Why Europe needs a Single Market for Telecoms? Because ‘The status quo is not sustainable’, according to Neelie Kroes

The EU’s single market has given consumers competition and choice, helped business innovate and invest. It is time to extend those benefits to the electronic communications, according to the European Commission. A single European telecoms market would have significant benefits for the wider economy and the Commission is currently assessing the impact of several options to realize this project.

 A Telecoms Single Market for Europe has been the subject of the open discussion organized yesterday by the EU DG Connect in Brussels.

Roberto Viola, Deputy Director-Genral DG Connect, presented the event, with the participation of Neelie Kroes, Vice President of the European Commission, who issued a call for the formation of a single telecoms market before the next European election: Current trends are not sustainable. Operators cannot reach economies of scale, and face barriers at every turn – she said – They can’t think European and compete globally. They can’t invest in the broadband we need. Our citizens cannot enjoy innovative new services. And companies doing business in different member states don’t have the networks to match: because arranging seamless communication services is costly and difficult. And that’s a serious barrier to growth.” The solution? “We cannot unlock these problems without a single market key.”

Look at the US mobile market, revenues per subscription are nearly double the EU – even though the call cost per minute is over three times lower. Here’s my point: we shouldn’t be fighting over crumbs: we should be making the pie bigger. And that is exactly what we will do: with fewer barriers, better services, and fairer prices.” Kroes added. The status quo is not sustainable. In the telecoms sector itself, many are doing very badly. Revenues decline by 1% to 2% a year, while in the rest of the world they are increasing 5% or more.”

Göran Marby Director PTS Swedish Post and Telecom Authority, BEREC participated o the opening session, inviting to consider new aspects of a “regulation for innovation”. According to Göran Marby,today’s regulation is based on technology, but the consumer demands have shifted. Consumers want speed, quality, mobility and access. Some questions can be asked to check is today’s regulation is appropriate : will the regulatory model of today make future business model possible? What are customer willing to pay for and will that be enough to sustain healthy profits? If access to Internet is something everybody needs, as all service will be IP-based, how do we made sure that everybody can get what they need at prices they can afford? Do traditional operators overestimates the threat from OTT? Changed revenue streams, from voice to data, is a prerequisite for investments in fast broadband networks. When can we deregulate? When consumer get what they expect and pay for. When new business models can show balance between risk and investment. If there is no risk for protection of old business models and services.

Operators were represented by the Associations ECTA (European Telecoms Association ) and ETNO (European Telecommunications Network Operators).

 According to Erzebet Fitori, Director of ECTA, the recent data of the Digital Agenda Scorebord show that in Europe there is lack of innovation, lack of choices by consumers, lack of investment and lack of effective competition in NGA (Next Generation Access). The key area is a Pan-European business communications market: 800 billion euros benefits will be achievable through single market for business communications over 15 years.

For me the solution is easy”, said Luigi Gambardella, President of ETNO, “Since the beginning we have supported the single market”, but the Telecoms Single Market has to be encouraged, not created with regulation, he added. EU has to provide operators tools to compete with global operators. “We are still waiting for a radical reform package

The discussion also considered the possibilities for all the consumers in a telecoms single market: they should be able to purchase and enjoy electronic communication services where they wish and without restrictions of national borders. 

Kroes said that she will be coming forward with a proposal to realize a telecoms single market in early September.

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