Almunia over telecom in Europa:
The telecoms markets
Ladies and Gentlemen:
The work that the European Commission is devoting to the telecoms industry will be my last topic for today.
Earlier this week the Commission approved a new "telecoms package". I believe that the draft legislation we approved is a step in the right direction towards a Single Market for telecoms, but indeed there is still a long way to go.
A well-functioning telecom sector is of crucial importance to consumers and businesses. Its role in providing innovation and connectivity means that it can boost productivity and competitiveness across many sectors of the economy. In particular, the telecom sector is a key factor that can allow the Digital Economy and its services to flourish.
Telecom companies are in the press these days also for the wave of consolidation that is sweeping the sector. As you know, a number of mergers have been announced over the last few months.
Some of them, such as Vodafone's proposed acquisition of Kabel Deutschland, merge a mobile network operator and a cable operator in the same Member State. We are currently reviewing the deal.
Other transactions will combine mobile network operators in the same Member State, such as the H3G’s acquisition of O2 Ireland and Telefónica’s acquisition of KPN’s business in Germany.
Last but not least, investments and acquisitions recently announced on both sides of the Atlantic, involving EU and US companies, go well beyond our national or European borders, showing how global strategies have increased in the last period.
But here, we are confronted with a paradox. Some strategies have a global scope, but the relevant markets for our enforcement work are still national.
Despite the package we adopted this week, the completion of a genuine Single Market for telecommunications services will take time. We do not expect market structures to change from one day to the next, and therefore we will likely continue to assess these mergers on the basis of national markets – at least for some time.
And this is a shame, because a genuine Single Market for telecoms would give a much needed boost to our economy and would help European integration.
The direct benefits of a Single Market for telecoms would be very important according to all the estimates available, and the potential spill-over gains in other sectors would add even more efficiencies and returns.
But the question is: what can one mean by a genuine Single Market for telecoms? Let me give you three quick answers.
First, it would be a market where customers can obtain services from any of the operators present in the EU, regardless of location;
Second, operators from any Member State could offer their services competitively to end customers throughout the EU; and
Finally, in a genuine Single Market customers would not have to pay extra charges for intra-EU calls, or for roaming within the EU – which is one of the provisions included in the Regulation approved this week.
Why is this not achievable in a shorter time-frame? The answer should not be addressed to Brussels.
The obstacles against the creation of a single telecom regulator at EU level come from market participants and national capitals.
Market participants should also resist the temptation to use their commercial behaviour to create artificial barriers to intra-EU trade. Some mobile operators, active across several Member States, do not behave as truly European operators. This needs to change.
As to Member States, they need to commit to the goal of achieving a single EU market in mobile telecoms.
For instance, without a true coordination of timing and conditions for the allocation of spectrum across Member States, the development of truly pan-European players will not be possible.
Ladies and Gentlemen:
I have come to the end of my review of the many ways in which competition policy can protect and promote innovation.
I have mentioned first how our new State aid rules will include simpler and clearer rules for well-targeted aid for R&D projects.
I have also discussed the threats that certain anti-competitive practices pose to innovation.
Finally, I have reviewed what we can do as a competition authority to create positive market conditions, especially in the more dynamic markets with a good potential for growth.
Now that an economic upturn looms on the horizon, we need more than ever the firms that can challenge established companies and disrupt markets.
We need to make room for the more competitive business models they are developing and the new products and services that they can bring to the market.
Above all, we need the invigorating push of innovative firms to improve economic dynamism and boost productivity in Europe.
Thank you.