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Ninth report on the implementation of the electronic communications regulatory package

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Ninth report on the implementation of the electronic communications regulatory package

In March 2002, the European Parliament and the Council adopted a new legislative framework ("telecoms package") designed to regulate the electronic communications sector and replace the existing regulations governing the telecommunications sector. This new regulatory framework had to be transposed into the national laws of the Member States by 24 July 2003. For this reason, apart from the market situation concerning electronic communications services, the following report gives an overview of the situation with regard to the transposition of the new regulatory framework and underlines the fundamental aspects to be taken into account in transposition.


Communication from the Commission of 19 November 2003 entitled: "European Electronic Communications Regulation and Markets 2003 - Report on the Implementation of the EU Electronic Communications Regulatory Package" [COM(2003) 715 final - Not published in the Official Journal].


This ninth implementation report by the Commission appears during a period of transition between the old and the new regulatory framework for electronic communications services. This new regulatory system, which is made up of a general Directive (framework Directive) and four other specific Directives (" authorisation ", " universal service ", " access and interconnection " and " e-privacy " Directives) is principally intended to make the sector more competitive. The report therefore describes market developments since the previous report and lists the main problems posed by the transposition of the new regulatory framework in the laws of the Member States.


Electronic communications services market

The growth in the market in 2003 will be stronger than overall economic growth in the European Union (EU). The nominal growth of the sector should be between 3.7 and 4.7% while the forecast rate of EU GDP growth is 3% in nominal terms.

Mobile telephony

In 2003, the number of subscribers increased at a higher rate than in 2002, despite the fact that the penetration rate for mobile communications is close to 90% in some Member States. 81% of EU citizens now have a mobile telephone. Moreover, third generation mobile communications services (UMTS) are now available in four Member States - Italy, the United Kingdom, Sweden, Austria - and are being launched in others.


The number of broadband lines increased considerably during the reference period. However, the impact of new entrants is still limited. The development of local loop unbundling is still rather unbalanced since 95% of the unbundled lines are concentrated in six countries (primarily Germany, then Italy, Denmark, Finland, the Netherlands and Sweden).

The highest broadband penetration rates are in Belgium, Denmark, the Netherlands and Sweden. Italy and Portugal have the lowest penetration rates.

Fixed telecommunications operators

After the massive entry into the market that characterised the first stage of liberalisation (+113% between 1998 and 2001), the number of operators authorised to offer public telecommunications services in Europe has started to decrease. Moreover, the weakness of the European economy has discouraged new operators from entering the market and has caused some bankruptcies and stimulated intensive major activity. Overall, the real number of competitors in each national fixed telecommunications market is considerably lower than both the number of authorised operators and the number of active operators. There are in the great majority of EU countries no more than three to four large competing players for public voice telephony.

Fixed voice telephony market share

Competitive pressure now seems to have moved from the international and long-distance voice telephony market to the local call market where the traditional incumbents share of the fixed market continues to decline.

Consumer choice

Traditional incumbents customers are better informed of the possibilities of changing provider, either by dialling a call-by-call prefix (carrier selection) or by choosing to route all calls by default to the network of an alternative operator (carrier preselection). In August 2003, 33% of EU subscribers used an alternative provider to route long-distance and international calls, compared with 25% for local calls.


The state of interconnection services, especially the level of charges, has an overwhelming effect on the sustainability of competition between undertakings providing electronic communications services. Generally speaking, the level of interconnection charges has stabilised after a period of significant reductions.

Fixed telephony tariffs

As expected, competition in the sector has led to a reduction in tariffs for consumers. While the downward trend has been maintained in 2003, the pace is slower than in previous years. The fall is less than half that reported in 2002.


Mobile number portability only became compulsory with the entry into force of the new regulatory framework in July 2003. The introduction of mobile number portability has proved particularly successful in some Member States, such as Denmark, the Netherlands, Sweden and the United Kingdom. Fixed number portability is making progress in some Member States. Again, Denmark leads the way with 13% of numbers ported.

Digital television

After the significant slowdown in growth in the year 2002, the digital television market has been showing signs of recovery. Digital TV household penetration has increased from about 18% to around 22% in the year 2003. However, progress in this area varies considerably from one Member State to another.


The new regulatory framework had to be transposed into national law by 24 July 2003. As of 1 November 2003, only eight Member States had taken the necessary measures to transpose the regulatory framework. Accordingly infringement proceedings were initiated at the beginning of October 2003 against those Member States which had failed to fulfil their obligations: Germany, France, Belgium, Greece, Luxembourg, the Netherlands and Portugal.

More specifically, the " e-privacy " Directive was required to be transposed by 31 October 2003. By that date, only five countries had notified their transposition measures: Denmark, Spain, Italy, Austria and Sweden.

The national transposition measures nevertheless pose a number of problems which will have to be resolved so that the objectives of the new regulatory framework can be achieved in full. For this reason the Commission will be particularly vigilant on the following points:

  • the responsibilities and powers of the national regulatory authorities (NRA) which, under the new framework, are wider;
  • the assurance that the NRA will have at their disposal all the remedies available under the new framework when they find a lack of effective competition in the market;
  • the ability of the NRA to carry out market analyses and reviews of existing obligations in good time;
  • the principles which govern the procedures for granting individual rights to use frequencies;
  • the scope of universal service and the obligation to establish, where necessary, mechanisms for designating universal service providers in a way that minimises market distortions and complies with the principle of non-discrimination.

Last updated: 18.03.2004