TELECOM MARKETS IN EU CANDIDATE COUNTRIES DON'T MEET STANDARDS
Telecom markets in European Union (EU) candidate countries (CC) differ significantly from one other and from those in EU member states, European Commission (EC) said in report. Report, 2nd of 4 semiannual documents, is under project funded by EC Directorate Gen. Information Society to help monitor progress of each CC toward compliance with EU standards for telecom services.
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Candidate countries’ problems complying with EU telecom standards “are tolerable,” EC Information Society Dir.-Gen. Fabio Colasanti said. He said problem was that in many CCs privatization hadn’t been completed and they “will have to implement both existing and new telecom” regulatory frameworks.
State holds controlling stake in fixed incumbents in 8 of 13 CCs that significantly affects competition in both fixed and wireless sectors, report said. It said incumbents in 8 countries had strategic investors and in 6 countries they also were publicly traded. Only 5 countries have made progress in carrier selection and only 3 in carrier preselection areas, report said, but most countries were planning to introduce both facilities next year.
Mobile penetration varies from 21% to 77%, and in most CCs is below EU average of 73%, report said. Most CCs have at least 2 mobile operators and in many countries operator usually has both GSM 900 and DCS 1800 licenses. UMTS licenses aren’t operational in any CC, report said, but some have been granted: 2 in Czech Republic, 3 in Poland, 1 in Slovenia. Report said level of mobile penetration in CCs correlated with level of GDP per capita more than with fixed lines penetration.
With exception of Cyprus and Malta, none of CCs reached lowest rate of penetration in member states, but many countries reported decrease in number of fixed lines. Trend is that number of standard telephone lines is decreasing in favor of ISDN and mobile lines, resulting in overall decrease in fixed lines’ penetration.
Total CC telecom market is valued at 24.8 billion euros -- only about 10% of estimated total value of telecom market in member states, where it’s 225 billion euros, report said. In many CCs, mobile market is prevailing over fixed market, which is undeveloped compared with member states. Growth of voice market in CCs dropped to 49% in 2001 from 60% in 1999, while mobile market grew to 45% from 36%.
Universal Service Obligation (USO) in most CCs is imposed on fixed incumbent operator by law, except for Cyprus and Romania, report said. It said USO recovery scheme was applied only in Czech Republic, where all operators were sharing loss according to level of their revenue. Provision of payphones is included in all USOs in CCs, but level of penetration significantly differs from 1.1 in Turkey to 4.9 in Malta. Generally, all national and long distance call charges in CCs are similar to EU average charges, report said.
Level of liberalization of local access across CCs is very low, report said. It said in most countries, Reference Unbundling Offer (RUO) wasn’t legally compulsory for fixed incumbent operator, but should become compulsory in 2003 in many countries. It said no alternative operator was providing voice telephony services to residential customers using direct access in CCs. Party and group lines are important potential barriers to introduction of local loop unbundling (LLU), it said. For example, in Bulgaria, party lines constitute 47.8% of all lines. xDSL penetration is highest in Estonia with 5% and Malta with 2.6%. It’s less than 1% for rest of CCs where lines are available.
Most of CCs have only one fixed significant-market-power (SMP) operator and no mobile SMP operators on interconnection market, report said. It said only Estonia had system based on current costs, but there were plans to introduce such systems in Czech Republic, Hungary and Slovenia this or next year. As of June, only 3 countries had published and 3 had drafted Reference Interconnection Offer (RIO), report said. In Hungary there are 5 drafts for 5 incumbent operators. Differences of interconnection charges among CCs are significant and further changes in that area will be necessary, report said. For all CCs with liberalized fixed telephony market, except for Hungary, fixed-to-fixed and mobile-to-fixed interconnection charges are equal. However, it said in more than half of countries market wasn’t liberalized yet, and fixed-to-fixed interconnection wasn’t applicable. It said most countries were planning to open market in 2003. Fixed-to-fixed agreements and related charges are applicable and available only in Czech Republic, Estonia, Hungary, Poland and Slovenia. Mobile-to-fixed interconnection exists in all CCs, report said.