EU Single Market Report: Letto advises integration of the European telecoms market

In a draft document seen by Euractiv, Enrico Letta in his anticipated report to European leaders on the future of the EU’s single market, will argue that the EU’s telecommunications sector is among the “primary reason[s] for Europe’s declining competitiveness.”

Letta a former Italian Prime Minister, whom European leaders asked to write a report on the state of the EU’s single market is expected to publish his findings and address European leaders on Thursday (18 April).

“There is an urgent need to catch up and strengthen the single market dimension for financial services, energy, and electronic communications,” said Letta.

It explains that the EU’s telecoms sector is held back by decisions taken in the past.

The “national focus” in the sector “must evolve towards a European dimension” in order to compete with companies from the US, China, or India, Letta wrote.

Yet Letta’s document does not explain how can a Europe-wide consolidation take shape.

Europe’s largest telecommunication operators have been calling regulators to accept mergers between companies in one national market, since they consider that cross-border mergers do not create sufficient scale.

Letta warned against mimicking “models that are consistently different from our own and do not fit with the European reality.”

However, this is a common reason used among European telecom companies looking to highlight a lack of scale and an investment gap in Europe.

The European Commission has estimated that €174 billion in investments are needed to achieve its connectivity goals by 2030.

Letta’s report further states that the EU model “thrives on the essential link between large and small enterprises,” explaining that this should be preserved.

The report explains that by identifying the European dimension as the relevant market for telecommunication operators, market forces will be permitted to consolidate and grow in scale, “in full respect of the European principles, objectives and rules.”

The report specifies that the new regulatory framework should rely on an “EU centralised authority responsible for guaranteeing the coherence of rules” of the single market, as well as coordination of the different regulatory bodies. Ιndependent national authorities should deal with issues “which for size or relevance remain national.”

Letta’s report notes the recent Commission white paper  is moving in a favourable direction.

The white paper opens the door to market deregulation, suggesting twelve scenarios for the future of telecoms.

A public consultation is open until 30 June allowing stakeholders to share their views.

It is expected that Letta will advise in his report, a roadmap to speed up the integration of the telecoms market.

[Edited by Rajnish Singh]

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