European Commission deregulates fixed line markets

The European Commission has confirmed that two fixed line markets will no longer be subject to regulation in Europe. The retail market for access to fixed telephony, and the wholesale market for fixed call origination will no longer be affected by price caps.

The Commission will also redefine two currently unspecified broadband markets, a move to minimise the regulatory burden on telcos in a bid to boost competition for broadband access and investment.

In an announcement, the Commission stated that a noticeable decrease in call volumes has caused the liberation of the fixed telecoms markets. It cited the rise of over-the-top (OTT) voice services, such as Skype, as the primary motivator for the deregulation.

“There has been a decrease in volume of fixed calls as customers have turned to alternative solutions, such as voice-over-IP (VoIP) and mobile calls, but also to alternative providers, like OTT players,” the Commission said.

“Also those customers who still use fixed telephony are now able to purchase fixed access from a number of different platforms, such as traditional telephone networks, fibre or cable networks, and also from alternative operators offering broadband and voice services over unbundled local loops, so competition has been increased,” it added.

Increasing competition within European telecoms markets has been the primary remit of the Commission’s Connected Continent and outgoing vice president Neelie Kroes is seemingly very happy with the most recently taken steps toward deregulation.

“Today I can announce that we can cut the number of regulated relevant markets. We are removing two markets from regulation all together – namely, retail fixed-line telephony, and wholesale fixed call origination. Plus we will redraw the boundaries, to further cut the burden, and focus on the distinct needs of business users,” she said. “This is cutting red tape, without harming competition. And that will boost European growth, jobs and opportunity.”

Kroes also urged the European Parliament to move towards complete deregulation and allow the development of the single market to continue.

“Maybe one day we can get that number (of regulated markets) down to zero,” she said. “We are not there yet. But we need to make it easier for operators to plan, invest and work across borders.”

“That is why I am pushing the European Parliament and Council of Ministers to complete that legislation as an absolute priority – end roaming, safeguard net neutrality, stronger spectrum coordination, and removing the barriers that obstruct a competitive, digital Europe,” she concluded.

As previously reported by Telecoms.com, deregulation of fixed price caps appeared to be a divisive issue between incumbent operators and challengers in national markets. The removal of caps, however, may provide a shot in the arm to what is a waning revenue stream for operators. The European Telecommunications Network Operators’ Association (ETNO) reported that fixed telephony revenues dropped by €5 billion in 2012 alone.