4.2.1 Telephone 1.0 and policy 1.0

In the development of the telephone network in the Netherlands, private entrepreneurship played a leading role. For instance, the City of Amsterdam selected the Nederlandsche Bell Telephoon Maatschappij (NBTM) to build a telephone network under license from US-based International Bell Telephone Corporation (IBTC).⁴ The network was placed into service in 1881. Private initiatives resulted in 43 local networks being created in the major cities. These private networks were operational for a significant period of time, between 10 and 34 years, for an average of 24.5 years. In 1896 upon the expiry of the NBTM license, the City of Amsterdam decided based on public interest considerations (quality and not-for profit objectives) to assume the exploitation of the local telephone network. The municipalities started to assume ownership and operational control with the transfer of the NBTM network in Amsterdam in 1896. This example was followed by seven transfers from private to municipal ownership and twenty new municipal network start-ups.⁵ The municipal ownership lasted from 3 to 44 years, on average 21 years. From 1906 the state began to build and exploit new networks and to take over the private and municipal networks, essentially starting in 1916 and completed in 1927, with the exception of the municipal networks in the three largest cities: Amsterdam, Rotterdam and the Hague which transitioned in 1940 under the Nazi occupation.

For the construction of the inter-local network only one licence was granted, to NBTM which subsequently operated the network as a monopoly. The inter-local network transitioned to the State in 1897 after just 10 years of operation. (Schuilenga, Tours, Visser and Bruggeman, Reference Schuilenga, Tours, Visser and Bruggeman1981; De Wit, Reference De Wit1998)

4.2.2 Radio 1.0 and policy 1.0

The first experimental radio broadcasting service in the Netherlands was provided by a radio-amateur à Steringa Idzerda in The Hague in 1919. (De Boer, Reference De Boer1969; Blanken, Reference Blanken1992) In 1923 the Nederlandsche Seintoestellenfabriek (NSF) also started broadcasting services in Hilversum, using a license for manufacturing and testing. The content of the broadcasts was provided by the ʻHollandse Draad-looze Omroepʼ, the precursor of the Dutch broadcasting membership-associations (AVRO, KRO, NCRV, VARA, VPRO, each inspired by a particular world view). Philips was a major sponsor of these broadcasts. In 1935 the Dutch government consolidated all broadcast transmitters under a new entity, NOZEMA, which undertook renewal of the transmitters in a new location – Lopik.⁶ (Vogt, Reference Vogt1958; De Boer, Reference De Boer1969; Vles, Reference Vles2008)

In 1924, the first wire-based radio transmission was started by Bauling on a commercial basis in the town of Koog aan de Zaan. For the subscribers the service was cheap compared to owning a radio set: only a headphone or loudspeaker was required, hence the service appealed to the working class. Radio distribution licenses were granted on a non-exclusive basis. The industry was led by entrepreneurs, essentially in a ‘competition for the market’. A total of 800 private and municipally owned radio-distribution networks were built, with 35 networks in The Hague and 200 in Amsterdam of which only 9 served more than 1,000 subscribers.⁷ Some radio-distribution organisations operated as cooperatives, whereby volunteering members enabled lower tariffs. In some cities (e.g., The Hague) the telephone network was used for the distribution of the radio signals. Also 20 municipalities became radio-distribution operators exploiting a local monopoly position.

From 1931, these networks were directly linked to the radio stations by cable, thereby facilitating ‘high quality’ transmission.⁸ Radio-distribution peaked with 51 per cent of total radio users by the end of 1932, a position unique in Europe. In 1940 under the Nazi regime, the radio-distribution systems were placed under the responsibility of the PTT. As upgrading towards TV distribution was not feasible, the decision to terminate radio-distribution service was taken in 1964, and the process was completed in 1975. (Schrijver, Reference Schrijver and Regeringsbeleid1983; Arnbak, Van Cuilenburg and Dommering, Reference Arnbak, Van Cuilenburg and Dommering1991; Bordewijk, Reference Bordewijk2004)

4.2.3 Television 1.0 and policy 1.0

Television broadcasting on a regular basis was introduced in the Netherlands in 1951. Shortly thereafter, the use of equipment for the central reception and distribution of the signal (CAI) was introduced, primarily by housing corporations in high-rise buildings. These systems improved signal quality and reduced the need for individual antennas. The use of these systems was legally the prerogative of the PTT, which had the monopoly on distribution of broadcasting signals. However, during the 1950s and 1960s the practice was condoned for practical reasons. In 1963 the government proposed a central antenna system (CAS) to be built by the PTT. Casema, subsidiary of Nozema, jointly owned by PTT and the broadcasting organizations, was set up to provide the service. Pilot projects were conducted in The Hague. However, this initiative was rejected in parliament in 1975. In the same year, the monopoly position of the PTT was replaced by a concession system, which allowed the legalization of the CAI-systems. Only one concession was made available per municipality and the municipality had a preferential position to exploit the concession or have the concession exploited by a third party.⁹ Hence, cable networks became predominantly owned by the local governments. The exploitation of the networks was often delegated to the local or regional energy company or to private firms; also Casema was positioned to exploit these networks.¹⁰ The future introduction of optical fibre to the home was recognized but considered largely incompatible with the cable systems and, based on a depreciation period of 10–15 years, it was not expected before the years 1990–2000. A research project DIVAC (digital subscriber access) was begun to explore the related challenges in 1982.¹¹ (Jelgersma and Titulaer, Reference Jelgersma and Titulaer1981; Schrijver, Reference Schrijver and Regeringsbeleid1983; Davids, Reference Davids1999; NLKabel, 2009)

4.2.4 Reflection on period 1.0

The important role of the municipalities in the development of the telephone and cable networks as described above should not come as a surprise, as municipalities have had an important role in infrastructure development in general. Consider, for instance, the development of the road system, the drinking water supply and the sewage system, as well as the local distribution networks for electricity and city gas (see for instance: Milward, Reference Milward2005; Van der Woud, Reference Van der Woud2007; and also the Stadtwerke in Germany, Chapter 8). In their objective of creating an attractive economic and social climate for business and citizens, good quality infrastructures play an important role. Moreover, competition between municipalities is to a large extent based on infrastructure supply: hence, their continued interest in telecom infrastructure, resulting in their current involvement in the roll-out of fibre.

