Mobile network operators call for loosening of competition rules to help drive investment in Europe

Out-Law News | 07 Mar 2014 | 4:15 pm | 2 min. read

EU competition rules must be revised to allow for more consolidation in the mobile telecoms market, a number of major mobile network companies have said.

Reforms to the competition regime are "necessary" to drive investment in the industry and to help Europe keep up with developments in other global markets, they said.

The comments were contained in a letter from Global System for Mobiles Association (GSMA) director general Anne Bouverot to EU commissioner Neelie Kroes. The letter was endorsed by senior executives at companies such as Vodafone, Orange, Telefónica and Deutsche Telekom.

"We believe ... the evolution of Europe’s antitrust framework to support market driven restructuring and consolidation will be necessary for redefining the investment climate and driving Europe’s competitiveness," the letter said.

In September last year Kroes outlined a range of proposals designed to overhaul the regulatory regime that currently applies in the EU's telecoms market.

The plans include simplifying the licensing regime by allowing operators to conduct business across all 28 EU member states on the basis of a single authorisation from one of the national regulators. Currently the companies must obtain separate authorisations from each telecoms regulator in individual states.

However, whilst the plans outlined ways to ensure premium roaming charges are reduced for consumers, they fell short of sanctioning widespread changes to EU competition rules to allow for easier expansion of companies across national borders.

Telecoms companies have previously expressed frustration with the fragmented nature of the EU telecoms market and have said that the costs involved in investing in new infrastructure in new markets within the EU, as well as differing regulatory requirements in the individual countries, presents a barrier to cross-border operations. Many would like to see a loosening of competition rules to make it easier for operators to expand their offerings across more of the EU market.

In other reforms proposed in September, radio frequency spectrum, used by mobile network operators (MNOs) to transmit data to consumer devices, would be allocated on a harmonised basis across national borders. The European Commission would have the power to "harmonise spectrum availability, the timing of assignments and the duration of rights of use for spectrum".

In their letter, the mobile network operators said they would welcome more harmonisation in the release of radio frequency bands for their use.

"Broad and bold reform to the management of Europe’s spectrum assets is required," it said. "It should be focused on the timely release of new capacity that is harmonised across the single market, and allocated with the objective of driving long-term growth and investment."

The telecoms companies also appeared to raise concerns about the Commission's proposals to introduce new 'net neutrality' rules.

"Even-handed regulation across the value chain is needed to open up opportunities for all players to offer competing new internet services, together with innovative, interoperable and secure telecommunications services," the letter said. "Operators must have the commercial freedom to develop new business models, innovate at the network and service level, and offer customised services in order to restore the investment climate and drive innovation and competition in the global marketplace."

Under the Commission's original net neutrality plans, telecoms operators would face a general ban on "blocking, slowing down, degrading or discriminating against specific content, applications or services, or specific classes thereof" that they provide to customers. They would be allowed to undertake necessary and reasonable 'traffic management' measures, such as interfering with the serving of content to tackle child pornography, preserve network security or to deal with congestion on their network.

The Commission also opened up the possibility for telecoms providers and content producers to come to special agreements on the quality of service to be offered when consumers seek access to the producers' content, under certain conditions.

However, proposed changes to the Commission's original proposals by MEPs seek to limit the conditions for those special agreements to be put in place. GSMA, together with the European Telecommunications Network Operators' Association (ETNO), recently warned that the MEPs' proposals could effectively see the creation of two separate internets. It said this could impact on consumer choice and on the ability of EU telecoms operators to compete and innovate.