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The Market for Subscriber Information Services


Publication Number: 2014-46
Authors: M. Kerste, N. Rosenboom & W. Rougoor
Commissioned by: Ministry of Economic Affairs
Published by: SEO Economic Research
ISBN: 978-90-6733-753-3

Every European resident has the right to obtain contact information on subscribers by telephone. In the Netherlands this Universal Service (US) is currently provided by KPN. To facilitate competition in the market for subscriber information services, a small number of Directory Enquiry Service numbers (‘18xy numbers’) has been specifically set aside for these services. These telephone numbers are allowed primarily to provide number information, along with subscriber information that is publicly available.

One of the operators, 1850 BV, has asked for the restrictions on the uses of 18xy lines to be relaxed so that they do not have to provide primarily number information. Specifically this means that providers would still have to provide number information, but it would not be obligatory to supply this in every call.

To enable a decision to be made on whether to approve the proposed relaxation, the Ministry of Economic Affairs asked SEO Economic Research to provide information on the market for telephone number information and look into the consequences of relaxation for 18xy lines and other telephone channels that provide subscriber information (090x lines).

The main findings of the study are as follows:
• The 18xy market is highly concentrated: although there are 99 18xy numbers available, 24 of which are currently in use, two 18xy line providers – KPN and 1850 BV – account for virtually the entire volume of calls.
• Call volume in the telephone market for number information has been shrinking for years now, amounting to about 7.7 million calls a year in 2013. Given the increasing use of online channels the decline is expected to continue, so that it will eventually be unprofitable to operate 18xy lines. This is likely, according to interviews held by SEO, to be the case in a few years’ time, which we interpret as being between a minimum of two years and a maximum of ten years.
• It is unlikely that many operators would start offering 18xy lines if the restrictions were to be relaxed, as the practical obstacles – especially in terms of the investment required in a shrinking market – are too great. Number information would still be provided even after the restrictions were relaxed.
• After the proposed relaxation 18xy lines would compete with 0900 line providers offering publicly available subscriber information – specifically the lines offering information on traffic, delays and public transport. This provides opportunities for an increase in call volume which might prolong the economic viability of 18xy lines. The existing product markets for 0900 lines (traffic and public transport information) are relatively limited in terms of call volume and there has already been a sharp fall in volume there too. Any prolongation would be no more than marginal.
• If the restrictions were to be relaxed, 18xy lines would thus compete with 0900 lines. The competition would come from no more than two operators, KNP and 1850 BV. There is nothing wrong with this in itself: increased competition is normally regarded as positive.
• 0900 lines could however be adversely affected by this competition in that an 18xy number is easier to remember and would therefore attract more consumers. As this advantage for 18xy lines would be the result of regulation, it could be regarded as unfair competition. Whether this is the case would depend on whether 0900 lines actually experience competition from 18xy lines after the relaxation, and if so whether the shorter 18xy numbers actually adversely affect the 0900 lines.
• This report concludes that there could in theory be unfair competition as a result of the proposed relaxation, but it is doubtful whether this would actually affect 0900 lines in practice. This conclusion is in fact shared by the operators themselves.

The Minister of Economic Affairs is to launch a consultation on the matter in January 2015.


Category: 2014, Nicole Rosenboom, Ward Rougoor