Belgian Institute for postal services and telecommunications Bundled

Belgian Institute for postal services and telecommunications Bundled Product Offers Impact on competition, comparison and switching PEER Regulatory Roundtable on Bundled Products Monday 2 October 2017 - Brussels Axel Desmedt Member of the Council - BIPT Telecom Télécom

Market outlook Higher transparency and easier switching Barriers to entry : network, content, bundled products, etc. High concentration in residential and business markets Low churn rates : impact of bundling Lack of price competition and high price levels

Key role of bundled services Subscriptions to bundled services have strongly increased Subscriptions of bundled offers Millions of subscriptions 4 3 2. 6 3 1. 9 2 1. 3 1 0 2. 9 3. 1 2. 3 2 1 2. 8 2. 9 0. 8 0. 5 2007 2008 2009 2010 2011 2012 Source: BIPT, situation on the Belgian Communication market 2016, June 2017 2013 2014 2015 2016

Mobile component Shares of 4 P products have strongly increased Share of broadband customers quadruple play X 10 100% 80% 2% 36% 3% 4% 49% 6% 22% 25% 49% 48% 16% 12% 11% 51% 60% 47% 29% 40% 20% 19% 33% 26% 28% 26% 24% 21% 18% 17% 16% 2012 2013 2014 2015 2016 0% 2010 2011 1 -play 2 -play 3 -play Source: BIPT, situation on the Belgian Communication market 2016, June 2017 4 -play

Low churn More bundled products means higher consumer loyalty Churn levels in various bundled services 20% 19% 18% 16% 14% 12% 14% 11% 10% 7% 8% 6% 5% 3% 4% 2% 0% Huishoudens met ongebundelde diensten 2 -play huishoudens 2015 3 -play huishoudens 2016 Source: BIPT, situation on the Belgian Communication market 2016, June 2017 4 -play huishoudens 5

Marginalized alternative operators Alternative broadband operators are unable to compete National market share residential broadband users (Source: BIPT) 60% 50% 40% 30% 5% 3% 3% S 1_2016 S 2_2016 5% S 2_2015 6% S 1_2015 7% S 2_2014 7% S 1_2014 8% S 2_2013 8% S 1_2013 10% S 2_2012 20% S 1_2012 S 2_2011 0% Proximus Other operators Source: BIPT, situation on the Belgian Communication market 2016, June 2017 Cable operators

Price increases Telecom prices have increased above inflation levels Consumer price index general Mobile telephony Fixed internet Telecommunication packs Source: SPF Economy, price index, 2016 6 t-1 Oc Ju l-1 6 6 r-1 Ap 16 n. Ja 5 t-1 Oc Ju l-1 5 5 r-1 Ap n. Ja Oc t-1 4 4 l-1 Ju 4 r-1 Ap Ja n- 14 120. 00 115. 00 110. 00 105. 00 100. 00 95. 00 90. 00 85. 00 80. 00 15 Consumer price index vs consumer prices telecom products January 2014 = 100

Regulatory remedies Allowing alternative providers to replicate bundled products FTTH & VDSL access Cable access Digital TV platform sharing

New entry in 2016 Orange launched a new bundled product in 2016

Consumer empowerment What is available? Which quality? Which cost? How to switch? 10

Consumer empowerment Higher transparency and easier switching Tariff simulator Atlas Compare prices Check availability Quality barometer Compare Quality of Service Easy switch Consumer experience Switch easily Crowdsourcing and drive testing

Price Finding the cheapest bundled product 12

Availability Detailed maps to identify white spots 13

Quality Benchmarking of the quality of service 14

Switching Simple process to switch bundled services 15

Challenges of comparing bundles Quality competition : differentiation based on higher quality and lower unit prices Higher amount of minutes (illimited, on net, ATAN, off peak, etc. ), international, etc. Download and upload speeds, increased data cap, etc. More TV channels, HD and premium channels, OTT services, etc. Higher amount of minutes, SMS, data, volume sharing between sim cards, etc. 16