FEATURE CARRIER FOCUS


put forward a telecoms package reform for a single market for electronic communications, named ‘Te Connected Continent’. Its proposals are designed to facilitate access to


Daneil Pataki believes greater deregulation


across the entire telecoms sector in Europe is essential to bolster investments


all services, including the telephone and Internet, for consumers by relieving cross-border restrictions and unjustified additional costs. Key elements of the proposal included simplified EU rules, harmonised consumer rights, promotion of net neutrality across the continent, and of course the abolition of roaming charges on incoming calls as well as coordinated spectrum assignment for mobile operators. Speaking at a press conference marking the


release of the proposed legislative package, Neelie Kroes, vice-president of the EC in charge of the digital agenda, stated: ‘Current trends are unsustainable for our economy and without the infrastructure to compete, we aren’t going anywhere in any sector.’ Her EC research had highlighted how, for


example, investment in fibre-to-the-premises networks had been limited across Europe with most next-generation broadband connection provided through cable networks where further expansion isn’t expected. In contrast, Asia can claim the largest market for FTTx technologies with North America boasting some 50 per cent of the fixed broadband market served by cable with expanding FTTH coverage. Meanwhile, recent ETNO figures indicate that


the lion’s share of European countries, including the UK, France, and Germany, have at best a little over 40 per cent FTTx coverage and sparse FTTH penetration (see Figure 2). As part of her speech, Kroes emphasised


promoting growth in the fibre, as well as mobile telecommunications, sector by ‘cutting red tape and making it easier for new companies to invest


FALLING EUROPEAN OPERATOR RETURNS


In July 2013, The Boston Consulting Group, commissioned by ETNO, published its report: Reforming Europe’s Telecoms Regulation to Enable the Digital Single Market. Alongside single market proposals, author Wolfgang D Bock, and BCG colleagues reported startling figures. Between 2008 and 2012, Bock and colleagues


reckoned European telcos lost nearly €70 billion in aggregate market capitalisation while over-the-top digital service providers, device manufacturers and cable companies gained more than €200 billion. What’s more, the return


on capital for leading telco incumbents in France, Germany, Spain and the UK averaged 9 per cent


from 2007 to 2011. Over the same time, the average return on capital for leading access seekers – companies that rent infrastructure access from incumbents at regulated wholesale prices ranged from 13 per cent to 21 per cent. ‘These are long-term


trends that show no signs of abating,’ wrote Bock. ‘We expect revenues of


the European telecommunications sector to continue to contract over the next decade by as much as 2 per cent a year until 2020, representing a cumulative decline of €70 billion to €190 billion.’ And as the author


added: ‘This will further diminish investments in next-generation networks.’ As part of the report,


BCG and ETNO lay out the strategy and roadmap for reversing these negative trends, claiming recommended measures could deliver EU countries up to €750 billion in GDP growth and 5.5 million jobs. But, as Bock asserted,


all stakeholders, from government and industry, must act jointly for a ‘common benefit’.


@fibresystemsmag | www.fibre-systems.com


in new networks and new services.’ She painted a tired picture of how telecoms companies can operate in all member states but do not, because of different access rules and tariffs, and nationally enforced rules that take time and money to deal with. To this end, the EC proposes a single EU authorisation so operators only have to deal with one authority on licensing issues as well as a veto on national decisions to prevent over-regulation and inconsistent practice from national telecoms regulators. Te package also emphasises the need to apply pan-European non-discrimination obligations to prevent current preferential treatment of operators with significant market power. ‘Te aim is to gradually make the telecoms


sector a ‘normal’ economic sector with limited ‘ex-ante’ rules and responsibility shiſting to ex-post regulation,’ says Kroes.


The lion’s share of European countries have at best a little over 40 per cent FTTx coverage


‘Tis package is crucial for the telcos sector


itself... [and] is the biggest thing that the European Institution could finalise in 2014 to boost growth and jobs,’ she adds. ‘We hurt consumers, we hurt the economy and we hurt our strategic future if we don’t act, and we can’t wait.’ Many parts of the package have been welcomed.


As TeliaSonera’s Mobedjina says: ‘Price regulation is the part of regulation that primarily creates uncertainty [for us]. So the commission’s


20 FIBRE SYSTEMS Issue 3 • Spring 2014


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