Study calls for lesser markets to be regulated and a more flexible regulatory approach for broadband markets
BRUSSELS – The current review of the EC recommendation on the relevant markets should lead to a reduction in the number of markets to be regulated and to fundamental change in the regulation of broadband. This is the main finding of a study by Plum Consulting for ETNO presented today at the ETNO-MLex Regulatory Summit, which attracted more than 120 participants.
“The European telecommunications sector is at a crossroad. It has been confronted with a prolonged decline in revenues and market value over the past years, in contrast with steady growth in other world’s markets. For this trend to be reversed, the EU regulatory framework must evolve, becoming more stable, investment-friendly and forward-looking. In particular, operators must be allowed to achieve larger scale through consolidation, overcoming existing fragmentation. That’s why we need a Single European Market for telecommunications. Completion of the Single Market would have beneficial impact across the sector and the EU economy as a whole, amounting to around 4% of GDP by 2020. We need to act fast, and we are eager to collaborate with the Commission to exploit this great opportunity”, said Luigi Gambardella, Chairman of the Executive Board of ETNO.
“The new recommendation on the relevant markets will be a key step in implementing the new approach to broadband regulation in line with VP Neelie Kroes’ announcement of last year. This review must have sufficient foresight to take into account the growing competition from new online applications and alternative platforms. The new regulatory approach should be flexible and focus on real bottlenecks,” says Daniel Pataki, ETNO Director.
“Communications markets have changed fundamentally since 2007 and further change driven by smartphone and apps adoption and LTE deployment can be anticipated to 2015 and beyond. Broadband is fast becoming the key form of access, while traditional communications services compete with global internet based applications. Regulation should change too, with a clear focus on broadband bottlenecks and removal of regulation of services,” says Brian Williamson, Partner at Plum Consulting.
The review should lead to a reduction in the number of markets, in particular the retail market for access to the fixed telephone network. No competition issues are observed on this market, where fixed telephony is increasingly subject to cross-platform competition and consumers increasingly use online Over-the-Top services over broadband networks to keep in touch. In some EU countries, services such as WhatsApp have already taken over SMS and VoIP accounts for one third of international voice traffic.
There is a need for a new approach to wholesale regulation of broadband networks, which takes into account all competing platforms at retail level (including cable and next-generation mobile networks), in accordance with the principle of technological neutrality. National regulators should also be asked to analyze geographical differences within a national market, in order to focus regulation on uncompetitive areas.
On termination markets, intense regulatory intervention has resulted in very low rates. NRAs could try to ensure symmetry and reasonableness of termination rates under Article 5 of the Access Directive.
Finally, ETNO sees no need for adding new markets to the list of relevant markets.
The ETNO MLex Regulatory Summit was also the occasion for a debate between all stakeholders, including ETNO members, new entrants, cable operators and investors on the future regulation and how to accelerate the single market in EU for telecoms.
For more information, please contact: Thierry Dieu, ETNO Director for Communications and Public Policy Tel: (32-2) 219 32 42 Fax: (32-2) 219 64 12 E-mail: email@example.com
ETNO’s 37 member companies and 12 observers from Europe and beyond represent a significant part of total ICT activity in Europe. They account for an aggregate annual turnover of more than €600 billion and employ more than 1.6 million people. ETNO companies are the main drivers of broadband and are committed to its continual growth in Europe.
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