Business leaders highlight E13 Billion cost...
BUSINESS LEADERS HIGHLIGHT E13 BILLION COST OF PROTECTIONISM IN TELECOMS
New study finds that pro-competitive policies could increase investment by a third
Business leaders representing some of the largest competitive communications carriers in Europe have called for President Barroso to take firm action to combat protectionist policies in telecoms. In a meeting with the European Commission President on 29 March, they identified barriers created by incumbents as the key blockage to greater investment and innovation for Europe's consumers and businesses.
These claims are supported by a new study European Telecom's Lost Investment, which found that improving regulation in telecoms could raise investment across Europe by as much as 13b. The SPC Network study analysed the results of 3 ECTA Scorecards measuring regulatory effectiveness and found that investment in countries with strong pro-competitive regulation was consistently higher than those where former incumbents had been allowed to continue to monopolise the market.
The finding comes at a time when President Barroso has called for a halt to national Governmentsâ support for national champions in the utilities sector in favour of more open markets.
"Whilst competition in telecoms is increasing, there are many aspects which - like utilities - remain in the grip of incumbents," says Stefano Parisi, CEO of Fastweb. "Addressing former monopolies and promoting investment in alternative infrastructures is key to remove the remaining barriers. Indeed, competitiveness in telecoms is vital to drive forward the European economy as a whole."
One of the countries which stands to gain most from a more active regulatory stance to promote competition is Germany, yet the Government is considering amendments to its telecoms law to protect its incumbent from competition in high-speed services. The SPC Study shows that Germany could perform far better and gain almost 50% investment - by opening its market fully to competitors, says Steen Clausen, Managing Director of ECTA. There is considerable scope for other countries to up their game as well.
Promoting competitiveness is a key issue for the European Commission this year as it undertakes a comprehensive review of the Telecoms Framework. At a time when Europe's economic performance is under intense scrutiny, we cannot afford for telecoms a key driver of growth - to be stuck in the slow lane, says Lars-Johan Jarnheimer, President and CEO of Tele2. The Commission should use this year's review of the telecoms framework to put competition and effective regulation at the heart of its agenda.
Head of Regulatory Affairs, ECTA
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Notes to Editors
Founded in 1998, the association looks after the regulatory and commercial interests of the alternative telecom operator community.
ECTA now has some 150 member companies - operators, service providers and suppliers as well as National Associations of such who all contribute towards regulatory policy development and participate in a comprehensive range of networking events, conferences, seminars, briefings and executive meetings.
ECTA works for a fair regulatory environment which allows all electronic communications providers to compete on level terms in order to multiply investment and innovation throughout an effective European internal market. The association represents the telecommunications industry to key government and regulatory bodies and maintains a forum for networking and business development.
ECTA operates a number of highly regarded industry events and its regulatory scorecards (available at http://www.ectaportal.com/en/basic276.html) have become the benchmark for measuring the level of competition in the EU member countries.
About SPC Network
SPC Network is a leading policy, regulatory and economics consultancy working for telecommunications operators around the world. Established in 2003, it has worked for over 25 clients in Europe, the Middle East and Asia Pacific. Amongst it clients are: Asia Pacific Carriers Coalition, BT Global Services, Cable & Wireless, Corning, Easynet, ECTA, The International Telecommunications Union, Jordan Mobile Telephone Company (Fastlink), Land Securities plc and ntl. For more information visit www.spcnetwork.co.uk
European Telecom's Lost Investment: An analysis of the ECTA Regulatory Scorecard was written by Richard Cadman and Chris Dineen. It can be downloaded free from the SPC Network website by clicking here
Data for the analysis are taken from the 2002, 2004 and 2005 ECTA Regulatory Scorecards and combined with investment data from the OECD and other economic data from the University of Groningen Growth and Development Centre (www.ggdc.net).