Member Article

EU Single Digital Comms Market worth ?90bn

The economic loss of a fragmented market for electronic communication services for businesses amounts to €90 billion according to a study commissioned by INTUG and ECTA.

INTUG is an international body representing major business users of telecoms services and ECTA is the European Competitive Telecoms Association – a grouping largely comprising non-incumbent operators.

The study concludes that a regulatory action from the European Union is needed in order to tap the full potential of the Digital Single Market for businesses and productivity.

Whilst only approximately 2% of companies within the EU could be described as multi- site or multi-national corporations (MSC/MNC), they form a major component of the European economy, generating 60 million jobs, representing nearly half of business turnover and more than 50% of “value added” across the EU. Europe’s corporations also have an important role in maintaining Europe’s position within the global economy. UNCTAD, a division of the United Nations, found in a 2010 report that 46% of the world’s largest companies are based within the EU27 region.

European businesses operating cross-border need high quality electronic communication services (e.g. voice, email, data) tailored to their needs (a bank has different needs from a retail chain) and they need a one-stop-shop for the provision of those electronic communication services that are at the heart of their productivity across all sectors.

The study released yesterday in the European Parliament during a breakfast meeting officially hosted by MEP Pilar Del Castillo, focused on analysing the challenges of multi-site and multi-national corporations in procuring electronic communication services and of Pan-European telecom operators supplying these services.

Tom Ruhan, Chairman of ECTA said, “This study demonstrates that there is still much that policy makers can do to help overcome the current crisis. Europe is missing significant economic opportunities. Multinational businesses are responsible for 60million jobs and half of the value of the whole EU economy. EU Institutions bear the responsibility to do everything they can to foster their productivity”.

ECTA and INTUG call upon the Commission to act quickly and firmly to enhance the conditions of the digital single market for businesses. A harmonisation of EU rules would allow European companies to gain ground over their global competitors.

Erzsebet Fitori, Director of ECTA said, “the key findings of the study show that competition in Pan-European business services markets could be further boosted. ECTA and its members trust that the European Commission will deliver on creating a single, harmonised Pan-European business communications market as a matter of priority.”

Danielle Jacobs, Chairman of INTUG said, “The cloud, video communications, collaboration, etc. define how companies can organize themselves. It is a pity that many businesses see that only a very limited number of service providers can present solutions combining true global connectivity with the required technical specifications due to a lack of competition at the national level. This situation leads to vendor lock-in, and offers too little choice and flexibility to build the best solution. The residential and business markets differ significantly, and need their own regulatory approaches.”

In the survey nearly 70% of business end-users said they preferred to purchase telecoms services via a single provider covering multiple countries but most said this was not normally a practical option and that they are concerned about the fragmentation of regulation of business service products across Europe. This seriously impacts their ability to use seamless cross-border services.

In the UK the views of major business users of digital services are represented by the Communications Management Association. Business customers (and public service agencies) contribute disproportionally to the revenues of major telcoms operators and these indirect ‘taxes’ on business are reflected in market distortions that need to be far better understood by regulators.

This was posted in Bdaily's Members' News section by David Brunnen .