Telecom market to become more unified

THE EUROPEAN Commission is gradually arriving at a plan to create a single telecom market. It introduced on September 11 a plan to scrap roaming fees, give more rights to telecom operator customers and reduce red tape for firms active in the market. The Slovak Transport Ministry, responsible for the telecommunication sector, welcomes the changes, but says some details are missing.

Rules for using phones will change.Rules for using phones will change. (Source: AP/SITA)

THE EUROPEAN Commission is gradually arriving at a plan to create a single telecom market. It introduced on September 11 a plan to scrap roaming fees, give more rights to telecom operator customers and reduce red tape for firms active in the market. The Slovak Transport Ministry, responsible for the telecommunication sector, welcomes the changes, but says some details are missing.

The ‘Connected Continent’ legislative package prepared by the EC proposes to establish a system in which customers travelling to any European Union member state can “roam like at home”, which means they will pay the same prices for calls, messages and data downloaded abroad as in their homeland. Moreover, even prices of calls made from their home abroad should be the same. Customers will also have the right to switch their mobile providers more easily, and to use the internet without unnecessary restrictions.

The EC is introducing several ways to support companies’ investments in the telecom sector and build broadband data networks and reduce the red tape when entering someone else’s network. It suggests that states carry out competitions over licences to mobile networks at the same time. Brussels will have the right to veto national decisions if it finds the terms of sale were unfair.

The changes are “great news for the future of mobile and internet in Europe” as they will stop roaming premiums, but also support net neutrality and investments and create new jobs, said European Commissioner for Digital Agenda Neelie Kroes.

“Fixing the telecoms sector is no longer about this one sector, but about supporting the sustainable development of all sectors,” Kroes added, as quoted in a press release.

The new rules will become valid after they are cleared by EU member states’ leaders and the European Parliament.

Slovakia responds

The Transport Ministry said it agrees with the aim of creating a single market for electronic communications, including establishing clear rules over net neutrality and increasing consumer protection. Yet, it warns that the proposal lacks impact analyses on market subjects. The reform “might have a negative impact on the stability of the regulation regime and will also significantly affect the operation of European operators”, ministry spokesperson Martin Kóňa told The Slovak Spectator.

He also described the time schedule for adopting the new rules as too ambitious, saying that it might have a “negative influence on the quality of the legislation”, and also on the market.
“The actual impact on the Slovak market will depend on the final version of the approved regulation,” Kóňa added.

Peter Steigauf, a reporter with the website, said that with the proposal the EC “openly challenged roaming fees”, which is a positive message for customers.

“The introduced legislative package also includes changes in the area of regulation, which will not directly affect the customer,” Steigauf told The Slovak Spectator.

Mobile operators active in Slovakia however declined to comment on the changes. The proposal is not final yet, said Martin Vidan, spokesperson for Slovak Telekom.

Fight against roaming fees

The EC introduced the first rules to address overcharging roaming fees in 2007. The so-called Eurotariff capped the maximum prices for phone calls made and received abroad. These prices apply to all consumers, unless they opt for special packages offered by operators. These rules have since been periodically reviewed and reformed, with further reductions in price caps and automatic protections against data roaming bill surprises, according to the EC.

The most recent roaming price reduction occurred in July, when the EC capped retail prices at 45 cents per Megabyte (MB) for data transmission, 24 cents per minute for made voice calls, 7 cents per minute for received voice calls and 8 cents per text message. The prices will fall to 20 cents per MB for data transmission, 19 cents per minute for made voice calls, 5 cents per minute for received voice calls and 6 cents for text messages as of July 2014.

The wholesale caps stand at 15 cents per MB for data transmission, 10 cents per minute for voice services and 2 cents for text messages. As of July 2014 they will fall to 5 cents per MB for data transmission and 5 cents per minute for voice call service. The cap for text messages will not change.

The EC reform is now proposing that operators will have to offer their clients travelling abroad the same prices as if they were home. If not, the customer will be allowed to buy free minutes and data from foreign operators, but without buying a new SIM card.

Moreover, customers will no longer have to pay an extra fee for calling abroad from their homeland. While there will be no charges when using a fixed line, the EC proposes caps for fees for mobile calls at €0.19 per minute, including VAT.

Supporting internet and investments

The operators will also no longer be allowed to block or limit internet content. They will have to give their customers access to the full and open internet regardless of the cost or speed of their internet subscription. The companies will still be able to provide so-called specialised services with assured quality, i.e. IPTV, video on demand, or applications including high-resolution medical imaging, if they do not slow down the internet speed.

Additionally, users will have the right to check if the internet speed corresponds with the speed they are paying for. If not, they will be free to terminate the contract, the proposal reads.

Regarding the rights of consumers, the EC proposes to harmonise the contracts, which means it will set the size of letters and the extent of the information provided, and add data allowing customers to compare the terms with those offered by other providers. Moreover, it plans to expand the list of reasons for customers wishing to change the operator or contract, and to allow the forwarding of emails to a new email address after switching internet providers.

The new proposal also focuses on companies active in the telecom sector. The EC wants to establish a single authorisation for operating in all of EU 28 member states, and set a threshold for regulating the sub-markets, which might result in a reduction in the number of regulated markets.

Moreover, mobile operators will be able to develop more efficient and cross-border investment plans, thanks to stronger coordination of timing, duration and other conditions. This will ensure that users get more 4G mobile access and Wi-Fi.

Finally, the proposal focuses on increasing the certainty for investors and the funds they invest in this sector. It also plans to reduce divergences between regulators. This means that the fees providers charge for accessing their network will harmonise and stabilise, and that those who want to access the network will have truly equal access to all networks. These measures might reduce red tape for operators.

Possible problems

The share of telecommunications in Europe’s digital economy currently stands at 9 percent. Though the EC has already implemented several reforms to change the system of offering services, there are still 28 individual markets offering their own prices and rules, reads the EC press release.

“So this package is essential for Europe’s strategic interests, economic progress, for the telecoms sector itself, and for citizens who need full and fair access to telecoms services such as internet and mobile services,” Kroes said.

Yet, Steigauf questions whether the new measures “will really be able to impact economic progress or competitiveness”. Moreover, some media outlets reported that several national regulators are afraid the reform might strengthen the position of Brussels, he said.

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