4.2.5 Telecom 2.0 and policy 2.0

4.2.6 Cable 2.0 and policy 2.0

Already in 1981, the ‘Swarttouw Committee’ had recognized that the cable distribution networks could develop towards a broadband network by facilitating two-way communication. If these CATV networks were connected on a national scale, they could form a competitive threat for the PTT. As the telecom policy was based on a primary role for the PTT, the Committee suggested mitigating this threat by creating an integrated network (Davids, Reference Davids1999). This position by the Committee was subject to both support and critique. The Scientific Council for Government Policy (WRR) concluded that cable networks were not necessarily to be integrated with the telephone network. The Ministry of Economic Affairs strongly opposed a monopoly of the PTT on all infrastructural networks.¹⁶ The opposition resulted in the appointment of the ‘Zegveld Committee’ to investigate the issue. Their report, published in 1987, recommended that integration should take place as part of one future broadband fibre network for audio, image and data communication. In 1988, this option was included in an update of the Telecom Law. However, in 1992 it became clear that the cable operators, united in sector organisation VECAI, opposed the integration. In the same year the Parliament formally rejected the option. (Eenhoorn, Reference Eenhoorn1994; Davids, Reference Davids1999)

The EU-initiated Reform, which required the transposition of Directives into national legislation, changed the position of the cable operators vis-à-vis KPN. They were allowed to interconnect their networks, which was done mainly through optical fibre. The change in telecom policy brought an end to the concession system and, hence, municipally owned networks could be acquired by private entities.¹⁷ By 2001, the result was that 29 cable operators were operating 647 cable networks, in a total of 504 municipalities, serving 6,159,972 subscribers. The consolidation process continued during the following decade around three firms: (1) UPC – owned by US-based Liberty Global, which acquired the cable network in Amsterdam (A2000¹⁸) in 1998; (2) Essent Kabelcom, a division of the energy company operating mainly in the north-eastern and south-eastern part of the country, combined with Multikabel (operating under the temporary name Zesko); and (3) Casema operating in the western and central part. The latter two merged to become Ziggo in 2008, leading to two major cable companies, Ziggo and UPC, essentially RTV monopolies in their own territories sharing the market, with at the second tier Caiway as the main player operating in the western and central part of the country. (Van Bockxmeer, Poel, Hulshof and Rutten, Reference Van Bockxmeer, Poel, Hulshof and Rutten2002; De Leeuw, Reference De Leeuw2009; NLKabel, 2009)

4.2.7 Reflections on the period 2.0

This period provides a nice illustration of the policy formation process in the Netherlands, with a strong emphasis on committees preparing policy advice based on broad stakeholder interactions, a pattern that we can observe again in the context of polices regarding broadband development.

The period has been relatively successful due to a central government advancing the liberalisation agenda: for example, market entry now requires only registration, not a license, and local governments facilitate entry by applying a ‘liberal’ application of the rights-of-way policy.

While the telecom reform resulted in new players entering the PSTN sector, thereby increasing competition, it led to consolidation of the local and regional RTV-cable monopolies into two major regional monopolies and a few smaller ones. This set the conditions for a techno-duopoly to emerge with the introduction of the Internet: on the one hand, between KPN, the dominant player in the PSTN, with access-based operators such as BBned and Tele2, and, on the other, the RTV-cable operators UPC and Ziggo.

4.3.1 Leading networking role by academic community

Concerns regarding the impact of micro-electronic technologies on employment led to an investigation by the Rathenau Committee. This Committee emphasized the benefits of ICTs and advised the government to introduce a more aggressive policy on the use of ICTs in 1978. This led in 1984 to the publication of recommendations under the heading ʻInformatica Stimuleringsplanʼ, which included initiatives and funding to promote ICT usage in higher education. The academic community responded and obtained governmental support for the development of a multi-year project plan, released in 1985 by the Samenwerkende Universitaire Rekenfaciliteiten (SURF) coordinating committee. In 1986 the government allocated NLG 300 million (approx. EUR 140 million) for the initial period 1987–1990 of implementation by the SURF Foundation. The data networking services to the universities and academic research centres were to be provided in cooperation with the incumbent telecom operator PTT (now KPN), for which they created a new legal entity SURFnet BV, with 51 per cent of the shares owned by the SURF Foundation and 49 per cent by the PTT.²⁰ The fourteen universities in the Netherlands agreed to obtain their data networking services from SURFnet for the next four years. (Verhoog, Reference Verhoog2008)

On 25 April 1986 the management of the.nl domain name registration was granted to CWI. Piet Beertema became the Dutch equivalent of John Postel, until SIDN (Stichting Internet Domeinregistratie Nederland) as a foundation assumed this role in 1997. On 17 November 1988, EUnet, with its central node at CWI, received ʻInternet connected statusʼ with the NSFnet and the first connection from the Netherlands to the Internet was established by the academic research community of CWI in Amsterdam, using the first ‘.nl’ country domain name: cwi.nl. Kees Neggers assumed chairmanship of RIPE-NCC, the Network Coordination Centre for European IP organisations.²¹

In 1987 SURFnet1 started to connect all fourteen universities using Datanet1, the packet-switched network based on the X.25 protocol operated by the PTT.²² However, the ultimate aim was to develop one common network based on OSI-protocols that would meet the requirements of the user community. Hence, the deployment of SURFnet2, based on OSI and X.25, as of 1989.²³ In 1990 SURFnet2 was fully operational using 64 kbit/s links and also provided transport facilities based on the TCP/IP-protocol using a Cisco router, introduced following its popularity in the USA.²⁴TCP/IP appeared to operate much better than expected and by the end of 1990 the decision was taken to focus on TCP/IP and to create a multi-protocol infrastructure SURFnet3, with 2 Mbit/s connections; the first step towards broadband access. By the time of its completion in 1992, TCP/IP had become the dominant protocol. In a parallel effort, SURFNet together with NORDUnet²⁵ created ‘Ebone’, the first European IP-backbone to become operational, in 1992. In the same year Erik Huizer became a member of the IETF and Kees Neggers was one of the founders of ISOC. (Verhoog, Reference Verhoog2008)

As the Internet became more easily accessible (e.g., through the introduction of the Mosaic browser in 1993) SURFnet observed strong growing traffic volumes and decided to become the initial customer of KPN in the implementation of an ATM-based network under the name of SURFnet4 in 1994, initially providing up to 34 Mbit/s access connections and a 155 Mbit/s data rate in the backbone; to become an IP-based backbone network with data rates of 155 and 622 Mbit/s. (Verhoog, Reference Verhoog2008)

