COI\NISSION OF THE EUROPEAN COI\NUNITIES 
COM(94)145 f lnal 
Brussels, 27.04.1994 
--- - --~-
(presented by the Commission> 
TABLE OF CONTENT 
PREFACE ....................................................................................................................... 3 
I INTRODUCTION .................................................................................................. 4 
II THE APPROACH CHOSEN .................................................................................. 7 
III MAIN RESULTS OF ANALYSIS AND CONSIDERATIONS TO BE TAKEN 
INTO ACCOUNT ................................................................................................. 12 
III. 1 Major trends and opportunities ..................................................................... 12 
111.2 Barriers to be overcome ............................................................................... l 7 
III. 3 The way forward.......... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 
IV ISSUES FOR COMMENT .................................................................................... 37 
IV. I Major changes required ............................................................................... 37 
IV.2 Proposed positions ....................................................................................... 38 
IV. 3 Measures required for implementation .......................................................... 53 
IV.4 Action lines for the development of a favourable environment ...................... 5 7 
V CONCLUSION ..................................................................................................... 68 
ANNEX A : REVIEW OF TECHNOLOGICAL AND MARKET 
DEVELOPMENTS .................................................................................. 69 
ANNEX B : ANALYSIS OF THE EUROPEAN ENVIRONMENT 
FOR FUTURE DEVELOPMENT ........................................... : ............. I 0 I 
ANNEX C : REVIEW OF WORLD-WIDE DEVELOPMENTS ................................ 139 
ANNEX D : ANALYSIS OF THE EXTENSION OF THE PRINCIPLES 
OF EUROPEAN UNION TELECOMMUNICATIONS 
POLICY TO THE MOBILE SECTOR .......................... ' ........................ 167 
GLOSSARY ............................................................................................................... 218 
2 
PREFACE 
On 22nd July 1993 the Council of Ministers adopted the Resolution1 on -the Review of the 
situation in the telecommunications sector and the need for further development in that market. 
This Resolution set the future agenda for_ the evolution of telecommunications in the European 
Union. It identified as a major goal the development of future poliGy in the field of mobile and 
personal communications, "to which the publication of a Green Paper on mobile 
communications will contribute". 
Mobile communications has developed over recent years into a key area of growth in the Union. 
With the broadening of mobile communications into general personal communications, the 
sector will, before the end of the decade, substantially affect the lives of every citizen of the 
European Union. 
In the light of the potential mass market for personal communications, a coherent policy 
framework for the sector and for the development of trans-European networks must now be 
promoted within the context of the Union's global strategy on growth, competitivity and 
employment. 
Such a framework can only result from broad consultation of all parties concerned. 
This Green Paper is intended to launch an active discussion involving th:;; Council of the 
European Union and the European Parliament; the Economic and Social Committee and the 
Committee of Regions ; consumers and business users ; fixed and mobile network operators, 
and service providers ; manufacturers of mobile equipment, fixed network equipment, data 
processing and multimedia technologi,es ; together with the trade unions and other organisations 
representing the social interests in the sector, and bodies in the area of data protection and 
pnvacy. 
Council Resolution of 22nd July 1993 on the review of the situation m the telecommunications sector and the need for further developm..:nt m that market 
(93/C 213/01, OJ C213, 6.8 93) 
3 
I INTRODUCTION 
Mobile communications is currently the fastest growing area within the telecommunications 
sector. Over the last few years it has experienced unprecedented growth in subscriber numbers, 
especially in cellular mobile telephony. Europe has now more than 8 million cellular mobile 
telephony users, over double the number of three years ago. There are also more than 8 million 
users of other mobile communications services, in particular, paging and so-called private 
mobile radio systems. It is forecast that by the year 2000, there could be nearly 40 million users 
in the European Union, and with the growing expansion into personal communications services 
(PCS), up to 80 million users by the year 2010. 
The market is being driven by rapid advances in technology, by commercial opportunities and by 
falling prices. Subscriber growth rates during the last few years in Member States with high 
growth cellular telephony markets (car telephones and hand-held portables) have varied from 30 
to 40%. Recent analysis shows that this trend is withstanding the current economic recession. 
Society as a whole can benefit from individuals being contactable from any location, and while 
on the move. The need for mobile communications is becoming a normal part of business life 
with users ranging from the multinational executive to the local plumber or builder. Over the 
next few years, as prices continue to fall, and as the latest technologies become well established, 
mobile communications are expected to make significant inroads into the mass consumer 
market. 
The market potential for personal communications services is huge. While the maximum ~ensity 
for fixed wireline telephones is not expected to exceed substantially an average penetration of 
some 50% of the population, (i.e. approximately one connection per household, plus business 
use), personal communications penetration has the ultimate potential to reach near 80% of the 
population (i.e. up to one connection per adult). 
The growth of mobile communications will have a significant impact on the whole of the 
telecommunications industry. Mobile services themselves will continue to experience rapid 
growth, both in terms of subscriber numbers and corresponding traffic. This growth will in turn 
stimulate traffic over the fixed networks, \.\-ith mobile networks continuing to deliver much of 
their traffic volumes to the fixed network, thereby increasing the overall use of 
telecommunications. 
Mobility has a particular significance in the broader context of the European Union. On the one 
hand, mobility is at the very heart of the objective of the Union for the free movement of goods, 
people, services, and capital. On the other hand, the prospect of European-wide advanced 
mobile communications services, will support the commercial success of these services on the 
mass market. 
4 
With the pan-European digital mobile system, GSM, the European Union has established a 
world-leading technology in this key area of the future global communications market. The 
Union must now build on this success. 
·Mobile communications also has an important role to play in stimulating massive private and 
public investment into telecommunications networks and services, and in contributing to 
maintaining and developing service in the less developed or peripheral regions of the Union. 
While the Green Paper on the development of the Common Market for telecommunications 
services and equipment of 19872 (the 1987 Green Paper) set mobile communications to one side 
for further consideration, the Union has already undertaken specific action in the field of mobile 
communications within the overall context of its telecommunications policy. This has been a 
major factor in European success and leadership in digital mobile technologies. 
With the expansion of mobile communications into the future personal communications market, 
a coherent policy framework for the s«~ctor must now be developed. 
It is now opportune to consider the: full extension, and where necessary, adaptation of the 
telecommunications policy of the Union to the area of mobile and personal communications 
networks and services. 
The purpose of this Green Paper is to identify basic principles and action lines for discussion. 
These are aimed at expanding the opportunities for the sector at a critical moment in its 
development. 
The process must build on the achievements that have been made within the context of the 
Union's telecommunications policy to create a strategy for the European communications 
market. The global aims of the positions and proposals in this paper are : 
~ to permit the development of a Union-wide market for mobile services, equipment, and 
terminals~ 
~ to identify common principles where required, for achieving this objective, in relation to 
the provision of mobile infrastructure, the development of mobile networks and services, 
and the supply and operation of mobile terminals ~ 
~ to promote the evolution of the mobile communications market into mass personal 
communications services, with particular emphasis on pan-European services ~ 
2 Green Paper on the Development of the Common Market for Telecommunications Services and Equipment (COM(87)290 final, 30.6.1987) 
5 
~ to facilitate and promote the emergence of trans-European networks and services in the 
sector, and to ensure that the sector's development is achieved in a manner consistent 
with the public interest. 
The proposals take into account existing and planned services, technological capability, user 
demand and the existing regulatory framework in the Member States. They build on the 
continuing growth of mobile services, whilst at the same time establishing a framework for the 
introduction of new services and networks ~ for greater user choice ~ free development of 
markets and the elimination of existing constraints ; promotion of trans-European networks and 
services, and full development of the world-wide potential of Europe's mobile sector. 
This Green Paper addresses a sector which is undergoing explosive growth and which therefore 
now needs a common vision as a matter of utmost urgency. It should be seen against the 
general background set by the White Paper on growth, competitiveness and employment for the 
future development of the information society in the European Union. It represents a major step 
within the global phased approach to the telecommunications sector set by the Council 
Resolution of 22nd July 1993 for the future balanced relationship of fixed and mobile networks 
and services in the Union and for the maintenance and furthering of univer~al service in the 
sector for the European citizen. 
6 
II THE APPROACH CHOSEN 
The working out of a consistent approach for the Union with regard to mobile and personal 
communications must be seen against the background of overall policy objectives. The 
European Union's policy in this sector should : 
~ be based on the recognition of the major market and technology trends which are having 
a dramatic effect on an already innovative sector. These trends are found in both the 
Union and world-wide, in particular, in the United States and the Pacific area.; 
~ build on the policies of the Member States to date which have led m most Member 
States to a substantially more open and competitive environment ; 
~ extend the basic principles of the Union's telecommunications policy and Community 
law, in particular the balance achieved between liberalisation and harmonisation, to 
mobile communications ~ 
~ take full account of the wider international dimension and the existing framework for 
cooperation which has developed in the sector reaching beyond the European Union. 
~ develop further the internal market in this area, as the basis for a strong negotiating 
position in the bilateral and multi-lateral framework aimed at achieving equivalent and 
comparable market access in third countries. 
These five objectives have determined the approach taken by the Commission in developing the 
positions and proposals set out for consultation and discussion in this Green Paper. 
The Commission has undertaken substantial analysis within its own services, as well as 
requesting external studies. As regards the latter, four major studies3 have been carried out for 
the Commission, and presented and discussed in public workshops4. 
The studies were concentrated on the areas most critical for future policy formulation, in 
particular, future market and technology conditions to the end of the decade and beyond, to the 
3 "Scenano l\fobile comm um cations 20 I 0 study on forecast developmert on future trends and technical development and commercial prov1s1on up to the year 
2010", Report to tht: Commission of the European Communities, prepare.d by EUTELIS Consult, Ratingen, Germany, October i993, 
"Licensing and declaration procedures for mobile communications in Member States of the European Community". Report to the Commiss10n of the European 
Communities prepared by Stanbrook & Hooper and t;PMG Peat Marwick, August 1993 ; 
"Study on analysis of new methods of frequency allocation in the Member States and comparative analysis of recent developments m this field", Repr,rt to the 
Commission of the European Communities prepared by Coopers & Lybrand, July 1993; 
"Study on the application of Open Network Provision to mobile telephony, data networks, and paging services", Report to the Commission of the European 
Communities prepared by PA Consulting Group, November 1992. 
-l Workshops were held on these studies in November 1992 and September 1993. Both workshops were attended by a broad spectrum of representatives of the 
different interests in the sector, m particular, representatives of fixed and mobile network operators, service providers, manufacturers, and users. The 
Commission also received a number of wntten statements and comments corcemmg the studies, as well as related statements of a more general natur•~. 
7 
year 20 I 0, current licensing and radio frequency allocation procedures for mobile systems in the 
Member States and future requirements in this field, as well as interface and interconnection 
issues between different systems and services and analysis of the application of the Open 
Network Provision framework to these issues. 
The studies should be considered part of the consultation process and will be made available on 
request. 
In parallel, the Commission has examined reports and comments forwarded by major 
organisations representing a variety of interests which were prepared with a view to contributing 
to the Green Paper5. The Commission also considered reports established in a national context, 
often based on national consultation and/or extensive hearings6. 
The Commission also received during the preparation period a substantial number of comments 
by mobile network operators, fixed network operators, service providers, and users which drew 
attention to specific issues involved. 
These contributions have considerably assisted the Commission in its preparation of fois Green 
Paper. 
As regards extension of the principles of the Union's telecommunications policy to the sector, 
account must be taken of the substantial body of European Community law which is already in 
place, primarily, Directives and Decisions, in addition to positions represented by Resolutions, 
and Recommendations, but also the principles in the Treaty establishing the European 
Community ("the Treaty"). 
5 Reports were f01warded, mter aha, by the following organisations 
European Committee for Telecommunications Regulatory Affairs (ECTRA), "Review of the reyuirements for the future hannonisat1un of regulatory pohc\' 
regarding mobile communications services", report by ECTRA Mobile Project Team, October I 993 • 
European Telecommunications and Professional Electromcs Industry (ECTEL ). "An ECTEL contribution for the preparat10n of a CEC llreen Paper on l\!obile 
Communications", May 1991 . 
European Free Trade As«ociation (EFTA). "Considerations and proposals concerning a Green Paper on Mobile Communications". mtenm workmg group on free 
movements of servi1.:es and capital : 
Furthermore, a number of repo'1s were submitted by nat10nal assocations and individual comparnes. 
6 Direction de la Regleme:Jtation Generale (DRG), "Les telecommunications a !'age de la mobilite. con:;ultat10n publique sur l'introductwn en France des systemcs 
de communications personnelle.s", November 1992 . 
Committee of experts on basic frequency regulation matters and civil telecommunications for BMPT. "Frequency regulation in the Federal Republic of 
Germany", June 1991 . 
Department of Trade and Industry, "Phones on the move", 1989 
Furthermore, a number of publications by National Regulatory Authorities. regarding in particular lacensmg procedures and calls for tendermg t(1r licenses were 
studied 
8 
These positions include Recommendations on the development of key mobile systems such as 
the pan-European digital mobile system (GSM the Global System for Mobile 
communications), the new digital cordless system (DECT -Digital European Cordless 
Telecommunications), and the digital Europe-wide paging system (ERMES, the Pan-European 
Digital Paging System)7 and the related Frequency Directives8, as well as Decisions in fields of 
direct relevance to the future development of mobile communications, such as in numbering9. 
It also concerns significant Council Resolutions10 and Resolutions of the European Parliamentll 
which have set the political framework for the Union's telecommunications policy and the 
development of a common market in telecommunications services and equipment. L This 
framework has developed on the basis of the 1987 Green Paper, the Green Paper on satellite 
communications of 1990, and the Telecommunications Review concluded in April 199312. It 
has been expanded through the Council Resolutions setting the framework for coordination in 
the fields of frequencies and numbering13, and Resolutions covering related fields, such as the 
Council Resolution on satellite-based personal communications14. 
Equally, the Directives central to Union's telecommunications policy have been taken into 
account, either where they are of dire:ct application to the sector, or otherwise by extension of 
the principles enshrined in them where: appropriate. 
7 Council Recommendation of 25th June 1987 on the coordinated introduction of public pan-European cellular digital land-based mobile communications in the 
Community (87/371/EEC; OJ Ll96/81, 17.7.87)- concerning introduction of the GSM system; 
Council Recommendation of 9th October 1990 on the coordinated introduction of pan-European land-based public radio paging in the Community (90/543/EEC ; 
OJ L310/23, 9.11.90) -concerning introduction of the ER.NIBS system; 
Council Recommendation of 3rd June 1991 on the coordinated introduction of digital European cordless telecommunications (DECT) into the Community 
(91/288/EEC; OJ Ll<W47, 8.6.91). 
8 Council Directive of 25th June 1987 on the frequency bands to be reserved for the coordinated introduction of public pan-European cellular digital land-based 
mobile communications in the European Community (87/372/EEC; OJ Ll96/85, 17.7.87)- the frequency designation for the GSM system; 
Council Directive of 9th October 1990 on the frequency b~mds designated for the coordinated introduction of pan-European land-based public radio paging in the 
European Community (90/544/EEC ; OJ L3 l 0/28, 9.11.90) -the frequency designation for the ERMES system ; 
Council Directive of 3rd June 1991 on the frequency bands to be designated for the coordinated introduction of digital European cordless telecommunications 
(DECT) into the Community (91/287/EEC; OJ Ll44/45, 8.6.1991). 
9 Council Decision of 29th July 1991 on the introduction of a single European emergency call number (91/396/EEC; OJ L217/31, 6.8.91), 
Council Decision of 11th May 1992 on the introduction of a standard international telephone access code in the Community (92/264/EEC ; OJ L 137121. 
20.5.92). 
10 Council Resolution of 30th June 1988 on the develc;iment of the common market fortelecommunications services and equipment (88/C257/EEC OJ C257/l, 
4.10.88); 
Council Resolution of 19th December 1991 on the development of the common market for satellite communications services and equipment (92/C 8/0 I , 
OJ C8/l, 14.1.92); 
Council Resolution of 22nd July 1993 on the review of the situation in the telecommunicat10ns sector and the need for further development in that market (93/C 
213/01, OJ C213/l, 6.8.1993). 
11 See, inter alia, Resolution of the European Parliament on the Commission Communication of 21st October 1992 concerning the 1992 Review of the situation in 
the telecommunications services sector, 20.4.1993. 
12 Green Paper on the Development of the Common Market for Telecommunications Services and Equipment (COM(87)290, 30.6.87); 
Green Paper on a common approach in the field of satellite communications in the European Community (COM(90)490, 20.11.90) ; 
1992 Review of the Situation m the Telecommunications Services Sector (SEC(92)1048 final) and Communication to the Council and European Parliament on 
the consultation on the Review of the situation in the telecommunications sector (COM(93)159 final). 
13 Council Resolution of 28th June 1990 on the strengthening of European wide cooperation on radiofrequencies, in particular with regard to services for the pan­
European dimension (90/C 166102; OJ C166/4, 7.7.90); complemented by 
Council Resolution of 19th November 1992 on the implementation in the Community of the European Radiocommunications Cornmlltee Dec1s1on 
(92/C 318/01. OJ C318tl. 4.12.92). 
Council Resoluuon of 19th November 1992 on the promotion of Europe-wide cooperation on numbering oftelecommunicauons services (92/C 318102. 
OJ C3 I 8/2, 4.12.92) 
14 Council Resolution of 7th December 1993 on the introduction of satellite personal communications services in the European Community (93/C 339/0 I; OJ C 
33911, 16.12.93) 
9 
This concerns, in particular, the Directives on competition in the markets for 
telecommunications services and for terminal equipment15 which set the basic principles for 
telecommunications liberalisation in the Union; the ONP framework and specific Directives 
which establish a framework for open access, interconnection and harmonisation16 
~ the 
Directives concerning mutual recognition which identify the procedures for implementing free 
circulation of terminal equipment and, according to current proposals, will apply the principle to 
licences to provide services17, as well as Directives concerning the protection of the public 
interest in this field, such as the proposed Directive on the protection of privacy18. 
Finally, the more general environment of the European Union must be taken into account. / 
The Treaty on European Union has now added the establishment of Trans-European Networks 
as an important objective of the Union. 
Title XII, Article l 29b of the EC Treaty indicates that "within the framework of a system of 
open and competitive markets, action by the Community shall aim at promoting the 
interconnection and interoperability of national networks as well as access to such networks". 
The European Union has undertaken substantial action to promote advanced mobile 
communications in the framework of its research programmes19. 
As regards the structure for cooperation in the sector beyond the European Union, key roles are 
played in the European context by the European Telecommunications Standards Institute 
(ETSI) ; the European Radiocommunications Committee (ERC), and its associated European 
Radiocommunications Office (ERO) ; the European Committee for Telecommunications 
Regulatory Affairs (ECTRA) and its future associated European Telecommunications Office 
(ETO), which are now developing continent-wide coverage, including the countries of Central 
and Eastern Europe. 
15 Commisison Directive of 16th May 1988 on competition on the markets in telecommunications terminal equipment (88/301/EEC ; OJ L 131/73, 27.5.88) 
Commission Directive of 28th June 1990 on competition on the warket~ for telecommunications se1v;ces (90/38FIEEC; OJ L192/l0, 24.7.90) 
16 Council Di1.!ctive of2f.tl, June 19<;.'.l on t.:1e estab:ii.hment of the Internal Market for telecommunications services through the implementation of Open Network 
Provision (90/387 /EEC ; OJ L 192/1, 24. 7. 90) 
Council Directive of 5th June 1992 on the Applicat10n of Open Network Provision to Leased Lines (92/44/EEC; OJ Ll65/27, 19.6.92). 
Common position on a Council Directive on the application of Open Network Provision (ONP) to Voice Telephony, I. 7.93. 
17 Council Directive of 29th April 1991 on the approximation of the laws of the Member States concerning telecommunications terminal equipment, including the 
mutual recognition of their conformity (91/263/EEC; OJ L128/l, 23.5.91), 
Council Directive of 29 October 1993 supplementing Directive 911263/EEC in respect of satellite earth stat10n equipment (93197/EEC. OJ L290/01. 24. 11. 93) 
for services . 
Amended proposal for a Council Directive on the mutual recognition of licences and other nat10nal authorisations for telecommunications services, to be 
published; 
Proposal for a Council Directive on a policy for the mutual recognition of licences and other national authorisations for the provision of satellite network services 
and/or satellite communications services, to be published. 
18 Modified proposal for a Council Directive concerning the protection of personal data and privacy in the context of public digital telecommunications networks, m 
particular the Integrated Services Digital Network (ISDN) and public digital mobile networks, to be published. 
19 See in particular Council Decision of 7th June 1991 adopting a specific research and technological development programme in the field of Communications 
technologies (1990 to 1994) (91/352/EEC; OJ L192/8, 16. 7.91) -the RACE programme. 
10 
With all of these organisations, the Union has -or is in ·the process of developing -close 
cooperation. Future Union policy in the sector must take full advantage o( the possibilities for 
cooperation which such organisations offer within the framework provided by Community law. 
As regards the international environment beyond Europe, action there is influencing the 
conditions for the future development of the sector in the Union. All Member States have 
undertaken major commitments within the framework of the International Telecommunications 
Union (ITU), in particular with regard to the International Radio Regulations. 
The World Administrative Radio Conference (W ARC'92) held at Torremolinos has led to major 
commitments with regard to future availability of radiofrequencies for mobile communications. 
This will substantially affect the development of mobile and personal communications in the 
Union. 
At the same time, the Union is negotiating to achieve, at the international level, a new multi­
national trading environment in the context of the General Agreement on Tariffs and Trade. 
This will also have a major impact on the Union's relations with third countries in the field of 
mobile services and equipment. 
