TELE2: THE DEREGULATION OF THE EU'S TELECOM MARKETS IS ADVANCING TOO
Member States are taking too long to implement the EU's new regulatory
framework for electronic communications, according to a major new report
presented in Brussels today by Tele2. In the report, entitled 'Tele2 -
the Monopoly Challenger', the company presents its views on fixed
telephony subscription, carrier pre-selection, MVNO and ADSL and
suggests how the prevailing domination by the former incumbents can be
In March 2002, the EU adopted its new regulatory package for electronic
communications, with the deadline for implementation by Member States
having expired on July 25, 2003. Only a few Member States have so far
implemented the framework.
"Many of the EU's recommendations are still on hold in the Member
States, mainly due to the national regulatory authorities' shortage of
resources, or in some cases, failing interest", said Jan Tjernell,
Director of Regulatory Affairs at Tele2.
The report, which compares the regulatory situation in the EU and
Accession countries, stresses the importance of a rapid and uniform
implementation of the EU regulatory package.
"Even though Tele2, as Europe's leading pan-European telecommunications
company, has had the power to influence the competitive situation in the
right direction in a number of areas, most countries still have a
monopolistic situation when it comes to key areas like fixed telephony
subscription, carrier pre-selection, mobile telephony network access and
ADSL", said Tjernell.
In the report, Tele2 highlights how Denmark has solved the fixed
telephony subscription issue. Denmark is the only EU Member State so far
to have enabled alternative operators to offer fixed telephony
subscriptions. In addition, a maximum price level has been set, which
has had positive effects on consumers' total fixed telephony costs.
Sweden has also recently shown itself to be open to a discussion on the
subscription issue. Other countries could also follow the Danish example
if provided with sufficient information.
"Fixed telephony subscription is the most important issue that needs to
be resolved in order to lower consumers' costs for fixed telephony. We
must put an end to the former incumbents' habit of rebalancing lower
traffic prices with higher subscription fees. The only way to do this is
to let alternative operators also offer fixed telephony subscription",
Another important area regarding fixed telephony is carrier pre-
selection (a service that enables the caller to chose an alternative
operator without dialling a prefix). According to the European
Commission, carrier pre-selection has proved a highly successful means
of opening the market to competition.
"In order for carrier pre-selection to develop, the regulatory
conditions need to be constantly improved. Here Sweden serves as an
example. The ordering process for new clients in Sweden has been
simplified and clients now only need to make a verbal order instead of
sending a written confirmation", continued Tjernell.
Competition in the mobile telephony sector has long been thought to be
more effective than in the fixed telephony sector. However, both
competition and the macroeconomic gains would be greater if the Mobile
Virtual Network Operator concept (MVNO) were more widely accepted across
Europe. The MVNO concept opens the market to additional operators and
radio frequencies can be more broadly shared. In Sweden, Tele2 is a
network owner that lets other operators use its network, while in other
countries Tele2 is itself an MVNO.
"Because it solves the issue of limited frequencies and thus increases
competition, the MVNO concept results in a more efficient use of a
country's radio infrastructure. This creates a win-win situation for all
parties. Network owners receive a better return on investment, while the
MVNOs can offer a complete range of services. The main winners are the
consumers, as the MVNO concept helps lower prices and increases the
number of available services", according to Tjernell.
Tele2 also believes the national regulatory authorities should devote
more attention to strengthening the competitive environment surrounding
ADSL. Internet services can be provided in many ways, but ADSL is the
only real mass-market broadband product.
"If EU Member States are serious about wanting to boost Internet
penetration, they need to address the ADSL issue much more decisively.
Today, alternative operators experience an unreasonable margin squeeze
between the wholesale price and the end-user price. The former
incumbents are still not giving alternative operators access to ADSL
under cost-oriented conditions", said Tjernell.
This autumn Tele2 has intensified its contacts with Europe's national
regulatory authorities to discuss fixed telephony subscription, carrier
pre-selection, MVNO and ADSL.
Tele2 is the only pan-European telecommunications company that did not
begin life as an incumbent. Tele2 operates in most EU Member States and
in several of the Accession States. The report 'Tele2 - The Monopoly
Challenger' was recently presented to Erkki Liikanen, European
Commissioner for Enterprise and Information Society.
Jan Tjernell Telephone: +46 8 562 640 00
Head of Regulatory Issues, Tele2 AB
Dwayne Taylor Telephone: + 44 20 7321 5038
Visit us at our homepage: http://www.Tele2.com
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