Honest broker at the end of the phone

Date: 24/04/1997

By Chris Johnstone

EUROPEAN telecoms companies should steer their way through the promised land of all-out competition with a lot less regulation and with a wider role for their lobby group.

So, not surprisingly, says former Swedish telecoms regulatory official Jerker Torngren, who officially took charge of the European Public Telecommunications Network Operators' Association (ETNO) in March this year.

Torngren sounds like a man with a mission. A month before formally starting his new job, he was already at his desk plotting a bigger role for the body he now heads both inside and outside the telecoms industry.

With that sector on the verge of full cross-border competition from January 1998, ETNO is moving to position itself as the spokesman, honest broker and advocate of all the companies which are expected to spring up in the new competitive environment.

That will demand some cultural changes since, until recently, ETNO was dominated by the old phone monopolies and was perceived largely as their mouthpiece.

The clear message is that the association wants to play a role befitting a lobby representing some of Europe's biggest and most dynamic companies - although Torngren would not admit that it has in the past suffered from the profile of an anorak-wearing potholer.

The current membership of 36 phone operators from 31 countries could easily climb to three figures if ETNO persuades all the newcomers that it can represent their views, says the Swede.

Some operators may be represented more than once - as the established operators on their home markets and as newcomers elsewhere - and everyone will be welcome in a broad church covering everything from established monopolies to mobile phone and Internet operators.

Coming from the already competitive Swedish market, Torngren reckons that he has learnt a lesson or three.

Competition was a 'win-win' situation for the Swedish monopoly Telia as the company saw its turnover increase in a booming business environment, even though its market share inevitably decreased.

Problems along the road stemmed from a lack of knowledge and experience, not from any foot-dragging on the part of the firms involved, says Torngren.

“We should not believe that some companies wanted to stop the process,” he adds.

The same benign attitude is true of European companies as they approach full liberalisation, he maintains, in what some might see as a rather Panglossian perspective for a big money industry where more competition cases are likely.

Torngren admits that disputes can be expected in the future when telephone companies have to agree on the rates and conditions for using each other's infrastructure and networks.

However, every cloud has a silver lining and Torngren identifies an honest-broker role for his body in helping to set the ground rules for access and interconnection.

ETNO's new director believes that the European Commission has taken the right approach in paving the way for telecoms competition. However, he maintains that regulation has been laid on rather thick in some instances, citing the example of the competitive procurement procedures which phone companies are currently forced to follow.

“All operators are moving towards a competitive environment and must ensure the best deal from suppliers,” he says, arguing that the extra paperwork caused by Commission rules only creates an unnecessary burden.

ETNO's task from now on will also be to influence the next wave of Commission regulations dealing with the evolution of the information society and introduction of new broad-band technology.

“All the directives which have gone through have clauses allowing for the review of legislation after a few years. There are bound to be changes,” says Torngren.

But he believes that none of Europe's big telecoms companies is likely to disappear in the early days of competition - so long as they have read the writing on the wall and acted accordingly. “It is a very slow process for a new competitor starting from scratch,” he warns.

As with European competition, the World Trade Organisation agreement on telecoms liberalisation struck early this year offers new chances for ETNO to stake out a role for itself.

Torngren sees the operators' lobby acting as a collecting house for European companies' complaints about market opening in different parts of the world and channelling their comments to the Commission.