Telecom sector to be reformed under EU plan

The European Commission will tomorrow unveil an ambitious reform of the European telecoms industry which aims to abolish roaming charges across the EU, and stimulate investment in the European telecoms sector.

The new regulations, which will be outlined by European commissioner Neelie Kroes at the European Parliament in Strasbourg, aim to create a single EU market for the telecoms industry, though they stop short of establishing a pan-European regulator.

Wholesale price
The plan would drastically reduce the cost of roaming charges for customers by addressing the wholesale price operators pay to access their rivals' networks, and encouraging providers to form "alliances".

The move – which could eventually see consumers offered EU-wide packages that minimise the disparity between international and domestic call rates – builds on measures introduced by the commission since 2007 to cap roaming fees. The package is also expected to address the contentious issue of “net neutrality” – the idea that all types of content, whether voice, video or data, are treated equally by telecoms carriers.

Ms Kroes has been keen to clamp down on the practice by which operators “prioritise” certain kinds of data, a move that has been strongly resisted by providers. They argue the rapid increase in data volumes and the change from voice and SMS- predominated traffic to a datacentric business model, has put huge pressure on provision and cost of dissemination. The commission has argued that consumers should not face slower download speeds or higher costs for certain kinds of internet data.

Also included in the package is a move towards greater integration of EU markets, with the commission proposing that operators regulated in one member state be permitted to trade in any other member state.

This idea of “single authorisation” could pose problems to some larger operators who have been the dominant player in home markets.

The aim of the package is to boost investment in the ailing European telecoms market by streamlining regulations, cutting red tape and encouraging economies of scale across the 28 member-state bloc. With revenues under pressure at most operators, investment in telecoms infrastructure has been lagging behind.

Ms Kroes, who held the post of EU competition commissioner between 2003 and 2009, believes streamlining of regulation will boost the sector’s competitiveness.

Industrial lobbying
However, European telecom operators have been lobbying strongly against some of the measures, arguing they will increase rather than cut costs, and will fail to attract more investment.

According to a study commissioned by the European Telecommunications Network Operators, a group representing Europe’s largest operators, the abolition of roaming fees and the introduction of EU-wide packages, could cost the industry €7 billion by 2020.