Monday, July 29, 2013

EU single market for telecoms: international roaming major stumbling block

Neelie Kroes is aiming for a single market in the EU for telecoms. Everybody would agree with this concept, but there are several serious issues. Let's look at the main constituents of the single market:
  1. Net neutrality
  2. International roaming
  3. Harmonisation of regulation and spectrum management
All this would add 0.9% to GDP, or EUR 110bn per annum through innovation, new business models and enhanced demand.

1. Net neutrality: adapt or die
NN can be seen as a way to protect the OTT/CSP sector against blocking and throttling by ISPs. Competition at the services level increases, and ISPs (the incumbent) want something in return.
To ease regulation (open access to wholesale customers at layer 2 or 3) doesn't make any sense, however, because regulation covers the relationship between the incumbent and its wholesale customers, not the OTT/CSP sector.
It looks like this is just tough luck for the incumbents: times are changing, managed services are disappearing, adapt or die. They need to focus on broadband (fixed and mobile). And to die isn't all that bad (looking at it from a national security point of view), because infrastructure will always be an attractive asset, even when auctioned off in case of bankruptcy.

2. International roaming: not realistic
While sympathetic, this is as ambitious as leveling the price of bread throughout the EU. Costs (opex) vary dramatically across the EU, so how could wholesale (let alone retail) pricing of an MB be equalised?

3. Harmonisation: lengthy process
Operators would be allowed to do business across the EU - as if that wouldn't be possible today. Next, they could choose which regime to follow - which makes no sense. Harmonising spectrum is ambitious but sympathetic, with current license expiring at vastly different points in time.

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