Economically Sustainable Ultrafast Broadband Markets: A two-sided market analysis

Markets need to deliver both consumer benefits and a fair return for investors. This report, prepared for Liberty Global, examines the efficient level of network duplication in ultrafast broadband markets.

Regulators of electronic communications markets and academic researchers have generally agreed that three operators separate a non-competitive from a competitive market. However, what has not been analysed is how many operators a market can economically sustain such that each has the opportunity to earn a reasonable return on investment. This is particularly concerning given that efficient investment is an objective of the European Electronic Communications Code. 

This report, prepared for Liberty Global, develops an economic model of competition and profitability of gigabet broadband networks to estimate that number of networks a geogrpahic area can economically sustain.

The report conlcudes that there is no right number networks and it is important that authorities examining market consolidation consider the needs of investors to make a fair return as well as consumer outcomes.