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IP/04/571

Brussels, 30 April 2004

Commission calls for action to boost competitiveness of the Radio and Telecommunications equipment industry

A new Commission report confirms that the Radio and Telecommunications Terminal Equipment (R&TTE) Directive has successfully met its aims. The 1999 Directive provided harmonised rules for the terminal equipment sector, whose products include everything from mobile phones to car remote controls. The Directive had twin objectives: to remove differing national regulations which prevented the creation of a single European market and to ensure a high level of safety and health protection. However, to consolidate the strong position European manufacturers enjoy in network infrastructure and the mobile phone market, the Commission is recommending a technical review of the legislation. This is needed to examine whether changes to current rules are needed to take account of technological developments and growing international competition.

Enterprise Commissioner Erkki Liikanen said: "Almost everyone today is using some form of radio and telecommunications equipment - be it car keys, mobile phones or televisions. Europe is one of the world leaders in this fast-moving sector, but policies must be pursued which will allow manufacturers to hold their own against international competition. At the same time, the on-going process of monitoring should continue to ensure the safety of these types of products."

The Commission report reveals that the combination of harmonisation and liberalisation have made the industry more competitive and offered consumers a wider choice. It has also put in place safety standards for mobile phones and base stations, contributed to maritime safety and ensured that safety devices such as avalanche beacons work when required.

However, the Commission is concerned that Europe lags behind the US and Japan when it comes to deciding on harmonised spectrum bands for new applications such as UltraWideBand and radio local area networking technologies (WiFi). It is also following an unnecessarily rigid approach, which chops up the spectrum that can be used for short-range devices. The practical result is that many markets are developing two to three years ahead of the EU.

Despite the overall effectiveness of the rules in place, the Commission believes some fine-tuning could help. This should be complemented by more a proactive approach from the Union by reviewing the rules on obtaining access to the spectrum.

Background

The market for Radio and Telecommunications equipment in the EU amounts to around €80 billion/year. EU industry is competitive in parts of this market, notably in the market for cellular mobile communications and in network infrastructure. After many profitable years with exponential growth, the sector went through a period of consolidation after the internet boom. Industry is currently recovering from this situation. The sector has traditionally been highly regulated. In 1999 the Council and EP adopted the Radio & Telecommunications Terminal Equipment (R&TTE) Directive with the aim of ensuring an effective market place across Europe for this equipment. This was seen as an important step in boosting competitiveness. This was needed, as at the time only a part of the sector benefited from harmonised technical regulations. This left much of the market fragmented because some equipment was subject to more than a 1,000 national regulations. Whilst ensuring a high level of safety and health protection, it harmonised and largely simplified market access for manufacturers, but without having to go so far as to harmonise the use of radio spectrum in the EU.

Detailed information on the report and the operation of the Directive can be found at:

http://ec.europa.eu/enterprise/rtte


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