The Norwegian telecommunications market continues to be dominated by incumbent operator Telenor, which is highly active in the fixed-line telephony, mobile communications, and broadband internet markets. Few dedicated alternative fixed-line networks have been established in the country, possibly because Telenor's entrenched position at the local loop level, as well as the low population density and rugged rural terrain make it economically unviable for alternative operators to challenge the incumbent in this market. In the mobile market, Telenor competes with just one other network operator, although two other operators have been licensed and have yet to launch services; they may find it difficult to do so, given the maturity of the market and the large numbers of service providers that lead growth in this sector. Telenor has ceded half of the broadband internet market to rivals, though few currently come close to accounting for more than 15% of the subscriber base. Rival fixed-line telephony operators appear to be content to offer services via limited infrastructure connected to the Telenor network. Carrier selection and carrier preselection (CS and CPS) allow them to provide local, long-distance, and international calls via Telenor's PSTN, as well as points of presence established by pan-European carriers at very low costs, and this provides little incentive for them to build their own networks. However, some - such as Tele2 - are building their own infrastructure as they begin offering broadband-centric products. Tele2 has been operating as a mobile virtual network operator (MVNO) in the Norwegian market for several years, first with Telenor Mobil and, from Q208, with NetCom. Tele2 initially secured a 3G licence of its own, which it almost immediately discarded due to the high costs involved in building its own infrastructure and the perceived lack of scope for growth by any new entrant. The company has since changed its mind, teaming up with a Norwegian partner to secure a combined GSM/UMTS licence in Q407; it will now launch a 3G service in 2010, though it is expected to rely on its MVNO arrangement with NetCom while it establishes the new service. Telenor and NetCom have already launched their 3G services. A fourth 3G licence has been issued to Sweden-based Hi3G Access, but this company shows no signs of preparing to launch its service by its late-2008 deadline, suggesting that it too sees little opportunities for growth in the Norwegian market, which reached 117% penetration in 2007. The broadband sector is very competitive, however, with the 1.5mn subscribers of late-2007 yielding a penetration rate of 32.7%. Via xDSL and cable TV networks, Telenor accounted for 51% of all broadband subscribers at the end of 2007, according to data sourced from the national regulatory authority. Telenor itself claims a 57% share of the market. Consolidation in this market is allowing growth to proceed at a healthy rate, with TeliaSonera (owner of NetCom) having swallowed up market leaders NextGenTel and Chess. However, NextGenTel is losing market share to cable operator get, Tele2, and the regional broadband operators gathered together under the Broadband Alliance umbrella.
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