The approach chosen in this Green Paper has aimed at taking into account this evolving and 
complex environment. Results of the analysis have been grouped according to those factors 
which represent critical challenges for any approach at a Community l~vel. Detailed 
consideration of each of these factors is presented in four anr~exes : 
• Review of technological and market developments (Annex A) ; 
• Analysis of the European environment for future development (Annex B) ~ 
• Review of world-wide developments (Annex C); 
• Analysis of the extension of the principles of the Union's telecommunications policy to 
the mobile sector (Annex D). 
The main results are set out in the following chapter. 
11 
III MAIN RESULTS OF ANALYSIS AND CONSIDERATIONS TO BE 
TAKEN INTO ACCOUNT 
The main results of the analysis undertaken are summarized below. For detailed explanation of 
the various issues, reference should be made to the Annexes and the Glossary of technical terms. 
III.1 Major trends and opportunities. 
I The mobile telecommunications sector represents one of the maJor areas for 
potential growth in the communications and information sector. 
From the ~tudies undertaken mid-range estimates of the use of mobile 
communications in Europe suggest that there could be nearly 40 million users by the 
year 2000 and up to 80 million users by 20 I 0 -up from a current total base of 
around 16 million users (including cellular telephony, paging and private mobile 
radio). 
Market research predicts that 20 to 3 0% of the business users can be expected to 
have personal mobile communications by the year 2000, with slower penetration 
growth thereafter. By 2010 penetration would be 30 to 50%. 
In addition, 30 to 40% of the population would have personal communications for 
private use by 2010. 
With the broadening of mobile communications to full scale personal 
communications, penetration levels can ultimately be expected to reach near 80% of 
the entire population. Total user numbers could ultimately substantially exceed 200 
million in the European Union -compared to a current total subscriber base for 
traditional fixed telephony of 153 million. 
This makes the future development of mobile and personal communications of key 
interest to the Union, both in the context of the development of trans-European 
networks and as a central component of the Union's future communications and 
information infrastructure. 
2 Currently, the overwhelming majority of mobile systems in the Union are still based 
on analogue technology, composed of three well established services -so called 
private mobile radio (for the use of corporate networks -this Paper will describe 
this as "own use" -or for the use of closed user groups, e.g. for fleet management, 
12 
emergency services, taxi-cab services, single businesses, etc.), paging and public 
cellular radio services (earphones, mobile phones, etc. )20. 
The total user base for all mobile services grew over 20 % in 1991, led by an 
increase in cellular usage of over 40 %. Despite the general economic downturn, 
1992 growth in cellular subscriptions remained strong. 
As well as accounting for greater than 45 % of the total user base,, cellular also 
accounts for around 90% of the value of the total European market for mobile 
services and 75% of that for mobile equipment. 
3 Digital technologies are now being introduced in both public and private mobile 
radio communications. This will rapidly determine the pattern of development for 
the sector. 
While the public mobile telephony market is still served mainly by analogue cellular 
technologies such as NMT, TA Cs and other systems, the digital technologies now 
being introduced, in particular GSM 900 (the European Global System for Mobile 
communications), DCS-1800 (so called Personal Communications Networks -PCN 
services) and DECT (Digital European Cordless Telecommunications), as well as 
systems such as CT2, and ERMES (the pan-European digital paging systems) and 
TFTS (the European digital Terrestrial Flight Telecommunications System) will 
rapidly overtake analogue systems21. 
Only one year after its em~ctive launch, GSM accounts for over 10% of the installed 
cellular mobile telephony base in the Union. 
As regards private mobile radio, new digital technologies such as TETRA (the 
European standard for digital trunked systems), mobile data, DSRR (Digital Short 
Range Radio), wireless LANs and wireless P ABXs (including use of DECT in this 
area) are expected to provide a substantial push in this part of the market. 
4 The development of digital mobile systems has been a major success for European 
industry, the European standardisation system, in particular, the European 
Telecommunications Standards Institute (ETSI), and for European operators. A 
number of recently developed European systems are poised to become world 
standards. Europe is now considered to be the world leader in digital cellular 
systems. GSM has been adopted -or planned to be adopted -in more than 60 
20 For definition and technical details see Glossary of Technical Terms 
21 For details see Annex A 
13 
countries, in particular, throughout Europe including the countries of Eastern and 
Central Europe, and also in the Pacific Area with the exception of Japan, and in a 
number of other countries in Asia, the Middle East and Africa. 
European industry has obtained a strong position in both network and terminal 
equipment markets in this area, and GSM is having a major impact on ensuring the 
world position of the global European telecommunications industry, with a resulting 
positive effect on its growth, competitiveness and employment. 
At the same time, GSM is overcoming the market fragmentation in the Community 
which resulted from the use of incompatible analogue systems in the Member States, 
and is developing into a major example of a market-led introduction of a trans­
European network. 
Based on a common development effort from the very beginning, resulting common 
standards and a consistent Community approach to the area, GSM has established a 
new model for the development of trans-European networks and systems. 
5 The licensing of competitive systems in the majority of Member States has made a 
substantial contribution to the take off of GSM services. 
Competitive provision has also been the basis, in a number of Member States for the 
development of DCS-1800 services, telepoint services, paging and trunked systems. 
This is in addition to the liberal licensing policy for private mobile radio generally 
found in all Member States22. 
6 One of the most dramatic effects in European telecommunications over the recent 
period has been the substantial price decreases of digital mobile terminal equipment 
and the reductions and innovative price packages offered for mobile services. 
According to the studies carried out, it appears that the development towards mass­
market use of mobile communications and the evolution towards mass-distributed 
personal communications services will accelerate substantially once terminal handset 
prices fall below 250 ECUs. 
22 For fwther details see Annex B 
As regards GSM, eleven out of twelve Member States have either licenced -or announced their intention to licence -two operators (in the field of analogue 
cellular telephony, two Member States have licenced competitive providers; in the rest of the Community analogue cellular services are generally provided by the 
existing telecommunications organisations, as far as such systems are available). 
As regards DCS-1800 (so-called PCN operators), systems have been licenced to date in two Member States with licensing procedures underway or being 
considered in other Member States. 
As regards telepoint services based on CT2 (or in future DECT), five Member States have awarded licences or launched pilot projects, however some of the 
licensees have subsequently withdrawn from the market. 
As regards so-called trunked (Public Access Mobile Radio -PAlvfR) systems, six Member States have allocated national or reg10nal competitive licences to date. 
14 
While handset prices are in general still a factor of 2 to 3 times higher, the current 
rapid price decreases seiem set to accelerate the development towards personal 
communications. 
7 Europe's role as a technology leader provides a favourable starting point for the 
evolution towards the emerging personal communications environment. Personal 
communications will ultimately allow pcr:mn-to-person calling independent of 
location and the terminal used, the means of transmission (wired or wireless) and/or 
the choice of technology. 
As the analysis and recent reports show23, personal communications services are 
likely to be based initially on combinations of existing systems such as GSM, DCS-
1800 and DECT, togethe:r with intelligent network functions in the fixed network 
providing for mobility via the fixed network, and will include satellite-based personal 
communications systems, in particular, to provide coverage in peripheral or thinly 
populated regions24. 
This trend will be further reinforced by the move towards portability. After desktop 
work stations and PCs have shown strong growth rates, demand shifted first to 
laptops, notebooks, and pen-books and now towards full-scale Personal Intelligent 
Communicators (PICs) or Personal Digital Assistants (PDAs), which may develop 
into a mass market tool operated by use of a keyboard, touch screen or pen 
pointer25. 
Tomorrow's communicator will integrate the features of telephone, agenda and 
organiser, combined with PC functions. Industry has already introduced very small 
PCs ("palm-tops"). Ultimately these devices are likely to integrate all features that 
modern telephony offers. This will include video-phone and fax features, as well as 
the possibility to "plug" into office or private computers. They will integrate 
multimedia and telecommunications applications. 
8 The person-to-person calling concept, personal and portable numbers, and the 
combination of mobility in both fixed and mobile networks will lead, once such 
innovative service combinations are allowed, to a gradual blurring of distinctions 
23 See, inter alia, 
Eutelis "Scenano Mobile Conununications 2010 -future trends in te~hnological development in commercial prov1s1on up to the year 2010", Repo1t to the 
Commission of the European Conununities, October 1993, and 
Direction de la Reglementation Generale (DRG) "Les telecommunications a !'age de la mobilite, consultation publique sur !'introduction en France des systemes 
de communications personnelles", November 1992 
24 See also Council Resolution of 7th December 1993 on the introduction of satellite personal communications services in the European Community (93/C 339/0 I ; 
OJC339/l, 1612.93) 
25 Such applications are currently mvest1gated interalia in the Conununity R&D programme in the field of telematics (Council Decision 91 /353/EEC, OJ L 192/ 18. 
16.7.91) where e.g. on-line traffic data, navigation maps and planning of personal trips are combined on the same mobile commWlication tenninaL In addition, 
new services are evolving in markets such as transport, health care, education and training where the use of mobile conununications offer flexibility for new 
applications. 
15 
which now exists between fixed and mobile services, m parallel with the 
development of Intelligent Networks. ''Mobile services are then likely to become 
more integrated with the fixed networks. The regulatory regime must therefore 
make provision for these changes"26. 
Personal communication services, allowing person-to-person calling based on a 
concept of full mobility will create a completely new telecommunications 
environment. 
9 Ultimately, personal communications services are likely to be carried most 
economically via a single integrated technology concept -the so-called UMTS (the 
Universal Mobile Telecommunications System). 
The strong European position in digital mobile communications has made the Union 
a major actor in the work towards this future "third generation" system, building on 
the strengths of the current second generation digital mobile systems. 
The Community's programme in advanced telecommunications technologies27 
(RACE) has substantially contributed to developments in this area and is currently 
supporting European industry in testing future technology options. ETSI's Special 
Mobile Group (SMG) which is also responsible for future development of GSM and 
DCS-1800, is working on standards in this area, thereby contributing to the 
preparation of the European position in the International Telecommunications Union 
(ITU), which is studying this area under the description Future Public Land Mobile 
Telecommunications Systems (FPLMTS). 
Given Europe's leading position in the implementation of digital mobile technologies 
with regard to the United States28 and Japan, Europe has the opportunity to carry 
forward its success in the GSM system into the future third generation market for 
personal communications technologies. 
26 European Committee for Telecommunications Regulatory Affairs (ECTRA), "Review of the requirements for the future harmomsat10n of regulatory policy 
regarding mobile communications services", ECTRA Mobile Project Team, October 1993. 
27 Council Decision of7th June 1991 adopting a specific research and technological development programme in the field of communications technologies ( 1990 to 
1994), (91/352/EEC; OJ Ll92/8, 16.7.91) 
28 See Annex C 
16 
29 
30 111.2 Barriers to be overcome 
10 While Europe has developed a strong position in mobile communications and in the 
race towards personal communications services, substantial barriers still remain29. 
11 As the majority of Member States are moving towards a competitive environment, 
certain Member States continue to maintain exclusive rights in different market 
segments which do not allow full scale development of the market, or special rights 
which prevent equality of opportunity for all market participants. 
12 Systems are generally licenced according to technologies. 
On the one hand, this is linked to assignment methods for radiofrequencies and is 
justifi~d to a certain extent by the neeu to ensure ~~,.;~tromagnetic compatibility and 
efficient use of frequencies. It has also facilitated interoperability and the use of 
European standards. 
On the other hand, technology-based licensing leads to market fragmentation 
between different technollogies and standards, unless sufficient flexibility is allowed 
in provision and combination of such services in response to market demand. 
13 Current licensing activities are nationally oriented. This results in a web of parallel 
national systems in the Union. 
While this has the advantage of allowing systems to be fully adjusted to specific 
national needs, this focus also leads to substantial delays in the implementation of 
pan-European systems. This has been the case even for those systems where this 
potential is most obvious. One example is the substantial delays and gaps 
experienced in ensuring full-scale roaming in the Union30 within the GSM network. 
14 There is no consistent approach in the Member States with regard to service 
provision, especially with regard to the activities of independent Service Providers. 
Common principles relating to service provision (whether as an integrated part of a 
mobile network or by independent service providers), with the aim of facilitating 
service provision throughout the Union in line with Article 59 and the Treaty 
Competition Rules, could overcome the current effects of both technological and 
For a full discussion of cwrent bamers, see the analysis of the cwrent Ew-opean envirorunent m Annexes Band D. 
Roaming means the capability to access a mobile commw-11cat10ns system anywhere in the Community, independent of country and the mobile commun1cations 
operator over whose network(s) the connection 1s made (such as over the pan-European mobile digital system, GSM), on the basis of a single subscription to a 
service provider, usually in the subscriber's home temtory 
17 
national fragmentation of mobile systems. It could also make a substantial 
contribution to the further development of the mobile market. 
15 One consequence of the current fragmentated approach to future development and 
service provision within the Union is the lack of a common vision on the 
development of personal communications services and the ultimate transition to the 
Universal Mobile Telecommunications System. 
The lack of such vision, insufficient dynamism in the approach to service provision 
and failure to adjust to market requirements could jeopardize Europe's current 
strong position. 
16 This situation is further aggravated by the lack of firm timetables for allocation of 
radiofrequencies for new European technologies. 
While the Council Directives for the Community-wide designation of frequency 
bands for GSM, DECT, and ERMES have charted the pattern of development for 
those systems, and while ERC Decisions have been recently adopted concerning 
frequency allocation for TFTS and DSRR, major decisions are still outstanding. 
This concerns in particular firm agreement and implementation of Europe-wide 
frequency bands for DCS-1800, a vital technology for Personal Communications 
Services ~ TETRA, a major future technology for private mobile radio, and firm 
planning in the Union for the implementation of the frequency bands designated at 
W ARC'92 for the UMTS/FPLMTS, which is vital for giving a firm base to the 
development of UMTS in Europe. 
17 At the same time, the Union to date has not yet found a suitable response to the US 
dominated initiatives in satellite-based personal communications. 
While the US is lagging behind Europe in the implementation of digital terrestrial 
mobile systems, it is now emphasizing satellite-based personal communications as a 
major strength and aims to play a dominant role in this global market. 
The Council Resolution of 7 December 1993 on the introduction of satellite personal 
communications31 calls for determined Community action in this field. 
31 C0uncil Resolution or 7th Ikcembcr 199.> l1n the intrnJuet1on llf satellite personal cnmmu111cathll1S ser\'ll"l'S 111 the hirnpean ( \11111m1111l\ 19.• ' • .>.N ()I. ( )J '. 
33911, 16.1293) 
18 
32 18 The general trend in cellular systems is towards micro-cellular systems with cell sizes 
down from some 30 kilometres diameter to 10 kilometres and substantially less in 
high density urban areas. This has been prompted by technologies such as DCS-
1800, as well as commercial and frequency-efficiency needs. This trend will increase 
the investment requirements for mobile communications operators by between 2 to 4 
times in comparison to traditional cellular ~ystems. However, mobile operators 
remain hampered in a number of Member States by restrictions on use of own 
infrastructure and/ or use of third party infrastructure, as well as on the sharing of 
infrastructure all of which prevents them from improving their efficiency. 
At the same time, mobile operators are facing the need to lower tariffs and 
restructure prices in order to keep pace as micro-cellular systems move towards the 
mass personal communications services market. 
I 
19 Access to third country markets, in particular, to the United States and Japan, 
remains difficult for European manufacturers and operator~, while European 
manufacturers buy a major part of their integrated circuits and components for 
digital mobile equipment in the U.S. and Japan, and U.S. manufacturers and 
operators play a significant role in the European mobile communications market32. 
This imbalance could undermine, in the medium term, the economics of the 
European mobile communications sector. 
111.3 The way forward 
20. In analysing the way forward, full account should be taken of the scope and scale of 
action required to overcome current barriers impeding the development of a Union­
wide market for mobile communications and the gradual transition towards a personal 
communications environment. 
The further development of such a Union-wide market mobile services and mobile 
equipment can allow opt~rators, service providers and manufacturers to achieve 
important economies of scale and scope, which will be reflected in improvements in 
innovation and services quality and decreasing prices which cannot be easily achieved 
on the basis of fragmented national markets. Furthermore, mobile services have by 
their very nature, a pan-European vocation which requires co-ordinated action, 
For fm1her detail, see Annexes C and D, Section 12 
19 
33 
34 consistent with Treaty obligations, to provide Union-wide solutions to issues of 
standardisation, and frequency and numbering co-ordination; and more broadly to 
allow a common regulatory framework to promote the emergence of pan-European 
services, operators and service providers. 
21. This approach must draw on the basic principles enshrined in the Treaty and, in 
particular, Article 3 promoting the further development of the internal market, 
together with the fundamental principles of Community law guaranteeing the freedom 
of movement of goods (Article 30); the right of establishment (Article 52) and the 
free provision of services (Article 59); the competition rules enshrined in Articles 85, 
86 and 90; as well as the mechanisms provided under Article 1 OO(a) for 
harmonisation measures designed to remove barriers created, for example, by national 
regulatory structures or licensing regimes, within the internal market. 
The approach also draws on the new political priorities and principles established by 
the Treaty on European Union, in particular, the establishment and development on 
Trans-European Networks and the fundamental principle of subsidiarity enshrined in 
Article 3b. 
A full discussion of the extension of the Union's existing telecommunications policy to 
mobile and personal communications, which underpins the positions proposed in this 
Green Paper, on the basis of these Treaty obligations and Community legal principles 
is presented in Annex D. 
22 The maintenance of exclusive and special rights is creating a situation which appears 
to be incompatible with the Treaty33 and such rights should be abolished. 
According to experience, some 95% of all calls transmitted via cellular mobile 
communications networks in Europe are calls to terminals connected to the fixed 
network or calls originating on the fixed network. 
Mobile communications networks are therefore, at this stage, not likely to reduce 
nor substitute, but rather substantially increase traffic and revenues on the fixed 
network. They therefore cannot undermine the financial viability of the 
telecommunications organisations operating the fixed network, nor could they 
obstruct the performance of the particular tasks assigned to such operators34. 
For a detailed discussion of the etlects ofslich nghts see Annex D, section 2 
See Annex D, Section 2 
20 
23 As a general principle n~gulation should be reduced to a mm1mum, with market 
forces, subject to the Community competition rules, playing a predominant role m 
shaping future markets. Regulation should be confined to areas of public interest. 
Licensing conditions for mobile telecommunications systems should be limited to 
e_ssential requirements and conditions based on public service requirements in the 
form of trade regulations as defined by Commission Directive 90/3 88/EEC and 
Council Directive 90/387/EEC as well as Commission Directive 88/301/EEC and 
Council Directive 91/263/EEC35, and the extension of the measures to the satellite 
sector36. 
Essential requirements should concern m particular effective use of the 
radiofrequency spectrum and electromagnetic compatibility requirements, as well as 
security of network operation, maintenance of network integrity, and, in justified 
cases, interoperability of services and data protection ~·and user safety, and safety of 
employees. 
Conditions based on public service requirements in the form of trade regulations37 
for systems intended for use by the general public which address permanence, 
availability and quality of the service. This may also imply conditions relating to the 
technical competence and financial resources of the licensee38• 
License conditions must be based on objective grounds, be transparent, be non­
discriminatory and respe:ct the principle of proportionality. When a license to 
provide a mobile network is granted to an operator which also runs a fixed network, 
the license should encompass specific safeguards to ensure fair competition39. 
This also implies that license fees must be based on objective facts, be proportionate 
and be justifiable. 
24 The major condition for the development of the sector and the further development 
of the internal market and a fair competitive environment will be overcoming three 
35 C omm1ss1t>n D11t:ct1w of 28th June 1990 on competition on the markets for telecommunications services (90/388/EEC ; OJ L 192/10, 24. 7. 90) 
( 'ounctl Dm.:ctive of 28th June 1990 on the establishment of the Internal Market for telecommunications services through the implementation of Open Network 
l'rov1s1on (90/387/EEC , OJ L 192/J. 24 7 90) 
Comn11ss1on Directive of 16th t-.Iay 1988 on the competition m the markets for telecommunications terminal equipment (88/301 /EEC : OJ LI 31 /3, 27.5.88) 
Council Dtrcctivc of 29th Apnl 1991 on the approximation of the laws of the Member States concerning telecommunications termmal equipment. including the 
mutual n.:cogn1t1nn ofthc1r conformity (91/263/EEC, OJ LI 28/l, 23.5 91) 
36 < 'ouncil Dtrective of2~) October 1993 supplementing Directive 91/263/EEC in respect of satcllik earth station equipment (93/97/EEC: OJ L290/0l, 24. 11 93) 
Dratl Commission Dm.:ct1vc amending Directives 88/301 /EEC and 90/388/EEC m particular with regard to satellite communications. to be published. 
37 Sec Annex D, Section 3 • 
38 Licensing award procedures should take mto ac.:ount the .ability of potential bidders to comply with trade regulations covenng permanence, availability (including, 
for example. speed of network development, compliance with price cap formulas) and quality of service to be contained in the licence to be awarded. The 
1dat1w wc1ghtmg of such cntcna must be objectively ba~cd. transparent (1.e published m detail in any call for bids) and respect the pnnciple of proportionality 
39 It should, where necessary, provide that a distmct suhsidi,ary should be set up to operate the mobile activity on an arms length basts 
21 
40 
41 
42 
43 key barriers in the Union: lack of flexibility in service provision, both across licences 
and within and between Member States ; conditions concerning the interface 
between mobile network operation and the fixed network(s); and the lack of 
flexibility in use of own or third party infrastructure, and in sharing of 
infrastructure4o. 
Overcoming these barriers will not only develop the mobile market, but will also 
allow through combined service offerings a major step to be taken towards personal 
communications services. 
