted access to TeliaSoneras access network. PTSs proposal involved a so-called functional separation (of network and service production) at

TeliaSonera. As a result of PTSs proposal, the agency was instructed by theGovernment to prepare a detailed investigation into such a solution. In June,PTS submitted the report Bttre bredbandskonkurrens genom funktionell

separation (Improved broadband competition through functional separation)to the Government.

The access issue was also an important aspect in PTSs proposal for abroadband strategy. To make sure the goals that have been formulated forbroadband accessibility really are met, PTS proposed technically neutralbroadband support with the result that everyone is Sweden should have accessto broadband no later than 2010. The accessibility issue was furtherinvestigated within the frame of the public investigation Broadband 2013,headed by ke Hedn. The investigation produced its report on continuedbroadband support in Sweden in spring 2008.

In 2007, PTS held a new auction, this time for municipality-based licences touse radio transmitters on the 3.6-3.8 GHz band. During the year, PTS alsogave general advice on good function and technical security. The generaladvice allows PTS to supervise the way operators handle security and work ongood function in the networks. At the end of the year, PTS started broadsupervision.

3.7 Second-generation obligation decisions are prepared

When looking back, it is clear that a number of areas have continued to betopical over the past five years. Since the introduction of LEK in 2003, PTS

has worked in different ways to improve competition in the market forelectronic communications. The measures have contributed to a gradualimprovement in the competitive situation in many areas (e.g., in theinterconnection market, which has seen prices fall significantly, and in themobile telephony market), while efforts in other areas have been insufficient(e.g., access to TeliaSoneras access network). During 2008, PTS has thereforecommitted considerable resources to producing second-generation obligationdecisions for use as a basis on which to continue its work to improvecompetitiveness in markets with special problems.


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From 2008, PTSs IT Incidence Centre (Sitic) has received an increase of 5million SEK on its appropriation. This increase has allowed Sitic to carry on itsactivity 24 hours a day, every day. With 24/7 activity, Sitic has been able to givemore support to the government authorities interest in and focus on ITsecurity.

3.8 Summing up and looking to the future

Much work remains to be done in the area of competition. The long-term goalof PTSs work on competition-promoting regulations is to achieve sustainablecompetition. When there is sustainable competition, the market can beexpected to achieve economic efficiency on its own, including prices that

reflect competition and a broad range of goods and services. To achieve thisgoal, the agency must make carefully considered assessments and take carefullyconsidered measures with regard to a rapidly changing market. Today, we areseeing the upgrading of the traditional telephone network, in which a gradualmigration is expected from copper-based acces lines to access lines based to ahigher degree on fibre. We are also seeing fibre installed to the home via so-called municipal networks.

The rapid growth of mobile broadband is of course also a very importantdevelopment. A more liberalised spectrum market was discussed at Europeanlevel already in 2003. During the years that followed, the spectrum issues

continued to occupy an important place on PTSs agenda, and the agency hastaken a number of steps in the discussed development and prepared nationallyand internationally for many years. Sweden is well ahead from an internationalperspective. In addition to the auctions described above, PTS held two newauctions in 2008. The auction for the so-called 2.6 GHz band gave the Staterevenues of over 2 billion SEK. Spectrum trade is concerned with resources ofgreat value and importance to the electronic communications market.

Initially, consumer access to infrastructure was emphasised as an importantissue for the future, maybe particularly to IT infrastructure in view of the rapidpace of technical development and change in consumer demand over time.

This makes it important for a regulator to manage accessibility issues in a waythat is sustainable in the long term. PTS has increasingly managed accessibilityissues as parts of a whole. It is clear that accessibility to networks and servicesis dependent on the development of a liberalised spectrum market, PTSs roleas an agency that promotes competition and, not least, technical development.Much work remains in this area however.

PTSs work on robustness has changed in recent years from focusing primarilyon robustness and redundancy in the physical infrastructure to also covering


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other measures. PTSs work, which starts out from the overall orientation ofpublic crisis preparedness work, is defined in the strategy for robust electroniccommunications for 2006-08. This has lead to more of PTSs work onrobustness covering different kinds of consensus solutions between manyparties.

A national telephony action group (NTSG) has been formed in recent years.NTSG consists of representatives of operators with significant infrastructure inSweden. The aim of the group is to reduce the impact of a major crisis shouldone occur in the sector. GLU, a system for shared situation awareness, hasbeen introduced to support the groups work and give information to other

players in society that have to manage crises.

A number of issues that require efforts by all authorities, largely as aconsequence of the Governments demands on the authorities, were presentedin Section 1.3. One of these issues concerns the requirement to introduce theGovernments action plan for e-administration. A specific requirement for PTSalso originates from the so-called Data Retention Directive5, which will lead tonew supervision tasks for the agency. Both of these issues will requireincreased resources.

