European Competitive Telecommunications Association

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Academic study confirms that more competition leads to better broadband performance 

Brussels, 14 April 2014: Eager to understand why some EU countries perform better than others when it comes to the availability, use and pricing of broadband services? An academic study released today by the Delft University of Technology (TU Delft) attempts to answer this question by exploring the differences in broadband performance between EU countries and identifying the key factors responsible for such divergences.

The academic study was commissioned by ECTA, the European Competitive Telecommunications Association, and involved the collection of data from regulators across Europe and the development of a complex statistical model. Despite the intricacy of the model, the main conclusions of the study are clear-cut. Competition plays a key role in ensuring that broadband markets perform well and thus the best performing broadband markets are those where there is more competition, namely where:

  • the historical incumbent operator has a lower market share
  • not only operators who own networks, but also those who provide services by having access to those networks, are able to effectively compete side by side  
  • the price paid by operators to access networks is lower (the higher the price, the more difficult it is for access operators to compete).

The study also shows that while regulation greatly influences the level of competition in telecommunications markets, it has no demonstrable direct impact on investment in broadband networks, in particular by the historical incumbent operators. ECTA has separately argued that regulation is essential to enable investment by alternative operators. This indicates to policy makers that caution is needed when trying to devise regulatory policies which aim at pushing investments at the expense of competition.

Tom Ruhan, Chairman of ECTA said "The idea that broadband markets perform better when competition is fiercer is intuitive and comes as no surprise. But having a statistical model reach this conclusion is very good news. The work which TU Delft has carried out reinforces our long standing founding advocacy principle – that competition is key to deliver the best outcomes for consumers.” 

Erzsebet Fitori, Director of ECTA said "At a time when the EU is about to start taking stock of the achievements of its regulatory model, robust academic evidence of the most important factors that deliver strong  performance in the broadband markets is most timely. Europe must build on its success story and continue ensuring that competition can flourish if it wants to remain a leader in broadband performance. Policy makers should not try to push investments by forging risky regulatory policies at the expense of competition. Just ensure that operators can compete with each other on a level playing field, address objective economic bottlenecks, and the market will do the rest.”

The study developed by TU Delft was carried out over the last three years and combines qualitative and quantitative research in broadband, namely the definition of a ‘Telecommunications Competitive Index’ to measure and explain differences in broadband performance. The analysis focuses on the period between 2008 and 2011. 

The TU Delft quantitative report can be found here. 

The TU Delft qualitative report can be found here. 

* * * * 

ECTA (the European Competitive Telecommunications Association - 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 and 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: Inês Nolasco, Senior Regulatory Affairs Manager (+32 2 290 01 03 /This email address is being protected from spambots. You need JavaScript enabled to view it." target="_self" style="color: rgb(0, 64, 142); font-family: "Myriad Pro", Arial, sans-serif; font-size: 13px;"> This email address is being protected from spambots. You need JavaScript enabled to view it.)

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