25 Achieving fair interconnection agreements with the fixed network(s) is vital for 
mobile operators41. Payments to fixed network operators for the conveyance of calls 
to their final destination and .the provision of leased lines for the establishment of the 
mobile network typically account for 30-50% of total revenue of mobile network 
operators. These costs therefore determine to a large extent the economics of 
mobile network operation. 
The basic framework for such interconnection is established within the Open 
Network Provision rules, in particular, the proposed ONP Voice Telephony 
Directive42. 
According to the ONP framework, National Regulatory Authorities carry the 
principal responsibility for ensuring interconnection. This offers sufficient flexibility 
to allow full account to be taken of national situations. 
26 The prohibition or restnct1on on mobile network operators using their own 
transmission infrastructure or that of a third party, or on the sharing of infrastructure 
is a major barrier to the development of mobile communications and appears to be 
conflicting with the Treaty competition rules43. 
Current positions in Member States vary. Given that a number of Member States 
have lifted such restrictions without any visible impact on the revenues of the fixed 
network operator(s) or their financial viability, maintenance of such prohibitions 
appears difficult to justify. 
27 This is particularly true in the case of infrastructure used for direct connections with 
other mobile operators, both within and between Member States. This has been 
For fwther consideration of these barriers. see Armexes Band D. Sections 3,6 and JO 
For full discussion, see Armex D, Section 6. 
Common position on a Council Directive on the application of Open Network Provision (ONP) lo Voice Telephony. 1. 7. 93 
For full discussion, See Annex D, Section I 0 
22 
aggravated by the current persistent difficulties for a number of fixed networks in 
providing mobile network operators with transmission facilities at reasonable cost or 
with the necessary technical facilities (such as control and signalling functions for 
roaming between mobile networks and between Member States). 
Direct connection could overcome these barriers and accelerate Europe-wide 
roaming as well as the establishment of trans-European networks, with a schedule 
for such a development to be determined on the basis of the comments received 
during the consultation period. 
Within this framework such policy should, as identified in Council Resolution 
93/C2l3/01, "recognise the need to take into account the objectives of Community 
cohesion in the light of the specific circumstances of peripheral regions". 
28 The regulation of service provision, as well as attitudes towards independent service 
provision vary substantially across Member States. 
Diversification and liberalisation of service provision is essential for the future of 
European mobile networks, as well as for Europe-wide service provision. 
In principle, network operators should meet all reasonable requests by service 
providers for access to their services, whether from an independent service provider 
or from a service provider integrated into other mobile network operations, within 
the limits of normal commercial practice and subject to the provisions of competition 
rules. 
29 Service provision should not be subject to licencing in the Member States and may 
only be subject to a requirement for declaration by Service Providers of their 
activities to the National Regulatory Authority(ies) of the Member State(s) where 
they choose to operate44. 
A Code of Conduct for Service Providers should be established on a voluntary basis. 
The Code should, in particular, identify measures to safeguard essential requirements 
consistent with the Community regulatory framework in this area and commitments 
with regard to permanence of service, availability and quality of service, as well as 
providing guidelines concerning technical, financial, and commercial practices fully 
consistent with the Treaty's competition rules. 
h1r lull d1s~uss1nn. sec· ,\rule>. J) Scl'lion .> 
23 
45 
46 The Code should also take fully into account the need to attain a high level of 
consumer protection. 
30 Definition of interfaces is required45, in particular, for : 
• the interfaces between mobile network and fixed network infrastructure ~ 
• the interfaces, functionalities and service elements made available by mobile 
network operators to independent service providers ~ 
• the interfaces made available to access the intelligent functionalities of fixed 
network( s) ~ 
• the interfaces for private mobile networks to interconnect with the public 
fixed network, where applicable ~ and 
• the interfaces to interconnect directly mobile networks of same or different 
technologies, as required. 
31 The basic principles set by Council Directive 90/387/EEC46 apply to such interfaces. 
This implies in particular that, for mobile communications, interconnection 
conditions established at these interfaces should be based on objective criteria, be 
transparent, and non-discriminatory, cost-oriented, and compatible with the principle 
of proportionality, as well as respecting the essential requirements. 
The establishment of suitable interconnection agreements respecting these principles 
should be primarily a matter for commercial agreement between market participants. 
At this stage it does not seem necessary to establish further specific Directives 
concerning these interfaces and related interconnection conditions at a Community 
level, provided such interconnection is subject to strict supervision by National 
Regulatory Authorities to ensure full application of these principles and the 
establishment of suitable dispute resolution procedures. 
The importance of defining these interfaces to remove obstacles to the development of the internal market and to pronllite pan Eurnpean ser.·1ccs 1s J1s,~usscJ 
further in Annexes B and D, Section 6 
Council Directive of 28th June 1990 on the establishment of the Internal Market for tclecommun1cations serv11.:es through the 1111plementat11>n nf< >pen Netwnrk 
Provision (90/387/EEC . OJ L 19211. 2-+ 7 90) 
24 
47 
48 
49 32 Standards concerning these interfaces should, in general, be voluntary. 
In order to facilitate interconnection, the establishment of technical standards 
concerning these interfaces should be promoted and published, where required, m 
accordance with the provisions of Directive 90/387/EEC. 
Only in cases where it is strictly necessary to ensure basic interoperability and 
freedom of choice for US(~rs, and subject to the principle of proportionality, should 
references to standards be made binding under the provision of Art. 5(3) of Directive 
90/387/EEC. 
This corresponds to the general approach to the overall adjustment of Open 
Network Provision in the context of the follow-up of the 1992 Telecom Review47, 
which emphasizes voluntary commitments and commercial negotiation between the 
parties concerned, with regulatory intervention only as the last resort. 
3 3 As set out, personal communications services are likely to be carried initially by a 
combination of existing digital mobile technologies, and ultimately, by a combination 
of mobile communications networks and the fixed networks. 48 
As a first step to launching this evolution from current mobile services towards such 
a personal communications environment, the removal of restrictions on the 
combination of multiple mobile technologies or services through a single service 
provider is required. This will allow users to access different mobile 
communications systems and services via hand sets combining different technologies 
such as DCS-1800, GSM, and DECT. 
Subsequently, restrictions on the free combination of services provided via the fixed 
and mobile networks should be removed. 
34 The full freedom to combine fixed and mobile communications services and to offer, 
or resell, services via mobile and fixed communications networks without limitations, 
including the switching of connections between fixed terminal destinations, will 
depend on the schedule for full liberalisation of public voice services established in 
Council Resolution 93/C 213/0149, namely 1st January 1998, with additional 
Council Resolution of 22nd July 1993 on the review of the situation in the telecommunications sector and the need for further development m that market (93/C 
213/01. OJ C213/1, 6.8.1993) 
For full discussion,see Annex L>. Section 11. 
Council Resolution of 22nd July 199] on the review of the situation in the telecommunications sector and the need for further development in that market 
(93/C 213101. OJ C2U. 6.R 1n1 
25 
transition periods of up to five years for Spain, Ireland, Greece, and Portugal and, 
where justified, two years for Luxembourg. 
Such fully integrated service provision will be subject to conditions which may be 
agreed for licenses for provision of public voice telephony via the public fixed 
network, concerning, inter alia, universal service obligations and/ or sharing of the 
financing of such obligations. It will also be subject to Community competition 
rules. 
3 5 In order to introduce a more European focus into current mobile communications 
operations and licensing procedures, and to facilitate the establishment of trans­
European networks and services, the principle of full mutual recognition of 
approvals, licences and authorisations should be applied whenever technically 
possible. 
36 This applies in particular to mobile terminal equipment. 
Mobile terminal equipment should be subject only to type approval according to the 
principles of Directive 91/263/EEC50 and Directive 93/97/EEC, which allow 
application of specific conditions ensuring electromagnetic compatibility. 
To the extent that mobile terminal equipment is not capable of connection to the 
public network and therefore currently outside the scope of application of Directive 
91/263/EEC and is not covered by Directive 93/97 /EEC, Directive 91/263/EEC 
should be extended to include such equipment within its scope51. 
Where the provisions of Directive 91/263/EEC have still not been made applicable to 
specific types of mobile equipment52, and where specific licences or class licences are 
required in Member States to provide for efficient use and operation of equipment, 
the principle of full mutual recognition of licences granted in another Member State 
should apply to ensure free circulation of such equipment in the Union. 
Further, pending adoption of CTRs53 or other harmonised standards and subject to 
the framework provided by ACTE54 establishment of interim type approval 
procedures in the context of the European Radiocommunications Committee (ERC) 
50 Council Directive of 29th April 1991 on the approximation of the Jaws of the Member States concerning telecommunications terminal equipment. including the 
mutual recognition of their conformity (91/263/EEC . OJ LI 28/L 23 5.91) 
51 Coucil Directive of29 October 1993 supplementing Directive 91/263/EEC in respect of satellite earth station equipment (93197/EEC. UJ L290/0l. 24.11.93) -
Specific issues anse, in particular. in the case of terminal equipment not intended for connection to the public switched network. Sec Annex D. Section 8. 
52 with the exception of satellite-based mobile equipment covered by Direcuve 93/97/EEC 
53 Common Technical Regulations (CTR) 
54 Approvals Committee for Terminal Equipment (ACTE) 
26 
can assist in achieving the objectives of Directives 91/263/EEC and 93/97 /EEC in 
those cases55. 
3 7 As regards licensing of mobile communications networks and systems56, the principle 
of mutual recognition can only be fully applied, where there are no limitation of the 
number of licensees. 
A restriction on the mutual recognition should only be introduced if justified on the 
basis of essential requirements such as the efficient use of frequencies, and where 
applicable ensuring compliance with public service requirements in the form of trade 
regulations57. Such restrictions must be consistent with the Treaty competition rules 
and subject to verification of their compatibility with Treaty obligations. 
Any limitation of numbers should be consistent with the principle of proportionality, 
by imposing the least limiting solution and giving priority to competitive provision. 
38 Where seiection of licences is made on the basis of first-come/first-served, mutual 
recognition should in principle be applied subject to availability of radiofrequencies. 
This concerns, in particular, satellite-based mobile communications networks and 
terrestrial mobile communications networks especially in border areas and in the case 
of mobile networks licenced for own use or use by closed user groups (private 
mobile radio networks). 
As regards satellite-based mobile services, the situation is addressed in the proposed 
Directive for the mutual recognition of satellite service licences58. 
39 Where limitations are imposed on the number of licences for the reasons set out 
above and the award of licences is carried out, for example, on the basis of 
comparative bidding, full application of the principles of mutual recognition is no 
longer possible. 
Whichever method is used to award licences -first come/first served, comparative 
bidding, auctioning, lottery -licence award procedures must be based on open, 
non-discriminatory and transparent procedures. 
55 For further discussion of the issue of type approvals, see Annex D, Section 8 
56 For full discussion of application of Community principles to licensing see Annex D, Sections 3 and 8 
57 As defined in Article 3(2) of the Services Directive. See Annex D, Section 3. Where frequency spectrum 1s still available, Member States could. m determining 
whether to accept mutual recognition of operator's licences granted in other Member States, take account of the extent to which the objectives sought by trade 
regulations would be satisfied by that operator. 
58 Proposal for a Council Directive on a policy for the mutual recognition of licences and other national authorisations for the provision of satellite networks services 
and/or satellite communications services (to be published) 
27 
40 The method chosen to award licences should ,be implemented in a way that the final 
selection offers maximum guarantees for the full respect of the essential requirements 
and the achievement of the goals sought in any public service requirements in the 
form of trade regulations as regards user benefits, in particular in terms of price. 
Lotteries are compatible with the Treaty, but do not seem to offer the most adequate 
guarantees for the future development of mobile communications market and, in 
particular, do not allow an assessment of the ability of participants to satisfy the 
criteria set out, in particular, concerning respect of the essential requirement for 
efficient use of frequencies as well as requirements relating to technical competence 
and financial resources of the operator, in order to ensure such efficient use. 
As regards the award of licences through auctioning on the one hand, studies carried 
out for the Commission point to substantial problems flowing from auctioning of 
licences and related frequency resources, such as excessive transfers to the public 
budget or for ~ther purposes, resulting in artificial barriers to entry to the relevant 
market, higher prices to the consumer and a slower coverage of the Union59. On the 
other hand, auctioning is now used in the United States and mixed forms of 
auctioning and comparative bidding have also been used recently in some cases in 
the Union and other countries. Current data is still inconclusive on the results of 
these experiences. Reports60 in some Member States have addressed the issue of 
auctions. 
At this stage, comments are sought on the different allocation methods. Currently, 
comparative bidding seems to be the method to be considered most satisfactory for 
the allocation of public mobile communications licences in the majority of Member 
States, while first come/first served is used in the field of private mobile radio, with 
the exception of licences and authorisations for Public Access Mobile Radio 
(P AMR), serving regional or national Private Mobile Radio systems on a shared 
basis. 
41 Licensing in the Union is currently carried out at the national level. 
59 Additional competition concerns can arise where auctioning of licences for new systems favours the supplier of an existing technology or system, especially if that 
supplier is the incumbent TO Auct10ns also may promote the creation of anticompetitive groupings among potential bidders 
60 See Committee of experts on basic frequency regulation matters and civil telecommunications for BtvfPT "Frequency regulat10n m the federal Republic of 
Germany", June 1991 
28 
61 
62 
63 In order to further the development of the internal market and promote pan­
European services and networks a number of measures should be taken to overcome 
the national fragmentation of the mobile market61. 
42 Roaming agreements should be promoted. 
In particular, cross-border roaming agreements allow the use of mobile services and 
sending and receiving of calls by a user in Member States ot~er than in territory 
covered by his or her original subscription with a service provider, or mobile 
communications operator in the case of direct service provision. 
Roaming capability is fundamental to Europe-wide use of public mobile systems, in 
particular GSM and, in the future, DCS-1800, as well as all satellite-based mobile 
services. 
Besides the necessary technical requirements such as exchange of call, signalling and 
control data between the networks over which the calls are exchanged62, the 
underlying requirement is that the commercial relationship established between 
Service Providers and mobile communications operators in one Member State is 
fully recognised by other Member States and that no restrictions are applied 
concerning any activity resulting from such relationships. 
In fact, the provision of services in the context of such roaming agreements 
represents the exercise of the freedom to provide services in a Member State other 
than the one in which the Service Provider is established63. 
Such activity should not be subject to any regulatory restriction. Nor should it be 
subject to any surcharge or equivalent measure unrelated to the actual cost of the 
provision of the roaming facility itself, whether imposed as result of regulatory or 
other action. 
43 As regards planning and management of the central resource for mobile 
communications -radiofrequencies, substantial progress on coordination in Europe 
has been made with the establishment of the European Radiocommunications 
Committee (ERC) and the European Radiocommunications Office (ERO). 
Examples are discussed in Annexes B and D. 
Such technical requirements also extend to adequate provisions ensuring confidentiality of communications, data protection and pnvacy 
This freedom is guaranteed by Article 59 EC. See discussion m Annex D 
29 
64 The major objective must now be to establish the appropriate relationship between 
the ERC/ERO framework and the Union, respecting the principle of subsidiarity 
whilst safeguarding Union interests and obligations under the Treaty64. 
44 In the immediate future, a number of short term bottle-necks in frequency allocation 
must be lifted to allow mobile and personal communications market development in 
the Union. 
This requires both decisions on frequency allocations and the timely implementation 
of such decisions by the Member States. This concerns in particular a firm decision 
on frequency bands for DCS-1800, firm allocation of harmonised bands and 
sufficient frequency resources for the Digital Mobile Trunking System (TETRA) and 
establishment of a decision concerning frequency bands for satellite-based personal 
communications systems (including so-called Low Earth Orbit (LEO) satellite 
systems), including a schedule of allocation. 
45 The overall goal for securing the development of the sector should be full 
implementation and the early firm designation and schedule of allocation for the 
bands set aside at the World Administrative Radio Conference at Torremolinos 
(W ARC'92) for the future Universal Mobile Telecommunications System (UMTS I 
FPML TS) in the 1885 to 2025 and 2110 to 2200 MHz range. This goal is required 
in order to provide overall certainty for future sectoral development in the 
Community. 
This is essential to maintain opportunities for Europe in the future UMTS/FPML TS 
system, particularly given current US regulatory policies which give priority to the 
satellite-based personal communications systems, where the United States has, at this 
stage, a technological advantage. 
46 Number allocation and the European numbering space is the second major resource 
to which access is vital for the development of mobile services. This will gain 
dramatically in importance with the advent of personal communications services. 
The new coordination mechanisms m the European Committee for 
Telecommunications Regulatory Affairs (ECTRA) and its future associated 
European Telecommunications Office (ETO) which will also take care of the 
numbering coordination, must rapidly be put into place and a firm relationship with 
For further discussion of frequency coordination issues see Annex D, Section 4. 
30 
65 
66 the Union established. Such a relationship should follow the approach taken in the 
field of radiofrequencies65. 
47 Several short-term numbering pnont1es will have to be addressed, in particular, 
harmonisation of access codes for mobile systems ; harmonisation of access codes 
for directory services ; harmonisation of principles of allocation of numbers or 
number ranges for access codes for Service Providers or for special service features. 
The global objective must be the rapid creation of a European numbering space, as 
the only viable long-term basis for personal and portable numbers and Europe-wide 
personal communications. 
48 Europe, based on its success in current generation digital mobile technologies, is in a 
leading position in the race towards the future Universal Mobile Telecommunications 
System (UMTS/FPLMTS), which is likely to be a future universal base of personal 
communications services. It can build in this field on the current work in the 
Community research programmes in the field of advanced telecommunications 
technologies66 and in the framework of ET Si's Special Mobile Group (SMG). 
However, in order to maintain and benefit from this position, a number of conditions 
will have to be fulfilled. 
49 The major pre-condition for a market-led introduction of UMTS into the European 
telecommunications system is the creation of conditions which promote early 
development of Personal Communications Services. The proposed lifting of 
restrictions on service otforings which combine services provided through different 
existing mobile technologies and/ or via the mobile and fixed networks, will play a 
key role in creating such conditions. 
Without such steps, the necessary market pull and experience will not be successfully 
developed. Nor will the required market volumes be achieved early enough in 
Europe to allow a successfol transition in a second stage for those services towards a 
unifying technology base such as UMTS, as the most economic ultimate solution. 
50 The European Union must contribute in a co-or~inated manner to the drawing up of 
strong European positions in the international fora where the future standards, 
frequency and numbering decisions in this area will be taken. 
See "A new approach to the rnordinat10n of radiofrequencies m the Community, Communication from the Comm1ss1on concerning proposal for a Council 
Decision on the implemcntat10n by the Member States of measures concerning radiofrequencies, COM(93)382, 10.9.93" 
See in particular, Council Decision of 7th June I 991 adopting a specific research and teclmological development programme in the field of communiction 
teclmologies (1990 to I 994)(911352/EEC; OJ LI 92/8, 16.7.91) -the RACE programme 
31 
This concerns in particular coordination within the International Telecommunications 
Union. 
Substantial support should be provided to ETSI's Special Mobile Group (SMG). 
SMG is working on standards in this area and preparing a European position for the 
ITU. 
51 European technological development must be flexible with regard to future 
technology options, in order to secure an optimum position. 
While work in this area should build on the strength of current European digital 
mobile technologies, in particular DCS-1800, GSM, and DECT, flexibility with 
regard to certain features should be maintained, depending on the outcome of 
comparative research currently being carried out in the framework of the RACE 
programme. This is the case in relation to future coding techniques used for the air 
interface (e.g. the relative merits of Time Division Multiplex Access (TDMA) and 
Code-Division Multiplex Access (CDMA)). · 
Whichever detailed features are finally chosen, care should be taken to ensure a 
smooth transition from the use of current technologies to UMTS technologies. 
52 The Community should continue to give high priority to the development of UMTS 
in its research programmes. 
53 The development of Europe-wide networks has been substantially assisted in the past 
by conclusion of Memoranda of Understanding between operators and/or 
manufacturers in key areas of mobile systems (Mo Us have been agreed, for example, 
concerning the introduction of GSM and, in relation to ERMES, teJepoint services, 
and the TFTS). 
In a number of cases these Mo Us have been extended to cover both EFTA countries 
and countries in Central and Eastern Europe and have sometimes been extended 
beyond Europe. This cooperation in the introduction of mobile systems should be 
further encouraged, in particular, in relation to the future development of UMTS67. 
54 In order to maximise the potential of European developments in the fields of UMTS, 
consideration should be given to awarding licences for such future third generation 
67 Priority should also be given to the promotion of use of new types of services, such as transport related information or guidance, on the pan-European mobile 
networks (e.g. GSM and UMTS) 
32 
services from the start in a coordinated mann.er and/or at a Community level. 
Account should be taken of the need to ensure a smooth transition from the use of 
current technologies for Personal Communications Services to the UMTS 
technologies. Account must also be taken of the specific situations in Member 
States and the interests of existing licensees. 
55 The provisions of the Treaty concerning trans-European networks now present the 
opportunity to make a further step in promoting cooperation in the establishment and 
development of such networks. The Commission has proposed guidelines 
identifying projects of common interest in other telecommunications fields. 
In the field of mobile and personal communications, priority could be given to the 
establishment of trans-European networks based on satellite-based personal 
communications including so-called Low Earth Orbit (LEO) Satellite Systems. 
Particular account should be taken of the need to link peripheral regions with central 
regions of the Union. Cooperation could be extended to third countries to promote 
projects of mutual interest in this field. 
56 In order to promote the development of trans-European networks, consideration 
should also be given to the award of licences for future mobile communications 
systems directly impacting on the development of such networks, in a coordinated 
manner between Member States and/or at a Community level, taking due account of 
Member States' interests and the interests of existing licensees. 
