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Kroes says telcos need EU regulation

Tuesday, February 26 14:14:48

Europe's top technology regulator called for more consistent telecom regulations to help create a true regional market for mobile and fixed services and boost investment in much-needed infrastructure.

European Union commissioner Neelie Kroes said the bloc's 27 member states needed to align their approach on mobile spectrum and fibre broadband, among other issues, or risk further weakening telecom operators' ability to invest in infrastructure and keep Europe competitive with the United States and Asia.

"We need a European telecoms market that is more coherent, more integrated, more efficient; with lower investor risks and higher investor rewards," said Kroes, according to a copy of the speech to be delivered at the Mobile World Congress trade show.

While U.S., Japanese, and South Korean telcos invest heavily in networks, Europe's players have been struggling to pay off debts as their ability to generate cash is hit by fierce competition and harsh regulation.

Europe has about 100 mobile operators to the United State's 6 and China's 3, leaving a fragmented market and wary investors.

As a result, Europe's telcos are building 4G and fibre broadband only slowly, leaving swathes of the region poorly covered and making the EU's target to reach 50 percent of the population with superfast broadband by 2020 look out of reach.

The situation has led many European telco executives to lobby the European Union for a more benign approach to mergers and acquisitions to reduce the number of operators, as well as softer regulation of mobile call termination fees and broadband.

Kroes said the Commission would be more aggressive in using the power given to it in the EU Treaty to pressure states to follow Brussels' guidance for the sector, especially on releasing more spectrum for mobile broadband.

The EU has authorised 1200 megahertz of spectrum for wireless broadband, but on average countries have only awarded 65 percent of it, she said.

Kroes' pro-investment message is likely to be welcomed by the bosses of Europe's big telcos such as Vodafone and Telefonica. But they will also have big questions when they meet with Kroes on Tuesday afternoon over how to translate the rhetoric into reality.

Among the most politically sensitive questions will be whether creating a true European telecom market would require having a single EU regulator instead of the current system of national authorities who implement guidance from Brussels.

Kroes has not publicly called for the creation of a single regulator. But conversations have begun in recent weeks among EU policy makers and telecom executives over the idea, according to two people familiar with the talks. Reuters