Market Analysis of the Broadcasting Sector

Project executed on behalf of a major European broadcasting company

Project Objective

One of the main infrastructure operators for wireless telecommunications in a European country asked for the support of Axon in a public consultation launched by the National Regulatory Authority, on the market analysis of the broadcasting sector (in particular, the market for terrestrial transmission services to deliver broadcasting services to end users). The main objective of the project was to ensure that the market analysis would be aligned with international best practice, and properly reflect market reality and dynamics, and the existing stakeholders’ operations and prospects.

Project Description

Axon Consulting provided support in the elaboration of the client’s formal response to the public consultation. The response was based on a thorough execution of the following steps:

  • Analysis of the television broadcasting and signal transmission services, as part of a full understanding and contextualization of the current market situation
  • Definition of the relevant markets, taking into consideration: Substitutability between Digital Terrestrial Television (DTT) and other platforms (e.g., IPTV, cable TV, satellite TV, OTT platforms, etc.), substitutability between terrestrial transmission services for broadcasting and other services (e.g., TV signal transportation service),  and geographical segmentation of the market (national, regional, local).
  • Analysis of the three-criteria test defined by the European Commission for the identification of the markets susceptible to ex ante regulation: Presence of high and non-transitory barriers to entry, absence of tendency towards effective competition, insufficiency of competition law
  • Designation of Significant Market Power (SMP) players and imposition of ex ante regulatory remedies (access obligations and wholesale tariff setting, non-discrimination obligations, accounting separation, transparency obligations, price control obligations, etc.)

The above analyses were supplemented with a review of international practice (with focus on European Union countries) on the ex ante regulation of the broadcasting sector and the outcomes reached at by the regulatory authorities in relation to the above items (market definition, analysis of the three-criteria test for the identification of the markets susceptible to ex ante regulation, designation of SMP and imposition of ex ante regulatory remedies).

Figure 1: Illustrative case of the international practice analysis

Key Takeaways

Axon Consulting’s support in the public consultation response was instrumental in safeguarding the interests of our client in connection with the regulatory obligations imposed in the broadcasting sector.