EU Study Urges Opening Telecom Infrastructure Market

BRUSSELS -(Dow Jones)- The European Commission published independent studies Friday that it says support the case for forcing incumbent telephone companies to loosen their grip on telecommunications infrastructure.

When Europe's telephone sector was deregulated in the 1990s, regulators forced many of the state-owned or recently privatized former monopolies to share their infrastructure with upstart rivals or provide connections at a low price.

The telecom companies have been pressing hard for Brussels to lift these controls. They have powerful allies: in Germany, for instance, the government has vowed to tailor-make a law that will exempt incumbent Deutsche Telekom (DT) from sharing access to a planned new broadband network costing the company more than EUR3 billion.

The studies, conducted by independent economists and experts, support the EU's tough line by arguing that greater competition and streamlined European rules lead to more investment and greater competitiveness.

"These studies support our economic case for unbundling infrastructure," E.U. spokesman Martin Selmayr said.

Europe's telecoms markets are changing fast. In a separate survey also published Friday, the commission found a growing number of European households shunning fixed-line telephone connections in favor of mobile telephones. Some 18% of European households now have mobile phones only. Lithuania is the most prominent case, with only 55% of households have a fixed telephone line.

Domestic Internet connections are on the up too: 40% of E.U. households have an Internet connection, headed by the Netherlands, where four in five households have access to the Internet.

-By Juliane von Reppert-Bismarck, Dow Jones Newswires; +32-2-741-1487; juliane.vonreppert@dowjones.com

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Posted to the site on 25th August 2006