Europe’s Digital Deficit Study

Recent information concerning telecommunications access can be found at the ECTA website: Analysys Mason issued a study commissioned by ECTA on “Europe’s Digital Deficit” which examines the competitive state of Europe’s telecoms markets (with a particular focus on six countries) and impact on consumers and businesses. The report and press release issued by ECTA are available here.

Main conclusions from the report are that: 

• Lack of competition in European telecoms markets is costing consumers and businesses €25bln per year through inflated prices and depressed usage
• Uncompetitive broadband markets result in much lower broadband speeds for consumers. For example, where unbundling has been effective consumers are receiving 8MBit/s broadband for the same price as 2Mbit/s in less competitive markets.
• Analysys finds similar trends in a next generation environment. In countries where FTTx has been installed but is not open to competition such as in Germany and Belgium high speeds have been restricted or prices are high. Analysys estimates that the take-up rate of vDSL-based services in Germany could double if networks were properly opened, whilst in Belgium speeds would significant increase and prices fall.
• Competition is not developing as well as it should be in Europe. Market shares for dominant firms in broadband have remained stable or increased in some countries. There is also a worrying and persistent significant gap between the profit margins of incumbents and large scale entrants that may not be sustainable.
• Evidence from a survey of competitive operators and available data across 6 countries suggests potentially discriminatory conduct by dominant firms including refusal to supply essential inputs to competitors, margin squeeze and substandard service quality.

Policy-makers and regulators should act to promote competition including through examining the cost-base for access, effectively enforcing non-discrimination and ensuring next generation access networks are properly opened