Berlin, September 22, 2008
Financial Chronicle
The European Union’s telecommunications commissioner is gearing up for the next phase of her effort to bring the Continent’s mobile phone industry under control and pass the benefits on to consumers.
“Since the beginning, the industry had been regulated at the national level,’’ Viviane Reding, the EU’s telecommunications commissioner, said during an interview. ‘‘Now, we need to gear up a step to use the logic of the single European market to benefit its 500 million citizens. We need to take measures across borders now to enable a stronger adoption of these technologies.’’
So far, Reding has taken the lead in bringing the industry to heel. She produced the first price controls on mobile phone service in Europe, setting limits on roaming charges beginning in July 2007. This week, Reding will ask the European Parliament to extend those roaming caps to mobile data and text messaging.
Reding, a conservative from Luxembourg, will also ask lawmakers to create a new European telecommunications agency with the power to harmonize calling rates and practices, and seek to give national regulators the power to force dominant phone companies to separate their service operations from the business of operating their transmission network — so-called functional separation — to encourage competition
She also wants to require operators to give competitors access to new high-speed fiber optic networks in exchange for access fees that would guarantee them a return rate of at least 12 percent on their investments in those networks.
Operators, not surprisingly, oppose Reding’s plans. They say the new price caps and the new regulatory agency would add to uncertainty in an industry where growth in spending on new networks slowed dramatically in 2007 to 1.4 percent, from 4.1 percent in 2006, according to the European Network Operators’ Association, which represents 41 operators in Europe, including all the major ones. ‘‘We’re looking at an estimated ¤300 billion in investment to build new next-generation networks in Europe,’’ said Michael Bartholomew, director of the network operators group. ‘‘Unfortunately, the proposal as it stands provides no incentives for companies to build those networks. On the contrary, it appears to give competitors the right of access, without having to share the investment risk. ’’Reding said increased regulation of the European wireless industry, which produced the market-leading GSM mobile phone standard and industry leaders like Nokia and Vodafone, is necessary because the mobile market has evolved into an environment where unwitting customers are often hit with excessive charges.
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