There has been rapid technical development in recent years, with services such

as IPTV and IP-based telephony now established in the market, and there areforecasts pointing to continued strong growth.6 Figure 6 below presents thegrowth in the number of subscriptions for IP-based telephony.7

5 Directive 2006/24/EC of the European Parliament and the Council6Svensk Telemarknad forecasts 2007-11 PTS-ER-2007:257 The figure is based on a compilation of the market data that PTS collects annually for publication in e.g.Svensk Telemarknadand on the portalwww.svensktelemarknad.se.


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Figure 6 Number of subscriptions (thousands) for IP -basedtelephony

The concept of IP-based networks is thus a reality, and the networks are filled

with services demanded by an increasing number of consumers. The fact thatmore and more services are becoming IP-based has great repercussions for the

way services are produced and, in the long term, for cost-effectiveness and therange of services to end-users. The transition to IP-based networks brings newissues for PTS. They concern the formulation of regulations to promotecompetition with, inter alia, neutral investment incentives for market players,and incentives to handle risks pertaining to the security of the growth of thenew type of infrastructure. PTSs measures and initiatives in the area in recentyears should be seen in light of this.


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4 Analysis of the businessenvironment

4.1 About PTSs work to analyse thebusiness environment

As the markets for electronic communications andpost are undergoing change, the conditions for PTSsactivity are changing. This makes it a matter of urgency for the agency to carryout systematic and continuous work on analysing the business environment.

In order to successfully analyse the business environment it is important tofirst clearly define the information requirement: which areas in the businessenvironment have the greatest impact.

A so-called business environment map makes it easier to identify relevantevents and trends in the business environment. For PTS, the informationrequirement is defined by the business environment map below.

Figure 7 PTSs business environment map

Technolgydevelopment

Industry structure

Creators ofpublic opinion

Economy &Industry

Social &consumer trends Reglering/ PTS

MARKET

The Commission

Government &Parliament

Judiciary

Authorities

Internationalorganisations

PTS

Regulation/ PTS

Technolgydevelopment

Industry structure

Creators ofpublic opinion

Economy &Industry

Social &consumer trends Reglering/ PTS

MARKET

The Commission

Government &Parliament

Judiciary

Authorities

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The top of the map illustrates the main factors that influence a player in themarket for electronic communications or postal services. The lower partillustrates some of the players that influence PTS in the regulatory area. Thelower part of the map is thus summarised in the subset Regulation/PTS at thetop of the map.

A large number of different sources are used to analyse the businessenvironment and catch what is happening in an optimal way. These areprimary sources (the agencys internal business environment network, Swedishand international organisations, operator contacts, etc.) as well as secondarysources (media, reports, blogs, etc.).

The markets for electronic communications and postal services are highlyinternationalised. It is therefore important that PTSs business environmentanalysis follows developments in other markets and assesses the extent to

which the corresponding developments may happen in Sweden.

A number of possible trends have been identified based on the map. Thesehave been evaluated and prioritised according to three dimensions:

Impact on PTS over 1-4 years (time perspective of the agenda) Impact on the market over 1-4 years (time perspective of the agenda)

UncertaintyBased on this evaluation, ten certain trends thought to have great impact onPTS and the market are described below. These trends are judged to have alow degree of uncertainty.

Two uncertainties are also described. These are deemed to be highlyuncertain, but they can nonetheless have a big impact on both PTS and themarket.

In the strategic agenda, these trends and uncertainties serve several functions:

To identify new possible areas things that the authority ought towork on but does not currently do so to any great extent.

To be considered in the evaluation of areas that should be prioritised. When it comes to setting relevant performance objectives.

The certain trends were presented to the market players at a seminar on 14April this year (invitations went to contacts at all registered operators). Thecorresponding seminar for operators in the postal market was held on 22 May.

The players then had the opportunity to give their views on whether these


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changes to the business environment are the most important ones now. PTShas thereby had an opportunity to check its analysis of the development.

4.2 Important trends and uncertainties

Ten certain trends and two uncertainties have been identified as being highlyrelevant to the strategic agenda. They are assumed to have a great impact onPTS and the market over a period of 1-4 years.

The following trends are described in more detail in this chapter:

Different kinds of operators compete with the same services The climate issue greater focus and tangible measures More equal treatment in the access network Penetration of mobile broadband Migration from copper to fibre Greater harmonisation in the EU Mobility everywhere Spectrum in low bands is liberalised Greater freedom on the spectrum market New challenges in the area of security

The following uncertainties are also described:

More parallel installation of fibre (through municipal networks etc.) The Government procures wireless coverage

4.2.1 TREND 1: Different kinds of operators compete w ith the same

services

It is clear that mobile, fixed network and TV operators are increasinglycompeting to offer similar (but not always equivalent) services. Some obviousexamples are telephony, TV and Internet access.

The development is a consequence of, inter alia, the constant improvement in

quality and performance of mobile networks. Fixed networks have also beenupgraded in recent years, and it is in fixed networks that package offers with,for example, TV, telephony and Internet supplied by one and the sameprovider, have so far had the greatest impact. It is important to note thatmobile broadband with a high transfer capacity is usually based on theoperators base stations being connected to a wire-based infrastructure with ahigh transfer capacity.


