Lack of single telecoms market holding back EU operators, says Kroes

Kroes fires warning shot on ‘lack of EU single market’

17 JUN 2013

Without a single EU telecoms market, operators in Europe will not be able to achieve economies of scale, meaning 4G and broadband rollout will lag behind other regions and stifle economic growth, said Neelie Kroes, EU digital commissioner, in a speech today (17 June).

“Operators cannot reach economies of scale, and face barriers at every turn,” she said. “They can’t think European and compete globally,” adding that she wanted to look at all the barriers the market currently faces and bring them down as fast as possible. “Our economy cannot afford to wait,” she said.

Speaking in Brussels to industry stakeholders, Kroes repeated her desire to scrap roaming rates, while also proposing an “EU passport” for telecoms groups so that an operator authorised in one EU country would be recognised in all others.

“Operators find it too hard to break into new markets,” she said. “They need separate authorisations under separate systems, for each country of operation. A “passport” would mean that if you can operate in one member state, you can operate in any member state. Without extra bureaucracy. Just like in other sectors that enjoy the single market boost, from banking to broadcasting.”

While insisting there was still a role for national regulators, Kroes nonetheless said that “operators shouldn’t have to deal with a mess of different rules, regulators and remedies in each member state”.

EU’s digital chief added that spectrum allocation across the EU needed to be much more coordinated. Lack of coordination, she argued, meant that “handset makers largely ignore the European market when planning their latest gadget”.

It’s also harder to plan and bid for spectrum across borders, she said, “particularly when each country’s auction or sale takes place at different times and under different conditions”.

Kroes emphasised that continued innovation in services will rely on advanced broadband networks, but Europe’s telecoms infrastructure was lagging behind the US and parts of Asia. For mobile, she said, average European data speeds are half of those of the US. The US, Japan and South Korea combined, meanwhile, have 88 per cent of the world’s 4G connections while Europe claims a meagre 6 per cent share.

Though operators might bristle at the abolition of roaming rates, Kroes makes the argument that if citizens and companies get higher-quality services and a fairer deal, they will use those services more. “Look at the US mobile market,” she said. “Revenues per subscription are nearly double the EU, even though the call cost per minute is over three times lower.”

Kroes’ intention is to “make the pie bigger, with fewer barriers, better services, and fairer prices”. She said the status quo was not sustainable. “In the telecoms sector itself, many are doing very badly. Revenues decline by 1 per cent to 2 per cent a year, while in the rest of the world they are increasing 5 per cent or more.”

Kroes and her team are consulting with different stakeholders on the principles of a single EU telecoms market and how that might look in practice. More detailed proposals, says the EU digital commissioner, will be ready by September.

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Ken Wieland

Ken has been part of the MWC Mobile World Daily editorial team for the last three years, and is now contributing regularly to Mobile World Live. He has been a telecoms journalist for over 15 years, which includes eight...More

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