In 1994 the plans for the Amsterdam Internet Exchange were announced. Through the AMS-IX Internet service providers (ISPs) exchange Internet traffic, a service initially managed by SURFnet. In 1997 twenty participants created the AMS-IX Association to establish a Limited Liability Company (as a not-for-profit cooperative) to assume the exploitation and operational management of the exchange in 2002. In 2003, with 178 participants, AMS-IX became the largest Internet exchange worldwide. (Verhoog, Reference Verhoog2008)

In 2000 the pilot phase of SURFnet5 started with 80 Gbit/s DWDM on glass fibre in the backbone and access connections of up to 20 Gbit/s. The network was completed by early 2002, connecting 170 institutes with approximately 500,000 users as of 2008. Even higher capacity needs were foreseen; hence, a hybrid network was developed providing IP-services next to optical network services as part of SURFnet6.²⁶ Following experiments started in 2002, a point-to-point network of optical light paths ([lambda] s) was implemented in 2004 with a node in the Netherlands called ‘NetherLight‘ connecting to ‘StarLight’ in Chicago. The first 10 Gbit/s lightpath was delivered between the University of Groningen and SARA²⁷ in Amsterdam in support of the Lofar project in early 2006.²⁸ By the end of 2007, lightpath #220 was realized, the demand being much higher than anticipated, in particular for the Optical Private Network (OPN) feature. ‘NetherLight’, the node located at SARA in Amsterdam, became the European node in the GLORIAD network, a research network initiative to connect the USA, Russia and China through a global optical ring. (Verhoog, Reference Verhoog2008; SURFnet, 2009)

In a parallel development, student housing complexes also were connected to SURFnet to provide students the same facilities as they enjoyed at the university campus. In 1990 ninety students of the University of Nijmegen were connected using the RTV-cable network and in Wageningen a pilot project was also set up. In 1998 the project ‘Student Online’ was aimed at connecting as many students and university staff as possible using the telephone network. In 1998–9 a thousand people were connected to SnelNet in Amsterdam, a collaboration between KPN, SURFnet and NOB Interactive Media providing 2 Mbit/s ADSL connections with a first trial of delay TV.²⁹ In 2000 further implementation pilot projects started with ADSL in Amsterdam, Delft and Twente, as well as the ‘Fibre to the Dormitory’ project which connected 2,600 student apartments in Delft with data rates of 10–100 Mbit/s. This project was followed by similar projects in the university cities of Groningen, Nijmegen, Enschede, Utrecht and Wageningen. Also in 2002, in the ‘Freeband Impuls’ project commissioned by the Ministry of Economic Affairs, SURFnet started trials to provide wireless access across multiple university sites for students and staff, leading to the now globally available eduroam service supporting users worldwide. (Verhoog, Reference Verhoog2008) SURFnet continues to drive the technology agenda, for instance in cooperation with mobile providers in the integration of 4G and Wi-Fi as part of the GigaPort3 project.

4.3.2 Internet access for the business user

In the business community, data networking between IBM computers was facilitated by V-net, a host-to-host file transport network, using synchronous data link protocols (SDLC) developed from 1975 onward. By 1979 it included 285 nodes in Europe, Asia and North America serving some 1,400 computer systems. The early connections operated on dial-up telephone lines supporting data rates of 1200 to 2400 bit/s. (Van de Ven, Reference Van de Ven1984; Wikipedia, 2009d) In 1989, NLnet started to provide Internet access to enterprises, using dial-up connections. (Verhoog, Reference Verhoog2008) This evolved into dedicated Internet access and IP-networking services provided by specialized companies, such as BBned, Easynet, Eurofiber, Tele2, UNET and the local branches of global operators such as AT&T, BT Global Services, Colt and Verizon.

4.3.3 Internet access for the residential user

Anticipating growing demand for end-to-end digital services the PTTs under the auspices of the ITU agreed to create a new, fully digital, circuit-switched system called ISDN (Integrated Services Digital Network). The ISDN would build upon the already digital backbone network (IDN – Integrated Digital Network) and involve upgrading the access network to digital, providing narrowband access at 2×64 kbit/s (basic rate) to the residential user and 2 Mbit/s (primary rate) to the business user. The elaboration of the ISDN recommendations in the CCITT required three four-year study periods to be completed by1988. The development of the European standard by ETSI was completed in the early 1990s. Testing ISDN in practice started with a pilot project in Rotterdam in 1987.³⁰ Making the telephone switching systems ISDN-ready and having ISDN compatible terminals available led to a general introduction of the service in 1993. (Kaasschieter, Reference Kaasschieter1985; Ekkelenkamp, Verstraaten and Wijbrands, Reference Ekkelenkamp, Verstraaten and Wijbrands1992; Tanenbaum, Reference Tanenbaum1996)

The same year the Mosaic browser was introduced to unlock the Internet for the wider public and the Hack-Tic³¹ community established XS4ALL, the first dial-up Internet access provider open to the general public. (Hack-Tic, 1993)³² In January 1994, in cooperation with De Balie³³, followed the inauguration of FreeNet ʻDigital Stad Amsterdamʼ aimed at bringing together citizens and policy makers in an online community (Meerman, Reference Meerman2004). VuurWerk Internet³⁴ started in 1996 as the first entity to provide web hosting and domain name registration services. (Wikipedia, 2010b)

While the notion of integrated services such as telephony, telefax, textfax, videotext, teletext, video and teleworking, based on circuit switching was not a huge success, ISDN did provide Internet access at 64 kbit/s at the price of a telephone call. By October 2000 17 per cent of internet access connections were using ISDN.³⁵ (CBS, 2001)

In 1996 CAI Westland³⁶, a cable network operator in the western part of the country, was the first cable operator to provide Internet access, using the DEMOS-1 system of DeltaKabel Telecom at a data rate of 115 kbit/s, using a flat rate. (Verbree, Reference Verbree1997; Wikipedia, 2010a)³⁷ Shortly thereafter, the major cable network providers became Internet access providers: UPC using the Chello brand name, Casema under the French Wanadoo brand, and Essent Kabelcom using the @Home brand.

The uptake of the Internet was directly related to the diffusion of PC to homes and businesses. Hence, the tax-break provided for the purchase of a ‘home PC for business use’ (PC privé project) should be mentioned as a factor that positively contributed to the adoption of the Internet.