Satellite-based personal communications are a case in point. 
57 Elaborating common Union positions in mobile and personal communications with 
regard to third countries and ensuring mark~t access to those countries will be 
indispensable to drawing maximum benefit for Europe, its mobile industry and 
operators. 
An important part of ensuring market access is the removal of non-tariff barriers. 
Equally, market access will be improved through agreements on the mutual 
recognition of conformity assessment procedures. 
Coordinated positions are also necessary on issues .having a direct impact on trade in 
this field, such as issues related to intellectual property rights, restrictions on the 
export of encryption techniques and other sensitive technologies. 
33 
5_8 As long as equivalent market access to third countries has not been achieved 68, the 
ability to take measures with regard to third countries should not be restricted, 
subject to Community commitments on a multi-lateral (such as in the context of 
GATT), or bilateral basis. 
Where asymmetric market access currently exists, Community policy must actively 
pursue the on-going multilateral negotiations on basic telecommunications within the 
General Agreement on Trade in Services in order to open up foreign market access. 
Within the limits of such international commitments and Community · law, an 
assessment must be made as to whether the current inequalities can be redressed 
within the framework of Community legislation, for example, with regard to non-EU 
participation in mobile licences 
59 The development of mobile communications into a personal communications mass 
market will require firm positions on areas of general public interest in the sector, in 
order to safeguard such interests, ensure acceptance by the public of the new 
systems and services, and provide a stable environment for future development. 
The main issues in this respect concern security, safety, protection of privacy, and 
the environment. 
60 Security of information systems has been addressed in a more general context in the 
framework of the European Community's action plan on this issue, established by 
Council Decision 92/242/EEC69. 
In the context of the essential requirements identified by the proposed Council 
Directive on the application of Open Network Provision to voice telephony, security 
of network operations specifically addresses the ability to maintain an appropriate 
level of service during defined emergency situations. 
With regard to mobile and personal communications systems, major issues are also 
raised, inter alia, by encryption, authentication, prevention of fraud, protection of 
network management, data bases, and service providers. 
68 See discussion in Annex C and m Annex D. Section 12 
69 Council Decision of 31st March 1992 in the field of security of informat10n systems (92/242/EEC . OJ L 123/19. 8.5.92) See forthcommg Comm1ss1on Green 
Paper on the security of Information Systems. 
34 
Safeguarding of confidentiality of communications and establishing secure 
procedures for handling subscriber and call data are addressed in the context of 
protection of privacy and personal data. 
61 Another issue is health and safety with regard to potential health hazards from 
exposure to electromagnetic radiation and with regard to electromagnetic 
interference 70. 
A comprehensive action plan must be set into motion aiming at accelerating the 
establishment of necessary safety standards, as well as providing guidance in this 
field. 
This should concern in particular rapid establishment of Europe-wide standards 
concerning thermal effects of radiation, in accordance with the mandate agreed with 
CEN-CENELEC in this field. It should also involve the preparation of a work 
programme for assessment of activities and research concerning the so-called 
athermal effects, and dievelopment of related European standards, as well as 
monitoring of potential problems of electromagnetic compatibility with other 
electrical equipment, such as hearing aids, heart pace makers, car automatic breaking 
systems (ABS) and cable systems. 
Given the difficulty of establishing conclusive results on possible athermal effects in 
the short term, the low power emission of devices, in particular, for hand-held 
equipment, should become an important criterion in future standards development, 
systems design and systems deployment. This will assist in reducing overall 
electromagnetic exposure. 
In the context of health and safety, a concerted approach between measures issued 
under Article 1 OOA and measures under Article 118A is required in order to allow 
for free movement of goods whilst maintaining the right of Member States to issue 
measures limiting the use of such goods to safeguard the safety of workers. 
62 As regards environmental concerns, sharing of sites and infrastructures will become a 
growing requirement to rnduce environmental impact. 
Sharing of infrastructure and sites should be allowed. Where overriding grounds of 
environmental policy or town planning so require, obligations on mobile network 
70 See Annex B, Section 8. 
35 
operators to enter into sharing agreements should be possible, subject to the 
principle of proportionality. 
63 · A central feature to reassure the public about future mobile and personal 
communications will be the protection of privacy and personal data. 
Given that future personal communications services will combine services via mobile 
and fixed networks, this problem must be addressed in a global fashion. 
The proposed General Data Protection Directive and the proposed specific 
Directive71 will tackle many of the potential problems in this area. 
Further, the issue of protection of personal data and protection of privacy should 
become major factors in future standards development in the sector, with regard, in 
particular, to following a consistent approach in relation to the evolution of personal 
communications 72. 
71 Amended proposal for a Council Directive on the protection of individuals with regard to the processing of personal data and on the free movement of such data, 
COM (92) 422, 15.12. 92 ("the gcnreral data protection directive") and the forthcoming modified proposal for a Directive concerning the protection of personal 
data and privacy in the context of digital telecommunications networks, in particular the inte&rated services dijital network (ISDN) and digital mobile networks 
(to be published). For further discussion of these issues, see Annex D, Section 5 
72 This should include consideration of solutions which arc appropriate to the range and characteristics of evolving services, in particular with regard to technical 
identification/requirements for anonymity. 
36 
IV ISSUES FOR COMMENT 
The analysis undertaken and the considerations and Treaty obligations set out lead to a range of 
proposals, which appear necessary to ensure the full development of the sector. They are set 
out below and submitted for comment. 
IV.1 Major changes required. 
The European Union's ·mobile communications sector can move forward from a position of 
strength. Europe has become a world technology leader and has succeeded in attracting 
substantial public and private investment to mobile communications. However, the sector 
is now at a critical juncture, poised on the transition from analogue to digital technologies, 
and from niche to mass market player. In order to fully use the potential and allow 
Europe's citizens, industry, inve:stors, and the economy as a whole to reap the benefits, 
mobile markets must now be allowed to develop. Existing barriers73 must be lifted : 
freedom to use and to provide s1~rvices must be ensured, the economies of scale and scope 
enjoyed by Europe's competitors must be replicated and a long term perspective opened. 
Based on its analysis and the considerations above, the Commission considers that five 
major changes are required to remove the barriers to further development : 
1 abolishing remaining exclusive and special rights in the sector, subject where 
· required to the establishment of appropriate licensing conditions ~ 
2 removal of all restrktions on the provision of mobile services both for 
independent Service Providers and direct service provision by mobile network 
operators. 
This should include the freedom.to offer a combination of services provided under 
different licences, as well as the ability to provide services in different Member 
States, and the lifting of existing restrictions , thereby facilitating access of users 
to these services. 
3 full freedom for mobile network operators to operate and develop their 
networks for the purpose of the activities provided for in their licence or 
authorisation. 
This should include the right to self-provide infrastructure for use in carrying out 
these activities or to use third party infrastructure for that purpose, as well as the 
right to share infrastructure ~ 
73 An oveiv1ew of the current regulatory situation of the sector is given in Annex B. See in particular B. 1. 1. 
37 
4 unrestricted combined offering of services via the fixed and mobile networks, 
within the overall time schedule set by Council Resolution 93/C2l3/01 of 22 July 
1993 for the full liberalisation of public voice services via the fixed network; 
This would imply the right for mobile operators or independent Service Providers 
to bid for resale licenses on the fixed network, as well as for the lifting of all 
existing entry restrictions for fixed network operators in mobile markets, subject 
only to full application of the Treaty competition rules, in particular, Council 
Regulation 89/4064/EEC on the control of concentrations74 and the provisions of 
the Treaty competition rules concerning abuse of dominant positions. 
5 facilitating pan-European operation and service provision. 
This should include further development of mutual recognition of type approval of 
mobile terminal equipment, as well as coordination of licencing and award 
procedures, where appropriate to facilitate development of trans-European 
networks. 
The combination of these five changes. would ensure a substantial acceleration of the 
development of the Union's mobile communications market, and speed progress towards 
true personal communications based on a combination of wired and wireless-services, with 
the market the ultimate arbiter of the balance between the two. This approach would · 
prepare the Union for a smooth market-led transition to the future Universal Mobile 
Telecommunications Systems. Such systems will be the ultimate base for both narrow­
band and broad-band personal communications, and consequently for the whole of the 
Union's telecommunications sector, and will combine mobility with voice, data and 
multimedia applications. 
IV.2 Proposed positions 
The working out of detailed positions based on these five major changes represents an 
extension of the principles of the Union's existing telecommunications policy to the mobile 
communications sector, based, in particular, on the principles of transparency, non­
discrimination, and proportionality. 
The approach must address three main areas : 
~ regulation at national level of mobile systems providing services to the general public ; 
74 Council Regulation 4064/89of21st December 1989 on the control ofconcentrat10ns between undertakings, OJ L395/l, 30. 12.89. 
38 
-+ operation of systems intended for own use or use by closed user groups (so called 
private mobile radio) ~ and 
-+ conditions required at a European Community level. 
The principle of proportionality requires that substantial public regulation should be limited 
to only those mobile systems providing services to the general public. Private mobile 
systems should not be ·subject to any constraints other than those currently applying to 
private systems or closed user groups operating via the fixed network with the possibility 
of addition.al sector specific safeguards, such as the requirement to avoid harmful 
interference and to ensure frequency efficiency. 
In identifying 'detailed positions, the Green Paper has limited itself to fields where a 
common position is required at a European Community level. These positions concern : 
-+ licensing conditions for mobile operators, 
-+ conditions for service provision, interconnection, infrastructure, frequency and 
numbering issues, and 
--. launching the evolution towards personal communications. 
As discussed above, (see Para. 20) these detailed positions are consistent with the principle 
of subsidiarity as representing action necessary at a Union and national level to ensure the 
further development of the internal market, the provision of pan-European services and the 
respect of the Treaty competition rules. They are set out in Figure 1. 
Chapter IV.3 sets out action in the short-term required to create at a European Community 
level the conditions for rapid implementation of these positions. 
Chapter IV. 4 proposes longer term action lines necessary to create an environment which 
will draw the maximum benefit from these proposals. 
39 
PR.OPOSED>POSITIONS 
.]ti~ glp~~l·9bJ!¢W1EJ of.th~.pfopos~d p9siti()ns<is to ~llov(Eur()pean-Wide markets to···develop 
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: .. ~tjf:()p~~lj ~#~n()J1ly ~s•·a•Whol~,•·•basecl.••oll·•the· extension•• C>f the .• principles.•of .• the· ·European 
9r1~C>ht~ t~le¢()fr111lunications .. policy,in partiC:u1arco4rlcil Resolution .. 93/C213/01 of 22nd·July 
1993~ 
I Licensing conditions for mobile network operators 
1 Abolition of exclusive and special rights in the sector concerning the operation of 
mobile communications systems. 
An exclusive right exists where the service is reserved by the Member State for a single 
public or private undertaking within a given area. A special right exists where, a · 
Member State within a given area, designates, other than according to objective, 
proportional, transparent, and ~on-discriminatory criteria, several competing 
undertakings or limits the number other than according to such criteria or grants one or 
more of them a lasting particular advantage, other than those referred to in Article 92 of 
the Treaty. 
2 Licensing conditions for mobile communications systems must be based on objective 
grounds, be transparent, non-discriminatory, and respect the principle of 
proportionality. 
These principles should also extend to fees payable in respect of licences (including 
any fees for use of radiofrequencies). 
Licencing conditions must not contain conditions other than those justified on the 
grounds of the essential requirements and, in the case of systems for use by the 
general public, public service requirements in the form of trade regulations. 
3 Essential requirements to be taken into account should be limited to those identified in 
Commission Directive 90/388/EEC75 and Council Directive 90/387/EEC76, as well as 
Commission Directive 88/301/EEC77 and Council Directive 91/263/EEC7B, 79. 
75 Conunission Directive of 28th June 1990 on competition on the markets for teleconununicat1ons services (90/388/EEC ; OJ L 1921 l O. 24. 7.90) 
76 Council Directive of 28th June 1990 on the establishment of the Internal Market for teleconununications services through the implementation of Open Network 
Provision (90/387/EEC; OJ Ll92/l, 24.7.90) 
77 Conunission Directive of 16th May 1988 on the competition in the markets on teleconununications terminal equipment (88/301/EEC. OJ L 131173. :!7 5 88) 
40 
These concern in particular the effective use of the radiofrequency spectrum and 
electromagnetic compatibility requirements, as well as security of network operation, 
maintenance of network intE~grity, interoperability of services in justified cases, data 
protection in justified cases, and user safety and safety of employees. 
4 Conditions based on public service requirements in the form of trade regulations 
should be only those currently identified in Commission Directive 90/388/EEC for 
systems intended for use b~· the general public. 
These concern conditions o'f permanence, availability and quality of the service. The 
safeguarding of permanencE!, availability and quality of the service may imply fulfilling 
conditions relating to the tec:hnical competence and financial resources of the licensee. 
5 Systems not intended for use by the general public (in particular so-called private 
mobile radio systems, used by closed user groups) should be subject to no other 
conditions than those based on essential requirements, in particular, effective use of 
frequencies and electromagnetic compatibility. 
6 In order to foster innovation of systems and services, and to ensure in particular 
efficient use of frequencies, the duration of licences should be based on the period 
required to pay back investment on reasonable terms. 
7 Licences may not include coinditions which restrict ownership by nationals of Member 
States or of the European Ec:onomic Area (EEA) or enterprises controlled by nationals 
of Member States or of the EEA. 
Subject to the European Community's commitments taken on a multilateral or bilateral 
basis, licences may include 1restrictions aiming at ensuring at a Union level equivalent 
access to third countries. 
8 Licence awards must be based on open, non-discriminatory, and transparent 
procedures. 
9 Where a limitation of the number of licences to be issued is established by Member 
States, such limitation must be based on essential requirements such as efficient use of 
frequencies, and/or conditio1r1s of public service requirements in the form of trade 
regulation, and must be com;istent with the Treaty competition rules. 
Any limitation should respect the principle of proportionality, by imposing the least 
limiting solution and giving priority to competitive provision. 
78 Council Directive of 29th April 1991 on the approximation of the laws of the Member States concerning telecommunications terminal equipment, including the 
mutual recognition of their conformity (91/263/EEC; OJ L128/J, 23.5.91) 
79 This includes the extension of these Directives to the satellite sector, which is of direct relevance to mobile satellite-based systems. See in particular , Council 
Directive of 29 Oct6ber 1993 supplementing Directive 91/263/EEC in respect of satellite earth station equipment (93/97/EEC; OJ L290/0l, 24.11.93) 
for services 
41 
-
10 Whichever method is used to award licences -first come I first served, comparative 
bidding, auctioning, lottery -the method should be chosen and implemented in a way 
that the final selection offers maximum guarantees in respect of the full implementation 
of the essential requirements and ensures the achievement of the aims of any public 
service requirements in the form of trade regulations. A particular priority should be 
maximising benefits for users (in particular, in terms of price and coverage). 
11 Reliance on auctions should not lead to an excessive transfer to the pubUc budget or 
for other purposes to the detriment of low tariffs for the users. 
Lotteries do not seem to guarantee the achievement of the criteria set out under 10, in 
particular, concerning efficient use of frequencies, technical competence and financial 
resources. 
12 The principle of full mutual recognition of licences should apply whenever relevant, in 
particular, in the case where licences are awarded on the basis of first come I first 
served, subject to the availability of required frequency resources. 
This should concern, inter alia, mobile services based on satellite communications, as 
put forward in the proposal for a Council Directive on a policy for the mutual 
recognition of licences and other national authorisations for the provision of satellite 
network services and/or satellite communications services80• 
It should also apply to systems licensed in border regions between Member States 
where systems could provide services on a trans-frontier basis, for example, private 
mobile radio systems used by taxi businesses or haulage companies. 
13 Where limitations are imposed on the number of licences on the grounds set out under 
9 and the award of licences on the basis of comparative bidding or auctioning makes 
the principle of mutual recognition no longer fully applicable, national award 
procedures must ensure that licence applications by nationals or companies controlled 
by nationals of Member States or of the EEA are possible on a non-discriminatory 
basis. 
No limitations with regard to licence applications may be introduced, except if justified 
under Treaty competition rules, in particular Article 86. 
14 Mobile terminal equipment should be subject only to type approval according to the 
principles of Directives 91/263/EEC and 93/97/EEC which allow the imposition of 
specific provisions ensuring electromagnetic compatibility. 
Where the provisions of Directives 91/263/EEC and 93/97/EEC have still not been made 
applicable to specific types of mobile equipment, and specific licences or class licences 
are required in Member States to provide for the safe operation of equipment, the full 
mutual recognition of licences granted in another Member State should apply to ensure 
free circulation of such equipment in the Community. 
15 Licensing conditions for mobile network operators must ensure the respect of 
competition rules and in particular, ensure transparent and non-discriminatory 
behaviour between fixed and mobile network operators in common ownership. 
80 To be published 
42 
II Service provision 
1 Commercial freedom should lbe guaranteed, allowing the provision of services by 
independent Service Providers, as well as direct service provision by mobile network 
operators. All existing restric:tions in licences impeding such activity should be 
abolished. 
2 Commercial freedom should iinclude the opportunity for Service Providers, whether 
independent or integrated into or forming part of mobile network operations, to offer a 
combination of services provided under different mobile licences, as well as the ability 
to provide services in different Member States, subject only to the provision of the 
Treaty competition ru1es. 
3 Service Providers should not be subject to licensing procedures and may be subject 
only to a requirement for declaration of their activities to the National Regulatory 
Authority(ies) of the Member :State(s) where they choose to operate. 
4 A Code of Conduct for Servic1e Providers should be established. The Code should, in 
particular, identify on the basis of voluntary participation by Service Providers, 
measures to safeguard essential requirements and commitments with regard to 
permanence of service, availability, and quality of service. It should also provide 
guidelines concerning technijcal, financial, and commercial practices in the sector, 
consistent with competition rules. 
5 Mobile network operators shc•uld, in line with their obligation to provide open, 
transparent and non-discriminatory conditions for interconnection (see point 111.2) have 
an obligation to accept all reasonable requests by Service Providers to deal, within the 
limits of normal commercial practice and Community competition law (including 
requests from Service Providt!rs integrated into other mobile network operations). 
It should be possible to challEmge any refusal to deal before the National Regulatory 
Authority. 
6 In order to guarantee open, transparent, and non-discriminatory conditions for 
independent Service Providers, mobile network operators should be required by their 
licence to provide for sufficient transparency, in particular concerning their accounting 
practices, to allow supervision of the service provision activities integrated into their 
operations. 
7 The commercial relationship E~stablished between Service Providers and mobile 
communications operators should be subject to full mutual recognition by Member 
States. 
No restrictions should be applied concerning any activity resulting from such 
relationships in one Member ~>tate on the activity in any other Member State. 
43 
The provision of services in the context of cross-border roaming agreements 
represents the provision of a service by independent Service Providers or by Service 
Providers integrated into a mobile network operation in the territory of a Member State 
other than the Member State in which the original commercial activity was established. 
Such activity should not be subject either to any restriction or to any surcharge or 
equivalent measure unrelated to the cost of the provision of the roaming facility itself, 
whether imposed as a result of regulatory or other action. 
Ill Interconnection 
1 The basic framework for interconnection of mobile communications networks intended 
for use by the general public with the fixed network infrastructure operated for use by 
the general public is set out by Council Directive 90/387/EEC81, and Proposal for a 
Council Directive concerning application of Open Network Provision to Voice 
Telephony and Council Directive 92/44/EEC82, as well as through the Treaty competition 
rules83• 
According to this framework, the National Regulatory Authorities carry the principal 
responsibility for ensuring interconnection , in conformity with the Directives above. 
2 As far as other technical and commercial interfaces are concerned, in particular, 
between Service Providers and mobile network operators, and also access to intelligent 
network functions in the fixed network which are not covered by the specific Directives 
mentioned, the basic principles set by Council Directive 90/387/EEC apply. 
This impli~s in particular that interconnection conditions established at those 
interfaces must be set on the basis of objective criteria, be transparent and non­
discriminatory, cost-oriented, and compatible with the principle of proportionality, as 
well as respecting the essential requirements84• 
The establishment of suitable interconnection agreements respecting these principles 
should be principally left to commercial agreements between market participants. 
At this stage, it is not considered necessary to establish further specific Directives at 
Community level, concerning these interfaces and related interconnection .conditions, 
provided these are subject to strict supervision by National Regulatory Authorities to 
ensure full application of those principles and the establishment of suitable dispute 
resolution and control procedures. 
81 Council Directive of 28th June 1990 on the establis})lnent of the Internal Market for telecommunications services through the implementation of Operi Network 
Provision (90/387/EEC; OJ LJ92/J, 24.7.90) 
82 Proposal for a Council Directive on the application of Open Network Provision (ONP) to Voice Telephony (COM(92)247, 27.8.92) (Common Position adopted 
1st July 1993). 
Council Directive of 5th June 1992 on the Application of Open Network Provision to Leased Lines (92/44/EEC; OJ Ll65/27, 19.6.92) 
83 See Annex D.6.1 and 6.2 
84 Where an operator has both a fixed and a mobile network there needs to be sufficient transparency, in particular, concerning their accounting practices. 
44 
3 The requirement of transparency concerning such interconnection agreements implies 
in particular that full access to those agreements is given to National Regulatory 
Authorities and that such information is made available to the Commission on request. 
4 In order to facilitate interconnection, the establishment of teehnical standards 
concerning these interfaces should be promoted and published, where required in 
accordance with the provisions set forth in Article 5(1) of Directive 90/387/EEC. 
5 Standards regarding interfaces. should only be made binding to the extent required by 
the Directive 92/44/EEC concerning application of Open Network Provision (ONP) to · 
Leased Lines and the proposed Directive concerning application of Open Network 
Provision to Voice Telephony. 
