In a report publisehd on March 25th, the European Commission gives an overview of Europe’s Telecom market as well as the state of competition in the 27 EU countries. According to that report, EU Telecom sector is doing well despite the economic crisis. The sector, worth about 3% of EU GDP, continued to grow in 2008 with revenues estimated at above €300 billion, up 1.3% compared to 2007 and outperforming the rest of the economy, which only grew by 1%.

Europe leads the world in mobile phone services with the number of subscriptions in 2008 at 119% of the EU population (up 7 percentage points from 2007), well ahead of the US (87%) and Japan (84%). This is a finding of today's Commission progress report on the single telecoms market.

Consumers gain the most from the sector's competitiveness: they pay less while getting better value for money, some benefits in their mobile communications which the institutions intend to extend to charges. Average mobile phone bills have fallen from €21.48 to €19.49 in 2008 and 75% of European consumers now have internet connections of 2 megabits per second and above (speeds allowing, for example, TV over internet), thanks to EU action. However, the Commission's report also warns that without better European coordination, the benefits of a single telecoms market could be jeopardised by inconsistent national regulation:

• Independent national telecoms regulators are essential to ensure fair and effective regulation, but are not yet a reality in all 27 EU countries. Infringement proceedings launched by the Commission are pending against Lithuania, Latvia and Romania, while a case against Poland was taken to the European Court of Justice.
• Inconsistent regulation of similar competition problems can be an extra burden on telecoms operators, especially the growing number of companies active in several countries or offering cross-border services.
• Diverging approaches to the regulation of new fibre networks could impair competition between operators in the single market and lead to regulatory uncertainty for new investment. Some regulators' decisions even appear to be taken in a manner which attempts to bypass EU rules (IP/08/2060).
• There continue to be serious discrepancies between the fees operators charge each other for connecting calls made from a different network (from €0.02/min in Cyprus to €0.16/min in Bulgaria.
• While it takes only 1 day for consumers in Ireland or Malta to change their mobile operator while keeping their phone number, it still takes 38 days in Poland, 15 in Italy and 14 in Slovakia.

EU consumers pay less for their mobile phone bills and get better high-speed internet

The mobile market remained the most dynamic telecoms segment in the EU in 2008. Mobile phone use rose from 112% of the population in 2007 to 119% in 2008. Italy, Lithuania and Luxembourg are over 140%. The leading operators' average market share fell by around 3% last year, indicating a more competitive market. As a result, consumers spend more time talking and texting for prices at least 34.5% less than in 2004.

The number of fixed broadband internet connections in the EU keeps growing: 14 million more in 2008, reaching over 114 million in total. Denmark and the Netherlands are world leaders in broadband, with take up over 35% of population. They lead, along with Sweden, Finland, the UK, Luxembourg, Belgium, Germany and France, the US, which was at 25% in July 2008. The Union has also made significant efforts to improve connectivity and extend high-speed internet at European rural areas, as a way to stimulate swift economic recovery.

Mobile broadband is also taking off; with the number of connections now representing 13% of the EU population. Mobile broadband via data cards and dongles is becoming a viable alternative to fixed broadband in countries like Austria (number of connections equivalent to 11.4% of population), Finland (9.1%) and Portugal (8.3%).

20.5 million consumers switched phone operators in 2008 while keeping their fixed or mobile numbers. By October 2008, about 84 million subscribers (17% of EU citizens) had switched operator since it became possible in 2003.