Brussels, 28 November 2001
Commission adopts 7th Report on liberalisation of telecommunications in the Member States
The European Commission today adopted a Communication examining the state of implementation by EU Member States of the current European regulatory framework for telecommunications. The key conclusion of the Report is that, against a generally pessimistic macroeconomic background, the telecom services sector is buoyant, the national regulatory authorities continue to make progress with liberalisation, but that, on the eve of the adoption of a new framework, a number of regulatory bottlenecks remain. The continuing divergences in implementation under the current framework indicate that a strong transparency mechanism and better co-ordination between National Regulatory Authorities are a pre-requisite for a level playing field and a single European market for telecoms services in the future.
Presenting the Report, Erkki Liikanen, Commissioner responsible for Enterprise and the Information Society, and Mario Monti, Commissioner responsible for Competition welcomed the positive indications concerning market growth and price reductions. They called on Member States to ensure that the remaining bottlenecks are removed immediately, to ensure continued growth in telecommunications markets and to allow this sector to fulfil its potential in helping to overcome recent more negative general economic trends.
Negotiations between the European Parliament and the Council on the Commission's proposals for a new regulatory framework are at a crucial stage. The success of this new framework depends on the full and coherent implementation of the current EU rules on harmonisation and liberalisation of telecommunications. This Report demonstrates that implementation of these rules has contributed so far to the growth in the sector over the last few years, and that competition has continued to encourage lower tariffs, greater choice and more advanced services.
Growth: The combined EU market will expand to an estimated €218 billion in terms of revenue by end 2001, representing growth of 9.5%. This is a fall of three percentage points over actual growth in 2000, but a slight increase over the rate of 9% forecast in the last implementation report. The fastest expanding segment is again mobile services, with revenue growth of an estimated 22.3% and 36% more subscribers this year, and with an average penetration rate of 73% in August 2001.
Choice: The whole population of twelve Member States can now choose between more than five operators for long distance and international calls. For local calls, in six Member States the whole population has a choice of more than five operators, with a rapid increase in the use of carrier pre-selection, in addition to the heavy use already made of carrier selection via access codes.
Price: Competition between these operators is bringing prices down overall. Incumbents' long distance calls are down 11% in price since last year and down 45% since 1998 for a three-minute call in Europe, and by 14% since last year and 47% since 1998 for a ten-minute call. The report contains abundant data to show this overall downward trend, for both residential and business users and for all call types except local.
Advanced services: The average level of internet penetration in EU households was around 36% in June 2001.
The Report shows nevertheless that there are still some regulatory bottlenecks that need to be addressed in order to ensure that fully integrated and liberalised telecommunications markets are completed.
One key issue is local loop unbundling, which was mandated by the Lisbon Summit to overcome a competitive blackspot and to speed up the development of affordable high speed internet access. There are some positive aspects:
But overall the situation is very disappointing:
Above all, the Report expresses concerns that incumbents are continuing to develop their own broadband services (especially DSL) in the absence of effective competition. For the situation to change, national regulators need to provide hands-on monitoring and set binding deadlines with credible penalties. Regulators also need to act to ensure that wholesale DSL is offered to new entrants on non-discriminatory terms.
The other regulatory bottlenecks identified in the Report include:
The Report can be consulted at: