Competition criticizes high rates in KPN’s new fiber optic areas | Tech

KPN is replacing the old-fashioned telephone line with fiber optic in a large part of our country. After this replacement, you can use the internet, make calls and watch television via the fiber optic network.

The old telephone network has been in existence for over a hundred years and is at the end of its life. The telephone network is expensive to maintain and it cannot be made better or faster. That is why KPN wants to replace the telephone lines in 80 percent of homes with fiber optic by 2026.

The fiber optic network is future-proof. It is much faster and cheaper to maintain. In addition, it uses much less energy than the old telephone network.

But both experts and telecom companies criticize the way in which KPN replaces the telephone line with fiber optic. According to them, the company is using the replacement operation to gain a firmer grip on the fixed telecom market.

In areas where KPN has already replaced the telephone line with fiber optic, competition is decreasing, sees telecom analyst Tim Poulus of market researcher Telecompaper. “With the disappearance of the telephone line, lower priced internet subscriptions with lower speeds also disappear.”

Ziggo has exclusive rights over its TV cable network. No other company can offer services through this network. KPN’s fiber optic network is open to other companies.

But other companies can hardly compete on an increasingly larger part of KPN’s fiber optic network, several internet providers tell NU.nl.

Most homes that received a fiber optic connection before 2020 have a direct connection between the house and the exchange. That’s best for other internet providers.

“We can connect our own equipment to these types of fiber optic connections,” says Anco Scholte ter Horst, director of provider Freedom Internet.

“We can then determine which internet speeds and services we offer. This gives us more influence on the price.”

But in the new part of KPN’s fiber optic network, homes no longer have a direct connection to the exchange. Instead, KPN is laying a main cable in the street. This is split to each home using special equipment.

This makes other internet providers dependent on KPN. “As a result, we can only offer the speeds and services that KPN offers,” says Scholte ter Horst. “We cannot distinguish ourselves because of this and that is a bad thing.”

Telecom and internet provider Odido also questions the rates that KPN charges for access to its network. According to the provider, these are too high.

“We also purchase fiber optic from providers other than KPN. As a result, we know the options for charging lower purchasing costs for the use of a fiber optic network,” emphasizes Margreet Hoekstra, head of legal affairs and regulations at Odido. “The rates for a fiber optic connection can be significantly lower than the rates that KPN currently charges.”

But the Netherlands Authority for Consumers and Markets (ACM) has approved the rates charged by KPN, Hoekstra continues. “We can jump high or low, but that doesn’t change the situation.”

Competing on price on the newer part of KPN’s fiber optic network has therefore become a lot more difficult, says Odido. According to the provider, this is because KPN’s wholesale rates are very high. KPN also determines the internet speeds.

“Even if we incur little or no costs other than the purchasing costs at KPN, we can only undercut KPN’s price to a limited extent,” says Hoekstra. “You quickly end up in a situation where we can no longer earn a cent from it ourselves.”

Despite the concerns that experts and telecom companies have, the ACM believes that there is sufficient competition. For example, the regulator sees that internet providers try to attract new customers with discounts and promotions.

“For consumers, it is worthwhile to check annually whether the current subscription still offers the best price and speed,” ACM board member Manon Leijten said earlier.

Internet providers compete with each other with discounts and promotions for new customers, telecom analyst Poulus confirms. “But after that you pay the full price.”

“KPN has an open network on which dozens of providers are active,” KPN said in a response. “There is plenty of competition on this network, also on price.”

KPN says it welcomes competition and the ACM monitors this, the company says. “We see other providers also offering services on our network in newer fiber areas.”

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