Interconector difficulties for telecoms

Date: 29/10/1998

By Chris Johnstone

NEARLY a year into supposed full liberalisation, competition in the EU telecoms market is beginning to bite.

Alex Schaub, director-general of Karel van Miert's competition department in the European Commission, insists the evidence is there for all to see.

“Only a few years ago, all telecommunications services in Europe were, with one or two notable exceptions, available only from the monopoly national provider,” he said. “Now we have over 500 local loop operators and nearly 100 mobile telephone companies in Europe, with more joining the market every day.”

Schaub warns operators that abusive interconnection pricing is “the most important area” in which competition rules will be applied over the coming months.

“When the monopoly structures of telecoms in Europe were demolished, each telecoms operator had to agree interconnection rates with other operators. Not all of these discussions have been successful and some companies have complained to the Commission or to the national regulatory authority,” he said.

But just as competition brings more operators, it also exposes firms to the realities of the market. Some, such as the highly regarded UK operator Ionica, are already facing serious difficulties.

In the meantime, the Commission is preparing to review the package of market-opening legislation, a process which is due to be completed before the end of 1999.

The institution will award study contracts to telecoms consultants to look at the scope for updating the rules, and follow this up with discussions early next year with industry, member states and consumer groups before considering whether fresh legislation is needed.

The move comes as Ireland, originally granted a delay until January 2000, prepares to open its market fully before the end of 1998. Spain did so earlier this year, despite being offered a postponement until December.