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There are several factors that can slow down this development, for example, ifthere is a strong increase in the demand for broadband. A rapid increase in thedemand for services requiring extreme bandwidth such as HDTV could meanthat the mobile networks, at least for a while, struggle to meet this demand.Security aspects are another factor that can slow down development, and it isreasonable to assume that security could become an increasingly clearcompetitive device. Altogether it is still likely, according to PTSs assessment,that this development will continue for the time horizon in question, 2009-12.

As a result of this trend, it is likely that new players will appear, at the sametime as we will see new business models, mergers, etc. According to a report

from Ernst & Young8

, the development towards new business models iscurrently a big factor of uncertainty in the international telecommunicationsindustry. PTSs view is that this also applies to a high degree to the Swedishsituation. It is difficult to foresee which business models will become dominanthowever. For consumers, there are risks as well as opportunities with this kindof development. The chance for operators to choose other business modelsthan those that have been applied in traditional telephony so far ought toprovide better conditions for growth of the more efficient IP technology,

which can lead to more services that are more affordable for consumers andcompanies in the long term. Depending on the business models that areapplied, there can be risks of locking-in effects, but the fact that one and the

same operator provides several services can also simplify the situation for theconsumer.

There is a clear link between this trend and several of the areas that PTS hasprioritised for 2009. The trend is linked primarily to the areas concerned withliberalisation of spectrum management, greater access to IT infrastructure,

work towards a long-term vision for interconnection and work to promotesecurity in All-IP networks.

4.2.2 TREND 2: The climate issue greater focus and tang ible

measures

Climate is a high priority in much of society, nationally as well asinternationally. Different ways of reducing carbon dioxide emissions andthereby hopefully slowing down or turning development around are currentlyunder discussion in industry as well as the public sector.

In PTSs view, the market for electronic communications will increasingly beaffected by this trend. A number of signs currently point to greater focus by

8 Strategic Business Risk Telecommunication 2008. Ernst & Young in cooperation with OxfordAnalytica.


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the industry on this issue. The Government declaration, for example, talksabout how IT should be used for sustainable development, while the players inthe industry have recently started a joint project called Grn IT (Green IT).

The demand for green IT in general will increase in the industry (formanufacturing, operation, maintenance and recycling). We will almost certainlysee a continued debate on energy consumption by terminals and networks as

well as lower acceptance of travel, especially by air, and thereby a willingness inmany areas to replace travel with more distance working, videoconferencing,etc.

This is a broad trend with links to many social areas, one of which is electroniccommunications. There is a link between, for example, the climate trend andthe priority area of liberalised spectrum management. There may be someconflict between spectrum efficiency and energy efficiency.

4.2.3 TREND 3: More equal treatment in the access network

In 2007, PTS proposed a bill for functional separation with the aim ofincreasing equal treatment on the access network. The bill allows the regulator,

when necessary, to decide on functional separation of the network and serviceproduction for an operator with significant market power in the accessnetwork market. The bill was adopted by Parliament on 5 June 2008 and came

into force on 1 July the same year. The development towards different formsof separation is a clear international trend, according to the analysis companyGartner.9

More equal treatment in the access network is expected to promotecompetition on the Swedish market. It is also expected to lead to lesscomplications when changing operators, subscription form or moving. Today,consumers suffer from operators failing to make these migrations work at

wholesale level. With equal treatment it will not be possible for the networkowner to provide its own users with a better service (and shorter lead times)

when moving than the competitors users receive.

The bill also gives the regulator an opportunity to accept a voluntaryundertaking on functional separation. TeliaSonera has formed a subsidiary,Skanova Access, which will supply primarily copper access on non-discriminating terms. According to TeliaSonera, the provision of more

9 Carrier challenges abound as structural separation looms large, Cellular News, 15 May 2008.


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comprehensive10 products shall also be handled on the principle of non-discrimination. Even if TeliaSoneras intention with this measure is greaterequal treatment in the access network, many players in the market do notbelieve equal treatment has been achieved to date. Whether equal treatment

will really be achieved is an important aspect when assessing the competitivesituation with regard to the provision of LLUB and bitstream access. It is clearthat an improved competitive situation in the access network will have apositive impact for the consumers, for example, in terms of price and supply.

There is a clear link between this trend and several of the areas that PTS hasprioritised during 2009. The trend is linked primarily to the areas concerned

with greater access to IT infrastructure and the work to safeguard equaltreatment for access to TeliaSoneras access network.

4.2.4 TREND 4: Penet ration of mobile broadband

Mobile broadband has seen an explosive increase in the number of subscriberssince the first half of 2007.11 The current turbo-3g (HSPA and CDMA2000)gives the end-user speeds of between 3 and 14 Mbit/s. The development ofLTE can be expected to give data speeds of approx 150 Mbit/s.

This will of course have a great impact on the market. As bandwidth increases,there are better opportunities for some users to meet much or all of their

requirement for Internet access by mobile broadband. If wireless broadbandcan substitute fixed broadband, it can affect the regulatory conditions. Oneimportant issue here is how quickly demand for broadband will grow in thefuture.



