Belgium

A numerous set of monographs has stressed since over a decade the extraordinary development of CATV in Belgium: today, the rate of penetration exceeds 95% and is often quoted as the highest rate worldwide.

Thirty-four separate companies are active as cable operators in Belgium. There is a minority of concessions and a growing amount of public associations of municipalities (called intercommunales pures) and public / private associations of municipalities (called intercommunales mixtes) with companies from the private sector. Practically, today, ELECTRABEL, the electricity distribution company which resulted from the merger in 1990 of three private sector-based companies, is the only private partner of the 19 public / private associations.

Concerning the CATV regulatory framework, since the start of the progressive federalisation of the State and since specific High Court decisions (Institutional reform of 1980; Arrêt de la Cour d’Arbitrage of 25 January 1990; Arrêt de la Cour d’Arbitrage of 7 February 1991), Communities have been designated as competent for all broadcasting and CATV related matters: contents as well as technical issues, copyright, price scaling, etc. Furthermore, CATV activity in Brussels is considered as a specific "bicultural" activity and, under such circumstances, kept under the authority of the State.

1.1 BRUTELE

BRUTELE is basically a CATV operator, which operates under "pure intermunicipal" company status (Intercommunale pure). It develops initiatives and projects out of the usual scope of CATV. For instance, BRUTELE has obtained an authorisation for exploiting a public. This authorisation confirmed its objectives as public telecommunication services supplier. Simultaneously BRUTELE had negotiated and obtained the renewal of its concession with one of its main clients, the municipality of Etterbeek.

Beyond traditional TV services, BRUTELE offers digital broadcasting (Canal+ Belgique), leased lines, data transfer services, videoconferencing or multimedia databases applications to companies through point to point links running at 64 Kbytes/s. Internet access at 256 Kbytes/s has been launched in 1997. A public commercial offer for internet access has been launched in March 1998. At the beginning of October 1998 and after a trial period, BRUTELE has officially launched its residential internet offer in the region of Charleroi. In the near future, 150 000 households of the Brussels area are to be concerned.

1.2 TVD-Radio Public

TVD-Radio Public, a private CATV operator, announced early 97 the launch of Internet access in 7 Brussels municipalities (out of 19 composing the city) and in Leuven, a small town of the Flemish Brabant Province. It has effectively obtained an authorisation for exploiting a public infrastructure and has started since 1st September 1997. The service was initially targeted at 130 000 clients by 1999, and 5% of these clients by end 1997, depending on the rhythm of infrastructure upgrading.

VOD is also part of announced future developments of Radio Public. Furthermore, its Director announced in September 97 that the company had introduced a demand to the Flemish Media Minister to exploit a CATV infrastructure on the territory of the Region as a whole and to propose rapidly vocal telephony at very low rates, if such an authorisation was granted by the government given a 1994 Regional Decree modifying municipalities prerogatives on cable exploitation.

At the moment, TVD is in trouble with a competitor which has developed, for the first time in Belgium, explicit competition in the CATV sector on the same territory as another operator. This newcomer, a project led by the intermunicipal operator IVELEK and the major utilities company ELECTRABEL, aims at proposing TV, VOD and Internet on the cable in the region of Leuven.

1.3 TELENET

The TELENET project, launched in 1994, was initiated by the Flemish government with the assistance of the public regional investment holding, the G.I.M.V. The basic idea was to modernise the CATV networks of the North of the country, to allow them to carry high-debit bi-directional multimedia services - an idea on which the emphasis was originally put - and vocal telephony services, which, according to the successive versions of the business plan, would provide most of the incoming revenues of the new operator.

TELENET has obtained its individual licence for vocal public telephony on the 24^th of December 1997. TELENET launched its first telephone services on 1.01.98 in the regions of Mechelen, where it has its offices, and Gent. It offers a 10% discount (up to 20% on specific services) in comparison to BELGACOM's telephone services. Today, over 500 000 households may switch to TELENET and it aims at developing progressively its geographical market starting with the axe Antwerp-Mechelen and growing slowly towards Brussels, Gent and Hasselt. The Flemish Region should be connected by 2002: a 6 B FB (150 MECU) investment has been necessary in 1997. Interconnection issues with BELGACOM and mobile telephony opportunities were issues also negotiated during 1997.

Since the 30^th of October 1997, TELENET leases broadband lines (34 Mb/sec) between Gent and Antwerp to MOBISTAR, the mobile competitor of PROXIMUS and has recently signed a Memorandum of Understanding to be the second operator of the city of Antwerp. It has also signed an international agreement with UNISOURCE and WORLCOM. TELENET has also tested its internet access product "PANDORA" in Antwerp and offers this service in Brussels and the Flemish Region since 1^st of April 1998.

