Single EU telecoms market to boost economy by $140 billion: Kroes

European Union (EU) commissioner Neelie Kroes has said a single European telecoms market could provide the region’s economy by as much as €110 billion ($140 billion) annually.

In a speech delivered this week to the European Parliament in Brussels, Kroes said that Europe’s telecoms industry is lagging those in other parts of the world because of “border checkpoints” that discourage investment and weaken competitiveness.

European Union (EU) commissioner Neelie Kroes has said a single European telecoms market could provide the region’s economy by as much as €110 billion ($140 billion) annually.

In a speech delivered this week to the European Parliament in Brussels, Kroes said that Europe’s telecoms industry is lagging those in other parts of the world because of “border checkpoints” that discourage investment and weaken competitiveness.

“The rest of the world is racing ahead,” said Kroes. “America, Japan, Korea have 88% of the world’s 4G subscriptions; the EU has just 6%. Meanwhile, only 2% of European homes have superfast broadband.”

Kroes promised a new package of reforms in September this year that would “bring down borders” and “stimulate investment”.

“Quality communications for business could be worth €800 billion over 15 years,” she said. “Broadband could create two million jobs.”

The commissioner said that operators needed standardized ways of accessing fixed-line networks – such as “virtual bitstream” products – and more coordination between EU countries on the assignment of spectrum needed to provide high-speed mobile services.

Her reference to bitstream is interesting in light of recent moves in Germany, the EU’s largest member state, allowing Deutsche Telekom (Bonn, Germany) to block sub-loop unbundling (SLU) – previously favored by regulatory authorities as a means of fomenting broadband competition – if it provides a bitstream alternative.

The operator is set to roll out a technology called vectoring that boosts broadband performance but is incompatible with SLU.

Kroes’ remarks about spectrum harmonization will also provoke debate.

Many operators and national regulatory authorities want greater ‘liberalization’, allowing providers to run 4G technology over airwaves originally reserved for older voice and text messaging services.

In many cases, however, liberalization seems to be at odds with efforts to ensure operators are using the same bands to support particular standards.

Kroes also argued that roaming charges were a barrier to market development, but said operators would be compelled to abolish them in a true single market.

“It’s not by banning roaming charges that we create a single market,” she said. “Quite the opposite: it is by creating a single market that we will end roaming surcharges. A market where companies face the same competitive pressure to push down roaming prices as they do at home on their own network.”