Operators fired up over EU red tape

25 Feb 2009

At the Mobile World Congress last week, telecoms at large, and mobile broadband in particular, were hailed as key to driving recovery from global recession. And regulation - concerning roaming, interconnect and spectrum allocation - was cited again and again by senior industry figures as being a huge obstacle to mobile operators being able to fulfill that role.

'Even in a crisis, regulators still punish carriers in terms of interconnect and roaming policy. Other things get stimulation support from government, so stop punishing us. We're rolling out essential infrastructure, yet they're still trying to get more cash out of carriers,' Lars Klasson, CTO and SVP, business area mobility services, TeliaSonera, complained last Tuesday at the panel session on Mobile and the World Economy in Barcelona.

Tom Wheeler, managing director, Core Capital Partners, who moderated the panel, agreed; 'If they expect us to invest, we can't have too big a regulatory overhang. Someone suggested a freeze on regulation telling carriers how they run their business during this crisis.'

'Regulators need to strike a better balance between protecting consumers and enabling operators to earn a living. The whole value chain is supported by operators, regulators need to make new spectrum available to them, not new taxes,' Simon Beresford-Wylie, CEO of Nokia Siemens Networks at the conference on Mobile Broadband.

'The key components [of LTE] will be ready by the end of 2010, but there are other obstacles, such as spectrum - a major issue for the effective use of LTE here [in Europe],' Hamid Akhavan, CEO of T-Mobile International, told a packed press conference on Tuesday.

Nevertheless, at the end of last week, the European Commission said it will enforce reduced interconnect fees, despite opposition from member states and aim to have a new regulatory framework in place by April, the Financial Times reported.

EU regulation has already cut roaming charges for calls and SMS, and plans to cap data roaming fees are under discussion. Twelve countries, including Germany, the UK and Spain, voted against plans proposed by Viviane Reding, the European telecoms commissioner, to cut interconnect fees.

Reding argues the charges should reflect the cost to the operator and higher fees prohibit competition and in effect force smaller operators to subsidise larger ones.

Interconnect costs consumers about 10 euro cents (13 US cents) a minute - the difference between calling a mobile phone and a fixed line. It accounts for about 20% of large operators' total revenues, including Vodafone, Telefónica and Deutsche Telekom, the FT said.

Given the defiant mood in Barcelona last week, it is clear operators and member states are not going to take this lying down. At the same time, we may see some horse-trading between blocs and the EC over spectrum allocation and the speed of that allocation.

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