DC08-105 3 April 2008
Keeping patchwork of telecoms regulations will cost EU billions of Euros
Study shows effective pan-European electronic communications services fundamental to economic growth in EU
Europe’s economy could benefit by as much as 1,300 billion Euros over the next 20 years with the development of seamless pan-European electronic communications services, according to a new study released by Indepen Consulting.
The study finds the EU’s current telecoms regulatory framework is handicapping efforts to boost productivity and competitiveness from ICT investment because it blocks the provision of Pan-European communication services to major business users. The study suggests that if regulatory reforms were implemented to solve this problem, it could boost EU GDP by 1.6 per cent to 2 per cent. This equates to an increase in wealth between 430 Euros to 510 Euros per person per year.
“Business users simply cannot obtain a single contract for fixed or mobile services with similar service levels in all member states. Instead they have to deal with a patchwork of inconsistent arrangements. This hinders the full use of IT applications to improve supply-chain management and re-engineer business processes on a pan-EU basis, often resulting in only partial implementation”, said Nick White, vice chairman of the international Telecommunications Users Group (INTUG).
“Investment in computers is not sufficient to improve productivity. They must also be linked effectively together”, said Ed Vonk, CEO of the European Virtual Private Network Users Association (EVUA). “Consequently, we need communications services with guaranteed levels of quality, reliability and security that can be ordered from anywhere in Europe and be delivered anywhere in Europe. If provision of such services remains fragmented along national lines, corporate users will be unable to take full advantage of the single market”.
As EU ministers gather for the informal Competitiveness Council meeting on 14 April they should be acutely aware that the current telecoms regulatory regime is not supporting the international competitiveness of EU businesses.
“This study clearly illustrates that a shift in mindset is required on the part of policy-makers”, said Luis Alvarez, BT president for EMEA and Latin America. “Competitive broadband services for private consumers are certainly an important part of building a European knowledge economy. But the current review of the EU telecoms framework must give equal attention to the different needs of multinational business customers which account for around 35 per cent of EU GDP.”
The study concludes that overall ubiquitous access, together with complementary measures, would generate benefits with a net present value of between 1,100 billion Euros and 1,300 billion Euros throughout the EU.
The report makes a projection over a 20 year period and uses three different models to quantify the potential benefits of a ubiquitous access network supplied under conditions of fair competition:
- Firstly, it estimates the potential benefits from increased market opening in telecommunications services and the corresponding gains from trade
- Secondly, it estimates the potential benefits from an increase in the rate of productivity growth coming from improved connectivity
- Thirdly, it estimates potential benefits to the way businesses organise their processes and get products to market, directly based on economic reasoning and survey evidence.
The study, “Productivity, Growth and Jobs: How Telecoms Regulation Can Support European Businesses” is written by Indepen Consulting and backed by INTUG, EVUA and BT plc.
