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Between 1999 and 2001, the value of telecommunications services in Europe rose 24% from Euro 182 billion in 1999 to 225 billion in 2001. The mobile sector alone grew by 32% in 2000 and 21% in 2001 in terms of revenue, while the average mobile penetration rate in Europe is now 75%, from 70% in 2001. Realistic estimates of growth in the telecommunications services market for 2002 in the combined national markets of the 15 Member States vary from around 5%2 to 7%3, slightly down on the 9.7% rise reported in 2001.

The report points to significant progress with carrier "pre-selection" (routing of calls to the alternative operator's network on the basis of the use of a call-by-call prefix by the customer or by default routing to a pre-selected carrier or carriers). 224 operators are using this service for the provision of local calls to residential users, that is, twice as many as last year, and 272 for long-distance and international calls (an increase of 27%).

Subscribers in all Member States have a choice between several operations for making their long-distance or international calls. In 12 countries, virtually all subscribers have at least five operators. In Belgium and Luxembourg the choice is more restricted (40% and 100% of subscribers respectively can choose between 3 and 5 operators). As for the number of subscribers making use of this facility, two countries stand out from all the rest; in Finland and Italy, 35% and 50% of subscribers respectively use a competing operator for these types of calls. In Denmark, Spain, France, Portugal, Sweden and the United Kingdom, the proportion varies between 20 and 30%.

As for prices, the report point to a wholesale reduction between August 2001 and August 2002, in spite of the increase noted in leased lined charges. Tariff rises for line rentals have been balanced by a 5% fall in the cost of national fixed calls provided by incumbents, and a 4% fall in international call prices since last year. While the rate of decline has slowed, the overall reduction for national calls has been around 50% since 1998, and for international calls around 40%. The Commission also notes that prices charged by new entrants are significantly lower than those of incumbent operators, with new entrant tariffs for national calls up to 56% lower and for international calls up to 65% lower in some countries.

Competition in the retail mobile call market has brought average monthly consumer charges down by 23% over the period 2000-2002, with most of the reductions taking place in the last twelve months. While incumbent fixed operators lost market share for long-distance and international calls during 2001, their share of the local call market stabilised at around 89% of the market in terms of retail revenues.

The Commission reports that penetration in the EU digital TV market rose slightly in 2002, to 21%, compared with 18% the year before.

In the DSL market (high-speed Internet access over copper subscriber lines), of the 7.52 million retail customers, some 5.86 million are in the hands of incumbent operators. This is blamed on the difficulties for new entrants in obtaining unbundled lines. The overall situation for broadband is somewhat different. Taking account of all platforms for the provision of access to high-speed Internet services, new entrants hold a 41% market share.

The Commission says the Member States can, in the prevailing financial situation, assist in the roll-out of electronic communications services by examining a number of additional burdens on the sector: "specific taxes on telecommunications services, disproportionate fees for the placing of infrastructure, including mobile antennas, on public land, and radio emission restrictions going considerably beyond those recommended at European level".
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Publication:European Report
Date:Dec 7, 2002

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