Telecom Review

March, 2007

The Success and Failure of EU’s Deregulation of Telecommunication

EU countries are aware that deregulation is an effective measure to promote sustainable and steady economic development. Deregulation can increase competition, lower service price and boost the supply of richer telecom products. Though some disadvantages such as monopoly and abuse of rights still exist, EU has made remarkable achievements in specification and technology. Over the past 20 years since EU’s Telecommunications Act was carried out, all EU member states have been challenged by disputes on this Act. Especailly the worry and suspension on the competitiveness of mobile telecom market is still there. Unequal international roaming price and incompatible Mobile Number Portability (MNP) technology have forced EU to recast the current rules. As the competitiveness of telecom service is increasingly dependent on technological innovation and low cost, EU is amending its telecommunication regulations, which will be inclined to adopt the universal law of competition; it will also promote effective and transparent cost accounting so as to bolster up the existing market competitiveness, bring more benefits to customers, and make market forces the main power to regulate the market. Government intervention in competition and definite cost accounting are the main factors to drive market transformation. Meanwhile, the market transformation is also supported by national legislature, improved regulation system and effective management tools, and will in turn adjust the market forces so as to benefit operators and customers.

So far, Mobile Number Portability (MNP), international roaming tariff and mobile virtual network have been listed into member states’ National Rifle Association (NRA) and Europe’s agenda, and government intervention will be the driving force for market transformation again. In a short term, control on international roaming may shrink operators’ income or profit, but for a long term it will increase customers and promote consumption to create more profits. Billing on MNP shall be based on cost, or it won’t be attractive. So it’s very important to manage MNP billing at this phase.