Reforms introduced eight years ago to open the telecommunications market have cut prices and offered customers new services, but some former state monopolies retain too strong a grip, the European Commission said on Monday.
"Some markets are not open enough to competition," EU Information Society and Media Commissioner Viviane Reding said. Some incumbent companies retain too much control over fixed-line and mobile markets, the report from the EU's executive arm said.
It also said there was a particular need to cut the cost of using mobile phones abroad. Reding expressed concerns about Deutsche Telekom's proposed 3 billion euro (US$3.56 billion) high-speed network. The commission wants to ensure such infrastructure is open to competing operators.
Monopolies
"The future of our telecom market is not in the establishment of new monopolies to replace the old, which over the years we have managed to dismantle," Reding said at a news conference.
The former German state-owned telephone company plans to roll out a high-speed optical fiber network that will transmit data up to 20 times faster than current offerings. The plan is to provide Germany's 50 largest cities high-speed broadband lines by 2007.
The German government originally had agreed with Deutsche Telekom's argument that it could only make a decent profit on the network if it was exempt from any requirement to offer its lines to rivals. The commission called the arrangement unfair.
Although the two sides agreed in December that the network would be regulated and competitors would be given access to the new network, the extent of the regulation hasn't been determined. In particular, the question remains open if the markets such as "triple-play" services for TV, Internet and Web-telephones would remain exempt from regulation.
Reding said she had written to the German government about the issue last week.
Broadband use rises
The commission's report showed big increases in the use of broadband Internet connections and mobile-phone ownership in the EU. However, it criticized continuing high roaming mobile-phone prices. The commission said it could propose regulation on the issue before the summer.
Another problem is high prices for mobile phone calls to fixed lines, which are eight to 10 times the level of calls between fixed lines, the report said.
Overall, Reding said the report was positive, showing that an influx of new players has helped the price of traditional fixed voice calls to fall by 1.6 percent a year over the past eight years.
Meanwhile, the success of liberalization in the telecoms sector shows the way forward for other EU industries, Reding said.
"It is a real success story for the internal market, and a good example of the way the market should develop for energy and transport," the commissioner told reporters.
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