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European Union Telecommunications and Information Technology Markets
Jan 2, 2001

Following the implementation of the EU’s eEurope Initiative set out in Lisbon in 1999, EU telecommunications markets experienced a sustained 9% growth rate over the last year according to the EU’s Commission Sixth Report on the Implementation of the Regulatory Package by Member States. The telecommunications market is now worth over €191 billion in 2000 with most of the growth in the mobile telephony market that grew over 20% in the last year. Data services and voice telephony experienced modest growth rates under 2% in 2000.

Mobile telephony penetration increased to 55% with more than 199 million subscribers. Competition has increased in the provision of voice services and data transmission and in 2000 over 460 providers offer long distance voice telephony and 388 operators offer local services. Over 82% of the EU population can chose from up to five operators for long distance calls and close to 45% of the population can chose from at least two domestic carriers. As a result, tariffs have decreased by 10.5% for business users and 4.6% for domestic consumers in 1999. The average price of an international call decreased by 15.1% for business users and by 13.5% for residential users. Leased lines traditionally used for national Internet traffic also experienced a dramatic decrease in charges of 30% in the period from 1997 to 2000, while prices for tail lines dropped by around 20%. Following the implementation of the EU regulatory framework interconnection charges decreased for double transit by 20.2% and by 6.5% for single transit.

However, internet penetration at 30% remains bellow the US 50% penetration level and with substantial disparities among member states. Mediterranean countries have penetration rates bellow 20% with Greece experiencing less than 10% penetration rates while over 50% of the population in Sweden and Denmark used the internet in 2000. Flat-rate pricing is not widely provided and only after incumbents adopt these type of schemes competitors follow suit. The United Kingdom, following a complaint by American Online, determined that the incumbent has to provide flat-rate wholesale Internet access to other operators to enable them to launch their own retail flat-rate packages.

The report identifies a number of areas were progress is yet to be achieved. In particular, license procedures are considered cumbersome in some cases, rapid and equitable interconnection remains absent in some member states, and negotiation of the physical requirements for the installation of new entrants’ equipment at local exchanges for the provision of local access services may require decisive regulatory intervention among other issues.

Source: Commission Of The European Communities. “Sixth Report on the Implementation of the Telecommunications Regulatory Package.” COM (2000) 814 Brussels, 7 December 2000.
The report is available at Europa.org or at SItrends Library Section.

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