Review of the telecom regulatory framework: let’s not follow a path to “Monopoly 2.0”!
let’s not follow the path to "Monopoly 2.0”!
Brussels, 26 February 2015: The EU telecommunications markets have recently witnessed an increased trend towards consolidation via mergers and acquisitions and towards bundled offers. Those developments can lead, in certain situations, to oligopolistic and duopolistic market structures. ECTA welcomed the opportunity to participate in the BEREC Workshop on Oligopoly Analysis and Regulation and to share views on the development of the EU regulatory framework for the telecommunications sector.
National Regulatory Authorities (NRAs) have traditionally been focused on regulating markets characterised by Significant Market Power (SMP) of a single telecommunications operator (individual SMP), typically the former state owned monopoly. However, the development of duopolistic/oligopolistic market structures is intensifying, putting competition at threat. In that regard, BEREC, the Body of European Regulators for Electronic Communications, has recently asked the European Commission for guidance on the treatment of joint SMP, which is indicative of regulators’ increasing concerns about market concentration in both fixed and mobile markets.
Erzsébet Fitori, Director of ECTA underlined that the issue of joint dominance is a real challenge and one shouldn’t forget that tight oligopolies, just like monopolies have a dreadful effect on competition and thus on users’ benefits (consumers and businesses). This workshop is also the opportunity to recall that the principle of regulated access to enduring economic bottlenecks is equally essential for fixed line copper networks and in the transition to Next Generation Access Networks (NGA) to foster investments in infrastructures and innovative products and services. If fibre regulation is treated separately, the review of the regulatory framework will be the path to ‘Monopoly 2.0’
The latest Digital Agenda Scoreboard data1 published by the European Commission in May 2014 shows that former state owned monopoly operators have 86% market share of subscribers in VDSL.
A fact-finding exercise is thus needed on the most recent merger and acquisition processes and regulatory remedies at EU level as well as an analysis of market developments post-merger and in particular the impact on end-users’ (consumer and businesses) welfare. It is also essential to examine the dynamics in electronic communications markets leading to increased market concentration and oligopolistic structures and to provide guidance on how best to assess joint dominance in the electronic communications sector.
Hubertus von Roenne, Chairman of ECTA stressed that: "In the transition to NGA, high barriers to market entry remain. We call on policy makers to guarantee that alternative operators are able to compete, innovate and invest for the benefits of end-users. To that extent, we need an evaluation of how to make the legal concept of joint dominance applicable in practice in the context of ex ante regulation in the electronic communications sector. Indeed, there might not be a magical number of operators but 2 is definitely not enough”.
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.
Aurélie Bladocha, Public Affairs Manager (+32 2 478 78 61 00/ firstname.lastname@example.org