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Kroes Sees Potential for Telecom Consolidation With New Rule

Oct. 8 (Bloomberg) -- European Commissioner Neelie Kroes, who is leading a push to overhaul the European Union’s telecommunications regulations, said her proposals may ultimately lead to industry consolidation across the bloc.

“We have listened to industry concerns, so that pan-European deals can come onto the market, sustainably, available for all as soon as possible,” Kroes said at an industry conference in Brussels today.

Kroes’s regulatory framework calls for an end to roaming charges for phone calls and Internet use, as well as policies to make allocation of spectrum, the airwaves that carry mobile voice and data traffic, more uniform and predictable across the more than two dozen countries in the EU.

She’s met resistance from carriers that say eliminating roaming revenue is unnecessary since the industry would have eventually cut the charges anyway, and that it’s a burden for the companies that have been battered by price wars and the economic crisis.

“By introducing price regulation for certain competitive services, the proposal gives a negative signal to the investors’ community, because the perception will be that further regulation is always around the corner,” Luigi Gambardella, chairman of the European Telecommunications Network Operators’ association, said today at the event. Kroes’s plans aren’t all bad for companies, he added, saying “in other areas such as spectrum policy, the proposed rules would improve the investment climate in Europe.”

Pacifying Naysayers

Kroes’s aim is to pacify these detractors by reducing regulatory burdens, including taxes, and making rules across EU markets more predictable.

“We do have to look at taxation across the wider sector, and getting a level playing field,” Kroes said at the ETNO conference, co-hosted with the Financial Times. “That shouldn’t involve more regulation in the sector, but lifting regulation in competitive markets so that EU Internet providers can offer the services and connectivity Europe needs.”

The plan, which needs approval by EU governments and the European Parliament, is to make Europe operate more like a single country and to encourage mobile-data use across countries and adoption of high-speed Internet. Kroes said she envisions a market where big European operators do business alongside smaller local companies, including so-called over-the-top providers that sell services using other carriers’ networks.

“Bringing down barriers is ultimately good for the sector. But you can’t do that without removing roaming surcharges, without removing the arbitrary high charges for calling across borders,” she said. “That’s why I say: you can’t pick which bits you want from the menu. This isn’t a restaurant.”

To contact the reporter on this story: Amy Thomson in Brussels at athomson6@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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