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Telecommunications: Commission welcomes decision of German telecom regulator to find the international calls market in Germany competitive

European Commission - IP/05/1707   23/12/2005

Other available languages: FR DE

IP/05/1707

Brussels, 23 December 2005

Telecommunications: Commission welcomes decision of German telecom regulator to find the international calls market in Germany competitive

The European Commission has adopted a decision under Article 7 of the EU Framework on electronic communications endorsing the findings of the German national regulatory authority responsible for telecom regulation (Bundesnetzagentur – BNetzA) that the market for international calls in Germany is effectively competitive. The market for international calls includes all calls made by residential and business customers from a fixed location in Germany to fixed phones outside the country. As a result of the Commission decision, BNetzA will no longer impose ex-ante regulatory measures on this market in Germany. In its decision, the Commission also comments on the treatment of Voice over Internet Protocol (VoIP) services.

“Today’s decision is a good example for the underlying philosophy of the EU telecom rules, namely to regulate only where competition is not effective, and to phase out sector-specific regulation as soon as market forces can do the job” said Information Society and Media Commissioner Viviane Reding. “The German regulatory authority has been working closely with the Commission on this case. Their well-balanced analysis proves that the international calls market for private and business customers in Germany is effectively competitive – findings which I welcome, as they demonstrate that the liberalisation of telecom markets in Europe is showing positive results on more and more markets.”

In the present case, the German national telecom regulator (BNetzA), in its notification to the Commission under Article 7 of the EU Framework, examined the competitive structure of the German retail access and calls markets for residential and non-residential customers. While the incumbent operator, Deutsche Telekom, continues to be dominant on most of these markets, its market share for international calls has fallen to 40%, with a tendency to decrease further. Consumers are now genuinely able to select different operators for their calls. In the light of this analysis, the Commission supports BNetzA’s decision that Deutsche Telekom does not have significant market power in the market for international calls. The immediate effect of this decision will be that no new rules are needed and that no ex-ante regulation of international calls will be imposed in the future.

The German market development is welcome news in the context of other markets in the EU where, in general, the incumbents’ average share on the international calls markets remains significantly higher.

The German regulator has also assessed the market with a view to on-going technological developments and has included Voice over Internet Protocol (VoIP) services in the market definition of the calls market. VoIP services are set to become increasingly important in the future and are already substitutes for traditional Public Service Telephone Network (PSTN) telephony. The regulatory authorities of France and the Netherlands had already examined VoIP services in their respective notifications earlier this year. The Commission now supports BNetzA’s position with regard to these innovative services and believes it will boost competition in fixed-line telephony markets. “I stand for an open, pro-competitive approach to internet telephony in all 25 EU Member States”, recalls Information Society and Media Commissioner Viviane Reding.

Background:

On 21 November 2005, BNetzA notified the Commission, as required by the EU regulatory framework for electronic communications, of a draft decision on the retail markets for national and international fixed-line telephony. This notification includes only market definition and SMP analysis. It does not include regulatory remedies to be notified by the regulator at a later stage.

As to the market for international calls, only the Austrian, Swedish and Finnish regulatory authorities have so far concluded that the market has become effectively competitive and required no new rules. In the EU25, the incumbents’ average share on the international calls markets remains well above 50% (December 2005).
More detailed information can be found at:

http://ec.europa.eu/information_society/topics/ecomm/highlights/current_spotlights/art_7_task_force/index_en.htm

On the Article 7-procedure: MEMO/05/255.

On the Commission’s approach to IP telephony: IP/05/167 and MEMO/05/46.


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