4.2.5 TREND 5: Migration from copper to fibreAnother consequence of the increased demand for services requiring a highbandwidth (e.g., HDTV) is that the traditional fixed telephone network, on

10 The more comprehensive a wholesale product is, the more components (and value) are included, whichmeans less opportunity for the purchasing operator to differentiate (adding value) the product that iseventually provided to end users.11 The number of Internet subscriptions with plug-in cards or USB modems increased from 92,000 on 31December 2006 to 376,000 on 31 December 2007, according to Svensk Telemarknad2007, PTS-ER-2008:15.


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which access lines to households have been based on copper wire, is upgradedas more of the network becomes based on fibre technology.

Other factors also drive this development, such as good access to capital,requirements for a return on invested capital and cost rationalisation. Areduction in the use of traditional fixed telephony in favour of broadbandservices also leads to a reduction in revenues and thereby less incentive for

TeliaSonera to maintain the parts of the copper-based access network that donot offer the broadband services that are in demand. Another important aspectis the fact that fibre technology is also often an important input to wirelessinfrastructure.

The initial investment to install fibre is high, and it is likely that fibre to thehome (FTTH) will only become the dominant form of connection for newbuilding and in the long term. It is PTSs view that fibre to the cabinet (FTTC),for which copper wire is used for a short distance to the home, will be anattractive intermediate step in some areas in the short term. With thedevelopment of new technologies, end-users can have access to speeds of upto 200 Mbit/s when fibre is laid to the cabinet.

There is a clear link between this trend and several of the areas that PTS haslaid down as priority areas for 2009. The trend is linked primarily to areas with

greater access to IT infrastructure, work to ensure equal treatment for access toTeliaSoneras access network, work towards a long-term vision forinterconnection and work to promote security in All-IP networks.

4.2.6 TREND 6: Greater harmonisation in the EU

Many factors point to increased harmonisation of the conditions in the marketfor electronic communications between countries in the EU. TheCommissions latest proposal for new directives for the area of electroniccommunications points in this direction, and there is also a general striving forfreedom of movement for goods and services. There is also a willingnessamong the large pan-European operators in the different countries to meet

regulations that handle the same types of problems with the same measures.

In addition, there are several driving forces that can counteract increasedharmonisation. EU countries, for example, can hold different views on theextent of harmonisation between countries. The degree of maturity of differentmarkets also differs, which means that the conditions will still look different.

There is a clear link between this trend and all the areas that PTS prioritises for2009, which illustrates the fact that so many of the issues that are handled by


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the agency are by nature transnational and require ongoing internationalcooperation.

4.2.7 TREND 7: Mobility everyw here

It has been established above that development is moving towards differentkinds of operators competing with the same services. It is also clear that end-users increasingly request mobility, or access to their electroniccommunications in mobile usage situations everywhere.

As dependence on electronic communications grows, combined with thedevelopment of mobile technologies, consumer expectations of the services

they can access in front of the computer or TV at home also grow on a mobilebasis.

Factors that can slow down this development are of course that it is expensiveto build infrastructure in areas with little use and that new services demandhigh performance, which is expensive to combine with great area coverage. Inaddition, growing worries about radiation may affect the willingness to usemobile services. Uncertainty about standards for, for example, TV on themobile phone may also slow down development, at least temporarily.

A likely consequence of the growing demand for mobility is a big requirement

for investment and possibly also more niche players that want to offer services.



4.2.8 TREND 8: Spectrum on low bands is liberalised

The Swedish Government has decided to phase out TV on the 790-862 MHzband and open it for other uses. At the same time, the EU Commission is

taking a decision on whether other technologies should be allowed on theGSM bands.

In general, there is pressure from market players to utilise low bands of thespectrum. The opportunity that arises to develop new services may lead to newconditions in the market. Access to spectrum on low bands can be expected tobecome very important for market players that want to provide a broad rangeof services to end-users.


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The transition from traditional fixed telephony to IP-based networks leads toincreased complexity of the network infrastructure, which in turn can lead tomore incidents and reduced reliability. Some of the vulnerabilities of theInternet (viruses, phishing, etc.) may also arise in other communication servicesonce they become IP-based. With our increased dependence on electroniccommunications, this increases the threat.

When it comes to integrity, people today are under surveillance in differentways than before, in the physical as well as the virtual world. Organisedprotests from users and other groups have not been very prominent for a longtime, but the rather lively debate ahead of the vote on the so-called FRA Law

gives a completely different picture. It is clear that the issue of integrity hasnow become an issue that involves many.

Market players will need to set aside resources for security-raising measures,including risk analyses and risk management, and it must be seen as amanagement issue. This also applies to providers that do not own networks.

With regard to integrity, players are responsible for managing user information,etc. in a responsible way to reduce the risk or incorrect exposure andunauthorised access. It is also important to realise and deal with the differentrequirements of different groups and the expectations of openness versusanonymity.

All in all, the development means that greater demands are placed on PTSstechnical competence while, at the same time, there is growing internationaldependence on and need for cooperation.

