ECTA CEOs meet Vice President Neelie Kroes
ECTA CEOs meet Vice President Neelie Kroes
Competition in telecoms is key to unlock Europe’s investment and growth potential
Brussels, 27 November 2012: Today a delegation of CEOs from the member companies of the European Competitive Telecoms Association (ECTA) met with the European Commission’s Vice-President Neelie Kroes to urge her to ensure a fair balance between investment incentives for dominant operators and pro-competitive measures fostering challengers’ investments and the growth of the sector.
The meeting took place in Brussels at the annual ECTA Regulatory Conference. CEOs from Cyta Hellas, Hellas Online, Iliad, Netia, Play, Versatel, Voxbone and WIND Telecomunicazioni called on VP Kroes to duly consider the central role that challenger telecoms operators have been playing in the fast growth of broadband markets in the forthcoming recommendation aimed at enhancing investments and demand for next generation broadband.
"Challenger telecoms operators have not only been the leading product innovators but also made broadband affordable for consumers, which in turn led to an exponential market growth and accelerated investments in broadband. The European model for competition has secured a leading position for the EU in the take-up of broadband. Europe shoots itself in the foot if this growth generating competitive dynamic was weakened at a moment when we are desperate for economic growth” said Tom Ruhan, ECTA’s Chairman. "Today’s meeting confirms that alternative operators are genuinely committed to invest in next generation networks if a sustainable economic space is guaranteed” Mr Ruhan continued.
In an effort to boost investments by dominant operators, the European Commission is currently working on a Recommendation that aims at stabilising and aligning wholesale network access prices in Europe to the current average level and gives dominant operators pricing flexibility when they partly or fully upgrade their networks.
In order to balance this approach VP Kroes also promised to tighten non-discrimination rules aimed at ensuring a level playing field and that dominant telcos offer wholesale services on the same terms to all wholesale customers including their own retail arm. Accordingly Neelie Kroes assured ECTA members: "I want to secure truly equivalent access by alternative operators to incumbent networks. That is probably the most important guarantee of sustainable competition. Overall, I think the Commission is supporting a balanced package for competition and investment."
"Given the track record1 of dominant operators to abuse their market power and squeeze the margins of their competitors a key element of a balanced approach is the effective prevention of margin squeeze” added Erzsebet Fitori, ECTA’s Director.
National regulatory authorities should check systematically that dominant operators are not squeezing competitors out of the market and distort competition ultimately to the detriment of consumers.
There is a particularly high risk of abusive pricing when wholesale access charges are increased without an increase in the underlying costs or dominant firms are given pricing flexibility. The Commission should make sure that such abuses of dominance are effectively prevented otherwise the benefits of competition enjoyed today by consumers and the growth potential of the sector could be seriously undermined.
Vibrant competition in telecoms is key to achieving the Digital Agenda targets and driving Europe out of the economic crisis.
Unless robust pro-competitive rules are implemented alongside investment incentivising measures dominant operators will regain monopolistic positions on next generation networks on which they already benefit from market shares approaching 100%2.
ECTA urges the Commission to open a public consultation on the draft Recommendation to enable all stakeholders to consider the impact of these highly technical and complex measures on their business cases and markets.
1 Abuses of dominant position and violations of competition law by dominant telecom operators are still very common. In 2011, for instance, the Commission fined Telekomunikacja Polska EUR 127,5 million for unlawfully refusing to grant alternative operators access to its wholesale products for more than four years. In 2012 the EU Court of Justice confirmed the conviction of Telefónica de España for unfair pricing behaviours. For more information see EC Competition website: http://ec.europa.eu/competition/sectors/telecommunications/broadband_en.html
2 See WIK’s NGA Progress Report of 6 March 2012 available at http://www.ectaportal.com/en/REPORTS/WIK-Studies/NGA-Progress-Report-6-March-2012/
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ECTA (the European Competitive Telecommunications Association - www.ectaportal.com ) is the pan-European pro-competitive trade association that represents more than 100 of the leading challenger telecoms operators across Europe. For over a decade, ECTA has been supporting the regulatory and commercial interests of telecoms operators, ISPs & equipment manufacturers in pursuit of a fair regulatory environment that allows all electronic communications providers to compete on level terms. Our members have been the leading innovators in Internet services, broadband, business communications, entertainment and mobile. Contact: Federico Poggi, Senior Manager Public Affairs (+32 2 290.01.03 / email@example.com ).