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European Commission outlines single telecoms market package

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The European Commission has outlined its plan for a single EU telecoms market. The package calls for the abolition of roaming rates within the EU, spectrum assignment to be coordinated across the continent, consumer rights to be harmonised across Europe, EU-wide protection of net neutrality and simpler rules across the EU to enable companies to invest more and cross borders with their offerings.

The package does not call for the creation of a single EU regulatory authority to govern all 28 member states.

The Commission plans to coordinate the timing, duration and “other conditions” of spectrum allocation. However, member state regulators would remain in charge of their auctions and will keep the spectrum fees that they raise. The EC said that coordinating spectrum assignment will ensure that Europe’s consumers get better access to 4G services and European operators will be able to develop more and efficient cross border investment plans.

The abolition of roaming rates within Europe is one feature of the package that has already been outlined in length by the EC. Incoming call charges for citizens within the EU will be banned from July 1, 2014, meaning that operators can either offer plans with prices that remain constant throughout the EU –  “roam like at home” packages – or allow their customers to opt for a separate roaming partner that offers cheaper roaming rates, without the need to purchase another SIM card.

Neelie Kroes, European Commissioner for the Digital Agenda is appearing at the Broadband World Forumtaking place on the 22nd – 24th October 2013 at the RAI Exhibition and Convention Centre, Amsterdam. Click here to download a brochure for the event and here to register for a conference pass.

“If your operator does not offer “roam like at home”  you can take matters into your own hands to avoid roaming charges,” said European Commissioner for the Digital Agenda Neelie Kroes. 

“When you travel you can simply choose another provider who will give you better rates using same SIM card, same bill. One way or the other, customers will be able to escape these high charges.”

Other new consumer rights include the right for all EU citizens to opt for 12-month postpaid contract, and for contracts to be written in “plain language”. The package also calls for more consumer protection and grants the right for customers to walk away from their contracts if promised internet speeds are not delivered.

Under the proposed package, blocking and throttling of internet content would also be banned, and users will be given access to “the full and open internet” regardless of the cost and speed of the plan they opt for. Operators and OTT players would still be able to provide “specialised services”, such as quality assured video on demand, as long as it does not affect the quality of experience received by other customers. Again, consumers will be given the right to walk away from their contracts if these conditions are not met.

Around 200 million Europeans are blocked from using the full internet today,” said Kroes. “We want all Europeans to have guaranteed right to full and open internet. Everyone in Europe deserves the same right to full internet- today 96 per cent lack this protection.”

The EC also plans to offer a single authorisation for operators to offer services in all 28 member states, rather than having to receive authorisation in each of the separate states. The plan also calls for further harmonisation in the way operators can rent access to networks owned by other companies, in order to provide a competing service.

And the package also aims to increase certainty for investors by further harmonising and stablising costs that incumbent operators may charge for giving others access to their existing copper networks; and ensuring that “access seekers” have truly equivalent access to networks. The EC said it wants prices for wholesale access to “next generation” broadband to be determined by the market rather than regulators, meaning less red tape for operators

Francesco Radicati, senior analyst with Informa Telecoms & Media, acknowledged that the abolition of roaming rates would help bring Europe up to speed with markets leading the rollout of LTE services, such as the US.

“In the US, most customers can go state to state and not have to pay roaming fees and it’s probably time we had something similar in EU,” he said. “A lot of operators have realised that people are switching off data when they go abroad – so the question is do they make less, or no money, from roaming?

He added that the call for the harmonisation of spectrum allocation may be difficult in the short term given that many EU markets have already held their LTE spectrum auctions, but acknowledged that it is a good move by the EC to put the industry on notice for the sale of spectrum in the future, when new technologies enter the market.

James Robinson, analyst for policy and regulation at research firm Ovum, noted that the many of the points featured in the package were predictable, given previous EC announcements, media reports and leaked documents. However, he maintained that a single EU telecoms market is a “great idea if it can come to fruition”.

“A European Commission report published in 2012 estimated an increase in revenue to mobile operators of €110bn. That’s a significant figure; 0.9 per cent of the European Union’s GDP. This will not happen immediately but over several years and the EC is looking in the medium term for the continent to become more connected and more of a single market. There are significant benefits for consumer s and businesses.”

However, the package is seen as controversial in some quarters. Bengt Nordström, CEO at telecoms consultancy firm Northstream, said he found it peculiar that the proposals have been drawn up without there first being a published analysis of the problems in the EU telecoms sector; specifically why it is lagging behind markets such as the US, Korea and Japan in terms of LTE rollout.

“It’s interesting to see proposals when you don’t know what they are based on,” he said.

He explained that he feels it does makes sense for roaming fees to be lowered within the EU, but whether this is the reason for the EU slipping behind other markets is questionable.

“If you say that the EU is lagging behind the US, Japan, Korea etc, it would be nice to see a study to analyse why we are behind. They could say: “Here are the findings and here are the measures we plan to implement.”

He added that in his opinion the root problem in Europe is the lack of coordination of spectrum, which can be achieved in the current format simply by promoting better coordination between national regulators. He added that in terms of pricing plans, EU markets tend already to be extremely competitive and suggested that the move could, to an extent, be a ploy for politicians such as Kroes to leave a legacy rather than addressing the fundamental problems faced in Europe by operators.

“All politicians work towards their legacy. Neelie Kroes is clearly in this situation given that these are the last years of her career,” he said.

“She’s working on her statue, and we’re paying for it.”


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