EU telecoms reform will trigger legislative battle

Subject

Telecoms sector reform.

Significance

Ministers responsible for the telecoms sector have watered down the European Commission's proposals to reform the industry. Their moves coincide with a wave of consolidation among mobile operators at the national and regional levels, raising questions of whether the balance of EU policy towards the sector has swung against consumers or if these changes are necessary for the sector's long-term competitiveness.

Impacts

• Consolidation will facilitate future investment, leaving the mobile telecoms sector better placed to develop next generation infrastructure.
• However, if recent mergers are any guide, most consumers can expect price increases in the short term.
• This may raise fears of a strengthening of incumbents' market power.
• National consolidation should be followed by European consolidation.
• However, this will only make sense if national governments agree to greater convergence of regulatory frameworks -- which looks unlikely.