Telecoms firm calls for end to ‘unfair barriers’

Date: 30/10/1997

TWO months before the full opening of EU telecom markets, a Belgian company is claiming that operators of services supposedly liberalised in 1993 could be driven out of business because of unfair barriers still in place.

The Belgian firm In Touch Telecom, which offers 'value-added' telecom services such as telephone cards and special fax and messaging products, is set to lodge a complaint with the European Commission over the failure of incumbent operator Belgacom to offer it the special interconnection agreements it needs to remain in business.

This latest row is a further embarrassment for Belgium in the telecommunications field, coming just weeks after Competition Commissioner Karel van Miert identified the country as a laggard in the run-up to full liberalisation on 1 January 1998.

In Touch managing director Alexander de Vos van Steenwijk says the value-added services his company provides were fully liberalised in 1993 under an EU directive. This should entitle firms like his to operate services and have access to fair interconnection on to the extensive networks of the former monopoly operators.

But De Vos van Steenwijk claims Belgacom persists in illegally charging the company the ordinary business call rate for connecting up In Touch customers with its national network.

He says that the threatened formal complaint to the Commission follows months of fruitless exchanges with Belgacom and regulatory authorities.

“I see very little movement in Belgium. The European Commission is the only institution that can speed things up. We will consider our actions at EU level within the next month,” he said.

“What is at issue is that there's no adequate tariff structure in what is supposed to be a free market and Belgacom has always rejected our approaches. If access costs are the same as the price charged to end-users, then no service provider like ourselves can make a margin. That is virtually the case now; our margins are paper thin.”

But Belgacom spokesman Yan Margot said In Touch did not have a telecom operator's licence and was not entitled to special interconnection rates. “We know there have been some problems with them, but we want to stress that they don't have a licence to become a telecom operator,” he said. “Belgacom respects In Touch as a client, but nothing more. If they want to have special rates, then they must be one of the recognised operators.”

The head of In Touch insists, however, that Belgian telecom rules, in practice, only deal with licensing for companies which run substantial fixed networks of their own.

In Touch, formed two and a half years ago, has yet to make a profit. In the longer term, De Vos van Steenwijk fears it could be driven out of business if Belgacom is not forced to backdate an interconnection deal.

“When we founded the company we projected that we would start to make a profit in 1998. But that is heavily reliant on us winning an interconnection agreement,” he said. “In the meantime, this painfully slow market access process is hindering the growth in innovative telecom services that are expected to make up half the total spending in the sector by the turn of the century. It is a scandal.”