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IP/09/473

Brussels, 25 March 2009

Mobile use up, consumer prices down: Europe's telecoms sector weathering economic downturn, says Commission report

Europe leads the world in mobile phone services with the number of subscriptions in 2008 at 119% of the EU population (up 7 percentage points from 2007), well ahead of the US (87%) and Japan (84%). This is a finding of today's Commission progress report on the single telecoms market. Despite the economic crisis, the EU's telecoms sector (worth about 3% of EU GDP) continued to grow in 2008 with revenues estimated at above €300 billion, up 1.3% compared to 2007 and outperforming the rest of the economy (up by 1% only). Consumers gain the most from the sector's competitiveness: they pay less while getting better value for money. Average mobile phone bills have fallen from €21.48 to €19.49 in 2008 and 75% of European consumers now have internet connections of 2 megabits per second and above (speeds allowing, for example, TV over internet), thanks to EU action. However, the Commission's report also warns that without better European coordination, the benefits of a single telecoms market could be jeopardised by inconsistent national regulation.

"Europe is THE continent of mobile communications, with more and more people using mobile phones and mobile broadband services. Despite the global economic crisis, European consumers communicate more than ever with their phones and via the Internet. This is good news for a sector that can help Europe defy the downturn," said Viviane Reding, the EU's Telecoms Commissioner. "But we can't rest on our laurels. We must strengthen national regulators' independence. We also need fairer competition between fixed and mobile operators, in view of increasing convergence between fixed and mobile telephony. Finally, we must prevent a bypassing of EU rules that could harm our single market. I am in particular concerned that many national regulators are going their own way on high-speed internet networks. The road to fair competition and investment in these networks does not lie through 27 different solutions mainly favouring national champions, but through open markets, legal certainty and equal chances for all investors and operators."

Today's Commission report is a snapshot of Europe’s telecoms market and the state of competition in the 27 EU countries.

Sector growths stronger than rest of economy

Estimated 2008 EU telecoms sector growth is 1.3%, above the overall economy's 1% real GDP growth. It continues to dampen inflation, with prices of most standard communications (like phone calls or surfing the web) still falling.

Mobile: consumers pay 34.5% less than 5 years ago

The mobile market remained the most dynamic telecoms segment in the EU in 2008. Mobile phone use rose from 112% of the population in 2007 to 119% in 2008. Italy, Lithuania and Luxembourg are over 140%. The leading operators' average market share fell by around 3% last year, indicating a more competitive market. As a result, consumers spend more time talking and texting for prices at least 34.5% less than in 2004.

EU countries global leader in high-speed internet

The number of fixed broadband internet connections in the EU keeps growing: 14 million more in 2008, reaching over 114 million in total. Denmark and the Netherlands are world leaders in broadband, with take up over 35% of population. They lead, along with Sweden, Finland, the UK, Luxembourg, Belgium, Germany and France, the US, which was at 25% in July 2008.

Mobile broadband is also taking off; with the number of connections now representing 13% of the EU population. Mobile broadband via data cards and dongles is becoming a viable alternative to fixed broadband in countries like Austria (number of connections equivalent to 11.4% of population), Finland (9.1%) and Portugal (8.3%).

More consumers changing operators

20.5 million consumers switched phone operators in 2008 while keeping their fixed or mobile numbers. By October 2008, about 84 million subscribers (17% of EU citizens) had switched operator since it became possible in 2003.

Still problems for a single European telecoms market

Today's report also said that divergent regulation in different EU countries continues to hinder a real single market for telecoms operators and consumers:

  • Independent national telecoms regulators are essential to ensure fair and effective regulation, but are not yet a reality in all 27 EU countries. Infringement proceedings launched by the Commission are pending against Lithuania, Latvia and Romania, while a case against Poland was taken to the European Court of Justice.
  • Inconsistent regulation of similar competition problems can be an extra burden on telecoms operators, especially the growing number of companies active in several countries or offering cross-border services.

- Diverging approaches to the regulation of new fibre networks could impair competition between operators in the single market and lead to regulatory uncertainty for new investment. Some regulators' decisions even appear to be taken in a manner which attempts to bypass EU rules (IP/08/2060).

- There continue to be serious discrepancies between the fees operators charge each other for connecting calls made from a different network (from €0.02/min in Cyprus to €0.16/min in Bulgaria.

  • While it takes only 1 day for consumers in Ireland or Malta to change their mobile operator while keeping their phone number, it still takes 38 days in Poland, 15 in Italy and 14 in Slovakia.

A press pack with the Commission's new Single Telecoms Market Progress Report, FAQ, and fact sheets on each EU country is available at:

http://ec.europa.eu/information_society/newsroom/cf/itemlongdetail.cfm?item_id=4784

MEMO/09/129

MEMO/09/132

Annex:

Selected charts from the Commission's
Single Telecoms Market Progress Report 2008

Mobile penetration

[ Figures and graphics available in PDF and WORD PROCESSED ]

Mobile penetration – country overview

[ Figures and graphics available in PDF and WORD PROCESSED ]

Development of mobile consumer prices

[ Figures and graphics available in PDF and WORD PROCESSED ]

Broadband price developments

[ Figures and graphics available in PDF and WORD PROCESSED ]

Source: BIAC – First half of 2008, Final report, December 2008, Van Dijk Management Consultants

Status of broadband take-up in the EU
(Broadband means an always-on Internet connection with a bandwidth capacity
of at least 144 kilobits per second)

[ Figures and graphics available in PDF and WORD PROCESSED ]

Mobile broadband penetration

(Mobile broadband refers to a wireless high-speed Internet connection via data cards and dongles that can be plugged in laptops, and does not include active mobile users accessing advanced data services via their handset)

[ Figures and graphics available in PDF and WORD PROCESSED ]

Consumer prices for broadband services

[ Figures and graphics available in PDF and WORD PROCESSED ]

Mobile number portability
(= consumers switching the mobile operator while being able to keep their number,
as required by EU law)

[ Figures and graphics available in PDF and WORD PROCESSED ]

Mobile number portability – days required to port number


[ Figures and graphics available in PDF and WORD PROCESSED ]



Fixed number portability
(= consumers switching the fixed operator while being able to keep their number,
as required by EU law)

[ Figures and graphics available in PDF and WORD PROCESSED ]


Fixed number portability – days required to port number

[ Figures and graphics available in PDF and WORD PROCESSED ]

Mobile termination rates

[ Figures and graphics available in PDF and WORD PROCESSED ]

112 - awareness

[ Figures and graphics available in PDF and WORD PROCESSED ]


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