Progress on telecoms liberalisation patchy

Date: 26/11/1998

By Peter Chapman

THE European Commission's latest score card on member states' implementation of telecoms liberalisation shows the Union's efforts to put the necessary rules in place are largely on track.

But the report set to be presented to EU telecoms ministers by Commissioner Martin Bangemann tomorrow (27 November) shows that new competitors and customers in some countries have yet to feel the benefits of competition.

"The main message is that the telecoms regime is in a good way," said a Bangemann aide, who added that "most" of the EU's package of directives and recommendations designed to pave the way for market-opening on 1 January this year had been satisfactorily implemented. But he said the report also highlighted some major differences between member states, particularly on interconnection.

The study examined the rates which rivals were charged for connecting non-mobile calls to the fixed network of incumbent operators over three distance ranges, from local to long distance.

It found that Spain and Portugal were amongst the worst "offenders", with much higher charges than most other member states. Portugal's interconnection rate was a massive 392% higher than the 'best practice' found in the EU in one of the categories.

Portugal has been given the right to delay liberalisation until 2000, while Spain, which opened its markets in the middle of this year, has only recently announced lower rates which came too late to be taken into account in the report. "This illustrates the benefits of competition," said the Bangemann official.

The study found that the UK, Denmark, Sweden, the Netherlands and Germany were among the countries with the lowest overall interconnection rates.

Other benchmarks which yielded mixed results included the retail tariffs for national calls charged by incumbent operators to business customers and households for a typical 'basket' of calls.

The report concluded that business callers in Luxembourg got the best deal, with Spanish and Portuguese firms paying most for calls and those in Belgium, Germany, France, Ireland, Italy and Austria paying slightly above average for calls via national operators.

Among householders, those in Greece, Spain and Portugal pay much more than the European average for their calls, with Swedish and Luxembourg consumers paying the least.

On international calls, Britain - which has one of the EU's most liberal telecoms markets, massively undercut other member states on the price of calls to the US. However, there was much less variation in the cost of calls to Japan.

The Commission also found massive differences in the prices charged by major operators for leasing lines to rivals and corporate clients. Those in Denmark, France, Finland, Sweden and the UK were amongst the lowest, with Greece, Italy and Portugal charging the most.