Visit by Turkish journalists Brussels, 1 st February 2005

Dick Harris - 30/1/2005 - 1

EU policy for electronic communications:what does it mean for Turkey?

Richard Harris, DG Information Society

EU policy for electronic communications:what does it mean for Turkey?

Richard Harris, DG Information Society

Visit by Turkish journalistsVisit by Turkish journalists

Brussels, 1Brussels, 1stst February 2005 February 2005

Visit by Turkish journalistsVisit by Turkish journalists

Brussels, 1Brussels, 1stst February 2005 February 2005

30/1/2005 2

AgendaAgenda

A short talk from an EU point of view covering, A short talk from an EU point of view covering,

Turkey's formal relationship with the EU, what this Turkey's formal relationship with the EU, what this

means for telecoms, how this might be affected means for telecoms, how this might be affected

when accession negotiations begin and, finally, when accession negotiations begin and, finally,

some current issues in EU telecommunicationssome current issues in EU telecommunications

• The context – commercialThe context – commercial

• A lost decade - 1990 to 2000A lost decade - 1990 to 2000

• What is the motive - who has the What is the motive - who has the initiative?initiative?

• Monitoring the marketsMonitoring the markets

• Topical issuesTopical issues

30/1/2005 3

Context – 1990s telecommunications sectorContext – 1990s telecommunications sector

• Liberalisation of telecomms had already begunLiberalisation of telecomms had already begun

• The “Information Society” gained currencyThe “Information Society” gained currency

• GSM and Internet technology arrivedGSM and Internet technology arrived

• Remaining EU monopolies abolished 1Remaining EU monopolies abolished 1stst Jan 1998 Jan 1998

• GATS was made, including the telecomms annexGATS was made, including the telecomms annex

• For C&EE telecomms the rate of change was hugeFor C&EE telecomms the rate of change was huge

30/1/2005 4

Context – 2000 telecommunications and ITContext – 2000 telecommunications and IT

• Lisbon agenda - eEurope action plans Lisbon agenda - eEurope action plans

• Third generation mobile technology arrivedThird generation mobile technology arrived

• The Internet bubble burstThe Internet bubble burst

• 2002 package, designed for an open market2002 package, designed for an open market

• 10 new members joined the EU 110 new members joined the EU 1stst May 2004 May 2004

• Slow progress in TurkeySlow progress in Turkey

30/1/2005 5

Preparing for accessionPreparing for accession

• Abolition of monopolies in line with treaty obligations Abolition of monopolies in line with treaty obligations

or with GATS - whichever is sooneror with GATS - whichever is sooner

• Implementation of market opening and of an effective Implementation of market opening and of an effective

regulatory regimeregulatory regime

• Full transposition and implementation of the Full transposition and implementation of the acquisacquis

before accessionbefore accession

• Promotion of knowledge based economyPromotion of knowledge based economy

• Use of EU aid programmes where neededUse of EU aid programmes where needed

30/1/2005 6

Regular report - 2004Regular report - 2004

• There is a certain level of alignment with the There is a certain level of alignment with the acquisacquis..

• Full market liberalisation was achieved at the end of Full market liberalisation was achieved at the end of 2003 in legal terms.2003 in legal terms.

• Further efforts are essential to complete the regulatory Further efforts are essential to complete the regulatory framework and to implement and enforce the rules in framework and to implement and enforce the rules in relation to the large powerful companies.relation to the large powerful companies.

• The progress achieved in some markets, such as The progress achieved in some markets, such as mobile telephony or internet service provision, could mobile telephony or internet service provision, could not be achieved in all telecommunication services.not be achieved in all telecommunication services.

• Turkey needs to take further steps in order to achieve Turkey needs to take further steps in order to achieve genuine competition in all telecommunication markets. genuine competition in all telecommunication markets.

