Disconnected EU telecoms is bad for business in Europe

Europe needs to tap into new sources of growth if it is to reinforce its competitiveness, drive innovation and create new job opportunities. Against that backdrop, however, Europe maintains a system of fragmented telecoms markets, where high roaming charges are hampering business.

European Commission vice-president Neelie Kroes says a single telecoms market would increase investment in Europe and boost choice and quality of service for consumers. Furthermore, it would allow the European telecoms sector to compete globally and provide new, affordable and superfast services.

"The founders of the European Union envisaged a market without borders and barriers. They thought this would give extra opportunities for doing business. One sector however – the telecoms sector – is not included in the single market. It is 27 fragmented markets and next month it will be 28. They all have their own approaches and rules.

“If you have a single market without borders you shouldn’t have roaming, for roaming is connected to crossing a border. There should be an open and free internet – I don’t mean free without cost, I mean free in terms of availability for everybody.”

She said millions of people use the single market to travel, trade or transact every day, adding that they now needed the communications to match.

“It’s too hard to communicate across borders. Quality is poor, there are few innovative services beyond basic phone calls and prices are unfairly high.”

She adds that, despite rapid changes in the tech sector over the past few years, with the introduction of tablet PCs and the smartphone, the telecoms market was “still linked to the last century”.

Noting that both China and the US have hundreds of millions of customers under a unified system, she says: "No wonder they are racing ahead of us. No wonder Europeans suffer from poorer connections and slower broadband. No wonder all the major internet players come from outside Europe, from social networks to device makers."

Ms Kroes, who is responsible for Europe's digital agenda, adds that large-scale operators such as China Mobile, AT&T and Verizon had benefited from one set of rules in China and the US, achieving economies of scale.

“In Europe, we don’t have that. Telecoms operators are stuck in tiny national markets, with borders and barriers at every turn.”

Ms Kroes says continued innovation in services was reliant on advanced broadband networks, which was increasingly difficult with Europe’s telecoms infrastructure lagging behind the US and China.

For mobile, she says, average European data speeds are half those of the US. The US, Japan and South Korea combined, meanwhile, have 88 per cent of the world's 4G connections, while European high-speed mobile communications currently represent less than 4 per cent of global 4G subscriptions

She says a single telecoms market would allow consumers to enjoy the same rights, wherever they’re from and wherever their operator is.

“If you have a single market without borders you shouldn’t have roaming fees and there should be net neutrality.”

Ms Kroes says she wanted a decision taken on the single telecoms market before parliament is out of office, a year from now.

“We can’t afford to wait a couple of years, or we will be losing our competitive position.”

She says a vote by the European Commission earlier this month to end roaming fees for calls, texts and internet in favour of a single telecoms market was not enough.

“Many citizens, for example, buy their minutes and megabytes as part of a bundle. But that bundle normally only works at home – rarely across the single market. I want to develop quick solutions that build on what we’ve already achieved, but the end goal must be clear,” she says.

She says digital advances were changing the world, adding that Europe needs to be flexible and alert to ensure it does not get left behind when it comes to telecommunications.

“In many ways, Europe is ahead of its peers in terms of innovation, leading the field in photonics, nanoelectronics and microelectronics, but we should not take them for granted. We must remember that ICT plays an important role in these fields.”