4.3.4 Industry development and dynamics

The emergence of Internet access and service providers in the early 1990s was followed by consolidation in the late 1990s and early 2000s, driven by competition on margin and increasing needs for investment capital. The incumbent telecom operators were the main buyers, extending their ISP footprints and services portfolios. In many cases brand names were retained after an acquisition, representing a different service positioning and different market segments being targeted, including residential users and business users. In 1997 NLnet sold its commercialized Internet provision activities to UUNET, a subsidiary of WorldCom. The XS4ALL foundation was transformed into a corporation, XS4ALL Internet Ltd, in 1996 which in 1998 became a subsidiary of KPN Telecom. In 2006 XS4ALL acquired hcc!net and in 2007 Demon NL. In 1997 Planet Internet, owned by KPN, merged with WorldAccess, the ISP established by Videotex. IPS acquired WorldOnline and was subsequently taken over by Tiscali in 2000. (Meerman, Reference Meerman2004; XS4ALL, 2007; NLnet, 2010) In 2004 the Top-10 ISPs by size was composed of: XS4ALL, Demon, Planet, Bbeyond, BabyXL, VuurWerk, Tiscali, Lycos, PSINet and Wanadoo. (Meerman, Reference Meerman2004)

Internet service provision is tightly coupled to the underlying Internet access provision. For instance, cable network operators provide access only to their own ISP, while KPN provides access to multiple ISPs, both wholly owned subsidiaries and, through unbundling of its infrastructure, to independent ISPs.

4.3.5 Reflections on the emergence of the Internet.

An important engine of Internet infrastructure development in the Netherlands has been the academic community through SURFnet. Supported by additional funding from the Ministry of Economic Affairs and the Ministry of Education, Culture and Science. SURFnet has pushed the operators, KPN and Telfort, and equipment providers, such as Cisco, Lucent Technologies and Nortel, into the deployment of leading-edge technologies; as well as opening up the market for dark fibre connections. SURFnet was instrumental in the set-up of the AMS-IX, thereby creating a highly attractive up-to-date communications environment in the Netherlands. Via its ADSL and fibre to the dormitory projects, SURFnet has been instrumental in developing a market demand for broadband access at home.

More generally, the tax-break provided for the purchase of a ‘PC at home for business use’ (PC privé project) has also contributed positively to the adoption of the Internet.

4.4.1 Competition in internet access

In 1996 through a change in the Media Law, cable network operators were allowed to engage in competition. In 1997 also the provision of telecommunications services over cable networks was permitted. (MinOC&W, 2000) This allowed the cable sector to diversify its service portfolio to include Internet access and to provide voice/telephony service. This required significant investments to upgrade the cable network from one-way analogue RTV-signal distribution to two-way digital communications services provisioning. Given the broadband nature of the coaxial cable-distribution network, the cable sector took the lead in providing end-users with high data rate Internet access, up to 30 Mbit/s.³⁸ By the end of 1999 some 130,000 digital cable modems were in operation.³⁹

In 2000 the first ADSL connections were provided by Demon using the network facilities of BabyXL Broadband (since 2002 part of Tiscali) and by XS4ALL, providing data rates of 512/64 kbit/s (downstream/upstream) and 1024/256 kbit/s. KPN started testing ADSL as part of the SnelNet project in 1998–9 and the roll-out started later in 2000. (MinV&W, 2000a; XS4ALL, 2001; Meerman, Reference Meerman2004)⁴⁰ In the following years ADSL gained significant market share.

In the ‘competition for the market’, data rates were increased step by step, resulting in a tit-for-tat competition between KPN, the wholesale-base operators BBned and Tele2, and the RTV-cable operators; only Essent Kabelcom with @Home followed a strategy of providing the highest data rate possible. (Van den Berg, Reference Van den Berg2004; Albrecht and Achterberg, Reference Albrecht and Achterberg2008)

By March 2004 the cable operators collectively provided 1 million homes with Internet access, up from 250,000 in the year 2000. ADSL services were led by KPN with 913,000 subscribers, Wanadoo 350,000 (which includes cable access), Tiscali 140,000 and Zonnet 127,000. In 2004, 50 ISPs served a total of 4.5 million online households, approximately 65 per cent of total households. (Meerman, Reference Meerman2004)

By 2008, fixed broadband connections appeared to have reached a saturation level with approximately 5 million connections. The market share of ADSL was stabilizing, reaching 45 per cent (Kool, Arno, De Munck and Huveneers, Reference Kool, Arno, De Munck and Huveneers2008).

The competition in Internet access resulted in a top-two position in the penetration of broadband within Europe; whereby broadband was taken as downstream capacity equal to or higher than 144 kbit/s. (EC, 2008a) In terms of the broadband performance index, again, the Netherlands assumed a top-two position, measured as a composite index of socio-economic context including the uptake of advance services, data rates, price, competition and coverage. (EC, 2008b)

With the market reaching apparent saturation, the ‘competition in the market’ increased in importance, and the ‘race on speed’ continued, with, for instance, UPC increasing the download data rate to 120 Mbit/s for its premium subscription offer in Amsterdam (NRC, 2008), and Ziggo announcing the upgrade from DOCSIS 2.0 to 3.0. (De Vries, Reference De Vries2009)⁴¹

4.4.2 Competition in voice

Competition between the CATV and PSTN networks started with Internet access. However, following the end of the PTT monopoly on telephony, the cable companies were allowed to provide voice services. Initially various techniques and standards were used, with very limited success. From 2004 onward the standard technique became Voice over IP (VoIP), supported by DOCSIS 1.1. The flat-fee-based offering was most attractive. In 2005 KPN responded with the introduction of VoIP based on ADSL, also on a flat-fee basis.

In 2004 Caiway started offering telephone service over the cable network. (Wikipedia, 2010a) In 2005 XS4ALL introduced VoIP, including a Webphone application as of July of 2006. (XS4ALL, 2007)

4.4.3 Competition in RTV-distribution

While the Internet protocol supports the distribution of video signals, the Internet is not ideally positioned for broadcasting TV signals in real-time. To facilitate infrastructure-based competition on the basis of Triple-play⁴² offerings – television, telephony and internet combined – a consortium of KPN with broadcasting entities obtained a license for nationwide terrestrial distribution of digital radio and television signals (DVB-T). The number of channels was limited to 23 TV-channels, plus 19 radio channels. In 2003, the service was launched under the name ‘Digitenne’ with country-wide coverage becoming possible after the shut-down of analogue TV broadcasting, the so-called Digital Dividend.⁴³ Meanwhile, KPN obtained 90 per cent of the shares and is now the sole provider of digital terrestrial TV broadcasting. The content is provided by the NPO (National Broadcasting Organisation) and by KPN. (KPN, 2009; Wikipedia, 2009b)

Also in 2003, KPN started to offer Video-on-Demand (VoD) via the Internet. From 2008, the company has added DVB services to handheld devices (DVB-H). Subsequently this services was terminated as TV-over-LTE is the more future-proof alternative.

