New lines opening up for mobile operators

Date: 07/12/1995

AS part of a larger campaign to break up powerful telecoms monopolies, the European Commission is expected to agree new measures before Christmas which would allow mobile-phone operators to use networks other than those owned by the state.

The measures, to be adopted under Article 90 of the Treaty of Rome, would give new arrivals on the market the right to use their own facilities or to send signals along networks provided by rail, electricity and other utility companies.

At the moment, operators who wish to compete with state-run monopolies are forced to pay high prices to use their rivals' networks. Many have complained to the Commission, claiming that it would be cheaper for them to build networks than to rent space on those owned by incumbents.

According to Commission figures, line rental fees currently account for between 30&percent; and 50&percent; of operators' costs.

That figure is likely to drop under the new regime, which would allow privatised mobile-phone operators to shop around for cheap deals.

Following the European Parliament's advice, the Commission has decided to tighten licensing rules laid down in the original version of the directive which was released last summer.

The revised draft says that operators of mobile-phone systems, such as GSM or DCS 1800, should be granted licences to operate other mobile systems under equal conditions.

A number of countries whose networks are underdeveloped have won derogations from the new rules - five years for Ireland, Portugal, Greece and Spain and two years for Luxembourg.

The directive, which is due to come into effect in the New Year, reflects the Commission's determination to loosen the grip of state monopolies on the telecoms market in the run up to full liberalisation in 1998.

DGIV, the Directorate-General for competition, has policed the mobile-telephony sector vigilantly in recent months. Several member states have felt the heat of this intensified scrutiny, but none more than Italy, which has been threatened with court action if it fails to obey DGIV's orders.

Italy handed out a second mobile-phone licence earlier this year, but only after it had charged the new operator a large entrance fee.

That, says the Commission, is unfair. It wants Italy's state operator to pay the same fee or to compensate its rival. Italian officials, who are scheduled to meet with Competition Commissioner Karel Van Miert today (7 December) to discuss the matter, have been given until the New Year to find a solution.

With an average growth level of 60&percent;, the mobile sector is by far the most dynamic in the EU telecoms market. Some 6 million Europeans hooked up to mobile-phone services during last year.

Article 90 directives, which are disliked by national governments, do not have to be approved by ministers or MEPs before becoming law.