The European antitrust commissioner has again warned of anti-competitive effects telecoms mergers might have in national markets.
The comments were made during a speech by Joaquin Almunia in South Africa, and came just a day after European operators…
The European antitrust commissioner has again warned of anti-competitive effects telecoms mergers might have in national markets.
The comments were made during a speech by Joaquin Almunia in South Africa, and came just a day after European operators sent a letter to telecoms commissioner Neelie Kroes calling for simpler, more even-handed regulation that supports consolidation.
The letter, endorsed by the CEOs of Deutsche Telekom, Hutchison Whampoa Europe, Orange, Telecom Italia, Telefonica, Telekom Austria, Telenor, TeliaSonera, VimpelCom and Vodafone, sets out what the operators believe to be the key elements needed to develop a single European telecoms market that will drive growth.
It begins by noting that European telcos are facing revenue declines and decreased market values worse than in the US, Asia and other parts of the world, hindering their ability to invest in the infrastructure needed to return Europe to growth and restore its global competitiveness.
The companies contend that consolidation is needed to boost investment in the sector, saying the “evolution of Europe’s antitrust framework to support market driven restructuring and consolidation will be necessary for redefining the investment climate and driving Europe’s competitiveness”.
In his speech today, Almunia did not mention the letter, but said: “The industry says it needs to consolidate to invest in the next-generation networks. However, allowing fewer, larger players in individual EU countries would just reinforce market power at that level.”
But it was the Commission’s responsibility to protect the interest of consumers. “We are therefore assessing these telecom mergers with great care and will announce our decisions in the coming months.”
I their letter the operators also called for major regulatory changes, arguing outdated and unnecessary layers of regulation need to be eliminated. They also advocate more harmonised regulation across the European Union with consistent rules for all players, irrespective of the technology used.
“Even-handed regulation across the value chain is needed to open up opportunities for all players to offer competing new internet services, together with innovative, interoperable and secure telecommunications services,” the letter states.
Operators need the commercial freedom to develop new business models and innovate in order to drive investment and competition in the sector, the companies contend.
Regulations also need to be amended to improve privacy and security, the letter states.
A spokesperson for Neelie Kroes said that implementing the EC’s Connected Continent legislative package will begin to address these concerns.
“There is widespread agreement on the damage caused by Europe’s fragmented markets,” he said. “The first step in solving these problems is finalising the Connected Continent regulation. Further steps will need to follow swiftly after that.”
European Union parliamentarians delayed voting on the proposal for a single telecoms market in late February, citing procedural reasons concerning translations. They are expected to vote shortly, ahead of a whole parliamentary vote in the April plenary session.