From 2005, the major broadcasting stations also started to use the Internet as an alternative distribution channel, to offer delayed viewing of their programs (e.g., www.uitzendinggemist.nl).

OPTA, the Dutch National Regulatory Authority, concluded that, despite competition from Digitenne and satellite operators, the CATV operators in their respective service areas had significant market power, and, hence, regulation was deemed necessary (OPTA, 2009a). This new regulation replaced the 2006 ruling requiring access for RTV content providers to transfer programs using the RTV transmission service provided by the cable operators (OPTA, 2006a). By the end of 2009, the cable networks were scheduled to open-up for competition through wholesale access: that is, alternative service providers may access the CATV network for the transfer of RTV-signals. However, KPN was excluded from access to the cable networks, as cable operators are excluded from access to the network of KPN. (Hijink, Reference Hijink2008) This decision was challenged in court and was rejected in August 2010; the court did not support the market analysis on the regional level. During 2011, proposals were submitted in Parliament in a renewed attempt to open-up the cable market. The new (national) market analysis by OPTA concluded that the market for digital television was sufficiently competitive and analogue television was going to be replaced by digital so there was no need for further regulation of the cable market. The regulator has retained this position for the regulatory period 2012–2014. (ACM, 2013e)

4.4.4 Reflections on broadband competition

Starting with a multitude of municipal cable operators in the 1970s the sector has been consolidating until very recently. In 2007 a major merger took place as the owners of Casema, the private equity firms Cinven and Warburg Pincus acquired Multikabel and Essent Kabelcom, to be merged into a new entity called Ziggo. The Dutch cable market is now served by two major players UPC and Ziggo, plus a few niche players.

With Ziggo owned by private equity firms, the endgame started with an IPO in March 2012. Through Barclay’s Bank as issuing bank, Liberty Global, the parent company of UPC, acquired 12.7 per cent of the shares of Ziggo in March 2013. At that time rumours about a take-over of Ziggo by Liberty started to appear in the press. By July Liberty had extended its position to 28.5 per cent. In October 2013 Ziggo confirmed the receipt of a tentative take-over offer by Liberty, which they rejected as inadequate. Ziggo confirmed it was in discussion with Liberty Global in December 2013. Early in January 2014, Bloomberg reported that the take-over could be concluded shortly.⁴⁴

KPN is the leading provider of ADSL under multiple brand names, in part acquired through consolidation (Het Net, Planet, XS4ALL). Moreover, through unbundling, other ADSL providers make use of the local loop owned by KPN (e.g., BBned/Tele2). The market is segmented as not all users require the highest possible data rates.

The market for broadband has become characterized by a techno-duopoly, consisting of KPN and its retail providers, providing broadband services on a national basis using the PSTN, and two major cable providers, Ziggo and UPC, each operating in a different part of the country, collectively providing close to national coverage, using the RTV network. There is strong competition in the market, based on price and data rates provided.

The question that can be raised is whether two competing firms are enough for a healthy development of the sector. (OPTA, 2006b) Clearly, the incumbent players are optimizing the utilization of their networks through an evolutionary approach. While fibre plays an important role in this evolution in the backbone and metropolitan networks, as well as in the feeder network to the street cabinets (FttC), the transition to FttH is apparently not (yet) attractive enough or considered not (yet) necessary from their business perspective. Third parties, in particular municipalities, were claiming ‘market failure’ and hence taking initiatives for the development of Fibre-to-the-Home – considered as the (more) future-proof trajectory.

This claim of ‘market failure’ has been investigated by the CPB, the Dutch bureau for economic policy analysis, following questions raised in Parliament. (Van Dijk et al., Reference Van Dijk, Minne, Mulder, Poort and Van der Wiel2005) The core question was whether the then-current developments would be sufficient to match the increasing demand for broadband.⁴⁵ The investigation concluded that ʻmarket failures in the Netherlands are limited to market power and, to some extent, to an increase in spill-over effects of knowledge. Current regulation by OPTA (the national regulatory agency) adequately deals with the issue of market power.ʼ The investigation suggested that ʻthe markets for broadband in the Netherlands function well in terms of competition (static efficiency) and innovation (dynamic efficiency). Hence, the best policy is to rely on market forces.ʼ

The central government’s policy remained focused on facilitation of, rather than intervention in, the development of broadband markets in general and the deployment of FttH in particular. But it did not prevent or block local governments from becoming involved, to a degree.

4.5.1 Towards policy 3.0

In this section the role of the government in broadband development in general and FttH in particular is reviewed, starting with the Lisbon Agenda formulated in 2000. (EC, 2000).

In the translation of the Lisbon Agenda into national policy, the Dutch government emphasized access to a high quality broadband infrastructure, whereby it assumed a technology-neutral position, driven by the opportunities these networks provide, rather than the technology or data rates being deployed. In short, the market should do the job. (MinEZ, 2004)

Nonetheless, the market can be assisted by providing information and reduced uncertainty. A number of investigations and reports by the Ministry of Public Works or the Ministry of Economic Affairs⁴⁷ were published around the year 2000, all aimed at broadband development: ʻDe Digitale Delta: e-Europa voorbijʼ (the translation of the eEurope Action Plan into national policy actions), ʻBouwstenennotitie breed-bandʼ (Building blocks for broadband), ʻSlim Graafwerkʼ (Clever trenching). Also in support of the municipalities wishing to contribute to the topic: ʻBreedband Internet voor/door Gemeenten – Stedenlinkʼ (Broadband Internet by and through municipalities) and the ʻGedogen mits…of een totaal andere wegʼ (Position paper on underground infrastructures and trenching rights) by the VNG (Cooperation platform of Dutch municipalities). (MinEZ, 1999; MinV&W, 2000b; Maclaine Pont and Van Till, Reference Maclaine Pont and Van Till2001)⁴⁸

In the report De Digitale Delta the Dutch government outlined its ICT-related policy objectives as follows:

1. (1) the availability of a first class, affordable, accessible and reliable telecommunications infrastructure;

2. (2) highly developed knowledge base and knowledge infrastructure and high degree of innovation based on close interaction between suppliers and users of ICT applications;

3. (3) professionals and citizens that have access to the latest electronic media and are capable of exploiting its opportunities;

4. (4) laws and regulations that facilitate the development and application of ICT; and

5. (5) optimal use of ICTs in the governmental sector, which may serve as exemplar of ICT-usage. (MinEZ, 1999)