There is a clear link between this trend and several of the areas that PTS hasprioritised for 2009. The trend is linked primarily to the areas concerned withgreater access to IT infrastructure and the work to promote security in All-IPnetworks.

4.2.11 UNCERTAINTY 1: More parallel establishment of fibre

One of the uncertainties that has been identified is if, and if so to what extent,there can be parallel establishment of fibre in parts of the country and thenetwork.

Factors that can lead to more parallel establishment are growing demand foroptical fibre combined with measures that make it easier for players to installfibre such as, for example, improved conditions for joint laying of fibre, accessto channelling and greater access to rights of use.


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Development towards more parallel establishment of fibre could of course leadto increased competition in the fibre market and in the end also on the end-user markets where optical fibre is used as an input. At the same time, parallelestablishment is hardly always desirable. In its proposal for a broadbandstrategy for Sweden, PTS has expressed doubt over whether parallel fibrenetworks are financially viable or even economically desirable at access level. Inparts of the network other than the access network, however, the conditionscan in some cases be different, for example, in the transport network whereparallel establishment is already a factor for the big transport routes. Thereought also be big regional variations between different geographic areas inSweden. As is shown in PTSs report Dark fibre market and state of

competition (PTS-ER-2008:9), the agency does not think it obvious that therewill be enough competition in this market. One uncertainty that plays in here isjust that, the degree of parallel establishment.

4.2.12UNCERTAINTY 2: The Government procures w ireless coverage

The growing dependence on electronic communications means greaterdemands from the public for sparsely populated areas to have some form of

wireless Internet coverage. At the same time, it is not profitable for operatorsto expand everywhere, and PTS does not currently lay down any requirementsfor coverage when awarding new licences.

One of the uncertainties that has been identified concerns which solution willprevail to ensure wireless coverage in Sweden (mobile telephony and wirelessbroadband) and, in particular, whether it will be through procurement. Theinvestigation into the use of radio spectrum and electronic communicationsrecently presented a report that proposed that the provision of mobile or other

wireless communications in areas where there is a lack of commercialincentive should be primarily via procurement financed by public funds or afund that could be set up by, from example, money from auction revenues.13PTS has also recently submitted a proposal for a change to the law concerninguniversal services in LEK to the Ministry for Industry, Employment andCommunications the proposal means that a fund solution will be added as a

further financing option for USO (the current options in LEK are obligationand procurement).

13 SOU 2008:72, Effektivare signaler (more effective signals)


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5 PTSs strategicorientation 2009

5.1 PTSs orientation goals 2009

PTS is working towards four overall goals that coverall of PTSs activity and give its overall orientation.

The overall goals are broken down into orientation goals, which are reviewedannually in connection with developing the strategic agenda.

The orientation goals are considered against the development of the market,including the impact of the measures that PTS has taken, and they are alsotested against the trends that PTS can make out for the future. In other words,the objectives ought to contain a certain measure of dynamics and not bedependent on, for example, a certain technology always being used in themarket.

Based on the above, PTS has formulated nine orientation goals for thefinancial year 2009.

ORIENTATION GOAL 1: Greater consumer benefit in the market for

electronic communications through more opportunities to make aninformed choice among a growing number of services, whileconsumer protection gradually becomes stronger and personalintegrity is good.

Operators shall comply with the existing rules and guidelines to safeguard acertain minimum level of protection for all consumers. There should beeasily accessible information on different services to allow consumers tomake informed choices. Operators and consumers shall also receiveinformation on their rights and obligations. The agency shall work forimprovements in the event of shortcomings in the regulatory framework or

its application.

ORIENTATION GOAL 2: PTS shall use different means to createconditions for the market to give more people in Swedenopportunities to access an IP infrastructure that meets consumerdemands, with consideration for what is economically effecient.

Access to electronic communications refers to the opportunity forindividuals and organisations to connect to infrastructure, different


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technologies, separately or together, that provides access to the services ofthe information society. The objective also covers persons with disabilitieshaving access to electronic communication services.

ORIENTATION GOAL 3: Access to postal and payment services shallbe maintained for everyone in Sweden.

Access to postal services has long been good in Sweden, measured byinternational standards. It is PTSs job to ensure that this is maintained. Intodays society, the requirement to carry out payment services is metalmost fully by the market. If the demand for these services is not yet

covered by market provision, it is PTSs job to ensure that access to theseremains at roughly the same level as today.

ORIENTATION GOAL 4: The market for electronic communicationsand postal services shall develop in a clear direction towardssustainable competition.

Sustainable competition means competition that gradually develops tostand on its own, with the requirement for regulatory interventiongradually lessening, as well as functioning buy and sell relations betweenplayers in the market.

ORIENTATION GOAL 5: Spectrum and numbers shall be used in amore market-oriented and flexible way.

