National incumbents hindering single telco market

Reding calling for the end of regulatory fragmentation

EU telecoms commissioner Viviane Reding has berated Europe's biggest telcos for resisting the move to a single telecoms market across the EU.

Speaking at the CEO Summit of the European Telecommunications Networks' Operators Association in Venice over the weekend, Reding spoke on Europe's evolving single telecoms market, particularly in light of the current financial crisis.

Reding pointed out the massive market share still held by the various national incumbents and the large national interest maintained by the local governments in the companies.

"Of course, many of you will see these figures as demonstration of your economic success. You will certainly understand that the Commission and national regulators have to look at them also from the angle of effective competition," she said.

"These figures also show to us that 10 years after the opening of markets to competition, the job of regulators is only half done. I know that you do not like me saying this. But this is my role as European telecoms commissioner. It is because of your economic and political power that the Commission has to remain vigilant, as the independent guardian of competition in the European Union," she said.

Speaking of the current financial crisis, Reding said that many operators had approached her requesting that telecoms regulations be softened or scrapped. She responded by saying that: "I firmly believe that regulation taking care of competition always has a positive effect on the economy. Times of economic difficulties are thus not a reason to suspend the principles of competition law.

"I am convinced that, for the time being, and if we want to continue the evolutionary path of Europe’s model of telecoms regulation, we cannot do without some regulation and some regulatory supervision in the telecoms markets," she added.

Reding argued that a single market for telecoms incumbents offered massive commercial opportunities, and that regulatory fragmentation and national protectionism is not in the best interests of the telco companies or the consumer.

"CEOs of many European telecoms incumbents often tell me that telecoms markets would be 'mainly national', and this is a view widespread among many telecoms ministers as well. This is, honestly, nonsense," she said.

"We are talking here about a sector where business is based to a large extent on radio spectrum and the internet protocol – and thus on technical resources that, by definition, do not know economic borders."

Reding pointed to recent research that suggested that regulatory fragmentation and the lack of a single telecoms market costs European businesses €20bn a year.

She left the summit audience with the choice: "Do you want to be friends or foes of a single telecoms market in Europe? Do you really want to let, for short-term reasons, the single market slip away to your US competitors? Or do you want to show the way to a modern, competitive European telecoms sector which will, once again, be the driving force for growth and jobs in the whole European economy?"