In 2000, the Ministry also took the initiative to create ʻKenniswijkʼ (Knowledge Quarter), a real-life environment to ‘test the consumer market of the future’, aimed at (1) breaking the perceived deadlock between infrastructure development and service development; (2) to improve the competitive position of the Netherlands; (3) to share the knowledge obtained through ʻStedenlinkʼ (City link); and (4) to provide input for government policy. The all-fibre pilot project in the city of Nuenen, involving 7,500 households in an area representative of the Dutch population, was part of the ʻKenniswijkʼ project. (Kools and Serail, Reference Kools, Serail, Onderzoeksreeks and Zaken2003)

By 2003–2004 the focus of the telecom policy was on assuring the proper functioning of markets and consumer protection, with an emphasis on continuity, safety, trust and quality. (MinEZ, 2003) Based on the ʻBreedbandnotaʼ , which recognized the various perspectives of market parties in relation to the roll-out of broadband, the policies can be summarized as shaping favourable preconditions for broadband development. (MinEZ, 2004)

4.6.1 The FttH case of Amsterdam

In 2001, the City Council of Amsterdam, observing ad-hoc plans being made for the deployment of fibre to the business and fibre to the home by private parties, placed the topic of fibre networking on the political agenda. The Council was concerned about a possible ‘digital divide’ emerging in the city, which was considered economically and socially undesirable. A second reason for involvement was the wish to channel the related digging activities to reduce the level of inconvenience to the public.

To address the issues properly, the City Council commissioned an investigation into: (1) the economic and social importance of FttH; (2) the expected capabilities of the existing infrastructure; (3) the expected demand for broadband by small firms and citizens; (4) whether the City should exert any influence on the developments; (5) if so, what goals should be pursued and what instruments should be used; and (6) what might be the financial implications. The resulting report Amsterdam the Big Cherry?, issued in 2002, concluded that the market will most probably not deliver an open infrastructure, nor fibre connections to every home and enterprise in Amsterdam, within the next 15 years. Hence, considering the economic and social importance, the local government may wish to take the initiative and guide the developments towards the creation of an open fibre infrastructure. (Weeder and Nijland, Reference Weeder and Nijland2002) Based on the report, the City Council decided to investigate a more active involvement in the roll-out of a dense open-access fibre network. The next steps were investigated by a committee chaired by former Minister of Economic Affairs Andriessen. Meanwhile, the City Council decided to pursue fibre deployment in a new-built city area called Zeeburg. In 2003, the Andriessen report provided the necessary guidelines for the implementation of a city-wide FttH project, as a public-private partnership (PPP): the implementation of an open-access, passive network infrastructure, supporting service level competition. (Weeder, Nijland and Hotho, Reference Weeder, Nijland and Hotho2003) The recommendations were turned into an implementation plan ʻAmsterdam: breedband in bewegingʼ which was ready in 2004. (Weeder, Nijland and Konijn, Reference Weeder, Nijland and Konijn2004; Citynet, 2009)

By 2004, out of the top-30 cities⁴⁹ in the Netherlands 29 cities had (draft) plans for implementing fibre networks to connect governmental buildings, 23 had plans for Fibre-to-the-Business, and 15 had plans for Fibre-to-the-Home. (Linssen, Reference Linssen2005) One of the smaller but highly important initiatives was by the municipality of Appingedam. Early in 2004 it decided to commence the network roll-out, but had to interrupt the work within a few months, following a court decision in a case filed by the local CATV operator (Essent Kabelcom) against the city. The court decided that the initiative had to be presented to the European Commission for approval of (alleged) state support. The decision by the European Commission, issued in 2006, concluded that in this case financial support by the state was not allowed, given that the newly built network would represent unfair competition with the broadband networks of KPN and Essent. (Weeder, Nijland and Konijn, Reference Weeder, Nijland and Konijn2004; Schouten, Reference Schouten2006) Subsequently, Amsterdam and other municipalities filed their applications for EC approval, making sure their financial involvement was provided on the basis of the so-called ʻmarket economy investor principleʼ.

In 2004, the municipality of Amsterdam started the European tendering process for construction of the network, resulting in the award to the combination of contractors BAM/DRAKA in 2005. In a negotiated arrangement, the exploitation of the fibre network on a wholesale basis was awarded to BBned to provide open, non-discriminatory access to retail operators. Subsequently, for the implementation of the fibre network, the city established a limited liability company Glasvezelnet Amsterdam (GNA) in 2006, in which the municipality participates for 1/3, the four housing corporations for 1/3, and investors for another 1/3; each party contributing EUR 6 million. (Citynet, 2009) This enabled the first phase of implementation, 40,000 connections, to start in 2006, subject to approval by the European Commission which was granted in December 2007. (NRC, 2007) It should be noted that UPC, the regional cable operator, has contested the fibre network plans of the municipality in the courts, at national and European level, albeit in vain.

Nonetheless, the debate on the involvement of municipalities in telecom infrastructure development in the Parliament resulted in tighter rules for participation of municipalities (and housing corporations) in telecommunication projects, becoming part of the 2006 revision of the Telecom Law. (Doorn, Reference Doorn2006; NU.nl, 2006) However, most of these restrictions were removed in the 2010 revision of the law, as part of an overall revision of laws and regulations to stimulate the growth of the economy following the crisis.⁵⁰

4.6.2 The FttH case of Almere

Another municipality placing fibre high on the political agenda was Almere – near Amsterdam – a young and fast-growing city in the reclaimed Flevopolder. As a city with the ambition to leverage ICTs in all fields under its responsibility, including housing, employment, leisure and care, and inspired by the Stokab model in the City of Stockholm⁵¹ and information from a fact-finding mission in the USA by the Ministry of Economic Affairs, it commissioned a study ʻAlmere op glasʼ in 2001. (Stratix, 2001) This study suggested an active role for the local government to implement an open-access ʻFirst Mileʼ infrastructure in a new city development, Almere Poort. It proposed a demand-driven community-based network, whereby the municipality leverages its role given by the Telecom Law to coordinate infrastructure developments. The city would take the lead in creating the civil infrastructure as a public domain activity. A separate entity (net-co) acting on behalf of the users would be responsible for the implementation and exploitation of the network, subject to a tender. The end-user services were to be provided in competition. As such a maximum degree of unbundling would be achieved. By the city taking the lead in the realization of this network, the need for operators to create another fibre network in parallel would be pre-empted, but not excluded. By leveraging the use of the network by government institutions, including city offices and schools, effective demand aggregation and efficient roll-out of the network would allow prices for fibre to be similar to those of ADSL.