30/1/2005 7

Monitoring the markets Monitoring the markets

• Annual implementation reports by the Annual implementation reports by the Commission – for Member StatesCommission – for Member States

• Monitoring of regulatory aspects for 13 Monitoring of regulatory aspects for 13 candidates is available as a multi-client candidates is available as a multi-client commercial servicecommercial service

• Monitoring of commercial aspects was done Monitoring of commercial aspects was done for two years under a special contract for 13 for two years under a special contract for 13 candidate countriescandidate countries

• Monitoring for the present 8 candidate and Monitoring for the present 8 candidate and potential candidates is now starting under a potential candidates is now starting under a special contractspecial contract

30/1/2005 8

Telecommunications market indicators


Fixed lines per 100 inhabitants in EUCCs

35,6

70,0

36,5

34,7

35,7

29,7

30,3

54,8

31,1

19,2

28,9

41,7

28,3

36,5

69,0

39,1

37,4

34,9

29,3

24,7

54,7

34,1

20,0

26,8

41,8

27,3

0

10

20

30

40

50

60

70

BG CY CZ EE HU LV LT MT PL RO SK SI* TR

06/2002 06/2003

30/1/2005 9



Digitalization rate of fixed networks in EUCCs

22%

82%91%

84%90%

73%

83%

93%96%

0%

20%

40%

60%

80%

100%

BG CY CZ EE HU LV LT MT PL RO SK SI TR*

12/2001 06/2002 12/2002 06/2003

30/1/2005 10

Telecommunications market indicators - 30/6/2003


Fixed-to-fixed (single transit) lnterconnection charge (€-cents)0,

82

1,62

0,89

2,40

2,61

3,63

1,12

2,14

1,07

No

t ap

plic

able

No

t ap

plic

able

No

t ap

plic

able

No

t ap

plic

able

EU average: 0,96

0,0

0,5

1,0

1,5

2,0

2,5

3,0

BG CY CZ EE HU LV LT MT* PL RO SK SI TR

?

30/1/2005 11



Comparison F-to-F I/C charge to local call price

31%

33%

59%

86%

93%

33%

46%

34%

42%

38%

33%

76%

78%

93%

52%

77%

48%

No

I/C

ch

arg

e

No

I/C

ch

arg

e

78%

42%

No

I/C

ch

arg

e

No

t ap

plic

able

0%10%20%30%40%50%60%70%80%90%

100%

BG CY CZ EE HU LV LT MT PL RO SK SI TR

local level single transit

?

30/1/2005 12



Fixed-to-mobile lnterconnection charge (€-cents)

11,5

9

18,5

3

15,2

1

9,64

22,1

6

17,9

5

19,4

8

Co

nfi

den

cial

Co

nfi

den

cial

16,0

4

3,08

13,3

1

16,8

0

EU average: 17,45

0

5

10

15

20

BG CY CZ EE HU LV LT MT PL RO SK SI TR

30/1/2005 13

What next?What next?

• 1010thth Implementation report published in November Implementation report published in November

• Next EU enlargement in 2007Next EU enlargement in 2007

• New external agenda:New external agenda:

• EU candidates - BG, RO, TR, HR

• West Balkans - ALB, BiH, MK(FYRo), SCG

• Neighbourhood - Belarus, Moldova, Ukraine, Mediterranean

countries, Caucasian republics

• Russia – treated separately

30/1/2005 14

What might this mean for large operators?What might this mean for large operators?

• Liberalisation is not an end in itself (and not a formula Liberalisation is not an end in itself (and not a formula for making easy money).for making easy money).

• It is a key building block of the Information SocietyIt is a key building block of the Information Society

• NRAs will have the powers. To avoid heavy NRAs will have the powers. To avoid heavy regulation, large operators need to help policy makers regulation, large operators need to help policy makers without being forcedwithout being forced

• When EU ministers meet, they no longer discuss When EU ministers meet, they no longer discuss liberalisation – this is historyliberalisation – this is history

• They discuss cartels, spam, IPRs, the digital divide, They discuss cartels, spam, IPRs, the digital divide, universal service, eGovernment, how to promote universal service, eGovernment, how to promote broadband access and securitybroadband access and security

30/1/2005 15

What is the EU doing?What is the EU doing?

• Liberalisation of telecommunicationsLiberalisation of telecommunications

• One framework – many situations

• eEurope action plans – LisboneEurope action plans – Lisbon

• Education

• Content

• Trust and confidence

• National broadband strategiesNational broadband strategies

• Common elements of strategies

• Supply side policies

• Demand side policies

30/1/2005 16

Broadband penetration rates – EU15Broadband penetration rates – EU15

Broadband Penetration Rates

0%

2%

4%

6%

8%

10%

12%

14%

16%

BE DK DE EL ES FR IE IT LU NL AT PT FI SE UK EU15

% p

op

ula

tio

n

Q1 2003Q1 2004

Source: Commission services' estimates on the basis of data provided by Informa Telecoms Group (Sweden, 2004 from ECTA)

