A Digital Single Market for telecoms

The EU Digital Commissioner, Neelie Kroes, has indicated that the EU plans to accelerate its proposals for a single market for European telecoms. A draft proposal was set to be released in October 2013, however the Commission has now stated it will release an earlier blue-print of the proposals in June to allow parties to suggest amendments in advance, in order to speed up the approval process. Kroes aims to agree the final proposal before the 2014 European Parliamentary elections and to create a “fully functioning Digital Single Market” by as early as 2015[1].

The Commission has been contemplating a single market for telecoms since as early as 2005 when it began a consultation into how the single market could beneficially be extended into the sector. Some of the key measures proposed are:

  • a single European regulator with powers to make decisions at a regional level;
  • a harmonised legal framework with new rules and standards on mobile spectrum and cross-border mergers;
  • European-wide telephone numbers to cut out or equalise roaming charges; and
  • spectrum being set aside to be awarded on a European licence to operators.

It is hoped that these proposals will considerably boost European competitiveness, in particular as against countries such as China and the USA, where large-scale operators such as China Mobile, AT&T and Verizon have benefitted from a unified regulatory regime and economies of scale, allowing them to invest in crucial network infrastructure and deliver faster, cheaper services to customers. By contrast the fragmented European market, which is split at a regional level across the 27 member states, has hindered development, as operators have had to invest separately in each country and comply individually with their respective regulatory requirements. The Commission estimates that a single telecoms market could add as much as €110 billion a year to the European economy, being equivalent to 0.8% of GDP.

Whilst some consolidation of regional mobile networks has already been needed to develop 3G and 4G networks across Europe, a single telecoms market is also seen as key to the further development of a “5G” mobile network. Kroes is keen for European industry and research to pioneer “5G”, stating that the EU intends to devote €50 million to researching the technology, with the aim of it being widely available by 2020.

Kroes also hopes that the measures will deal conclusively with the controversial issue of roaming charges, either by cutting them altogether, or by implementing a single European roaming rate. Again, this compares to the current situation in the USA and China, where customers may move freely around the country without incurring additional charges.

The proposals are supported by ETNO (the European Telecommunications Network Operators’ Association), who are due to submit proposals to the EU for consideration ahead of the June deadline. However they may come into greater conflict on a regional level, where they risk dampening the power of national regulators such as Ofcom, and re-igniting national debates about how much control should be ceded to Brussels.

[1] http://blogs.ec.europa.eu/neelie-kroes/european-council-ict-single-market/ (all figures cited from this source).

First published on www.olswang.com on 23 April 2013

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