In accordance with Article 5(1) of Directive 90/387/EEC, in all other cases, the principle 
of voluntary application of standards should apply. 
Only in cases where it is strictly necessary to ensure basic interoperability and freedom 
of choice for users and subject to the principle of proportionality, should references to 
standards be made binding under the provision of Article 5(3) of Directive 90/387/EEC. 
6 As regards mobile networks licensed only for own use or use· by closed-user groups 
(private mobile radio systems), interconnection with the public network must not be 
impeded, and is subject to application of Directive 90/387/EEC, Directive 92144/EEC, and 
the proposed Directive on the application of Open Network Provision (ONP) to Voice 
Telephony, as regards the issue of access to fixed infrastructure operated for use by 
the general public. 
The activities which may be carried on via such interconnections are subject to the 
provisions under which such mobile communications networks have been licensed. In 
principle, conditions applying to such communications networks must not be more 
onerous than those applying to other closed user groups operating by use of facilities 
of the public fixed networks. 
IV Infrastructure 
1 Mobile network operators should have full freedom to operate and develop their 
network for the purpose of the activities allowed in their licence or authorisations, 
including a free choice of facilities used to support such activities. 
2 The provision of facilities and use of infrastructure forming part of the public fixed 
network is provided for and subject to the provisions of Council Directive 90/387/EEC, 
Council Directive 92144/EEC, and the proposal for a Council Directive for application of 
Open Network Provision to Voice Telephony. Provisions relating to the interconnection 
of mobile and public fixed networks are set forth under Ill above. 
3 In addition, mobile network operators should have full rights to establish their own 
infrastructure as well as to use infrastructure provided by third parties, subject to 
limiting the use of such infrastructure to those activities provided for in their license or 
authorisation. 
45 
------------ ~---~~~------~~-----~---
4 Mobile network operators should have the right to directly interconnect with other 
mobile network operators, either via facilities provided by the public fixed network, via 
their own infrastructure or infrastructure provided by third parties, both within Member 
States and between Member States. 
Use of such direct connections should be permitted for all activities allowed for in the 
licences and/or authorisations of the respective mobile network operators, and should 
include transmission of signalling and control data to facilitate roaming between mobile 
networks. · 
Where their own infrastructure requires the availability of radio resources such as links 
based on microwave transmission, Member States should make available suitable 
radiofrequencies. 
5 Mobile network operators should be allowed to share infrastructure, other facilities and 
sites. 
Arrangements must be transparent, non-discriminatory, and respect the essential 
requirements, as well as respecting the Treaty competition rules, in particular Articles 
85 and 86 and Regulation 4064/89, and the general principles of Council Directive 
90/387 /EEC85. 
National Regulatory Authorities must be kept informed of such arrangements. This 
information should be made available to the Commission on request. 
6 Member States may require that mobile network operators share infrastructure and sites 
and conclude arrangements in line with the principles set out under 5 above, where 
overriding grounds of environmental policy, or public safety so require. 
Such requirements must respect the principle of proportionality, and must not 
substantially impede the activities allowed for in the respective licences or 
authorisations and they must be in line with the Treaty competition rules. 
V Radiofreguencies 
1 The basic principles concerning access to radiofrequencies should be those set by 
Council Directive 90/387/EEC which includes in its scope according to Article 2(10) 
usage conditions, including "access to frequencies where required". 
2 This implies that conditions for access to frequencies must comply with a number of 
basic principles. 
They must, in particular, be allocated based on objective criteria, procedures must be 
transparent and published in an appropriate manner and must guarantee equality of 
access and be non-discriminatory. 
85 SeeAnnexD.10.2 
46 
3 The basic approach to frequEmcy planning, allocation, and co-ordination has been set 
out in Council Resolution 90lC 166/0286. 
Resolution 90/C 166/02 requires, inter alia, that the co-ordination of radiofrequencies 
must respect the principle of separation of regulatory and operational duties, while 
timely opinions from service providers, industry, users, and standards bodies in 
researching the frequencies best suited for further applications should be sought. 
Radiofrequency use must take place in accordance with the radioregulations of the 
International Telecommunications Union (ITU). Within this framework, work should 
proceed particularly towards the timely allocation of sufficient frequency resources to 
mobile and satellite applications. 
The Resolution also calls for promoting the most efficient use of the frequency 
spectrum by taking timely acclount of service provider and user requirements against 
the background of industrial development and developments of standards. 
4 The framework for carrying out frequency coordination in Europe is defined by Council 
Resolution 90/C 166/02, as complemented by Council Resolution 92/C 318/0111. 
These two Resolutions identify the CEPT's European Radiocommunications Committee 
(ERC) (and the European Radiocommunications Office (ERO) linked to it) as a basic 
framework for European coordination in this area, subject to this framework being open 
to the opinions of frequency 4axperts from national authorities responsible for frequency 
management, telecommunications operators and other Service Providers, industry, and 
users. 
Council Resolution 92/318/01 calls for full consideration to be given in future to the 
mechanism of ERC decisions as the primary method of ensuring the provision of the 
necessary frequencies for new Europe-wide radio services, subject to the development 
of working methods allowing wide consultation with the categories mentioned above as 
well as cooperation and interaction with the European Telecommunications Standards 
Institute (ETSI) and the European Commission. 
5 In response to the Council Re!solution, the Commission has set out a New Approach to 
frequency coordinat.ion in Europe, integrating these elementsB8. It can conclude with 
the ERC/ERO a Memorandum of Understanding and a framework contract allowing work 
to be entrusted to these bodiE?s to.establish common frequency bands, once a firm legal 
base has been created in ordE?r to ensure that Union interests are safeguarded. 
86 
87 
88 
89 This new approach to frequency co-ordination, whilst fully taking into account the 
mechanisms provided by the ERC/ERO establishes minimum conditions necessary to 
comply with Treaty obligationis89 
Council Resolutton of 28th June 1990 on.the strengthening of the Europe-wide co-operation on radiofrequencies, in particular with regard to services with a pan­
European dimension (90/C 166/02; OJ C 166/4, 7.7.90) 
Council Resolution of 19th November 1992 on the implementation in the Community of the European Radiocommunications Committee decisions 
(92/C 318/01 ; OJ C3 I 8/1, 04.12.92) 
A new approach to the coordination of radiofrequencies in the Community, Communication from the Commission concerning proposal for a Council Decision on 
the implementation by the Member States of measures concemmg concerning radiofrequencies, COM(93)382, 10.9.93 
See Annex D, section 4. 
47 
.---------------------------------------
6 Council Resolution 90/C166/02 also calls for developing common European positions in 
relation to the use of the frequency spectrum concerning international frequency 
harmonisation, in particular, with regard to the ITU and its relevant World Radio 
Conferences using these mechanisms. 
The European Community used this approach during the World Administrative Radio­
Conference, held at Torremolinos in 1992 (WARC'92), where major decisions with 
regard to radiofrequencies to be allocated for mobile and satellite communications were 
taken. The Commission intends to follow the same approach during future World Radio 
Conferences, whilst ensuring that Union interests are safeguarded. 
7 Major immediate priorities for radiofrequency co-ordination for mobile communications 
in Europe result from the requirement for the full and coordinated implementation of 
the decisions taken at WARC'92 in the Union. 
As regards radiofrequencies for systems intended for the general public, short term 
priorities should concern the establishment and implementation of binding decisions 
concerning the designation of frequencies at the European and Community level for the 
frequency bands designated by WARC'92 for future use by terrestrial mobile 
communications and satellite based communications systems. 
This should include in particular designation of binding common bands for DCS-1800 
services, for the future Universal Mobile Telecommunications System (UMTS), as well 
as frequency bands for satellite-based personal communications systems (including so 
called Low Earth Orbit (LEO) Systems). 
Decisions should also identify firm schedules for progressive availability, as well as 
standards to be used, either existing or in development in order to ensure their practical 
implementation by the Member States. 
8 As regards systems intended for own use or for the use of closed user groups (so­
called private mobile radio), an immediate priority should be a decision on designation 
of frequency bands as well as time schedule for availability, for systems operating 
according to the European digital trunking standard (TETRA), which will gain major 
importance, inter alia, in the context of the implementation of the Schengen Agreement 
for communications between police forces and between public authorities. 
VI Numbering 
1 Beside radio frequencies, access to and allocation of numbers is an essential resource 
for both mobile network operators and service providers. The importance of this 
resource, and the potential bo~le-n,eck it creates, will substantially increase with the 
evolution of mobile communications toward personal communications services. 
2 Provisions for access to numbers and administration of numbering schemes have been 
set out in the proposed Directive on the application of Open Network Provision to Voice 
Telephony90• 
90 Proposal for a Council Directive on the application of Open Network Provision (ONP) to Voice Telephony (COM(92)247, 27.8.92). (Common Position adopted 
lstJuly 1993). 
48 
By analogy with the application of basic principles of Open Network Provision to issues 
of access to radiofrequencies, the same principles should apply. 
This implies, in particular, that numbers are allocated based on objective criteria, 
procedures must be transparent and published in an appropriate manner, must 
guarantee equality of access and be non-discriminatory. 
3 According to the provision of the proposed Directive on the application of Open 
Network Provision to Voice Telephony, Member States shall ensure that the control of 
national telephony numbering plans is the responsibility of National Regulatory 
Authorities. National Regulatory Authorities should ensure that national numbering 
plans, and all subsequent additions and/or amendments to them are published, subject 
only to limitations imposed 0111 the grounds of national security, or privacy and data 
protection. 
4 The basic approach to numbering planning, allocation and coordination has been set 
out in Council Resolution 92/C:318/0291. 
By analogy with the basic approach in the field of radiofrequencies, Council Resolution 
92/C318/02 requires, inter alia, that coordination of numbering schemes respect the 
principle of separation of regulatory and operational functions, while allowing account 
to be taken, in a timely manner, of the opinions of representatives of National 
Authorities concerned with network numbering schemes, network operators, service 
providers, industry, and users. 
Council Resolution 92/C 318/02 calls for the most efficient use of numbering space and 
indicates that Europe-wide mc•bile services are to be a high priority for the development 
of coordinated procedures for the management and allocation of telephony numbers 
from a European numbering space. 
5 ·Council Resolution 92/C 318/02 defines the framework for coordination for numbering 
in Europe. 
The Resolution calls for the w:;e of the mechanisms of coordination of the European 
Committee for Telecommunications Affairs (ECTRA) and requests the creation by 
ECTRA of a European Numbering Office (ENO), subject to allowing the opinions of all 
interested parties to be taken iinto account and involving the Commission as 
appropriate. In the meantime, ECTRA is creating a European Telecommunications 
Office (ETO), to be based in Copenhagen, which will include the numbering 
coordination function amongst its tasks. 
In response, and mirroring thE~ approach taken in the field of radiofrequencies, the 
Commission intends to conclude with the ECTRA/ETO a memorandum of 
understanding and a framework contract allowing work to be entrusted to these bodies 
to carry out the harmonisation of numbers and the creation of a common European 
numbering space, based on an appropriate legal basis which must ensure that Union 
interests are safeguarded. 
91 Council Resolution of 19th November 1992 on the prornotlon of Europe-wide cooperation of numbering of telecommunications services (92/C 318/02 , OJ C 
318/2, 94.12.92). 
49 
6 Council Resolution 92/C 318/02 also calls for common positions at ITU numbering fora. 
Common positions should in particular be developed with regard to the reform of the 
global numbering system, currently underway in the ITU. Preparation of common 
positions should take place in ECTRA/ETO, provided that safeguarding of Union 
interests is ensured. · 
7 In line with Council Resolution 92/C 318/02, global priority should be given in the 
European numbering coordination process to the creation of a European numbering 
space, with particular attention to the requirements for personal numbering. 
8 An immediate priority should be harmonisation of current activities aiming at the reform 
of national numbering spaces, including issues of numbering for mobile 
communications purposes and for personal and portable numbers. 
In this context, special attention should be paid to the harmonisation of access codes 
for mobile systems, for directory services, and for services of special public interest 
such as emergency and information services, as well as access codes of special 
relevance to the intelligent network environment This can build on the progress 
already achieved in the Union with the adoption of common emergency and 
international access codes. 
VII Launching the evolution towards personal communications services 
1 Personal communications services must be seen as services which ultimately will allow 
person-to-person calling, independent of location, the terminal used, the means of 
transmission (wired or wireless) and/or of the choice of technology. 
Personal communications services will be based on a combination of fixed and 
wireless/mobile services to form a seamless end-to-end service for the user. 
2 To launch this evolution, and to allow current mobile services to move towards such a 
personal communications environment, the basic requirements are to remove initially, 
restrictions on the combination of multiple mobile technologies or services through a 
single service provider, and subsequently, to remove restrictions on the free 
combination of services provided via fixed and mobile networks. 
3 In order to allow such development, mobile network operators, or independent service 
providers, should be allowed in a first phase to combine different mobile services, 
provided under different licences and/or on the basis of different technologies I 
standards. ' 
No restrictions should be introduced into new licences in this regard and restrictions in 
existing licences should be lifted. 
50 
4 In a second stage, mobile network operators or independent service providers should 
be able to bid for licences for the provision of public voice via the fixed network, as 
those licences become available. 
At the latest this should be in accordance with the schedule for full liberalisation of 
public voice service established in Council Resolution 93/C 213/01, namely 1st January 
1998, with additional transition periods of up to five years for Spain, Ireland, Greece, 
and Portugal, and, where justified, two years for Luxembourg, subject to the conditions 
which may be agreed for such licences concerning universal service obligations or 
sharing in the financing of such obligations, and subject to the Treaty competition 
rules, in particular Articles 8!ii and 86, and Council Regulation 4064/89. 
5 In parallel and in order to givEi full opportunity for the development of personal 
communications services by 4~xisting public fixed network operators, such operators 
should not be prohibited ab initio from bidding directly or indirectly for licences for any 
mobile communications services. 
Existing prohibitions on such bids should be abolished at the latest by the deadlines 
set for full liberalisation in Council Resolution 93/C 213/01, namely, 1st January 1998, 
with additional transition periods for the Member States referred to in 4 above, subject 
to the Treaty competition rule:s, in particular Articles 85 and 86 and Council Regulation 
4064/89. 
6 In order to prepare the mobile communications sector to play its role in the rapid 
transition towards a personal communications environment, Member States should 
allocate licences, in particular, for those technologies most suited for providing the 
wireless part of such services. 
In particular, Member States should allocate at least one licence for operating mobile 
systems according to the DCS-1800 standard, and allow for the development of micro­
cellular extensions of current mobile systems licensed according to the GSM standard 
in the 900 MHz bands. 
Member States should also allocate licences for so-called public access I telepoint 
applications, in particular, for systems operating according to the DECT standard. 
7 In order to promote the develc1pment of trans-European networks, in accordance with 
Article 129b of the Treaty, licences for future mobile communications systems directly 
impacting the development of such networks should be awarded, where required and 
most efficient, in a coordinated manner between Member States and/or at a Community 
level, taking due account of M1ember States interests and interest of existing licensees. 
In particular, and in accordanc:e with the Council Resolution on the promotion of 
systems for satellite-based peirsonal communications, including so-called Low Earth 
Orbit Satellites (LEOs) systems, licences for such future systems should be awarded at 
a Community level. In order to maximise the potential of European developments in 
the field of the Universal Mobille Telecommunications Systems (UMTS), which can 
ultimately provide a unified and cost-efficient basis for personal communications 
services, licences for such future third generation services should from the start be 
awarded in the Community in a coordinated manner and/or at Community level. 
51 
Account should be taken of the need to ensure a smooth transition from the use of 
current technologies for the provision of personal communications services to the use 
of the UMTS technologies to provide such services in a more economic and universal 
manner, as well as of the need to take account of the specific situations in Member 
State and the interests of existing licensees. 
52 
IV. 3 Measures required :for implementation 
Building on the positions proposed and the analysis of the current situation and the 
measures to be taken, the range of action within the European Union to facilitate the 
achievement and smooth implementation of these goals is summarised below. In extending 
the existing telecommunications policy of the Union to the mobile communications sector 
the following measures can be anticipated : 
-MONITORING OF THE PROGRESS ACHIEVED IN THE INTRODUCTION OF 
COMPETITION IN THE SECTOR, 
in order to implement the principles set out, and amendment of Directive 90/3 88/EEC92 
on competition in the markets for telecommunications services, where required in order 
to include those principles. 
This would involve in particular : 
~ abolition of exclusive and special rights with regard to mobile and personal 
communications and replacement by licensing frameworks in line with conditions 
that are consistent with European Community law ~ 
~ definition of criteria to guarantee that licence award procedures are carried out in 
an open, transparent, and non-discriminatory manner, in particular, in cases where 
there are justifiable technical limitations on the number of licences granted ; 
~ measures to ensure the necessary transparency between market participants, in 
particular, in cases where fixed network operators also operate mobile networks, 
and between the service provision function of mobile network operators and their 
other operations. 
-ADJUSTMENT OF THE OPEN NETWORK PROVISION , FRAMEWORK 
and amendment of Directive 90/387/EEC93, where required to include the principles set 
out in the positions. 
This concerns, in particular, adjustment of the scope of Directive 90/3 87 /EEC, in order 
to ensure the general application of the principles of equality of access, transparency, 
non-discrimination and propo11ionality. 
92 Commission D1rcct1vt: of 28th June _I 990 on compet1t1on on the markets for telecommunications services (90/388/EEC ; OJ LI 92/10, 24. 7.90) 
93 Council Directive of 28th June 1990 on the establishment of the Internal Market fortelecommumcations services through the implementation of Open Network 
Provision (90/387/EEC, OJ Ll92/I, 24.7.90) 
53 
Such adjustment should be seen in the context of the general process of adaptation, 
called for by Council Resolution 93/C 213/0194 
-ACCELERATED APPLICATION OF MUTUAL RECOGNITION OF TYPE 
APPROVAL OF TERMINAL EQUIPMENT 
and extension of Directive 9 l/263/EEC95 to include mobile terminal equipment not 
capable of connection to the public network, which is currently outside its scope96• 
Accelerated application must include more rapid adoption of Common Technical 
Regulations (CTRs), in particular, for terminal equipment using new digital mobile 
technologies. CTRS and CTR9, adopted in October 1993, will support the mutual 
recognition of type approval of terminal equipment using GSM technology, replacing the 
interim type approval based on NETlO. 
Accelerated application of Directives 91/263/EEC and 93/97/EEC should also include 
mutual recognition of terminal equipment on the basis of fulfilment of the essential 
requirements for those types of equipment for which CTRs have still not been adopted, 
in accordance with the procedures foreseen in the Directive and the principles of the 
Council Resolution on a New Approach to technical harmonisation and standards and 
the Communication on a Global Approach to Certification and Testing97. 
Further, establishment of interim-type approval procedures in· the context of the 
European Radiocommunications Committee (ERC) should be encouraged in order to 
facilitate application of the Directive in the case set out above, where, in the absence of 
adopted CTRs, recognition is made on the basis of fulfilling the essential requirements. 
94 Council Resolution of 22nd July 1993 on the review of the situation in the telecommunications sector and the need for further development in that market 
(93/C 213/01, OJ C213, 6.8.93) 
95 Council Directive of 29th April 1991 on the approximation of the laws of the Member States concerning telecommunications terminal equipment, including the 
mutual recognition of their conformity (91/263/EEC; OJ Ll28/l, 23.5.91) 
96 as far as not covered by Directive 93/97 /EEC 
97 Council Resolution 85/C 136/0J of7th May 1985, OJ Cl36/J, 4.6.85 and Corrununication of the Corrunission on a Global Approach to Certification and Testing 
of 15th June 1989, COM(89)209, OJ C267/3, 19.10.89. 
54 
-DEVELOPMENT OF THE MUTUAL RECOGNITION OF LICENCES FOR THE 
OPERATION OF MOBILE COMMUNICATIONS NETWORKS, WHERE 
APPLICABLE 
and adoption of a Directive for this purpose, including mechanisms for coordination of 
award and licensing procedures where appropriate in order to promote trans-European 
networks. 
This should concern, in particular, those cases where award on a first come/first served 
basis is · appropriate, and therefore full mutual recognition, subject to availability of 
radiofrequencies, is possible, namely : 
~ satellite-based mobile communications networks. 
This situation will be covered by the proposed Directive for the mutual 
recognition of satellite service licences98 ; 
~ terrestrial mobile communications networks in particular in border areas and in the 
case of mobile networks licenced for own use and for use by closed user groups 
(private mobile radio networks) ~ 
~ mutual recognition of licences or class licences in those special cases, where the 
use of mobile terminal equipment may be subject to licensing, in conformity with 
Community law. 
Coordination of award and licensing procedures between National Regulatory 
Authorities and/ or at Community level should include licensing of experimental systems 
for services and technologies with Europe-wide needs, in particular, in relation to the 
creation of trans-European networks. 
-ESTABLISHMENT OF A EUROPE-WIDE CODE OF CONDUCT FOR SERVICE 
PROVIDERS 
to identify on the basis of voluntary undertakings, appropriate principles to safeguard 
compliance with essential requirements as well as standards with regard to permanence, 
availability, and quality of service, and establishing guidelines concerning technical, 
98 Proposal for a CoWlcil Directive on a policy for the mutt1al recognition of licences and other national authorisations for the provision of satellite networks services 
and/or satellite commW11cations services (to be published) 
55 
99 financial and commercial practices in the sector99, consistent with competition rules and 
respecting the need for a high level of consumer protection. 
