Liikanen targets weak links in telecoms sector

Date: 30/11/00

ENTERPRISE Commissioner Erkki Liikanen this week will target several weak spots he claims are blighting the EU's efforts to boost competition in the telecoms sector.

In an otherwise glowing annual report on the huge strides member states have made since the Union agreed to liberalise the sector in 1998, the Finnish Commissioner will voice serious concerns over licensing regimes, consumers' ability to choose rival carriers for calls, mobile markets and local competition.

On licensing regimes, Liikanen will warn that national regulators in a number of Union countries are still using procedures which are too rigid and overly burdensome on new entrants. The telecoms chief also will warn that customers in some member states are still denied the right, already enshrined in EU law, to pre-select a telephone carrier other than the one given them by default.

Liikanen will repeat his previous criticisms that mobile companies are demanding non-competitive prices to connect calls from fixed-line phones. Finally, in the local market, he will argue that the old monopoly operators have had an unfair advantage in the roll-out of fast new digital 'ADSL' services, which turbo-charge the traditional copper-wire networks running into homes and businesses to speed up Internet use.

In most cases, Liikanen will claim that draft telecoms laws which he unveiled earlier this year and which are currently being scrutinised by member states will put right these persistent problems.

The Commissioner also hopes that a new regulation calling on member states to force the former monopoly operators to open up their 'local loops' - the parts of the network which go directly into consumers' homes - will address competition concerns in local markets.

This regulation will permit rival firms to offer their own ADSL services by hitching a ride on the 'local loop' capacity, which they will be allowed to rent from the former phone monopolies controlling most of the existing local networks.

The local-loop unbundling takes effect at the start of 2001. But the rest of the proposed laws are not expected to make it onto the EU's statute books until 2003 at the earliest, meaning telecoms or competition officials may be forced to take interim action.

The Commission is still conducting a detailed 'sector' inquiry into parts of the mobile market - including 'roaming' charges for use of phones abroad - although clear conclusions have yet to emerge.

Aside from the doom and gloom, Liikanen is anxious to highlight more positive news in his forthcoming report. He will, for instance, present figures showing that overall, the telecoms market, buoyed by liberalisation, grew by 9% during 1999 and is now worth more than €190 billion.

Despite fears about the effects of competition in the mobile sector, an amazing 55% of EU consumers - 194 million in total - now subscribe to a mobile service. Tariffs on local, long distance and international calls also continue to plummet for both households and firms.

Enterprise Commissioner Erkki Liikanen is set to target several weak spots he claims are blighting the EU's efforts to boost competition in the telecoms sector. In an otherwise glowing annual report on the huge strides Member States have made since the Union agreed to liberalise the sector in 1998, the Finnish Commissioner will voice serious concerns over licensing regimes, consumers' ability to choose rival carriers for calls, mobile markets and local competition.