In the next phase three parallel developments became important. The City Council preferred as a first project connecting an existing city area that required an economic boost as it was suffering from a relatively high degree of unemployment. At the same time the City wanted to attract high-tech industry and institutions, such as the Institute for Information Engineering (linked to the Technical College in Amsterdam) and a division of SARA. These institutes require high data rate connectivity and thus connections with AMS-IX were established in 2001. This in turn made it attractive for BT and later Global Crossing, KPN and COLT also to set up facilities in Almere. Interactions with the existing operators showed that they were reluctant to participate in the pilot project due to conflicts of interest and a lack of willingness to assume risk. This combined result provided the momentum for the pilot phase of the project to be directed by the City, ultimately targeting 1,700 homes and 450 businesses in business parks, to be connected in 2003.⁵² The project was subsidized with EUR 1 million by the Ministry of Economic Affairs. A special entity, the Almere Fibre Company Ltd (AFCo), was established for the implementation and maintenance of the civil works, with the City as the owner. In the subsequent tender process the newly established First Mile Venture (later to acquire the ISP Unet and to assume this name) was selected as the infrastructure operator. (GemAlmere, 2004; Jansen, Reference Jansen2004; Halsema, Reference Halsema2012)⁵³

The FttH part of the project was not successful because the willingness to pay was too low, resulting in a too low uptake but the FttB was successful and that became the focus of Unet’s business. In 2006 the City followed up with a demand-aggregation project among local institutions, administrative buildings, schools, health centres, etc., leading to an FttInstitute project to connect 200 locations with fibre. The tender was won by Unet. This was followed by an FttB-project expanding the backbone to connect all business parks by fibre. The FttH initiative was rejuvenated by the idea of modelling it on the Amsterdam arrangements with 1/3 participation by the City, 1/3 by housing corporations and 1/3 by private investors. Initially KPN decided not to participate in the venture, but at the end of 2007 it joined the project with Reggefiber. Based on the evaluation of the pilot, the City made internal rearrangements such that implementation approvals could be obtained in 1–2 weeks rather than 13 weeks. This facilitated the connection of 60,000 homes within two years. XMS and Lybrand became new service providers, in addition to KPN and XS4ALL. By taking a leading role and being prepared to kick-start the project with pilot funding, the City of Almere assured that the private sector is actively deploying Fibre-to-the-Home in new and existing parts of the city. (GemAlmere, 2004; Jansen, Reference Jansen2004; Halsema, Reference Halsema2012)

4.6.3 Reflections on municipal initiatives

The involvement of so many municipalities in fibre initiatives, large and small, suggests that infrastructure supply is considered very important for economic development; the case of Almere is a clear example. The awareness of limited bandwidth available on copper and perception of fibre as future-proof explains their early involvement. While there were many initiatives, not too many have ultimately led to the actual deployment of municipally-led fibre. Issues around alleged state-aid, requiring upfront clearance, and the issues of funding and managing have been too cumbersome in many cases. Nonetheless, the push by municipalities has forced earlier deployments although in the end it have been commercial parties which became involved in the implementation and operations of municipal fibre networks, in part or in whole. See also Section 4.8 on Reggefiber and Chapter 7 for the municipal fibre deployments in Sweden.

4.8.1 Policy 2.0 applied to telecom 3.0

As to be expected, the decisions by the NMa/OPTA were challenged in court, by cable providers UPC and Ziggo, alternative network providers BBned and Tele2, as well as ISPs Scarlet and Online, a subsidiary of T-Mobile (Emerce, 2009). Notwithstanding, the adaptation of the regulation by OPTA to accommodate the deployment of fibre to the cabinet and fibre to the home remained. The principle of open-access fibre networks, initiated by Reggefiber, became part of the regulation, as KPN became a shareholder in Reggefiber. The use of an actual fibre business case as starting point for setting the wholesale tariffs was novel. Therefore, we may conclude that so far Telecom 3.0 did not require a new policy but, rather, an extension of the existing Policy 2.0 to Policy 2.5.

4.9.1 Fixed broadband

Following a stabilization in broadband uptake around 2005, the increasing use of video on the Internet has driven the competition for higher data rates. ADSL2⁺ is being replaced by VDSL and the capacity of VDSL is boosted through vectoring and bonding. While the maximum data rate on the copper twisted pair was 8/0.5 Mbit/s (download/upload) for ADSL and 24/1 Mbit/s for ADSL2, with the combination of FttC and VDSL data rates of 50/5 Mbit/s can be provided and with vectoring 80/8 Mbit/s becomes feasible. KPN started deployment of vectoring in September 2013. On the CATV network with the combination of FttC and DOCSIS-3 data rates in excess of 100 Mbit/s can be provided by reducing the number of users sharing the capacity, with further upgrades possible. (TNO, 2012)

By mid-2013 the total broadband connections stood at 6.7 million or 88% of households (total: 7.6 million).⁶² DSL connections stood at 3.2 million or 48% and CATV connections at 3.0 million or 45%, while fibre accounted for 0.46 million or 7%. This implies a decrease 6.2 percentage points for DSL compared to 3Q2011 and an increase of 3 percentage points for CATV connections. The growth is small: over the last eight quarters the percentage of additions was 4.23% and exceeds the percentage of disconnects of 3.37% by only 0.9%.

Unbundling plays an important role with 3.2 million unbundled lines (44% of total) of which 78% is fully unbundled and 22% shared.

Broadband is increasingly subscribed to as part of a triple-play bundle, up from 39% to 56% over the period from mid-2011 to mid-2013. Broadband-only subscriptions dropped from 28% to 18%. The total number of bundled subscriptions reached 5.5 million by mid-2013, or approximately 75% of households.⁶³

By mid-2013 broadband by download data rate provides the following picture:

Relative to the Digital Agenda targets for 2020, the target 100% of households having access to up to 30 Mbit/s is largely accomplished, with 7.4 million or 98% of homes connected to the cable network. With 2.5 million homes (33%) subscribed to up to 30 Mbit/s and 0.4 million (5%) over 30 up to 100 Mbit/s, achieving the subscription target of above 100 Mbit/s is still further away. Nonetheless, progress around 10% over the last two years in the category ≥ 30 Mbit/s – < 100 Mbit/s is promising. See Figure 4.1.

Figure 4.1 Broadband connections by data download rate as percentage of total, the Netherlands, 2011–2013

Data source: ACM, 2013a.

Moreover, the FttH deployment by Reggefiber is picking up pace. See Figure 4.2.⁶⁴ According to Stratix Consulting, the deployment of FttH in the Netherlands had reached the level of 1.9 million homes passed (25.1% of the total) and 626,000 homes subscribed (8.3%) by September 2013. This represents a conversion rate of around 30%. (Stratix, 2013).

