It is exactly the same fiber optic cable, in the same meter cupboard, with exactly the same upload and download speed. Yet an internet connection of 1 gigabit costs 57.50 euros per month with one provider, and 45 euros with the other provider.
Such substantial price differences ensure that you as a consumer have something to choose from. But this degree of competition is not possible in all places in the Netherlands.
KPN, the largest fiber optic provider in the Netherlands, offers other broadband providers such as T-Mobile or Freedom Internet access to its networks. In the networks that KPN is currently installing, tenants have less freedom to compete with KPN’s own internet packages. There are no major price differences at those locations – or lack of alternatives.
After a complaint from T-Mobile, one of KPN’s tenants, the Netherlands Authority for Consumers & Markets is considering again to enforce fair rental rates for fiber access.
KPN is trying to avoid regulation and last week filed a proposal at ACM. KPN wants to lower the existing rental rates by 10 to 30 percent. ACM calls this proposal ‘meaningful’ and is examining the fine print this week. After that, from mid-April, other market parties can look at it and ACM takes a decision.
More leeway
KPN’s fiber optic network consists of two flavours. The first variant covers approximately 3 million households, all of which have a separate line to the street cabinet. Other providers can place their own ‘active’ equipment there and only rent the last meters from KPN. That offers providers the most financial leeway to compete.
But in new networks KPN itself keeps the reins; other providers only get virtual access to individual customers. This means that they can offer services remotely via software, but are not allowed to install their own hardware.
This type of network is cheaper to build and maintain, but tenants have less room to compete. That is why T-Mobile has decided not to offer broadband via those networks for the time being: that would be loss-making.
Also read: The resurrection of T-Mobile
KPN’s new networks offer in the future speed limits up to 10 Gbit/s. KPN wants to lower the rates for this by 10 to 30 percent. But the network provider does charge higher rental rates for higher speeds. According to Rudolf van der Berg of research agency Stratix, this is unnecessary. “Speed no longer costs money. It makes no sense to charge those costs to other providers.”
National rental rate
KPN also uses different rental rates per region. The logic behind this: less fiber is installed in sparsely populated areas than in a city. There will now be one national rental rate of 16.56 euros per line. According to KPN, that is two euros cheaper. However, it is not yet known exactly how that amount relates to regional price differences.
The construction of fiber optic in the Netherlands is lagging behind that of other European countries, but is gaining momentum. KPN is ramping up the pace, in collaboration with pension fund APG† In addition, provider Delta is installing its own fiber optic network, just like Open Dutch Fiber, which has T-Mobile as its first tenant.
Fiber optic networks are being installed in many places because the competitors do not want to give way to each other. In The Hague, ODF and KPN, with the help of the municipality, are here this week a division to avoid duplication of work. In this way a new ‘digging war’ is avoided: in 2020 KPN was in The Hague with fiber network Primevest Capital in the clinch, a T-Mobile partner. As a result, some streets had to be broken up twice.