-COl\.1PLETION OF THE FRAMEWORK CONCERNING THE NEW APPROACH 
TO THE COORDINATION OF RADIOFREQUENCIES IN THE COMMUNITY1oo 
in line with Council Resolution 90/C 166/02 as complemented by Council Resolution 
92/C 318/01101, a1mmg at promoting close cooperation with the European 
Radiocommunications Committee (ERC) I European Radiocommunications Office 
(ERO) and recognising the role ofERC Decisions as the primary method of ensuring the 
provision of the necessary frequencies, while safeguarding the Union's interests. 
Major elements of such a framework should be the conclusion of a Memorandum of 
Understanding and a Framework Contract allowing work to be entrusted to these bodies 
to elaborate common frequency bands, once an appropriate legal basis for such 
cooperation has been put in place. 
-CREATION OF A FRAMEWORK CONCERNING COORDINATION IN THE 
FIELD OF NUMBERING, 
reflecting the approach taken in relation to the coordination of radiofrequencies set out 
above. 
In line with Council Resolution 92/3 18/02102, such a framework should foresee close 
cooperation with the European Committee for Telecommunications Regulatory Affairs 
(ECTRA) I European Telecommunications Office (ETO), which is currently in the 
process of establishment. 
Major elements should be the conclusion of a Memorandum of Understanding and a 
Framework Contract allowing work to be entrusted to these bodies, with the primary 
objective of creating a European numbering space and undertaking necessary 
coordination of national numbering reforms, in particular, with regard to personal 
numbering. 
Such guidelines could include measures designed to alleviate fraud. 
100 A new approach to the coordination of radiofrequencies in the Commumty, Communication from the Commission concerning proposal for a Council Decision on 
the implementation by the Member States of measures concerning radiofrequencies, COM(93)382. 10.9.93 
101 Council Resolution of June 1990 on the strengthening of the Europe-wide co-operation on radio frequencies, m particular with regard to services with a pan­
European dimension (90/C 166/02; OJ C166/4, 7.7.90) and 
Council Resolution of 19th November 1992 on the implementation in the Community of the European Radiocommunications Committee decisions 
(92/C 318/01 ; OJ C318/1, 04.12.92). 
See also Council Conclusions of 7th December 1993. 
102 Council Resolution of 19th November 1992 on the promotion of Europe-wide cooperation of numbering of telecommunications services (92/C 31 8/02 . 
OJ C318/2, 04.12.92). 
56 
-ENSURING PROTECTION OF PERSONAL DATA AND PRIVACY IN THE 
CONTEXT OF DIGITAL MOBILE COMMUNICATIONS NETWORKS. 
and adopting in this context the proposed General Data Protection Directive and the 
proposed specific Directive on protection of privacy in the digital network 
environment 103. This would strengthen the protection of personal data and privacy in 
the context of both fixed andl mobile digital network services. 
A central feature of the new environment must be maintaining privacy, in particular with 
regard to the handling of subscriber and call data, and the use of intelligent network 
services provided via fixed and mobile networks. 
Major issues are the safoguarding of confidentiality of communications during 
transmission via radio links, automatic registration of the subscribers location in the data 
bases required for locating the position of subscribers in the cells of mobile cellular 
systems, as well as for the operation of intelligent network services. 
This will be indispensable to safeguard public confidence m the future personal 
communications environment. 
IV.4 Action lines for the development of a favourable environment 
A number of action lines shouldl be followed to draw maximum benefit from the proposals. 
These action lines aim at : 
~ safeguarding the public interest within the sector. 
This addresses the concerns over user safety. It also involves meeting the environmental 
issues which are fundamental to public acceptance of the future developments in the 
sector. 
Finally, it concerns interconnection and interoperability which are essential preconditions 
to promoting market developments in a competitive environment ~ 
103 Amended proposal for a Council Directive on the protection of individuals with regard to the processing of personal data and on the free movement of such data, 
COM (92) 422, 15.12.92 ("the general data protection directive") and the forthcoming modified Proposal for a Council Directive concerning the protection of 
personal data and privacy in the context of public digital telecommunications networks, in particular the Integrated Services Digital Network (ISDN) and public 
digital mobile networks (to be published) 
57 
_.,. ensuring optimum use of the basic resources needed by the sector, by agreeing on clear 
priorities both for coordination of radiofrequencies and for numbering, as well as 
supporting work towards these objectives ; 
_.,. promoting market and service development in the sector, in particular, through the 
development of trans-European networks and the promotion of mobile technologies in 
the less favoured regions, as well as in Central and Eastern Europe ; 
_.,. strengthening the position of European industry, operators and service providers by 
ensuring access to third country markets and re-inforcing Europe's position in advanced 
digital mobile technologies, in the transition towards the future Universal Mobile 
Telecommunications System. 
These action lines should be carried out by the Union in cooperation with relevant 
organisations, in particular, the European Committee of Telecommunications Regulatory 
Affairs (ECTRA) and its future European Telecommunications Office (ETO); the 
European Radiocommunications Committee (ERC) and the European 
Radiocommunications Office (ERO); the European Telecommunications Standards 
Institute (ETSI) and the European Committee for Standardisation and Electrotechnical 
standardisation (CENELEC). Such. cooperation should be on the basis of agreed 
procedures. Where appropriate, it could extend to the Memoranda of Understanding 
established by operators and/or equipment-companies. 
I ENSURING SAFETY AND SAFEGUARDING ENVIRONf\ffiNTAL CONCERNS IN 
THE FUTURE MOBILE AND PERSONAL CO:MMUNICATIONS ENVIRONf\ffiNT 
Central issues which must be addressed are electromagnetic compatibility and the 
potential for health hazards through exposure to electromagnetic radiation. The 
Commission proposes setting in motion a comprehensive action programme to 
accelerate necessary safety standards, as well as providing general guidance in this field. . 
This must involve in particular : 
..... rapid establishment of Europe-wide safety standards concerning thermal effects of 
radiation, in accordance with the mandate agreed with CEN-CENELEC for 
58 
establishing European standards in this field, b·ased on Directives 91/263/EEC and 
93/97/EEC104, 73/23/EEC105, and 89/336/EEC106 ~ 
-+ preparation of a work programme for the development of European standards and 
assessment of related activities and research on so-called athermal effects, based 
on existing CEN-CENELEC mandates ; 
-+ integration of other rnsearch activity, m particular, the on-going work m the 
COST-framework ; 
-+ monitoring of potential problems of electromagnetic compatibility encountered 
with other electrical equipment, such as hearing aids, heart pace makers, car-ABS­
systems, and cable systems ; issuing of mandates to CEN-CENELEC to establish 
appropriate European :standards for enhancing protection, where required and to 
the extent not covered by existing mandates .. 
-+ rapid integration of European standards in this field into TBRs (Common 
Technical Basis for Regulation), and CTRs (Common Technical Regulations) used 
in approval of mobile or related equipment. 
In order to reduce overall electromagnetic exposure, low power emission characteristics, 
in particular for hand-held equipment, should become an important criterion in future 
standards development, systems design and systems deployment. 
In order to safeguard the environment and to take account of town planning issues, 
standards should be designed to allow sharing of sites and radio infrastructure 
The Commission proposes to give special attention to these aspects in future 
standardisation mandates to the European Telecommunications Standards Institute 
(ETSI) and to CEN-CENELEC, as well as in the preparation of positions in the 
international standardisation fora. 
104 Council Directive of 29th April 1991 on the approximati•)n of the laws of the Member States concerning telecommunications terminal equipment, including the 
mutual recognition of their conformity (911263/EEC; OJ L128/I, 23.5.91) 
Council Directive of29 October 1993 supplementing Directive 91/263/EEC in respect of satellite earth station equipment (93/97/EEC; OJ L290/0I, 24.11.93) 
105 Council Directive of 19th February 1973 on the harmoni~;ation of the laws of the Member States relating to electrical equipment designed for use within certain 
voltage limits (73/23/EEC; OJ L 77/29, 26.3. 73) 
106 Council Directive of 3rd May 1989 on the approximation of the laws of the Member States relating to electro-magnetic compatibility (89/336/EEC, OJ L139/19. 
23.5.89), and Council Directive of 28th April 1992 amending Directive 89/336/EEC on the approximation of the laws of the Member States relating to electro­
magnetic compatibility (92/31/EEC; OJ L126/l 11, 12.05.92). 
59 
2 PROMOTING STANDARDISATION TO ENSURE INTERCONNECTION AND 
INTEROPERABILITY, 
both through the timely definition of interfaces and through facilitating mutual 
recognition of type approvals for mobile terminal equipment. 
As regards interconnection and interoperability, an environment. for future open 
interconnection of systems requires substantial progress in the definition of European 
standards. The standards should specify the most essential interfaces, while leaving 
flexibility for innovative approaches. 
According to the studies undertaken, this should particularly concern : 
~ the interface between mobile networks and fixed. network infrastructure, as far as 
not covered by the current standards work ; 
~ the interfaces, functionalities, and service elements made available by mobile 
network operators to independent Service Providers ; 
~ the interfaces made available to access the intelligent func6onalities of the public 
fixed network( s) ; 
~ the interfaces to be offered to mobile networks operated for own use or for use by 
a closed user group (private mobile networks) to allow interconnection with the 
public fixed network( s) ; 
~ interfaces allowing direct interconnection of mobile networks based on either the 
same or different technologies. 
The Commission intends to initiate a programme of standardisation mandates to ETSI to 
accelerate the definition of standards in this area. This will be based on, and will 
complement, current work within ETSI and within the various Memoranda of 
Understanding formed by mobile networks operators and/or manufacturers for systems 
implementation. 
60 
As regards facilitating mutual recognition of type approvals, work should concentrate 
on: 
~ accelerating establishment and completion of standards in ETSI concerning the 
new digital technologies, in particular : 
• enhanced features of the GSM system , for both voice and data, and for 
.. DCS-1800; 
• DECT, DigitaJ Cordless Telecommunications; 
• TFTS, Terrestrial Flight Telecommunications System ; 
• ERMES, the pan European digital paging system ; 
• Mobile data ; 
• TETRA, the European digital trunking system ; 
• DSRR, Digital ShortRange Radio ; 
• Wireless LANs and wireless PABX; 
• Satellite-based mobile and personal communications systems. 
~ rapid transposition of relevant parts of the respective standards into TBRs and . 
CTRs; 
~ stepping up support to conformance testing, validation, and setting up of 
accredited test laboratories in this area. This will take place in the context of 
existing Community programmes107. 
Accelerating the definition of interfaces and supporting the necessary steps for rapid 
mutual recognition of type approval in the key future mobile technologies is a pre­
condition for realisation of the market's full potential. It is also the basis of the 
implementation of an open environment according to the principles of Directive 
107 In particular the Community's programme for supporting conformance testing (CTS programme) 
61 
90/387/EEC108 and implementation of Community-wide type approval according to 
Directives 91/263/EEC and 93/97/EECI09. 
The Commission intends to accord high priority to these objectives in its standardisation 
mandates to the European Telecommunications Standards Institute and to maintain close 
contacts in these matters, in particular, with ETSI TC SMG (Technical Committee, 
Special Mobile Group), TC RES (Technical Committee; Radio Equipment 
Standardisation), and TC SES (Technical Committee, Satellite Earth Stations, which 
also deals with mobile satellite-based terminals). 
3 SETTING PRIORITIES FOR FREQUENCY COORDINATION RELATED TO 
MOBILE AND PERSONAL COMMUNICATIONS 
As set out in the pos1t1ons, the major priont1es of the Union for radiofrequency 
coordination for mobile communications reflect the requirement for the full and . 
coordinated implementation of the decisions taken at the World Administrative Radio 
Conference at Torremolinos, 1992 (W ARC'92). 
At the same time, a number of short term bottle-necks in frequency allocation must be 
lifted to allow market development within the Union. 
The Commission proposes therefore the following main priorities : 
~ specific action : 
• agreement on frequency bands for DCS-1800 in the Union and 
replacement of the current ERC Recommendation by a ERC Decision, 
including firm allocation schedules ; 
• establishment of an ERC Decision for the allocation of harmonised bands 
and sufficient frequency resources for the digital mobile trunking system 
(TETRA), including firm allocation schedule ~ 
108 Council Directive of 28th Jwie 1990 on the establishment of the Internal Market for telecommunications services through the implementation of Open Network • 
Provision (90/387/EEC; OJ L 192/1, 24.7.90) 
109 Cowicil Directive of 28th April 1991 on the approximation of the laws of the Member States concerning telecommwiications terminal equipment, including the 
mutual recognition of their conformity (91/263/EEC; OJ L 12811, 23.5.91), and Council Directive of 29th October 1993 supplementing Directive 91/263/EEC in 
respect of satellite earth station equipment (93/97/EEC, OJ L 29011, 24.11.93) 
62 
• within the implementation of the W ARC'92 decisions, establishment of an 
ERC Decision concerning frequency bands for satellite-based personal 
communications systems (including so-called Low Earth Orbit (LEO) 
satellite systems). 
-.. global objective : 
• early designation and schedule of allocation for the bands set aside at 
W ARC'92 for the future Universal Mobile Telecommunications System 
(UMTS) I Future Public Land Mobile Telecommunications System 
(FPLMTS) In the 1885 -2025 and 2110 -2200 :MHz range. 
This should provide overall certainty for future· sectoral developments in 
the Union. 
The Commission intends to follow closely full implementation by the Member States of 
decisions in these priority areas as well as of Council Directives 87/372/EEC, 
91/287/EEC, and 90/544/EEC concerning frequency allocation for the Global System 
for Mobile Communications (GSM), Digital European Cordless Telecommunications 
(DECT), and the pan-European digital paging system (ERMES), as well as existing 
ERC Decisions such as the ERC Decision for the•Terrestrial Flight Telephone System 
(TFTS), which should provid1e the basis for rapid introduction of public aeronautical 
correspondence services in the Union, and the ERC Decision on Digital Short Range 
Radio (DSRR). 
4 INITIATING COORDINATION OF NUMBERING AND WORKING TOW ARDS A 
EUROPEAN NUMBERING SPACE FOR PERSONAL COMMUNICATIONS 
As set out in the positions, the creation of a European numbering space is the key to the 
viable implementation of a personal communications environment in the Union. 
At the same time, a numb1~r of immediate steps can be taken to facilitate the 
development of mobile communications. 
The Commission therefore proposes the following main priorities in the co-ordination of 
numbering for mobile and personal communications : 
63 
~ specific action : 
• harmonisation in the framework of ECTRA/ETO, and in close contact 
with ETSI and the respective Mo Us set up for system implementation, of 
access codes for mobile systems ; 
• harmonisation of access codes for directory services ; 
• harmonisation of principles for allocation of numbers and number ranges 
of access codes for Service Providers or for special service features ; 
• harmonisation of access codes to emergency services, as far ~s not 
covered by Council Decision 91/396/EEC110, and other services of 
special public interest ~ 
• harmonisation of access codes of special relevance to the intelligent 
network environment. 
~ global objective : 
• rapid creation of a European numbering space, as the only viable long­
term base for personal and portable numbers and Europe-wide personal 
communications, in line with Council Resolution 92/C 318/02111 . This 
should be . based on preparation by ECTRA and should use the 
opportunity for profound reform offered by the global reform of the 
world numbering system currently underway in the International 
Telecommunications Union. 
The Commission intends to follow closely full implementation by the 
Member States of decisions in these priority areas. 
110 Council Decision of 29th July on the introduction ofa single European emergency call number (91/396/EEC; OJ L 217/31, 6.8.91) 
111 Council Resolution of 19th November 1992 on the promotion of Europe-wide cooperation on numbering of telecommunications services (92/C 318/02, 
OJ C318/2, 4.12.92). 
64 
5 FACILITATING THE DEVELOPMENT OF TRANS-EUROPEAN NETWORKS 
BASED ON MOBILE AND PERSONAL COMMUNICATIONS TECHNOLOGIES, 
as well as their use to support the development of telecommunications in the less 
favoured regions, and in the countries of Central and Eastern Europe. 
The development of Europe-wide mobile operations has been substantially assisted in 
the past by conclusion of Memoranda of Understanding between operators and/or 
manufacturers in key mobile system development areas. Examples include the MoU 
concerning introduction of GSM, and in relation to ERMES, telepoint services and more 
recently TFTS. In a number of cases, these MoUs have been extended to cover both 
EFT A countries and countries in Central and Eastern Europe and have sometimes 
extended beyond Europe. 
This cooperation in the introduction of such mobile systems should be further 
encouraged. 
The provisions of the Treaty concerning trans-European networks now present the 
opportunity to make a further step in promoting such cooperation through the 
establishment and development of such networks. According to the Treaty, particular 
account will be taken of the need to link peripheral regions with central regions of the 
Union. Furthermore cooperation may be extended to third countries to promote 
projects of mutual interest and to ensure the interoperability of networks. 
·The Commission has proposed guidelines identifying projects of common interest in 
other telecommunications fields. It is proposed that in the field of m_obile and personal 
communications priority should be given initially to the establishment of trans-European 
networks based on satellite-based personal communications including so-called Low 
Earth Orbit (LEO) satellite systems. 
This should include, together with the Member States and the sector, the establishment 
of guidelines identifying projects of common interests, and identifying projects of mutual 
interest with third countries. 
Further, special attention should be given to provision of telematics applications via 
mobile networks/services, in fields such as transport, health care, education and training 
where the use of mobile communications offer flexibility for new applications. 
65 
6 ELABORATING COMMON COMMUNITY POSITIONS WITH REGARD TO 
THIRD COUNTRIES AND ENSURING MARKET ACCESS TO THOSE 
COUNTRIES, 
in order to ensure the Union's full contribution to the global development of mobile and 
personal communications and equivalent market access for European equipment 
industry, network operators and service providers. 
Main objectives should be : 
~ Common Community positions in the international fora where the major future 
standards, frequency, and numbering decisions will be taken. 
This concerns coordination in the International Telecommunications Union and its 
World Radio Conferences, and with committees and working groups m the 
respective standards and numbering fields ; 
~ development of common procedures with regard to trade and circulation of 
services and equipment to/from third countries in line with any agreements by the 
European Union with those countries and based on the principles of the GATT ~ 
~ Common Community positions on issues having a direct impact on trade and 
Community exports in this field, such as issues related to intellectual property 
rights, on restrictions on exports of encryption techniques and other sensitive 
technologies ; 
~ Common Community positions with regard to obtaining equivalent market access 
to third country markets, taking account of the Union's commitments on a multi­
lateral or bilateral basis. 
7 CONTINUING SUPPORT FOR THE EVOLUTION TOWARDS THE UNIVERSAL 
MOBILE TELECOMMUNICATIONS SYSTEM, 
as a common future basis for personal communications. 
The Universal Mobile Telecommunications System (UMTS), currently under 
development in Europe, aims at ultimately providing a unified cost-eflicient basis for 
personal communications services. 
66 
It is proposed that : 
~ the Community continues its support for UMTS developments through its 
research programmes in the field of communications technologies, in the context 
of its R&D Framework Programme and by promoting telematics applications on 
UMTS.; 
~ substantial support is provided to ETSI's Special Mobile Group (SMG). SMG is 
working on standards in this area and preparing a European position for the 
standardisation sector of the International Telecommunications Union which is 
dealing with this area under the title Future Public Land Mobile 
Telecommunications System (FPLMTS) ; 
~ work in this area builds on European strength in current digital mobile 
technologies, in particular DCS-1800, GSM, and DECT. At the same time 
flexibility with regard to certain features must be maintained such as future coding 
techniques used for the air interface, depending on the outcome of comparative 
research currently being carried out in the framework of the Community's research 
and technological development programme ~ 
~ the satellite component of UMTS should be carefully investigated, in view of the 
current proposals for satellite-based personal communications; 
~ whichever detailed options are finally chosen, care should be taken to ensure a 
smooth transition from the use of current technologies to UMTS technologies. 
67 
V CONCLUSION 
The evolution of mobile and personal communications represents one of the three major trends 
which dominate the current developments in communications -alongside the general 
globalisation and internationalisation of the communications sector, and the emergence of multi­
media services, combining the digital provision of voice, image, and data and of interactivity. 
At the same time, mobile and personal communications networks will form a major component 
of the future trans-European communications network environment. 
The European Union enjoys a position of technological leadership in this sector.. Maintaining 
this position and drawing maximum benefit from it for the European citizen, European industry, 
and European society now depends on creating the right conditions for future development. 
The major pre-conditions will be increasing market flexibility, while developing a common 
vision and safeguarding the fundamental public interest in the sector. Contributing to finding 
the right balance in the context of the Union through a broad public discussion is the aim of this 
Green Paper. 
After an appropriate period of consultation, the Commission will present its conclusions on the 
future development of mobile and personal communications in the European Union and on the 
required measures. 
68 
Towards the Personal Communications Environment: 
. Green Paper on a common approach in the field of 
mobile and personal communications in the European Union 
J\.NNEXA 
REVIEW ()F TECHNOLOGY 
AN~DMARKET 
DEVELOPMENTS 
69 
TABLE OF CONTENTS 
REVIEW OF TECHNOLOGY AND MARKET DEVELOPMENTS ........................................ 72 
1. GENERAL OVERVIEW .................................................................................................. 72 
1.1 The transition to digital systems .............................................................................. 7 4 
1.2 Second and third generation systems ....................................................................... 74 
1. 3 Convergence of mobile communications with intelligent systems .............................. 7 5 
1.4 Sharing of resources ............................................................................................... 75 
1. 5 Satellite-based systems ........................................................................................... 7 6 
2. PUBLIC MOBILE COMMUNICATIONS ....................................................................... 77 
2.1 The Global System for Mobile Communications -GSM ..... : .................................. 77 
2.2 Digital Cordless Telecommunications -DECT ...................................................... 80 
2.3 Public Access/Telepoint Applications ...................................................................... 81 
2.4 The Pan-European Digital Paging System -ERMES ............................................. 82 
2.5 The Terrestrial Flight Telecommunications System-TFTS ....................................... 83 
2.6 The evolution towards the Universal Mobile Telecommunications System -
UMTS .................................................................................................................... 83 
3. PRIVATE MOBILE COMMUNICATIONS ..................................................................... 85 
3 .1 Private mobile radio (PMR) .................................................................................... 85 
3 .2 The trend towards digital trunked systems -TETRA ............................................... 8 5 
3 .3 Mobile Data ........................................................................................................... 86 
3.4 Digital Short Range Radio-DSRR ........................................................................... 86 
3.5 Wireless LANs and Wireless PABXs ...................................................................... 86 
4. THE CONVERGENCE OF FIXED AND MOBILE COMMUNICATIONS : THE 
EVOLUTION TOW ARDS A PERSONAL COMMUNICATIONS 
ENVIRONMENT ............................................................................................................. 87 j . 
