EU: Telecommunications Competition Must Increase -Report
BRUSSELS -(Dow Jones)- Competition among Europe's telecommunications operators must increase in order for the sector to prosper, the European Commission said Thursday in its annual report on the state of the European telecom market.
"This is why this year's reform of the EU's telecom rules must focus regulation on those key bottlenecks where competition is still not effective," said EU Telecom Commissioner Viviane Reding.
The report comes just ahead of the commission's proposed overhaul of telecom rules, due out this summer. The commission is expected to call for a rapid move towards a single European telecom regulator, new laws to liberalize Europe's radio spectrum market and more antitrust rules to reign in incumbent operators and increase competition, among other measures.
The commission's report highlights some improvements in the sector, namely lower consumer prices, stronger investment and higher revenues. Prices for domestic mobile phone services have gone down by "up to 13.9% in the past year," the commission said.
The price of a three-minute domestic call on a fixed phone line has dropped as well, down to EUR0.25 today from EUR0.41.8 in 2000 according to the report - this represents 40.2% drop.
Also, investment in the sector grew by 5% over 2006, according to the report.
Revenue in the mobile phone market grew by 4.6% in 2006, and according to the commission mobile phone use rose to 103% of the population in 2006 from 95% in 2005. Revenue in the broadband Internet market also grew in 2006, showing an increase of between 7.8% and 8.5%, the report said.
Revenue in the fixed-line phone market dropped between 4.5% and 5.1% in 2006, the commission's report said, blaming the decrease on stiffer competition for incumbent operators.
The commission used the report to once again stress the need for more independent national regulators and stronger, more consistent application of the E.U.'s telecom rules. Concentrating Europe's 27 national regulators into one centralized regulatory power over the sector would also help to spur competition and bolster the sector's success, the report said.
"Cross-border competition, economic growth and consumer benefit could be enhanced substantially if the EU moved from 27 different national systems to a more consistent regulatory approach throughout Europe," the report states, adding that market players today already generate a third of their revenue in a country other than their own.
Poland's and Slovakia's national regulators are the least independent, the commission said, though it added that "political influence over the day-to-day work of the national regulator continues to be cause for concern."
The report also complains of "inefficient and fragmented management of radio spectrum." A uniform approach to dealing out radio spectrum frequencies throughout Europe would generate an additional 0.1% in gross domestic product growth, the report said.
-By Anne Jolis, Dow Jones Newswires; +32 2 741 1488; anne.jolis@dowjones.com
(END) Dow Jones Newswires "
Posted to the site on 29th March 2007