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• W194324128 abstract "EU's five-year-old dream of a uniformly wired and regulated Europe is still just a gleam in Eurocrat's eyes It is five years since the European Union laid out a regulatory framework for the liberalization of member states' telecommunications industries, and in that time billions of dollars of private funds have been invested. For the countries that have led the way, such as the United Kingdom - which had a head start of almost 15 years over other members - and Finland, the result has been an upgraded telecoms infrastructure, a host of new entrants, better service, and lower prices. The picture is rosy, said the EU's telecommunications commissioner Martin Bangemann when he released his annual progress report early in 1998. Yet the fact that in principle anyone can now own or operate an EU telecoms company does not mean that Europe has achieved an optimal level of competition, nor that it will do so in the near future. Although the European Commission set 1998 as the deadline for deregulation, it will take years for market forces to have their full effect, as the experiences of the United Kingdom and the United States have shown. pace at which these forces take hold in terms of price levels, degree of competition, service quality, and even the kind of infrastructure available will vary by country, determined by their different starting positions and, more important, by the many decisions still to be made by local regulators. A uniformly wired and regulated Europe is still no more than a gleam in Eurocrats' eyes. Pricing questions Liberalization has sent prices for long-distance and international calls tumbling - by more than 40 percent in two years in the case of France. Experience in other countries indicates that this trend will continue as operators begin to charge prices based on the actual cost of providing these services, although the monthly charge for a telephone line is likely to rise to comply with an EU directive that forbids operators from subsidizing currently unprofitable businesses with high-margin long-haul traffic. Price convergence across Europe remains a long way off, however. A three-minute 250 kilometer peak-time call costs the equivalent of US$9[cents] in Sweden and 87[cents] in Germany, while a monthly line rental costs US$19.60 in the United Kingdom and only $8.13 in Spain. How far and how fast these gaps are closed will be influenced by the extent to which local regulators try to control market forces. European Union holds little sway in this area. Local regulators have the power to determine the number of competitors in a market, for example, because they decide who receives a licence. To date, Belgium has licensed two new entrants to provide all of its fixed-line telecoms services, the Netherlands more than a dozen, and Italy none. Regulators also affect prices by setting the cost of entry. In Sweden and Denmark, mobile licences have been free, but in the Netherlands, they are being auctioned, which may mean an expensive entry ticket for would-be participants. In Belgium, the two mobile operators Belgacom and Mobistar (75 percent owned by France Telecom) - have had to pay $243 million each for a licence. There is also a more direct form of price control at regulators' disposal. European directives apart, most operators want to raise the price of their monthly line rentals in line with costs to make up for lost long-distance and international business. Some would also like to raise charges for customers in remote rural areas to reflect the higher cost of serving them. But claims by customers that higher line rentals amount to a monopoly abuse, and that raising charges in rural areas would undermine the principle of universal service, give regulators grounds for imposing price caps. Regulators are also all-important in determining other aspects of liberalization that will ultimately affect the cost and quality of services and operators' competitive positions. …" @default.
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• W194324128 date "1998-03-22" @default.
• W194324128 modified "2023-09-25" @default.
• W194324128 title "Full Telecom Competition in Europe Is Years Away" @default.
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