4.1 The development of Micro Cellular Networks .......................................................... 87 
70 
4.2 Personal Communications Network-PCN/DCS 1800 ............................................... 88 
4.3 Wireless in the local loop ........................................................................................ 88 
4. 4 Complementary growth of traffic on mobile networks and the fixed network ............ 8 9 
4. 5 Development of mobility in the fixed network: personal numbering in the 
intelligent network environment ............................................................................... 89 
4. 6 The convergence of mobility in the fixed and mobile networks: personal 
communications as a global service offering, and the role of service 
providers .. , ............................................................................................................. 91 
4. 7 Tbe future personal communications environment, the role of the Universal 
Mobile Telecommunications System, satellite based systems and the 
intelligent network .................................................................................................. 93 
5. CONCLUSIONS .............................................................................................................. 97 
71 
REVIEW OF TECHNOLOGY AND MARKET DEVELOPMENTS 
1. GENERAL OVERVIEW 
Mobile communications is currently the fastest growing sector within the 
telecommunications industry. The majority of this growth has occurred since the mid-l 980s 
following introduction of public_ cellular telephony services in Europe, although private 
mobile radio communications have in fact been in use in Europe since the 1940s. 
Europe today has a total mobile user base of around 16 million subscribers (a figure which 
excludes cordless telephony), made up mainly of users of the three most established services 
-private mobile radio, paging and analogue cellular radio. This total user base grew by over 
20% in 1991, led by an increase in cellular users of over 40%. As well as now accounting 
for greater than 50% of the total user base, cellular also accounts for over 90% of the value 
of the total European market for mobile services and 75% of that for mobile equipment!. 
Because of the diverse requirements driving mobile developments, many teclmology and 
market characteristics are exhibited at the level of individual systems and services. A 
number of important trends, however, are significant in terms of the general continuing 
development of the sector2. 
Exhibit Al gives an overview of the current mobile market situation 111 the European 
Union. 
While digital systems at present account for some 10% of the cellular subscriber base~ 
further rapid transition from analogue to digital systems is expected over the decade. This 
review of technology and market developments therefore concentrates on digital mobile 
communications. 
One of the most dramatic effects in European telecommunications over the recent period has been the 
substantial price decreases in digital mobile terminal equipment prices, together with the widespread 
reductions in service prices and innovative pricing packages, (for example, the introduction of schemes 
targetted at customers with low usage). Current annual cellular revenue per subscriber is 1 , I 00 EC lJ. 
compared with around 400 ECU per fixed network subscriber. However, with the evolution of mobile anJ 
personal conununications services towards mass market deployment, the difference in revenue levels \\·ill 
diminish. 
2 Further detail can be found in supporting studies, in particular "Scenario Mobile Communications up to 201 O -
study on forecast developments and future trends in teclmical development and conunercial provision up to the 
year 2010", EUTELIS Consult, October 1993, undertaken for the Conunission in preparation for the Green 
Paper. Additionally, there are a large number of studies and market analyses regularly published by 
consultancies and market research companies. 
For details on current status of systems, see in particular "Review of the Requirements for the ti.1ture 
hannonization of regulatory policy regarding mobile conunw1ications services", repnrt by ECTRJ\ Mobile 
Project Team, European Conunittee for Teleconununications Regulatory Affairs, October 1993. 
72 
Exhibit Al: European Mobille Telecommunications at end-1993 : key data 
1. USERS 
Total number of users ofmobik communications in Europe1 ••••••••••••••••••••••• 15,800,000 
on public networks2 •....................................................•.•••..........•.•••....•••••.•••••••••• 70o/o 
and on private networks3 ..............................................•..•..•................•.•••••••••.•••••• 30°/o 
operating on analogue systems4 ..............•...••.•......••.••.••••••••••••.•••••••••••.•••••••••••••••••• 91 % 
and on digital systems5 ..................................................•.......................••...•.•.•....•.•• 9°/o 
2. SERVICE REVENUES 
Total public mobile service revc:nues in Europe6 ...••••.••••••••••......•.••.•.••• 8.5 Billion ECU 
Mobile services as a percentage of all telecommunications services ........................ 10% 
3. EQUIPMENT REVENUES 
Customer equipment sales ................................................................... 4.6 Billion ECU 
Tenninals for use on public cellular systems ..................................................... "\"". 75% 
and other networks7 .......................................•............•............................••..•.•.•.••• 25°/o 
4. PROJECTED CUMULATIVE INVESTMENT TO 20008 
4 
6 
9 
10 
11 Projected investment in mobile infrastructure (lower bound9) ................ 27 Billion ECU 
Projected investment in mobile infrastructure (upper bound10) ............... 45 Billion ECU 
As a percentage of all telecommunications investment11 ..•..•.••.••••••••••••.••••••••••••• 7 -13% 
Source: Published market research 
Comprising 8, l 00,000 cellular telephony u.."Crs, 4,500,000 private mobile radio (PMR) and public access 
mobile radio (PAMR) users, and 3,100,0C.() wide-area paging users. 
The installed base of other services. such as telepoint and mobile data, remains small at present with an 
estimated 100,000 subscribers in total. Cordless telephone use in residential and/or business environments is 
excluded from this total.· 
Includes European Economic Area and S\i.itzerland, equivalent figures for central and eastern Europe are not 
, available. 
Public networks include: analogue cellular tdephony (NMT 900, NMT 450, TACS, C-NET, Radiocom 2000 
and others), GSM, OCS 1800, paging and tekpoint. 
Private networks include: PMR, P M1R anJ dedicated mobile data networks. 
Analogue systems include: analogue cellular telephony, analogue paging and PMR and analogue PAMR. 
Digital systems are: GSM cellular telephony. OCS 1800 cellular telephony, digital PA.MR and telepoint. GSM 
cellular telephony, currently w1dergoing rery rapid expansion, represents the majority of digital users. 
1993 service revenues for analogue and digital cellular telephony, and wide-area paging. 
Includes paging tenninal, private mobile radio tenninals and private mobile radio base stations. 
During this period, mobile telephony subscribers as a percentage of all telephony subscribers will increase 
from approximately 4% to 11.14%. Re\"enues will also grow although declining costs and the effects of 
competition (notably the range of tariff packages offered) will mean that revenues per subscriber will fall from 
the present level of over 1100 ECU ~r arumm to less than 500 ECU. 
Based on public investment plans and on licences already all0cated or planned. 
Assuming widespread adoption of Personal Conununications based on OCS 1800 teclmology. 
Cumulative teleconununications investment in the European Union from 1991 to 2000 will be 345 to 401 
Billion ECU according to Analysys' study •perfonnance of the Telecommunications Sector up to 2010 under 
different Regulatory and Market Options·. · 
73 
1.1 The transition to digital systems 
Recent technical development in Europe has been concentrated on second­
generation digital mobile systems offering improved cost . and performance 
compared to initial analogue systems, as well as greater capacities and new 
functionality. 
ETSI-specified mobile systems and technologies include: 
• 
• 
• 
• 
• 
• 
• GSM -'Global System for Mobile communications' digital cellular 
DCS 1800 -digital cellular system based on GSM, operating at 1800 
MHz; 
DECT -digital European cordless telecommunications; 
ERMES -digital paging and messaging system; 
TFTS -system for terrestrial in-flight passenger telecommunications; 
TETRA -digital trunked mobile radio system; 
DSRR (digital short-range radio system for private mobile radio) 
each of which comprise a technological advance on first-generation analogue 
products, and offer, for the first time, through their Europe-wide specification, true 
possibilities for pan-Europe~ mobility and manufacturing econ.omies of scale. 
1.2 Second and third generation systems 
It is likely that a subset of second generation systems will, through successive 
development, play a key role in ~the delivery of future personal communications 
services3 up to and into the next century. 
For the longer term, industry and policy makers both in Europe and at the global 
level are actively promoting research and development towards a unified 
technological approac4 to meeting needs for world-wide personal conununications. 
The development of a universal mobile system which can support the full range of 
market-specific applications via a single terminal is seen to require a further, third 
generation evolution of mobile communications technology. 
Research and development on this third-generation mobile technology in Europe is 
concentrated, under the European Community RACE programme, on developing 
the architectural aspects of a Universal Mobile Telecommunications System 
(UMTS). Responsibility for coordinating European technical specifications suitable 
for implementation of UMTS has been allocated to the ETSI Technical Conu11ittee 
SMG (Special Mobile Group). 
At the global level, the ITU has resolved to produce international a priori standards 
for a third-generation global mobile communications system under the concept of 
Future Public Land Mobile Telecommunications Systems (FPLMTS). FPLMTS 
has gained support at the W ARC '92 through the earmarking of global frequency 
bands for its introduction. 
3 See Sections 4.6 and 4.7 
74 
1.3 Convergence of mobile communications with intelligent systems 
The provision of large degrees of mobility, including the capability to· roam4 
between networks, has created new technical challenges for call handling and 
related functions in networks such as GSM. These arise from the basic needs to 
hold, update and interrogate information to enable real-time handling of the location 
of mobile terminals/nwnbers, authentication of roaming subscribers and terminals, 
and routing of calls. A degree of 'network intelligence' is therefore intrinsic to the 
provision of mobility functions. 
The solutions adopted for GSM involve the use of compu~erised databases 
distributed across diffi~rent GSM networks and the implementation of advanced 
parts of the CCITI No. 7 signalling system to enable information transactions 
between networks and databases. These are core components of network 
intelligence. 
The ability to handle a high volume of information transactions will become 
increasingly important as mobile subscriber numbers increase in future. RACE 
estimates project a vollume of signalling transactions which may be an order of 
magnitude greater than the levels for which current systems are designed. 
In addition to the need to enhance transaction handling capabilities to provide basic 
mobility functions, progress towards mass-market personal communications will in 
future create additional requirements for network intelligence, including number 
translation capabilities associated with personal numbering, the setting up and 
modification of individual subscriber service profiles, and provision of a range of 
advanced services. 
Such capabilities will not only apply to mobile networks, but will span the range of 
fixed, mobile and satelllite platforms over which personal communications services 
are likely to be offered. 
1.4 Sharing of resources 
Of increasing concern in a competitive environment is the efficiency with which 
technologies allow for sharing of resources between systems. While this touches 
radio frequencies, in particular, it also extends to sharing sites and infrastructure. 
For public mobile communications, personal communications will generate a wealth 
of technologies, opera.tors and users. Development of increasingly spectrally­
efficient and agile technologies is therefore a continuing priority for the mobile 
industry. 
For private mobile technologies, the introduction of trunked mobile radio systems, 
such as TETRA, as an alternative to self-provided private mobile radio (PMR) 
systems offers, through pioneering the large-scale sharing of private-use radio 
channels, a significant (;:xample of the trend towards sharing of resources. 
4 For technical terms see Glossary 
75 
Increasing use of trunked mobile radio also signifies a trend in the private mobile 
communications area away from separate towards shared radio communications 
infrastructures. This is likely also to become an increasingly important aspect in the 
public mobile communications area in view of the likely future requirements for 
infrastructures. 
1.5 Satellite-based systems 
Mobile and personal communications are not limited to the· usage of terrestrial 
networks. Satellite based systems provide voice and non-voice services to an ever 
increasing number of users at sea, and also on land and in the air. 
The international maritime satellite organization Inmarsat has been offering voice 
and telex services to mobile users for more than ten years. Originally the service 
was only· intended for maritime mobile communications, but in the eighties the 
Inmarsat system came to be used for land-mobile communications as well. The 
Inmarsat system had about 20,000 terminals in use late 1992 (Inmarsat A5), of 
which about three quarters are on vessels, and the remaining quarter on land. About 
25% of all these terminals are registered in European countries. 
Recently, there has been increased attention to the use of satellite systems for 
mobile voice and data services via satellite. In Europe Euteltracs (Eutelsat), 
Inmarsat-C, and Traksat's service are examples of satellite-based data services6. 
In an already changing environment, it appears that the usage of satellite systems 
for mobile services may enter yet another period of revolutionary change, now 
brought about by new concepts for personal communication services via satellite. 
Already in the Inmarsat system, terminal sizes and related prices are decreasing. 
The new systems that are proposed offer a wide variety of technical solutions in 
tenns of power of the systems, architecture, facilities or use of orbits (ranging from 
systems using the Geostationary Orbit (GEO) to systems using a Low-Earth Orbit 
(LEO), Highly Eliptical Orbit (HEO) or even other orbits). A common aim of these 
systems is the delivery of voice and/or non-voice services to customers via mobile, 
hand-held terminals 7. 
5 Inmarsat Standard-A tem1inal is the original terminal used by Inmarsat for its services. In January 1991 
Imnarsat added the Standard-C tem1inal to its range. This latter category of terminal is used for text and data 
services only. At the end of 1992 there were approximately 3.500 oflnmarsat C terminals in use. · 
At the beginning of 1993 Inmarsat launched its Inmarsat-M (portable satellite phone) service. Inmarsat also 
offers an aeronautical satellite communications service (since 1990). Future plans include the introduction of 
Inmarsat-B, the digital successor to Inmarsat-A. 
6 Published market research suggests that the current base of around 6,000 tem1inals for land mobile satellite 
data services, such as Inmarsat C and Euteltracs in Europe should rise to 100,000 terminals in use by 2000. 
7 See Conununication from the Commission on satellite personal communications, COM(93)171 final, 27 April 
1993. Most proposals are currently US-based, such as the widely-known proposal for the Iridium project led by 
Motorola. 
76 
2. PUBLIC MOBILE COMMUNICATIONS 
2.1 The Global System for Mobile Communications -GSM 
While analogue cellular systems still dominate the European installed base, GSM -
the new pan-European digital system is catching up rapidly (see Exhibit A2). 
Work on GSM standardisation started in 1982 under the CEPT (the European 
Conference of Post and Telecommunications Administrations) and was transferred 
to ETSI following its formation in 1987. GSM introduction was from the start 
strongly supported by the European Community, in particular by a Council 
Recommendation and Council Directive adopted in 1987, and a Council Resolution 
adopted in 19908. 
GSM is now the major European digital mobile system and has ·become a world­
wide success9. Its implementation was supported by the GSM Memorandum of 
Understanding (MOU) in which all European Community operators are members. 
8 Council Directive of 25 June 1987 on the frequency bands to be reserved for the coordinated introduction of 
public pan-European cellular digital land-based mobile communications in the European Community 
(87/372/EEC; OJ Ll 96/85, 17.07.87) (GSM); 
Council Reconunendation of 25 June 1987 on the coordinated introduction of public pan-European cellular 
digital land-based mobile communications in the Community (87/371/EEC; OJ Ll 96/81, 17.07.87); 
Council Resolution of 14 December 1990 on the final stage of the coordinated introduction of pan-European 
land-based public digital mobile cellular communications in the Community (GSM) (90/C329/09; OJ C329/25, 
31.12.90). 
9 For details of the Community strategy in this field, see Communication from the Conunission on the 
coordinated introductimi of the pan-European digital cellular mobile conununications system (GSM), 
COM(90)565 final, 23.11.90 
77 
Exhibit A2 : Main Trends in cellular telephony during 1993 
Analogue still dominates the European installed base. •.. ·--J-
E 
u 
E 
F 
T 
A Belocom B NMT 450 66.000 14% 
TeleDarunark NMT 450 47.000 -6% 
Deutsche Telekom D 
Telefonica E 
IT Radiocom 2000 
SFR 
Eircell IRL 
SIP 
P&T L 
PTT Telecom NL 
TMN p 
Cellnet UK 
Vodafone 
PTV A 
Telecom Finland SF 
Telemobil N 
Comvik s 
Telia Mobltel NMT900 
C-Netz. 
NMT450 
TACS900 
RC 2000 
NMT450 
TACS900 
R1rrs 
TACS 900 
NMT4SO 
NMT4SO 
NMT900 
C-Net 
TACS 900 
TACS 900 
C-Netz 
D-Netz 
NMT450 
NMT900 185.000 
807.000 
59.000 
180.000 
331.000 
125.000 
50.000 
35.000 
950.000 
950 
27.000 
170.000 
30.000 
711.000 
895.000 
56.000 
145.000 
168.000 
235.000 23% 
9% 
-11% 
82% 
1% 
23% 
25% 
-33% 
39% 
0% 
4% 
33% 
30% 
23% 
19% 
-7% 
49% 
6% 
33% 
NMT 450 159.000 5% 
NMT 900 162.000 38% 
NMT 450 21.000 00/o 
NMT 450 257.000 3% 
NMT900 452.000 21% 
PTT CH Natel C 241.000 17% 
-:-:·:::::::::::::::::;::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: :::::::::::::::::::;:::::::::::::::::::::::::·::::;::::·:·:· .. ·.·.;.·.·.·.:·:·:·:·:·:·:-:-:-:-:-:-····:·:-:·:·:·:·:·:·:·:·:·:·:·:·:·:·:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-
Ei!fonMtftt?ttfti~:::~:tft: nttt:t~:::::::tt?/:::· ·. ,/::j:j:::«$4~§sq::::=:j}}:j~m:tj®.?.4tltifj 
~ource: uperators·puoushed marKet research 
... but GSM growth is strong in a number of Member States. 
=.·1!!l!!ll!!!l .~l!!!!!l!l!l!l!lll!l!l!l!!!!!!!l!l!~l!lll!!!!!!!l!l!l!l~!l\!! :!lll!llllll.ll!:!~ll~!!~l:liililfll::[··.·:·1·:1111~'11i~i.!lll\!ll\\!!\1 
TeleDanmark 
Dansk 
Mobiltelefon 
<DMTI 
DeTeMobil DI 
~lannesmann Dl 
E FT Itinerls 
U SFR 
SIP 
TMN 
Telecel 
Vodafone 
STET Hellas Telec. 
PanafonSA 
Eircell 
P&T 
PTV 
Telecom Finland 
E Radiolinja DK GSM 
GS~f 
D GS~f 
GS~f 
F GS~f 
GS~l 
GSM 
p GS~1 
GS~I 
UK GS~I 
GR GS~I 
GS~f 
IRL GS~1 
L GS~I 
A GSM 
SF GS~f 
GS~l 6.000 Mar-92 
•15,000 Jul-92 
190.000 Jul-92 
260.000 Jun-92 
15.000 Jul-92 
7.000 Jul-92 
1 .000 Oct-92 
16.500 Oct-92 
21.000 Oct-92 
l .Ol'lO Dec-91 
..3.0<.)() Jul-93 
.. 3.000 Jul-93 
··~ Jul-93 
•3_~ Jul-93 
0 Oct-93 
5.000 Jun-92 
6.000 Dec-91 
F T elemobil N GS!\f 1.000 May-93 
T ~etCom GSM •2.._COO Sep-93 
A C-Omvik S GS~1 5.500 Sep-92 
E.uropolitan GS~i 2.000 Sep-92 
Telia Mobitel GS!\1 3.500 Nov-92 
PTT SZ GSM 2.000 Mar-93 
tttfd5.~1lttllll@flitl tMlKMlllHlEl>ItlSW.500\tJHtl\@tltlttt 
Source: Operators-GSM MoU/CEC Studies 
Subscriber numbers estimated at start of October 1993 except for : 
* Subsall>er numbers estimated at September 1993 and .. Subsaib.:r numbers estimated at August 1993 
StartdaJes refer to public service availability. 
These figures change quickly due to rapid gro~ e.g. in Germany by January 1994 each GSM operator bad more than 
500,000 subscribers. In Greece the two GSM operators have more dwt 20,000 subscribers, whilst the Belgian GSM 
operat«, Proximus, is operational. 
78 
GSM offers a number of advantages over analogue cellular, including: 
• High speed data transmission 
• Portability of the user identity through the use of the SIM-card10 
• Pan-Europe<m roaming 
• Enhanced range of value-added services 
• Increased traffic density due to greater spectrum efficiency 
• Increased security via the A5 algorithm and variants 11 
• Increased quality of service 
GSM can be deployed as a micro-cellular network to allow for increased traffic 
levels in high-density areas. A further important potential development of the GSM 
specification will allow the introduction of half rate encoding of speech, thereby 
supporting a two-fold gain in voice traffic handling capacity. 
GSM is at present commercially available in 9 Member States, with current 
· planning supporting availability in all Member States by 1994. Progress in 
establishing roaming agreements in Europe has been initially slow. While the 
situation is now improving, substantial gaps in pan-European coverage for roaming 
still remain. 
A number of problems have had an impact on the introduction of GSM. These 
include: 
• intellectual property right (IPR) issues 
• exportation of the security algorithm, where only compromise solutions have so 
far been found 
• problems of interference with non-radio devices 
• the emerging concerns of radiation hazards and environmental impacts 
• delays in terminal type approval, requiring an Interim Type Approval (ITA) 
scheme as a necessary short-term solution. 