Here, a market-oriented way means that the spectrum is shared in a waythat is competition neutral and economically viable through a transparentand clear regulatory framework that gives the players choice according tothe markets needs. Flexibility on spectrum issues means that technologyand service neutrality shall be applied to the full extent possible in PTSsregulatory framework and in the licence terms that PTS issues. Market-oriented use of numbers means that the telephony number plan shall be

competition neutral, sustainable in the long term and end-user friendly.Flexible use of numbers means that the telephony number plan shall beadaptable for new services and that end-users shall be able to use thenomadic telephony services in full.

ORIENTATION GOAL 6: Electronic communications shall be morerobust and secure in 2009 than they were before.


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Robustness refers to durability and accessibility also during extraordinaryevents. In this context, access refers to the possibility of using an electroniccommunications service to the expected extent and within the expectedtime. Security refers to system integrity. System integrity applies to thegeneral ability of a system to maintain its intended function and therebyprotect against undesirable influence, change or viewing.

ORIENTATION GOAL 7: PTS shall be an accessible and efficientagency for the benefit of citizens, companies and staff.

PTS shall be a modern, efficient, competent and active agency that

conducts its activity based on the needs and interests of the citizens in thepostal and electronic communications sectors. With the support of IT andchanged ways of working, and within the framework of the Governmentsaction plan for e-administration, PTS intends to: (1) improve the usabilityand accessibility of its services, (2) improve the efficiency of incidentmanagement, (3) improve the efficiency of the internal administration, and(4) provide staff with good support for the activity.

ORIENTATION GOAL 8: PTS shall be an attractive employer withsuitable competence provision.

Being an attractive employer means that PTS should, with consistentinternal work, be able to communicate this to the outside world and attractand recruit the staff it needs. Suitable competence provision is an ongoingprocess to ensure that the right competence is available for PTS to achieveits objectives and meet its needs in the short and long term.

ORIENTATION GOAL 9: PTS shall have sound finances and goodfinancial control.

Sound finances means that PTS balances costs and revenues in all financialareas. Good financial control includes continuous budget follow-up,

accurate forecasts and high quality of PTSs financial report.5.2 Priority areas 2009

PTS has prioritised six areas for 2009. This means that the agency needs toincrease its efforts in these areas during 2009.

PTSs assessment of which areas should be prioritised is based on the agencysmission (condensed into PTSs vision and overall goals), the market


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development that PTS has observed (including the impact of the measures thatPTS has taken) and the trends that can be made out for the future.

PTS has prioritised the areas in which there is a clear need for the agency toincrease its efforts and in which the increased efforts are expected to have bigpositive effects. The priority areas are:

Liberalisation of spectrum management Greater access to IT infrastructure Equal treatment for access to TeliaSoneras access network Work towards a long-term vision for interconnection

Promoting security in All-IP networks Greater financial supervision of the postal sector

5.2.1 AREA 1: Liberalisa tion of spectrum management

Description of the area

This area aims to lower entry barriers and facilitate technology and marketdevelopment by formulating conditions for using and liberalising frequencies.

The main thought behind liberalising the market is that more market-orientedhandling of the spectrum ensures efficient use of resources, as it is then thetrue market demand that controls the use of the spectrum. A more efficientuse of the spectrum is also expected to have a positive impact in terms of

increased accessibility to more electronic communication services and therebygreater freedom of choice for end-users.

The issues that have come to the fore are high on the national andinternational agenda, and development in the area is of decisive importance tolarge parts of the market. Liberalisation of spectrum management therebyaffects large parts of PTS and the agency sees a requirement to take an overallhold on the work to liberalise spectrum management.

Link to orientation goals

The area corresponds mainly to orientation goal 5 (Spectrum and numbers

shall be used in a more market-oriented and flexible way.)

Efforts in the area are expected to have an impact with regard to orientationgoals 1 (consumer benefit), 2 (access) and 4 (sustainable competition).

Performance objectives

Market players should have access to more spectrum than last year on termsthat are technology and service neutral through a combination of (1)exceptions to the licence obligation, (2) new allocations through public


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invitations to spectrum that was previously not available to the market, and (3)a change in the licence terms.

PTS will therefore work in different ways to liberalise spectrum on technologyand service neutral terms during 2009. As frequencies will increasingly beawarded with as few restrictions (licence terms) as possible in the future, it willnaturally become less relevant, in the long term, to liberalise spectrum throughchanges in the licence terms.

Planned measures

PTS intends to work to continuously evaluate and update the emergency

ordinance, including international influence. It also intends to act as a drivingforce at international fora where liberalisation of new spectrum is controlled,and to conduct a dialogue with the Swedish Armed Forces on recovering orsharing the current military spectrum, especially when it is used inefficiently.Furthermore, PTS shall, as soon as possible, prioritise and set times for themeasures proposed by the investigation into the use of radio spectrum andelectronic communications, when such proposals reach the stage ofGovernment decision and/or law within, for example, areas of leasing andsecondary trading.

5.2.2 AREA 2: Greater access to IT infrastructure

Description of the areaThis area covers access to broadband as well as fixed and mobile telephony.PTS does not work in isolation with one technology at a time, but focuses onthe end result for the market (operators and users).

