European leaders push for plan for single telecoms market

European leader have called for the European Commission (EC) to publish a plan by October detailing "concrete measures to establish the single market in telecoms as early as possible."

The EC's commissioner overseeing digital and telecoms policy, Neelie Kroes, is said to have been working on proposals that would see a substantial revamping of Europe's telecoms sector that will include new rules on mobile spectrum, price regulation and merger and acquisition activity.

A source at a large telecoms operator told Reuters that a number of firms were lobbying for more consistent, pan-European regulations instead of the current system whereby Brussels sets guidelines that states often implement differently.

"All the large European telecom operators have talked to their governments and made their case for a single European supervisor," said the source, who spoke on condition of anonymity because of the sensitivity of the discussions.

Vodafone, France Telecom and others have indicated they would welcome a single EU regulator, something that many operators opposed in the past. ETNO, a lobbying group that represents the largest telecoms firms, welcomed the idea.

"ETNO now calls upon the Commission for a bold reform of the policy framework for the sector," the group said, according to the Wall Street Journal. "It should involve further deregulation to reflect changing market realities and improve incentives for investment, while at the same time allowing for more consolidation to achieve the necessary scale for a sustainable and competitive EU industry."

The larger operators have been asking for a relaxation in rules governing mergers, claiming that a reduction in operator numbers is needed in Europe to improve profits after four straight years of revenue decline.

Kroes and several telecom executives have suggested that Europe could eventually have four or five large operators serving customers across borders--similar to the U.S. and Chinese markets--resulting in healthier, more profitable companies able to invest more in networks.

But any move to a single, Brussels-based telecoms regulator will be fraught with political issues, with some countries wanting to keep control, for example, of lucrative mobile spectrum auctions.

A single European regulator would also need the support of the EU Competition Commissioner Joaquin Almunia. Another telecoms operator source told Reuters that, while Almunia might not resist this proposal, he has registered his view that mergers are not a cure-all for the telecoms sector.

For more:
- see this Reuters article
- see this WSJ article (sub. req.)
- see this separate Reuters article

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