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ETNO - Total Telecom Regulatory Summit EU Telecoms sector: change is needed to relaunch growth – Analysts confirm that lower copper prices discourage fibre investment

Date

30 May 2012

Sections

InfoSociety

BRUSSELS – On the occasion of its Regulatory Summit held today in Brussels with Total Telecom, ETNO calls for an innovative regulatory and policy approach to stimulate new business models and spur investment. The ETNO- Total Telecom Regulatory Summit, opened by Georg Serentschy, 2012 BEREC Chair, and Anthony Whelan, Head of Vice President Kroes Cabinet, has attracted about 200 participants from the EU Institutions, national regulators, industry, academics and investors.

Europe’s telecoms sector is at crossroads. Operators have to move from voice to data driven business models in order to monetize rapidly increasing data traffic and reverse the declining revenue trend. It is timely to assess whether regulatory rules are adapted to new realities, in order for all players in the EU telecoms sector to benefit from more flexibility to develop new business models and applications, in line with consumer needs. It is now the time for us within the industry to cooperate and look at what we share rather than at what makes us different. These are the conditions to make our sector stronger and more competitive on the world scene”, says Daniel Pataki, ETNO Director.

In Asia and the US the competition takes place on the basis of innovation. In Europe, too often excessively intrusive regulation blocks innovation. Such a situation creates a paradox: hampering innovation is hampering competition. In Europe, the way rules are applied does not enable operators to innovate. European citizens and consumers are not getting the full benefits that we could deliver to them. Profound changes in the industry should result in changes to regulation. Industry is committed to invest, but is expecting both the European Commission and NRAs to engage in a review of their policy that takes into account current and foreseen market conditions”, says Luigi Gambardella, ETNO Executive Board Chair.

Despite unprecedented growth in data traffic, driven by over the top applications and services, and continuous increase in broadband subscriptions, the overall revenue of the EU telecoms sector has declined by 1.4 and 2% in 2010 and 2011. Revenue is estimated to continue falling by 1.8% a year until 2015 unless operators would change their business models to generate new revenue streams.

On the occasion of the ETNO-Total Telecom Regulatory Summit, ETNO calls on the European to help reverse these trends through a change in regulatory policy that supports investment. One important tool in the hands of the Commission is next year’s review of the list of relevant markets, which presents an opportunity for the Commission to take a bold step towards deregulation.

It would be important to not only reduce the scope of regulation under the Recommendation but also to give more guidance on geographic market definition, encouraging de-regulation in those areas where platform competition is a reality, and to limit the application of remedies to essential elements needed to counter an identified market failure.

As reiterated by capital investors, in a next generation environment, operators should have flexibility in setting the price of access to fibre and engage in risk sharing agreements. Regulated prices on copper networks should moreover remain stable and should be allowed to rise where costs increase to provide continuous support for fibre investment. As confirmed at the ETNO/Total Telecom Summit by Charles River Associates, who carried out a study on regulatory pricing for the European Commission, lower access prices discourage investments in fibre

networks.

Finally, ETNO calls on the Commission to remove remaining obstacles to the deployment of new online services, such as connected TV or content, which will generate new revenue streams and improve the business case for investment.

For more information, please contact: Thierry Dieu, ETNO Director for Communications and Public Policy Tel: (32-2) 219 32 42 Fax: (32-2) 219 64 12 E-mail: dieu@etno.be

ETNO’s 40 member companies and 10 observers from Europe and beyond represent a significant part of total ICT activity in Europe. They account for an aggregate annual turnover of more than €600 billion and employ over 1.6 million people. ETNO companies are the main drivers of broadband and are committed to its continual growth in Europe.

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