On December 14, 1998, TELENET announced that it was delayed in its business plan, the upgrading of the existing infrastructure taking more time than previously planned. Only 200 000 households, out of 500 000 initially planned can be connected, and, because of number portability constraints, only 10% of these households have chosen to connect themselves to the TELENET infrastructure.

1.4 TITAN association

The creation of the non-profit organisation TITAN (Televisual Interactive Terminal and Associated Networks) was initiated by the Ministry of the French-speaking Community following the work of the Carrefours de l'Audiovisuel. Its aims were quite modest: to allow or facilitate the transition of the cable networks in the French-speaking Community towards numerical systems.

Defining itself more as a "think-tank" or as a permanent forum than as an entity with directly operational aims, the consortium gathered a large number of actors from a variety of sectors.

Early 97, it appeared that the actors of the French-speaking Community, even if they gathered into a consortium, would not have a sufficient power on the market to define the specificity of the numerical decoders, which necessarily represent an international market. In Europe, the "owner"-type approaches, despite their disadvantages, seem to have the upper hand on the "open"-type approaches. Since, TITAN hasn't developed any effective project.

1.5 Application Cable Multimedia SA (ACM)

ACM is a joint venture created early 97 between 9 CATV Walloon operators + 1 Brussels CATV operator (66% of shares) and 3 minority shareholders, the Crédit Communal (8.3%), the Société Mutuelle des Administrations Publiques (8.3%) and the Société Régionale d’Investissement (16.6%)

The CATV operators represented a 1 196 000 households market and aimed at interconnecting their networks and propose common services such as broadcasting of BBC, RTL-TVI channels. They also planned to broadcast digital "bouquets" and advanced services.

1.6 ON R / TPS Memorandum of Understanding

The O.N.R. is an economic interest group created on behalf of the Ministers of the Walloon Region and the French Community in June 1996. Its aim was to set up pilot experiments in the Liège region.

It has signed in 1997 a Memorandum of Understanding with Télévision par Satellite - TPS, the major competitor of Canal+, to develop a four months long pilot digital broadcasting experience, starting in July among 200 households in the Province of Liège. TPS was, at that time, composed of France Telecom, France Television, M6, Lyonnaise des Eaux and the CLT

1.7 TECHNOPOLE

At a regional level, the Brussels Region government has initiated in 1996 a survey of the existing cable infrastructures owned by the Région Bruxelles-Capitale (Brussel-Capital Region). This survey is being realised under the authority of the TECHNOPOLE - Communication Pool, in co-operation with the Administration of the Equipment (a ministerial department) and the STIB (Société de Transports Intercommunaux Bruxellois - Brussels Interurban Transportation Company).

This study came along with the set up of a general telecommunication policy governed by the Société Régionale d’Investissement de Bruxelles (SRIB, Brussel Regional Company for Investment) and the Centre d’Informatique pour la Région Bruxelloise (CRIB, Informatics Centre for the Brussels Region). TECHNOPOLE was in charge of some aspects of this future policy, particularly regarding participation to the Telecities project.

1.8 CODITEL / WORLDCOM Joint venture

Private cable operator CODITEL has formed mid 1997 a 50% - 50% joint venture with WORLDCOM Inc. to create an alternative facilities-based provider of telecommunication services in Brussels: NV WORLDCOM SA. Meanwhile, CODITEL has negotiated an unconditional ten year renewal of its concession in Brussels.

The CODITEL/WORLDCOM joint-venture is integrated into WORLDCOM Global Network which includes operations in London, Paris, Frankfurt, Stockholm, Amsterdam and over 40 networks in the USA. WORLDCOM intends to build a pan-European fibre network between its MANs. In Belgium, the joint-venture with CODITEL has allowed WORLDCOM to build upgraded infrastructures while compelling the obligations of the Belgian October 96 Royal decrees regarding the development of new infrastructures.

WORLDCOM obtained a vocal telephony licence and offers this service to corporate clients in Belgium since the 1^st January 1998. Nine months after arriving in Brussels (April 97), WORLDCOM manages a 32 km long fibre infrastructure in the capital, has a provisory interconnection agreement with BELGACOM since the 7^th of November 1997, and has obtained a provisory voice telephony licence end of December 1997 (CAC 1666). WORLDCOM has also passed a collaboration agreement with IDX Belgium, subsidiary of Data Express (USA), for the management of international telefax routing.