30/1/2005 17

Broadband penetration in the New Member States (January 2004)

Broadband penetration in the New Member States (January 2004)

Broadband penetration in the New member States (as of 1 January 2004)

1.4

1.0

4.3

2.0

1.2

3.5

0.3

3.0

0.2

0

1

2

3

4

5

6

7

CY CZ EE HU LT LV MT PL SI SK

Bro

adb

and

lin

es p

er 1

00 p

op

ula

tio

n

Broadband penetration EU 15

Source: COCOM (Provisional data). Data for EE refer to July 2003. LV: No data

30/1/2005 18

Broadband take-up by technology in the EU15 - July 2002 to January 2004

Broadband take-up by technology in the EU15 - July 2002 to January 2004

Figure 2 - Broadband take-up by technology in the EU 15July 2002 - January 2004

0

5.000.000

10.000.000

15.000.000

20.000.000

25.000.000

July 02 January 03 July 03 January 04

Source: Commission Services

Nu

mb

er o

f su

bsc

rib

ers

Total broadband

DSL

Cable

Other technologies

30/1/2005 19

DSL and cable modem coverage in the EU15 (December 2003)

DSL and cable modem coverage in the EU15 (December 2003)

Figure 5 - DSL and cable modem coverage in the EU 15December 2003

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

National Urban Suburban Rural

DSL CableSource: IDATE

30/1/2005 20

Conclusions - broadbandConclusions - broadbandConclusions - broadbandConclusions - broadband

• Growth of broadband has acceleratedGrowth of broadband has accelerated

• Wide differences between countriesWide differences between countries

• Most growth is in DSL and cable TVMost growth is in DSL and cable TV

• Other technologies are in evidenceOther technologies are in evidence

• Even rural areas have 50% accessibilityEven rural areas have 50% accessibility

• Scope for increased take-up is highScope for increased take-up is high

30/1/2005 21

What might all this mean for Turkey?What might all this mean for Turkey?

• The political dialogue continuesThe political dialogue continues

• Turkey needs success regardless of the EUTurkey needs success regardless of the EU

• Accession negotiations could be helpfulAccession negotiations could be helpful

• Turkey has some unique problems but there are Turkey has some unique problems but there are

useful lessons to be learned from elsewhereuseful lessons to be learned from elsewhere

• Continuous monitoring and comparisonContinuous monitoring and comparison

• Turkish authorities cannot be compelled by the EUTurkish authorities cannot be compelled by the EU

• Industry must be active and constructiveIndustry must be active and constructive

30/1/2005 22

What might all this mean for Turkey?What might all this mean for Turkey?

• Most important to achieve successful market openingMost important to achieve successful market opening

• Settle the future of Turk Telekom, encourage inward Settle the future of Turk Telekom, encourage inward

investment, credible regulatory regime, benefits also investment, credible regulatory regime, benefits also

for the EUfor the EU

• Monitor progress in the EU, through the Cocom and Monitor progress in the EU, through the Cocom and

the newly emerging ERG/IRG networkthe newly emerging ERG/IRG network

• EU regulatory framework is based on competition law. EU regulatory framework is based on competition law.

No room for NRAs to depart from this No room for NRAs to depart from this

• Meantime, make full use of the formal dialogue with Meantime, make full use of the formal dialogue with

the EU under the association agreementthe EU under the association agreement

30/1/2005 23

Thank you for your attentionThank you for your attention

[email protected]@cec.eu.int

For more information:For more information:

See - Europa web-siteSee - Europa web-site

30/1/2005 24

For more informationFor more information

europa.eu.int/comm/enlargement/index_en.html

europa.eu.int/comm/external_relations/

europa.eu.int/comm/world/enp/index_en.htm

europa.eu.int/information_society/topics/ecomm/index_en.htm

europa.eu.int/information_society/topics/ecomm/all_about/implementation_enforcement/index_en.htm

europa.eu.int/information_society/topics/ecomm/all_about/international_aspects/main_areas_work/eu_enlargement/index_en.htm

europa.eu.int/comm/competition/liberalization/others/#telecom

trade-info.cec.eu.int/doclib/cfm/doclib_search.cfm?action=search

www.wto.org/english/tratop_e/serv_e/serv_e.htm

Visit by Turkish journalists Brussels, 1 st February 2005

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