“The opening of telecom markets to competition is certainly one of the EU’s success stories as can be seen by the downward trend in tariffs and better services. However, whilst 2.3% growth of the sector and 5% additional investment are good, they are not good enough in times when Europe’s competitiveness is a stake.” commented Viviane Reding, EU Commissioner for Telecommunications. “This is why this year’s reform of the EU's telecom rules must focus regulation on those key bottlenecks where competition is still not effective. In a sector where technology transcends national borders, regulators should pave the way for pan-European economies of scale that are in the interests of both operators and consumers.”
The Commission report takes a snapshot of Europe's telecom markets, worth almost €290 billion in revenues, just prior to the reform of the EU telecom rules. It includes individual chapters covering the situation in each EU Member State.
Highlights of this year’s report:
Lower prices and more consumer choice
Prices for a 3 minute national fixed telephone call have gone down from around 41.8 €-cent in 2000 to 25 €-cent today. The prices of domestic mobile services have decreased by up to 13.9% in the past year.
Moreover, more than 31.4 million mobile customers (up by 6.3 million) made use of their right under EU law to keep their number, when changing subscription from one operator to another. Of all Member States, Spain has the highest number of consumers choosing to do this (9.21 million). For fixed-line telephones, more than 15 million customers in the EU also switched operators in this way (compared to 7 million in 2005). In Sweden, it is already possible for consumers to retain their number, when switching to VoIP services.
Mobile markets are maturing
Revenue growth was 4.6% in 2006. With 478.4 million mobile phones in use, penetration in Europe is now at 103% of population (up from 95% in 2005). Penetration is highest in Luxembourg (171%), Italy (134%) and Lithuania (133%).
Fixed voice telephony: operators' revenues decline
Revenues decreased by between 4.5 and 5.1% in 2006. Competition continues to drive the market shares of the incumbents down; they are now on average at 65.8% of retail revenues in the EU25.
Competition drives fast broadband growth
Revenue growth was between 7.8% and 8.5% in 2006. More than 20 million additional broadband subscriptions were taken up in 2006, bringing penetration in the EU25 to 15.7%. The Netherlands (29.8%) and Denmark (29.4%) now have the highest broadband penetration rates in the world topping South Korea while seven Member States have higher broadband penetration rates than the US. Countries where regulators have imposed access obligations on the incumbent operator’s networks and where infrastructure based competition has started to unfold, are seeing the highest growth rates.