2. On-going non-CATV projects

2.1 Railroad transportation: the SNCB case

The Société Nationale des Chemins de Fer Belges (SNCB) is the national state-owned railroad transportation company. As such it has developed an important internal telecommunication network (200 km at 2.5Gb) and presents it as bearing "unlimited transport capacities" based on optic fibre technology. It participated in 1997 to, at least, two on-going project negotiations: HERMES and a BELGACOM / SNCB potential joint-venture.

Since, it has obtained a licence for exploiting a public infrastructure and offers such services to various telecom operators such as ESPRIT TELECOM. It also develops various internal projects such as EDI links with its major accounts or the SABIN project which is an integration of different services in a one-stop-shopping offer: railroad transportation, hotels, event admission, etc.

2.2 Fibre backbones: the HERMES RAILTEL Consortium

HERMES EUROPE RAILTEL B.V. (under Dutch Law) is a private company dedicated to building and operating a pan-European fibre-optic communications network along railway company rights-of-way in Europe. HERMES EUROPE RAILTEL B.V. (H.E.R.) is a 50% / 50% joint venture between HITRail B.V., a consortium initiated by 11 national railway companies and GTS (Global TeleSystems Group, Inc.), an American developer and operator of telecommunications companies in the Eurasian markets. HERMES EUROPE RAILTEL B.V. is dedicated at providing high-quality trans-border transmission service to established and emerging carriers and other telecom service companies.

The network should finally interconnect major European cities with high capacity fibre-optic rings equipped with transmission nodes operating at 2.4 Gbits: bandwidths offerings range begin at 2 Mbit/s up to 155 Mbit/s. In 1997, 280 kms network were fully operational between Belgium and the Netherlands, with approximately 120 kms in Belgium.

In 1997, it obtained an authorisation for exploiting a public infrastructure and accounted for three test clients. Supported by its systems vendor ALCATEL, H.E.R. has launched a non-commercial Beta Trial in which CONCERT (BT and MCI’s venture), ESPRIT TELECOM (privately held company, already present in UK, Spain, the Netherlands and Belgium) and WORLDCOM (US long-distance carrier, Inc. of Jackson, Mississippi, already present in most European countries) have taken part.

2.3 Ministry of Transport of the Walloon Region: the WIN Project

The Walloon government has decided to develop a specific development program dedicated to telecom policy on the 27th of June 1996. During 1996 and early 1997, preparatory works have been organised within a specific operational workgroup, together with consultants of Mission Critical, Digicable and Arthur Andersen.

In June 1997, this program has become a concrete project, called WIN (Wallonie Intranet), which aims at developing a 875 km long fibre network infrastructure covering most of Wallonia and at encouraging the development of applications and services in the area of SMEs activities, public administration modernisation, schools on the net, etc. The infrastructure is to rely upon the existing Ministry’s highway telecom infrastructure and to be leased to an operator under specific commercial conditions to allow preferential and competitive prices for end-consumers and public services. The total investment was estimated at 3 BFB (75 MECU), including 1BFB on behalf of the Ministry.

The bid for operating this infrastructure under specific conditions was launched on 6th of August 1997. On 12 September, over 13 infrastructure operators had answered and nine had been considered as "serious" by the Walloon government in December. Three finally responded to the bid in February 1998: BELGACOM with TFI ; Unisource Belgium; and WINSTAR, a consortium of FT, Telindus and CEC close to the mobile operator MOBISTAR. Recent moves of major industrial investors (Frère Group) may change the profile of these offers and their competitive advantages in the next few months. The final decision was taken at the end of May 1998: the consortium led by BELGACOM won the bid.

The WIN company, meant to manage the network, has been created the 14^th September 1998. Its shareholders are BELGACOM (50%), the SRIW (Walloon regional invest; 13%), the Crédit Communal (public bank; 8%) and the SMAP (Public Insurance; 8%). The Compagnie Nationale à Portefeuille (the so-called group "Frère", close to the financial Groupe Bruxelles Lambert and to the CLT-UFA consortium) who was supposed to participate, has resigned and BELGACOM has offered to participate in a provisory manner to the 21% shares left.

The shareholding of WIN has changed since its creation: the "Compagnie Nationale à Portefeuille" has finally taken a 13% share in the 22.5 MECU high capital of the WIN company. BELGACOM keeps a 45% share.

2.4 Digital Metropolis Antwerp

At city level, the Metropolitan Area Network Antwerp (MANAP) represents the information highway of the City of Antwerp which started halfway 1994 and was chosen in 1996 in Stockholm (Bangemann Challenge: www.ispo.cec.be) as one of the best urban information highways of Europe.