The area is not limited to ensuring access to IT infrastructure by those whocurrently lack any such access. It is also about evaluating and showing socialimpact of increased accessibility. Here too, PTS sees a requirement to take anoverall hold of the area as well as a need to improve the agencys opportunitiesto work for greater accessibility.

Link to orientation goalsThe area corresponds mainly to orientation goal 2 (PTS shall use differentmeans to create conditions for the market to give more people in Swedenopportunities to access an IT infrastructure that meets consumer demands,

with consideration for what is effective in terms of the public economy.)

Efforts in the area are expected to have an impact with regard to orientationgoals 1 (consumer benefit) and 4 (sustainable competition).


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Performance objectivesAccess to telephony and functional Internet access shall be ensured in a waythat will also be secure in the future. PTSs ambition for 2009 is to work for asolution that can be applied over time, regardless of technical development andchanges in the pattern of demand, and which is characterised by solid funding.It should be possible to guarantee the service to consumers for the foreseeablefuture. The following two performance objectives have therefore been set for2009:

PTSs financing solution for access to telephony and functional accessto the Internet shall be accepted by the Government and Parliament.14

Consumer knowledge about wireless technologies as an alternative tothe fixed network shall increase.

In this area, PTS has set a further performance objective for 2009:

Through geographic mapping, PTS shall have a good picture of accessby Swedish households in different parts of Sweden to ITinfrastructure with a high transfer capacity and promote the use of themapping as a basis for decisions on relevant issues.

Planned measuresPTS is holding discussions with the Ministry of Industry, Employment andCommunications on a proposed bill on the USO issue. The solution PTS

would like to see is an amendment to the law on universal service in LEK, byadding a fund solution as a further financing option for USO (the currentoptions in LEK are obligation and procurement). According to PTSsproposal, PTS should be able to decide on a fund solution in an instruction, inthe same way as it can choose to auction spectrum or award spectrum licencesthrough a so-called beauty contest. The Government and operators couldcontribute to the fund. PTS is proposed as administrator of the fund, acommon solution in other countries. PTS will also actively contribute to the

directive review with regard to USO issues.

An important part of PTSs work in the area is to map the requirement for ITinfrastructure with a high transfer capacity that exists at local, regional andnational level. It is also about contributing to increasing knowledge about whatis required to meet the needs of such an infrastructure on a local, regional and

14 The financing solution assumes a change to LEK. Once this change has been implemented, PTS willhave achieved its objective.


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national level. In this context, the geographic mapping of access to ITinfrastructure with high transfer capacity is an important tool.

As well as the measures that will be taken to achieve the objectives set here,PTS will have different approaches to the accessibility issues. The obligationdecisions taken by the agency in the broadband area are judged to have apositive impact on broadband development. The agency will therefore work onactive conduct of proceedings and supervision of access network regulation

with the aim of a quick implementation of the decisions. PTS will also conductconsequence analyses of competition-promoting measures, and, throughauctions and in other ways, liberalise more spectrum on technology and service

neutral conditions, which is seen as beneficial for the development ofbroadband. PTS will consider accessibility issues and competition-promotingmeasures at spectrum auctions.

Within the frame of the Governments assignment for a broad and long-termanalysis of the market for electronic communications on which PTS iscurrently working, the agency will develop a number of strategies that can takecare of different possible development scenarios in the market. One importantcomponent of future development is the growth of different infrastructures forbroadband and their impact on competition and accessibility.

5.2.3 AREA 3: Equal treatment fo r access to TeliaSoneras accessnetwork


In order to safeguard long-term sustainable competition in the broadbandmarket, it is essential that TeliaSoneras access network is used efficiently interms of the national economy, provided that the company has significantmarket power in the markets covered byex anteregulation. TeliaSonera musttherefore be made to deal with all market players equally when they use thecompanys access network. PTSs task is to make TeliaSonera act in such a waythrough revised competition-promoting regulation and active supervision. Atthe same time, PTSs regulation shall ensure that competition-neutral

conditions are created for the installation and use of new infrastructure. Thebasic conditions for profitable and effective investments shall thus be equal fornetwork owners and alternative operators. PTSs calculation models thereforeaim to achieve efficient use of existing and new infrastructure.


The area corresponds mainly to orientation goal 4 (The market for electroniccommunications and postal services shall develop in a clear direction towardssustainable competition.)


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Efforts in the area are expected to have an impact with regard to orientationgoals 1 (consumer benefit) and 2 (access).


The markets for access networks (LLUB) and broadband access (bitstream)shall be characterised by working competition, so that the need for specialobligations gradually lessens in pace with the development of long-termsustainable competition. The following performance objective has been set for2009:

TeliaSonera shall not have competitive advantages, to the extent it

does today, in the end-user market due to a lack of equal treatment atwholesale level.

