Brussels, 03/03/2008 (Agence Europe) - A public hearing on the telecoms package at the European Parliament's Industry Committee on Wednesday 27 February revealed differences of opinion among incumbent telecoms operators and new entrants (see EUROPE 9612). The former believe the markets are already competitive enough and the package fails to introduce sufficient deregulation and therefore discourages investment at a time when the EU urgently needs to catch up with new generation networks. The new entrants, however, speak of the danger of a return to monopolies on the new high-speed fibre optic networks and welcome the European Commission's draft legislation which would monitor access to the new networks to ensure non-discriminatory access for all. Both sides have published contradictory statistics which has only served to muddy the waters. The European Commission will be publishing its own figures on 19 March 2008.
The telecoms industry is highly competitive and fully liberalised and is also subject to both legislation upstream and competition rules, and therefore focussing debate on the danger of a return to a monopoly situation is misplaced, argued Michael Bartholomew, Director of ETNO, which defends the interests of the historic teleocms operators. He said the urgent challenge was to allow the EU to catch up with the new generation networks, for which huge investment would have to be found. ETNO regrets that by suggesting the unbundling of networks, the Commission would only make the situation worse. Bartholomew said the unbundling section of the reform package contradicted the very spirit of the sunset clause stipulating that upstream rules would be purely transitional. ETNO wants management of the radio spectrum to be flexible and meet market needs to allow the full potential of digital convergence to be exploited and fill the digital divide by encouraging wireless broadband for rural areas.
ECTA, an association defending the interests of new telecoms operators, argues that the main source of competition - unbundling of the local loop - is seriously under threat because incumbent operators are trying to deregulate access to high-speed fibre optic networks. At present, incumbents hold a big share of the retail market (50%) which would rise to 80% on the new networks or even 100% in some countries if the incumbents manage to get deregulation accepted, fears ECTA. The new operators say that unbundling is an effective way of removing barriers to competition and reject the idea that unbundling discourages investment, giving the example of the United Kingdom, which has benefited from the unbundling of 4 million lines over two years, boosting investment in infrastructure by competitors, leading to a fall in prices and a growth of broadband networks. ETNO's figures dispute this, suggesting that the incumbents' market share is continuing to fall to the benefit of the new operators which now hold more than 50% of the market. ETNO says that broadband penetration has grown faster in Germany than in the United Kingdom (5.8% and 4.7% respectively in July 2007). (I.L.)