Five of Europe's large telecommunication companies have written to
the European Commissioner for Competition, Mario Monti, complaining
about "methodological anti-competitive behaviour" by former
telecommunication monopolies.
The five responded to calls from the European Commission earlier
this week for telcos to produce hard evidence that incumbent
suppliers were blocking efforts to open up to competition the local
loop, the link between the subscriber and the local exchange.
The chief executive officers (CEOs) of Cable and Wireless
(C&W), Arcor, Groupe Cégétel, Wind Telecomunicazioni and QS
Communications, said that in spite of a one-year-old European Union
law designed to boost competition, they and other new market
entrants "still face entry barriers".
The five companies urged the commission to separate the local loop
"structurally" from the incumbents, if they continue to prevent
fair competition.
The commission is sympathetic to their concerns. In the year since
the local loop law was passed, only 2% to 3% of local lines have
been opened up to fair competition, according to the
commission.
Last December, it accused Deutsche Telecom of squeezing its profit
margins to force rivals out of the market. In May, the competition
regulator accused France Télécom of predatory pricing to support
its ISP (Internet service provider) subsidiary Ganado.
A Competition Commission spokeswoman said the allegations made in
informal complaints pointed to a "pattern of discrimination" by
incumbents across the 15 member states of the European Union.
In the first quarter of this year, an average of 6,000 phone lines
a week across the EU were unbundled to allow the subscriber a
choice of operator, according to commission research. During the
same period, telecom incumbents established 65,000 new high-speed
ADSL (Asymmetric Digital Subscriber Line) Internet connections a
week. Competitors can only offer a rival ADSL service if they have
access to the local loop.
A representative of the incumbent operators was unsympathetic. "It
sounds like a cry of desperation by the new entrants," said Michael
Bartholomew, director of the European Telecommunications Network
Operators' Association, a trade body that represents the incumbent
operators.
Bartholomew said the incumbents have spent €330m (£212m)
establishing to accommodate competitors in local exchanges, but he
added, " There are alternative, less costly ways of providing fast
Internet, such as cable TV lines and fibre-optic lines. The reason
why so few local telecom lines have been unbundled is that there is
no market demand from competitors for local loop products."