At the basis of this realisation lies a fibre-optic network of 65 km upon which TELEPOLIS connects 30 urban administration offices. MANAP makes it possible to exchange all kind of information - text, sound, figures, graphics, photo's, video's - between the different services. By using this network, 2 000 public servants can telephone one another free of charge and access long distance learning services.

2.5 COLT Telecom Ltd

COLT Telecom, a UK based company, has purchased 51% of LCL Powerphone, a Belgian radio-communication (PAMR) company, to benefit of its licensing and develop fibre infrastructures all over Belgium. Since December 1997, the company has explicitly announced it builds a fibre infrastructure in Brussels and has opened its new offices in Brussels during the first semester 98. This confirms its "large business, government end users and telecommunications carriers"-oriented strategy at European level: it is already present in London, Frankfurt, Hamburg, Munich, Paris, Zurich, Madrid, Milan, and has a European facilities agreement with HERMES RAILTEL. It has obtained a provisory licence for vocal telephony in June 98.

2.6 UNISOURCE Belgium

Unisource Belgium, a subsidiary of Unisource with a KPN majority shareholder, has announced it would further develop its telecommunication business in Belgium: it intends to lease lines from alternative operators such as TELENET and BRUTELE and has passed a collaboration agreement with BRUTELE, a major CATV operator in Brussels.

Unisource has also passed a co-operation agreement with Banksys, a subsidiary of Belgian banks in charge of most ICT developments in the Belgian banking sector (ATMs, credit cards, electronic payments, electronic wallets, Proton card, etc…), to share electronic payment systems and make compatible the Proton system of Banksys and the Internet securised payment system of Unisource.

UNISOURCE offers now a wide array of services to the corporate market: voice telephony, data, Internet, mobile and satellite communications, network management. It also participates to the development of call centres around Brussels. It has obtained a provisory licence for vocal telephony in June 98.

2.7 ESPRIT TELECOM

ESPRIT TELECOM is pursuing cost-oriented access to public network and has confirmed its positioning by passing in February 1998 a BRIO 2 interconnection agreement with BELGACOM and was granted a Voice Telephony licence (CAC 1680) from the IBPT, both operational on 1^st of March 1998.

It announces it aims at targeting corporate clients and 5% to 7% of the Belgian market by 2003 and the residential market after year 2000. It will thus extend its presence from Antwerp and Brussels to Kortrijk, Liège, Gent and Namur before the end of 1998.

ESPRIT TELECOM has also passed an agreement with the SNCB, the Belgian railroad transportation company, to rent its fibre infrastructure (200 km; 2.5Gb) for the next 15 years. It will be connected through Europe to Germany (Dusseldorf), France (Strasbourg), Netherlands and UK (London) where it links with its headquarters in Washington DC and New-York.

2.8 CODENET

CODENET is the data Division of the Telecommunication Operational Unit of TRACTEBEL, offering Virtual Private Networks to major corporate clients. TRACTEBEL is an important industrial holding, active in various sectors such as gas, electricity, environment, engineering, facilities management, etc. It has activities and subsidiaries all around the world and a consolidated turnover of approx. 7.6 BECU.

Its Communication activities include:

• CATV activities with CODITEL, ELECTRABEL, PRIME CABLE (USA)
• Mobile Radio communication: USCC (USA)
• Network Services: CODENET (in Belgium and Luxembourg)
• Data Broadcast: DATABEL
• Security Network: DATATRAK
• Telecoms: WORLDCOM Belgium
• Satellite transmission: shares in the SES

CODENET manages a Belgian-based primary backbone of 32 nodes working on a Frame Relay switching mode and proposes data, voice, videoconferencing services etc. to numerous clients such as CitiBank, Paribas, BMW, Unisys, ACEC, VISA, Belgium On Line, etc. It has obtained a provisory licence for vocal telephony in May 98.

2.8 ASTRID

ASTRID, which stands for "All-round Semi-cellular Trunking Radiocommunication network with Integrated Dispatchings" is a newcomer among the telecom sector: it is a freshly created company, as a result of the launch of a TETRA-based radio communication network project. This network is meant to offer sophisticated means of communications, especially mobile ones, to various emergency and security services in the country.

The project is to be developed in cooperation between the ASTRID Ltd company - which statutes were approved on 26 June 1998 by the Belgian government - and the KNT consortium (Kreutler - Nokia -Telindus). The initial investment is estimated around 350 MECU.