Brussels, 20/02/2006 (Agence Europe) - On 20 February, the European Commission unveiled its 11th Report on European Electronic Communications Regulation and Markets, looking back over 2005. Viviane Reding, EU Commissioner for Information Society and Media, commented to reporters that fast, positive, evolution made electronic communications a success story. 93% of people living in the EU now have mobile phones, 42% have access to the internet, and 11.5% have access to broadband. Overall, the report notes growing competition, especially in retail markets, bringing increased consumer benefits (more choice and lower prices) and the outlook for innovation and investment within Member States and across borders is positive. Most Member States have made good progress in implementing the EU telecom rules of 2002, which is opening up markets to new entrants. The report highlights rapid take-up of high-speed broadband internet connections. The general trend is for electronic communications to account for the lion's share (44.4% of the information technology and communications (ITC) market (compared with 43% in 2004). The ITC industry generated EUR 614 bn in 2005 in the EU, with EUR 273 bn of this directly generated by electronic communications. The report points out that:
Broadband. Reding commented that broadband is considered crucial to European competitiveness because it attracts new services. It mushroomed in 2005. The EU now has 53 million broadband connections, an increase of 20 million in 2005 alone. On average, some 52000 new lines are installed every day. There are now more broadband suppliers (new entrants account for half the market), and as a result prices are falling. The highest performing countries are the Netherlands, Denmark, Finland, Sweden and Belgium, which have outstripped the United States and Japan. If growth continues at the same pace, these countries may even outstrip the world leader, South Korea, where the broadband market is growing at 1.65% a year, compared with 7.8% in the Netherlands, explained the Commissioner.
Mobile phones. The mobile phone market is still growing, particularly in the new Member States, with excellent results in Estonia, Lithuania and the Czech Republic. Eight countries have more mobile phones than head of population, compared with the EU average of enough phones to cover 92.8% of the population. The European Commission warns that there are still problems with extremely high prices for global roaming. It announced recently that it is planning new legislation to regulate the market and bring roaming prices down (see EUROPE 9128).
Landlines. Income generated by landlines is continuing its slow decline (1.6% a year) but landlines are still the main source of income for fixed communications operators. The market is estimated to be have been worth EUR 85.8 bn in 2005. Consumers continue to benefit from falling prices through the arrival of new entrants on the market. The report notes that the growth of free internet phone calls (VoIP or voice over the internet protocol) is posing an ever greater threat to traditional landlines and operators will need to re-assess their strategy accordingly.
When it comes to implementing EU rules, all Member States have now transposed the legislation into their domestic law. Greece was the last Member State to do so, transposing the EU rules in January this year. Some have already passed virtually all the necessary national legislation and regulatory practices, and others have made substantial progress. Despite this rosy picture, Reding commented that Member States would have to be encouraged to do more in some areas (global roaming and the EU emergency number, 112, telephone directories and the portability of phone numbers). Some 50 infringement proceedings were launched in 2003, half of which have since led to a positive outcome. Only Denmark and Ireland have avoided infringement proceedings, she explained. She also expressed concern at the way countries with good results in some markets have failed to provide the Commission with analysis of their national markets (Belgium, Latvia and Poland).
The information in the report will be used as the basis of a re-assessment of the electronic communications regulatory framework, explained the Commissioner, saying that she was not planning any fundamental rehaul. She commented that she would not be throwing the baby out with the bathwater, following such excellent results because the framework works well, but said she would be focussing on areas to boost competition, like infrastructure and the efficiency of proceedings (we have to thing 'cross-border,' she explained). In terms of timing, she indicated that at the end of the June, the Commission would be publishing a report with options for the review of the regulations, followed by a draft revised recommendation about the relevant markets before amendments are unveiled at the end of this year.