Planned measures

During 2009, PTS shall complete the market analyses that have been started onaccess network markets and work for a quick implementation of obligationdecisions taken by the agency. The measures taken when the decisions aremade are described in more detail in PTSs report Precision i beslut (Accuracyof decisions).15 Quick implementation covers efficient handling of cases whendecisions are appealed against. It is also about continuous supervisionmeasures and solving disputes that result from the revised regulation. It may

also become relevant to make decisions on functional separation ofTeliaSonera. During the year, PTS will also complete the annual update of thefixed LRIC model.

5.2.4 AREA 4: Work tow ards a long-term vision for interconnection


Development is moving towards more services being IP-based. This, togetherwith the convergence trend described in, for example, Section 4.2.1, allows theregulation requirement to be reduced. For PTS, it is about supporting theintroduction of new business models when the Internet and the traditionaltelephony market become one. The work towards a long-term vision for

interconnection will continue for several years.

Otherwise there is a risk that the whole market ends up in the situation thatprevails on the current markets for fixed and mobile interconnection. On thesemarkets, the model the operators use to charge their fees to each other meansthat the investment incentives are not neutral. The basic conditions for makingprofitable and effective investment are therefore not equal for the operators

15 PTS-ER-2008:14


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PTS will also work actively to achieve the same performance objectives in theEU.

5.2.5 AREA 5: Promoting security on All-IP networks


Use of and dependence on the Internet and other IP-based communicationservices is increasing. The transition from traditional circuit-switched networks(PSTN) to IP-based networks leads to more advanced network structures thatcan involve greater risks for stability and increasingly complicated incidents.Some of the vulnerabilities on the Internet may also appear in other

communication services when they become IP-based.

The area is now attracting increasing attention in international fora and by theEU Commission. The Government has also increased the appropriations toPTS for this. Sweden has a tradition of working on security and robustness inthe national electronic communications infrastructure. These experiences andsimilar measures shall also cover IP-based communication services andnetworks. The work is carried out in cooperation between, market players toincrease robustness and the ability to counter disruptions, stoppages andinfringement. Supervision is also required. It should primarily consist ofplanned preventive supervision efforts, though more direct supervision efforts

will also be needed in the event of more serious incidents.


The area corresponds mainly to orientation goal 6 (Electroniccommunications shall be more robust and secure in 2009 than they werebefore.)

The efforts in the area are expected to have an impact with regard toorientation goal 1 (consumer benefit).


PTS has the following performance objectives for its work in the area:

The crisis management function between operators including Internetservice providers shall be developed.

Knowledge of the security aspects of Internet expansion shall increasefor PTS as well as operators.

Knowledge of which measures can be taken to reduce risk exposurewhen using IP-based services shall increase for users of these services.

Measures to improve robustness of IP-based networks shall increase.


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Sitic shall have more customers (authorities, municipalities, countycouncils, organisations) and they shall feel that Sitic has givenpreventive advice, acted quickly and helped or lessened the impact ofIT incidents that have occurred.

Planned measures

Alongside its work on investigations and information efforts, PTS, togetherwith operators and other interested parties, will implement cooperationprojects concerning continuity work for electronic communications includingthe Internet. PTS will continue the supervision work by following up the waythe provisions on good function and technical security are complied with and

continue to work on crisis exercises and develop systems for situationawareness in the event of a crisis or difficulties. Sitic will continue to play animportant role in PTSs work, through direct efforts for PTSs interestedparties in the event of incidents on the Internet and by increasing theunderstanding and technical competence of PTS in terms of the securitychallenges that exist on All-IP networks. PTS will continue to work to promotethe introduction of a secure DNS system (DNSSEC) and the next-generationInternet protocol (IPv6), and otherwise strengthen the infrastructure.

On an international level, PTS will work to improve international security byexchanging experiences at different international fora and implementing

experiences from good examples.

5.2.6 AREA 6: Greater financial supervision of the postal sector


The merger of the Swedish and Danish postal services, which aims tostrengthen the position of an increasingly competitive Nordic market, makesPTSs financial supervision of the Swedish postal service more complex. Thefinancial supervision becomes more important as the cost mass that is to beaudited increases, as does the transactions element in the new and expandedgroup structure. The complexity increases further through, for example, theuse of a joint infrastructure. The merger may thereby make it more difficult for

PTS to ensure that the Swedish postal service complies with the requirementsof the regulatory framework for universal service to be provided at prices thatare based on costs. The problem can become particularly clear when PTSaudits the logistics activity for which a joint company is responsible. The auditof the pricing of package services must thereby be carried out against a newobject that ought also be supervised by the regulators in both Denmark andSweden, which still have completely different approaches and ambitions fortheir audits. The building up of contact routes and structures for the audit hasproved to be a long-term and time-consuming process. As a result of the


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merger, PTS faces a new such process for important parts of the financialsupervision.

The impact on the market can be big, especially if PTS is unable to ensure thatthe Swedish postal service does not use its strong position improperly. PTSsprice regulation should work against cross-subsidising. If the agency cannotachieve this, then there is a risk that the Swedish postal services competitorsare driven out, as they do not have the same financial strength and power to,for example, cross-subsidise. The market is fragile, and it is therefore importantthat the a

Documents

Strategisk Agenda 2009_eng