Figure 4.2 FttH deployment in the Netherlands, 2006–2013

Data source: Stratix Consulting, 2013.

Voice-over-Broadband reached 4.9 million connections, or 68% of total retail fixed telephony connections, with 9% ISDN and 23% PSTN (grand total: 7.2 million – 95% of households) by mid-2013. The average disconnect rate of 3.31% over the last eight quarters is slightly lower than the connect rate of 3.56%. Between end-2006 and the end-of 2012, fixed telephony revenues dropped by 30%.

RTV subscription revenues amounted to EUR 1.62 billion for 2012, this represents 7.4 million subscriptions. The share in revenue of non-cable operators has grown from 5% in 2006 to 24% in 2012 and, in terms of subscriptions, to 35%.

The importance of bundles increased to reach 50% for TV as part of triple-play and 9% for TV as part of dual-play with broadband by mid-2013. TV-only dropped from 57% to 40% between mid-2011 and mid-2013. Telephony as part of triple-play increased from 34% to 52% over the same period. Telephony-only dropped from 46% to 33%.

TV services are increasingly delivered as IPTV and hence the number of active connections on the cable network has dropped to 4.8 million or to 64% of the 7.4 million homes connected (98% of homes)⁶⁵ by mid-2013. Digital TV by technology stands at: 55% CATV; 16% DSL; 9% FttH/B; 9% terrestrial; and 11% satellite. (Telecompaper, 2013a)⁶⁶

4.9.2 Mobile broadband

Although the main body of this case study has been dedicated to the development of fixed broadband, the current status of the mobile broadband market is included in this section to provide a complete market overview, in the light of the realization of the Digital Agenda for Europe. A short summary is provided on the development of the mobile market, with a focus on the number of players as an important parameter in determining mobile broadband dynamics. (MinEZ, 2010; Anker, Reference Anker2013; TNO, 2013)

Following the introduction of GSM by the PTT – now KPN – in 1994, the wireless cellular market became competitive in 1995, when Libertel – now Vodafone – won the beauty contest for a second GSM license.

In 1998, the auction of GSM-1800 MHz (called PCS at the time) introduced three more mobile players: Telfort – as a joint venture between the Dutch railways and BT; Dutchtone – backed by France Télécom and Deutsche Telekom (DT) and two major Dutch banks, Rabobank and ABNAMRO; and Ben – a collaboration between Belgacom and Tele Danmark. Shortly thereafter DT sold its interest in Dutchtone and BT acquired a 100 per cent interest in Telfort.

In 2000, the mobile broadband era started with the auction of five licenses for UMTS frequencies. All five operators plus Versatel participated. All existing operators managed to acquire UMTS licenses. Vodafone provided the first commercial service in 2004, with a data rate of 384 kbit/s. KPN followed in the same year. In 2006, T-Mobile launched its service including HSDPA, providing initial data rates of 1.8 Mbit/s, to be increased over time to 3.6 Mbit/s, 7.2 Mbit/s and later to 28.8 Mbit/s.

From 2000, a number of ownership changes followed but the number of operators stayed at five, each operating a network with (almost 100%) national coverage. In 2000, France Télécom acquired the UK-based Orange and rebranded its mobile telecommunications as Orange, hence Dutchtone became Orange. In 2001, BT divested its mobile activities to become mmO2 PLC with O2 as its brand name. Thus Telfort became O2. In 2002, O2 sold its Dutch interests to Greenfield Capital Partners, which re-introduced the Telfort brand. In 2003, T-Mobile had acquired all shares in Ben and the brand disappeared, to resurface again as a T‑Mobile brand for SIM-only subscriptions in 2008.

From 2005 a consolidation wave started: Telfort was acquired by KPN, which retained the brand and returned the second license to the government. In 2007, Orange NL was acquired by T‑Mobile and the Orange brand disappeared. Three main players resulted: KPN, Vodafone and T-Mobile.

In 2010 followed the auction of the 2.6 GHz band to expand mobile broadband capacity, with new entrants Tele2 and Ziggo4 – the consortium of the cable operators Ziggo and UPC. In 2012 followed the so-called multiband auction enabling 4G/LTE roll-out. It included the re-auctioning of GSM900 and GSM1800 spectrum, the new ‘digital dividend’ in the 800 MHz band and new, smaller blocks of spectrum in the 2.1 and 2.6 GHz bands; including the spectrum that Telfort had occupied. KPN, Vodafone, T-Mobile and Tele2 obtained licenses and thereby assured the continuation of their operations, while Ziggo4 did not obtain additional spectrum. KPN announced national coverage of LTE by the end of 1Q2014, T-Mobile aims at an 80⁺ per cent coverage by the end of 2014, while Vodafone has launched 4G in a few major cities, but did not communicate any further targets. Tele2 and Ziggo4 combine the use of their new spectrum with existing MVNO arrangements with T-Mobile and Vodafone, respectively, to provide national coverage. Tele2 also entered into a passive network-sharing arrangement with T-Mobile. Ziggo and UPC also push Wi-Fi as part of their mobile broadband strategy. In January 2013, KPN announced its collaboration with FON, to extend its Wi-Fi strategy based on hotspots.⁶⁷

The three main MNOs plus 52 MVNOs serve the Dutch market through 70 brands, generating EUR 5.8 billion in revenues in 2012. Data revenues (excluding SMS) have grown from just under 25%, reaching 35% by mid-2013. SIM-cards in the market reached 22.1 million in 3Q2012, with KPN (including its MVNOs) as the market leader with 47% of SIMs; Vodafone followed with 29% and T-Mobile with 24%. MVNOs accounted for 20.3% of total SIMs and 15% of revenues. ARPUs per operator ranged from EUR 21.70 to EUR 25.50. Broadband connections (combined and broadband-only) reached 52% and M2M an additional 5%. On 6 January 2014, the LTE coverage by KPN was 71% by population and 45.6% by area; Vodafone 30% and 12.5% respectively; and T-Mobile 21.7% and 6.5%, respectively, while Ziggo/UPC and Tele2 had established only the minimums required by their coverage obligations.⁶⁸

Since 2Q 2010, more calls are made on the mobile network than on the fixed network. The number of mobile calls over the period 2010–13 remained flat. As of 2H 2010 the number of SMSs started to fall, to stabilize at 50% in 2013, while the revenues dropped by close to 30%. The data volume doubled over the period 3Q 2011–2Q 2013 and the retail revenues by a factor of 2.3.