Tuesday, October 28, 2008

Belgian regulator told to streamline market

The European Commission has given the green light to Belgium’s telecoms watchdog the Institut Belge des Services Postaux et des Telecommunications (BIPT,) to do the needful to bring down fixedline prices charged to the European citizens in the country. “BIPT has sought to force Belgium’s incumbent telecoms operator and the dominant player on the fixed-line market to comply with EU demands since 2000, but has failed to cut the costs that consumers have to foot,” the Commission said in a statement.

Viviane Reding, EU Commissioner for Information Society and Media said, “Although the Belgian retail calls markets have all the conditions to be competitive, leading to choice and affordable prices for Belgian consumers, the overall retail prices for fixed telephony in Belgium are one of the highest in the EU.” The Commissioner, who has come to symbolise EU citizens’ interests, warned the Belgian telecom industry: “This is simply not acceptable for Belgian consumers.

The European Commission will keep a very close eye on the Belgian market We ask the Belgian telecoms regulator to come back to us on this issue within a year’s time.” “BIPT should also revise its price control obligation imposed on Belgacom, the telecoms incumbent, to allow Belgian customers to make cheaper calls as soon as possible,” the Commission said in a statement. In a letter sent to BIPT, the Commission “endorsed BIPT’s finding that Belgacom is still dominant on the Belgian fixed line calls markets.”

Commenting on the letter sent to BIPT, a Commission spokesman told journalists, “For a three-minute local call in Belgium you pay 21.2 Euro cents. On an average in the EU you pay substantially below 10 Euro cents.” According to European laws the Commission can ask national regulators to enforce national rules to guarantee competition in their national markets but the Commission can not establish caps for local calls as it did for cross-border mobile services.

Noting that all national telecom regulators have the possibility to use tools such as a price cap on retail tariffs, the Commission spokesman added, “We recommend that the Belgian regulator makes full use of the instruments available to them under EU telecom rules.” The Commission asked BIPT to ensure complete enforcement of the existing wholesale measures and to let the Commission know of the results of a new market analysis within the next year.

Explaining the one year time period, the Commission spokesman told journalists that usually the national regulators submit their reports every two years but in this case the Commission has asked for an early assessment report. The spokesman lamented the fact that even though all the regulatory measures needed are in place in Belgium, the prices are still highest in the EU. The Commission identified the non-implementation of the wholesale line rental obligation imposed on Belgacom in 2006 and asked the national regulator for a better implementation, stating, “the wholesale line rental obligation, which was imposed on Belgacom by BIPT in 2006 and which allows alternative operators to use Belgacom’s networks, has not been implemented so far.”

Answering questions from the journalists, the spokesman clarified that the action against Belgium was not the first such move as there have been similar cases the latest was concerning Italy.

Moreover, the carrier pre-select system, launched in 2000 along with high broadband penetration is yet to have a significant effect on the fixed line telephony market in Belgium.

“The carrier (pre-)selection obligation, which allows consumers in Belgium to choose their preferred provider to supply their telecoms services, was imposed as early as 2000 and should have led, together with Belgium’s high broadband penetration, to effective competition in the fixed telephony market,” the Commission stated, adding, “in particular, the remedies should ensure that consumers benefit from cost reductions resulting from decreased wholesale interconnection charges.”

Market observers pointed that the present intervention under the leadership of Commissioner Reding is set to lower interconnection prices and usher in an era of tighter price controls on Belgacom’s retail offers thus benefiting the European citizens.

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