10 The SIM (Subscriber Identification Module) card is an 'intelligent' card which holds details of a GSM user. It 
can be inserted by the user into any authorised GSM terminal to register on the network, and thus provides an 
option for roaming without the need to carry a GSM handset between locations where service is required. The 
SIM-card is also being used as a means of enabling cross-border competition between GSM service providers. 
l l AS denotes the infonnation encryption m;!thod designed to provide end-to-end security in the GSM system. 
79 
Initial GSM implementations support only voice telephony and emergency calls. 
Enhancements in due course will support full data transparency, facsimile service 
and short call facilities. The latter capability will allow a GSM terminal to 
effectively act as a paging terminal, receiving and storing short messages, for 
example when the user chooses not to answer incoming calls. 
Forecasts predict a very high market potential for GSM in Europe, as well as world 
wide. Within the Union, before the year 2000, GSM is expected to provide a 
coverage that is equivalent or better than corresponding analogue services· with 
significantly better quality of service and the capability to support international 
roaming. This, with appropriate marketing, is expected to provide a significant 
stimulus for subscribers to migrate from analogue services. Market forecasts 
indicate that GSM may attract around 15-20M subscribers by the year 2000 across 
the European Union and EFTA countries. 
GSM specifications have now been extended to support operation at higher 
frequency bands, based on a micro-cellular structure. The resulting specifications 
are known as DCS-1800 (see sections 4.1 and 4.2) 
2.2 Digital Cordless Telecommunications -DECT 
D ECT is set to become the generalized digital cordless telephone in Europe, 
however with significantly broader applications. It is aimed at offering mobility 
around the office (via the cordless PABX), home, and public areas (via 'telepoint' 
services), and may be deployed in wireless local loop configurations. 
The development and introduction of DECT was supported by a Council 
Recommendation and Council Directive adopted in 199112. 
The first D ECT products are now available on the European market in the fom1 of 
cordless extension upgrades for P ABX installations. 
DECT is designed to be capable of supporting very high traffic densities (upwards 
of 6,000-12,000 Erlang!Km2 depending on application), making it suitable for very 
concentrated usage environments such as in city centre offices and transport hubs. 
For smaller PABX installations, residential and telepoint applications, DECT will 
have the CT2 technology as a competitor. 
For these applications, the cost of DECT equipment will be critical in realising full 
market potential, estimated to be around 30 million users in Europe. 
DECT could potentially be used to provide cordless access to a range of networks. 
ETSI has already developed DECT profiles for integration with GSM and ISDN. · 
12 Council Directive of 3.June 1991 on the frequency bands designated for the coordinated introduction of digital 
European cordless teleconununications (DECT) into the Conununity (91/287/EEC; OJ Ll44/45, 08.06.91 ); 
Council Reconunendation of 3 June 1991 on the coordinated introduction of digital European cordless 
teleconununications (DECT) into the Conununity (91/288/EEC; OJ LI 44/4 7, 08.06. 91 ). 
80 
D ECT has, as with other systems, faced a number of issues during development: 
• competition from investment in the development of GSM, resulting in a 
shortage of manpower for the development of the standard, both in the ETSI 
and in manufactun~rs · 
• competition for th1e adoption of alternative European cordless standards ( CT2 
and DCT 900) 
• as with GSM, there have been delays in getting CTRs 13 approved in good time 
• some countries consider there are risks that DECT effective capacities may be 
reduced due to possible interference with systems in neighbouring bands. In the 
UK, a particular problem of frequency sharing between DECT and DCS 1800 
has been seen. 
The validation and demonstration of DECT applications, supported by the 
Commission under the CTS (Conformance Testing Service) program (plaimed for 
the first quarter of 1994) will be a definitive push for a wider use of DECT. The 
main initial DECT appplications (cordless PABX, telepoint and local loop) are the 
essential part of the planned programme. 
The market potential for DECT is forecast to be very high once the technology is 
fully available. It could become, alongside GSM (wide range, high mobility), the 
major component of European wireless mass-market communications (short range, 
low mobility). 
2.3 Public Access/Telepoint Applications 
In its basic conception, telepoint14 approximates to a cordless public call-box, 
providing access to the public network for making calls only. Enhanced 
implementations aimed at increasing contactability involve combining the basic one':' 
way service with paging (including the offering of combined cordless/paging 
terminals) and voice messaging, and the implementation of network functionality 
which can hold and route calls to a telepoint subscriber when he comes in range of a 
base-station. 
The two main non-proprietary solutions for the present and near future are CT2 and 
DECT. All current itnplementations are based on CT2, however a DECT-based 
triai is now planned in France. DECT is seen as a medium term possibility in the 
European context. 
13 CTRs: Conunon Technical Regulations~ the basis for harmonized type approval specifications in the context of 
Council Directive 91/263/EEC. 
14 Telepoint is a limited mobility service involving the use of a cordless telephone, carried by the user, to access 
the public network from any point within range of shared radio base-stations. These have so far been deployed 
mainly in town centres, railway stations, etc. Telepoint extends the standard home and office use of cordless 
telephones. 
81 
Telepoint in Europe has seen mixed success. Although some success has been seen 
in the Netherlands and major success recently in France, to date this has not been 
mirrored elsewhere. In the UK, all licensed operators have now abandoned efforts in 
this area. Plans for telepoint launches in Germany have been postponed. 
However, success in other markets (notably in Asia, e.g.Hong Kong and Singapore, 
see Annex C section 3) must be seen as a signal of the potential for such services. 
2.4 The Pan-European Digital Paging System -ERMES 
Development and introduction of ERMES was given political support through the 
adoption of a Council Recommendation and Council Decision in 199015. 
Implementation of ERMES is supported by an MOU between 28 European 
signatories. 
Currently, there are no commercial ERMES systems in operation in the Member 
States, also firm plans now exist for the licensing of operators in a number of 
Member States. France allocated three licences in Autumn 1993. 
Several issues have delayed the implementation of ERMES: 
• the priority given by both operators and suppliers to the implementatior: of 
other systems (GSM in particular) 
• in some cases, paging networks have been very recently installed, and existing 
available capacity is leading to a "wait and see" attitude to ERMES. 
• ERMES may compete against the capability of the short message service 
(SMS) of GSM, possibly using SMS-only GSM terminals. 
• Some operators have identified that in order for ERMES to be commercially 
successful as a supplement to the existing paging networks, it will depend 
heavily on roaming traffic. A lack of commitment to date to the undertakings 
given at the MoU meetings in this area is causing a loss of confidence with 
regard to the implementation of national ERMES networks .. 
• Questions have been raised about interference with non-radio systems, in 
particular, broadcast and cable TV services in Germany. Consequently 
required experimental ERMES trials have held up licence allocation. 
However, once these problems are overcome, ERMES has the potential to become 
the future backbone for European wide-area paging. 
15 Council Directive of 9 October 1990 on the frequency bands designated for the coordinated introduction or 
pan-European land-based public radio paging in the Conununity (90/544/EEC~ OJ L3 l 0/28, 09. 11. 90) 
(ERMES)~ 
Council Reconunendation of 9 October 1990 on the coordinated introduction of pan-European land-has1.:d 
public radio paging in the Conunw1ity (90/543/EEC~ OJ L310/23, 09.11.90) (ERMES) 
82 
2.5 The Terrestrial Flight Telecommunications System-TFTS 
The Terrestrial Flight Telecommunications System (TFTS) is the first digital 
system designed to provide passenger telephone correspondence services using 
direct radio links betwieen aircraft and ground stations with one-way access to the 
fixed ground network 16. 
TFTS could become a vital element in trans-European communications structures, 
and although by natur1e limited in volume, a flagship of European digital mobile 
systems. 
ETSI has defined the technical specification for TFTS radio characteristics and the 
interfaces with European public networks. The European Airlines Electronic 
Committee (ECAC) has specified the TFTS airborne equipment and its interface 
with the cabin equipment. 
TFTS ground infrastmcture is currently being rolled out. Competing Operators 
indicate that they have signed up a number of European airlines for TFTS service. 
A commercial TFTS-based service is due to be available during 1 S'94. An initial 
service became available in December 1993 at London Heathrow airport. 
2.6 The evolution towards the Universal Mobile Telecommunications System -
UMTS 
As set out, the UMTS third-generation mobile telecommunications system is 
designed to be a universal multi-function multi-service digital system evolving from 
current second-generation systems. 
The general service objectives for UMTS include: 
• UMTS should provid~ services in a wide range of operating environments 
allowing communication from home, office, cities or rural areas, fixed locations 
or moving vehicles; 
• UMTS should provide a wide range of services; 
• UMTS should support a wide range of mobile terminal types, from integrated 
lightweight handheld voice terminals to multimedia tenninals and mobile 
terminals which can provide a communications interface to other tenninals; 
16 The Conunission in 1992 proposed a Council Directive to secure frequency designations for TFTS 
(COM(92)314 final -SYN 440, 22.07.92). This was later replaced by an ERC decision, under the guidelines 
set out by the Council Resolution of 19 November 1992 on the implementation in the Conununity of European 
Radioconununications Conunittee Decisions (92/C318/01; OJ C318/l, 4.12.92). See also new approach to 
frequency coordination, Annex D. ERC is about to adopt a reconunendation on Interim Type Approval which 
will be implemented in CEPT countries prior to the adoption of a CTR for TFTS. 
83 
• UMTS should support Universal Personal Teleconununications (UPT) 
concepts. 
Responsibility for standardisation of UMTS has been given to the ETSI Teclmical 
Committee SMG (Special Mobile Group). Its tasks in this area include: 
• production of technical baseline material for UMTS ~ 
• production of parts of the European standards; 
• cooperation with European research programmes (e.g. RACE); 
• coordination with the ITU Standardisation sector for world wide standards on 
UMTS/FPLMTS. 
The European Conununity RACE II progranm1e of research and development into 
advanced communications technologies contributes to the work on UMTS via 
projects in the areas of radio access technologies such as TDMA and CDMA, cell 
and frequency planning and networking aspects 17. 
The objectives for UMTS are dealt within the ITU under the title Future Public 
Land Mobile Telecommunications Systems (FPLMTS). Within the ITU, work has 
been progressing on FPLMTS since 1986. Frequency arrangements for FPLMTS 
were initially set out WARC' 92 (see Annex B). 
17 Within RACE a number of distinct projects participate in the work towards the definition of UMTS. These 
include ATDMA, CODIT, MONET, PLATON, MA Vf, SAINT and TSUNAMI. The overall objective of the 
project CODIT, is to explore the potential of CDMA for UMTS, while that for A TDMA is to develop advanced 
teclmiques for realising a TDMA-based UMTS. The relative merits of these multiple teclmiques will be 
evaluated at the end of the projects. The main objective of project PLATON, is to develop new software tools 
that will allow efficient frequency planning for UMTS, while the project MONET aims at development or a 
framework for network standards for UMTS. The project MA vr, aims at identifying new video audio coding 
algorithms for the transmission of high quality audio, moving and still video in a mobile environment. 
Recently two new projects were launched namely SAINT which will evaluate and identify the requirements for 
the integration of satellites in UMTS and TSUNAMI which focus its work on the development of adaptive 
antenna systems for UMTS. 
A number of other R&D projects in the framework of RACE also contribute towards the definition of future 
mobile communication systems namely MOBILISE which addresses a number of aspects related to the 
introduction of UPT; MODAL, contributing to the planning and evolution of the fixed infrastrncture for future 
Mobile Broadband Systems; and MOEBIUS, a project focused on satellite-based mobile broadband 
communications. 
Another very important project in the context of future developments in mobile conununications is the project 
MBS which will explore the possibility of very high data rate mobile communications in the 60 GHz frequency 
range. 
84 
3. PRIVATE MOBILE COMMUNICATIONS 
3.1 Private mobile radio (PMR) 
Private Mobile Radio (PMR) developed out of the need to be able to establish 
closed user group communications with fleets of vehicles. Operation is typically 
from a despatch centre to mobiles operating over a limited number of dedicated 
radio channels. Communication may be via both voice and data; voice 
communication is typically half-duplex (ie "Push to talk"). Its low functionality 
means that PMR is assigned to niche, but nevertheless large, market sectors. 
PMR is currently experiencing relatively moderate growth, reflecting the maturity 
<?f the market, the availability of alternatives such as cellular, and significant 
congestion and freqm~ncy allocation problems, in particular as the efficiency of 
spectrum use can be very low. 
Analogue trunked PMR (so-called PAMR -Public Access Mobile Radio) systems 
were introduced in the: European Union in 1986. These systems support shared use 
of radio channels between users, the main aims being more efficient use of spectrum 
and improvement on basic PMR service levels. The UK MPT1327 specification is 
most widely-used in Europe, and is slowly establishing itself as a de facto standard. 
Other proprietary systiems also exist. 
A principal difference: of trunked PMR compared to basic PMR from the users' 
point of view is they have the option to subscribe to a service instead of building 
and running their own infrastructure. 
The digital TETRA (Trans-European Trunked Radio) standard being developed by 
ETSI represents the se:cond generation of trunked mobile radio systems. 
3.2 The trend towards di.gital trunked systems -TETRA 
ETSI is currently completing the specification of TETRA (Trans-European 
Trunked Radio). TETRA provides for efficient use of spectrum, interoperability 
between networks and common definition of equipment, aiming at offering users, 
operators and suppliers a more efficient and lower cost solution than with current 
analogue PAMR sysk~ms. It will, where required, support a high Jevel of service 
functionality including roaming capabilities. 
Public safety and operations-based organisations (police, fire-brigades, border 
authorities, forestry services, etc.) are likely to be the major users of TETRA. 
Benelux public safety organisations, acting within the Schengen group, have stated 
an urgent requirement for product availability during 1994, however the full 
requirements of these organisations have yet to be covered ETSI specifications. 
An important requirement where use of such systems spans intra-EC borders is the 
contiguous availability of suitable frequencies. 
TETRA could in fact become a major factor of renewed growth in the European 
PMR market. 
85 
3.3 Mobile Data 
Data can be carried over most mobile systems, and a variety of applications have 
been implemented carrying data at low speeds. 
Dedicated mobile data systems are a more recent development, and in most cases 
use a packet-based technique to achieve spectrum efficiency. Applications include 
despatch-type services and remote data entry. Most use is currently within closed 
user groups, however growth in portable personal computers may produce a wider 
range of services. The Mobitex system has emerged as the most widely adopted 
platform for dedicated mobile data networks in Europe, although other proprietary 
systems also exist. 
The ETSI-specified TETRA system will provide a European standard for mobile 
data services as well as for voice. ETSI is also working on the specification of a 
mobile packet-data radio system. 
3.4 Digital Short Range Radio-DSRR 
DSRR is intended to provide a low-cost digital PMR system, offering direct 
communication between mobile users, or operation via a repeater, without the need 
for a specific mobile infrastructure, such as that required by TETRA. 
The Commission has proposed a Directive concerning the frequency bands to be 
designated for DSRR. In the meantime, according to the new approach to frequency 
coordination (see Annex D), the European Radiocommunications Conunittee (ERC) 
has adopted an ERC-decision on the frequencies to be made available for DSRR. 
The availability of DSRR products has been delayed. Claims regarding possible 
interference with other systems, in particular GSM, and a "wait and see" attitude 
from the manufacturing industry are contributing to this. 
As a result a major European digital product is currently being held back from 
market deployment, in particular due to the continuing unresolved frequency issues. 
Urgent resolution of these issues is required18. 
3.5 Wireless LANs and Wireless PABXs 
In the area of wireless local area networking, the ETSI-specified "HiperLan" system 
refers to a radio-communications sub-system intended to provide high speed, short 
distance links between computer systems and is typically intended for local, in­
house and on premises working. It provides a standard, allowing for transmissions 
up to 20 Mbit/s, is expected to be delivered by ETSI during 1994. 
18 Related, but technically less-sophisticated systems also allowing radio-based communications without the need 
for fixed infrastructure have existed for many years in the form of Citizen's Band and amateur radio. Such 
systems have primarily been used for leisure activities. 
86 
In the area of wireless P ABXs, proprietary solutions dominate. CT2 and DECT 
(sec section 2.2)-are well placed to allow for lower-cost, more flexible and 
intercompatible equipment. Out of the two, DECT has more potential, mainly for 
non-voice communications as it allows for higher bit rates than CT2. Nevertheless, 
for true high bit rates, new standards are needed. 
4. THE CONVERGENCE OF FIXED AND MOBILE COMMUNICATIONS : THE 
EVOLUTION TOWARDS A PERSONAL COMMUNICATIONS ENVIRONMENT 
Personal communications means moving from a terminal-to-tenninal calling concept to a 
person-to-person calling concept. 
Personal communications involves the offering of a range of telecommunications services 
that arc able to be flexibly taillored and packaged to meet the needs of individuals, allowing 
them to conmmnicate independently of their location or access method. 
Taking this idea to any great extent anticipates ultimately an environment in which services 
could potentially be delivered over mobile, fixed, and/or satellite networks, accessed using 
either wireline and wireless terminals, and covering public and private domains, both 
business and residential. 
According to the studies carried out19, the European market for wireless personal 
communications could reach around 80 million users by the year 2010. Ultimately, personal 
conunurrications penetration could be expected to reach near 80 % of the entire population, 
i.e. up to one connection per adult. 
4.1 The development of Micro Cellular N~tworks 
A major step tO\:vard.s an infrastructure supporting the wireless part of personal 
conununications services is the use of small-radius cells (micro-cells), which allO\ys 
a high rate of spectmm reutilisation (aimed primarily at increasing the number of 
radio channels available in zones or enclosed areas with high peak traffic levels, 
thus supporting higher subscriber densities). 
To be more efficient and less costly, micro-cellular architectures require more 
decentralized intelligence than the normal cellular solutions. Decision and control 
needs to be done as far as possible at a local level in order to keep transmission 
costs and the volume of signalling traffic to workable levels. 
The roll-out of micro-cellular networks is now underway in Europe with the 
implementation of so-called Personal Communications Networks (PCN s) making 
use of the DCS 1800 standard in the UK and Gennany, and the deployment of 
micro-cellular versions of GSM at 900 MHz in urban areas. 
19 See in particular EUTELIS "Scenario Mobile Conunw1ications 2010 -Study on forecast development and 
future trends in teclmical development m:id c01mnercial provision up to the year 2010, October 1993". 
87 
4.2 Personal Communications Network-PCN/DCS 1800 
PCN licences were originally granted in the UK, resulting from consultation on the 
basis of the DTI's "Phones on the move" document. The aim was to extend the 
benefits of mobile communications to a wide market and stimulate competition in 
cellular communications, based on the use of cellular systems operating in the 
1800MHz band (denoted as PCN systems). The current licence-holders both chose 
to implement the European DCS1800 standard. A PCN-type licence has since been 
granted in Germany, and announcements have been made in France and the 
Netherlands. 
The DCS 1800 standard is essentially a modification of the GSM specification to 
support operation in the l 800MHz band. The low power level used, both in the 
terminal and in the base station and the use of frequencies in the higher band 
implies shorter distance coverage but supports higher traffic densities in urban 
areas, near main roads and crowded areas in general. 
Further incremental developments are being considered by ETSI for GSM at 
l 900MHz and 21 OOMHz, in order to position the European standard for additional 
markets20. 
The main differences of PCNs compared to GSM from the users' point of view are 
likely to be the cost, size and weight of the hand-helds which are generally expected 
to be lower. According to DCS 1800 operators and some analysts, scale economics 
for handset terminals will be greater than for GSM. 
4.3 Wireless in the local loop 
Currently, the most widespread applications of wireless in the local loop in the 
Community are based on the use of conventional analogue cellular techniques in 
conjunction with 'fixed' mobile terminals. Such techniques are being used in Spain 
and Eastern Germany to provide coverage for fixed telephony service, where the 
wireless local loop is seen as a cost-effective and faster alternative to roll out of 
wired fixed networks. · 
Cordless standards such as DECT provide the possibility of "neighbourhood 
telepoint" under which cordless terminals may access shared base-stations over 
relatively short distances. Access could potentially be to both current fixed and 
mobile networks. 
In the UK, one company21 is developing a proprietary wireless technology which 
will involve the deployment of roof-based antennae at subscriber premises. 
20 Work within ETSI is also focusing on the combination of GSM and DCS 1800 and of GSM an<l DECT. 
21 The company Ionica has been granted a licence to offer wireless local loop access to the public net work 111 
competition to BT and cable TV companies. 
88 
Furthermore, mobile operators will, from 1994, be allowed to offer fixed services 
over their networks22• 
ETSI is shortly to produce a technical report and recommendations for 
standardisation conceming wireless local loop technologies. 
4.4 Complementary gro·wth of traffic on mobile networks and the fixed network 
. Current demand for cellular telephony, which accounts for 90% of mobile service 
revenues, translates into substantial additional telephony traffic over and above that 
between fixed network subscribers. 
This is mainly attributed to the fact that the mobile subscriber is more of the time in 
a position to initiate and receive calls. Mobile communications overcomes the main 
disadvantage of fixed telephony -an ability to reach the called party only 30% of 
the time. Calls to a mobile subscriber are more often completed, which has the 
effect of producing increased calling. 
Currently, in develop€xl markets, according to estimates, 95% of calls involving a 
mobile subscriber are made to or from a fixed subscriber. A large majority of the 
demand for cellular communications correspondingly tran$tes into additional 
revenue for the fixed network. 
In the medium to long term, the proportion of mobile-to-mobile calls may increase 
as users, both business and ordinary consumers, start to subscribe in volume to 
wireless personal communications services. 
Projections for wireless personal communications in more advanced markets 
suggest that 30-40% of consumers and 30-50% of business users may subscribe to 
mobile personal communications by the year 2010. 
As a result, there could be a diversion of revenue from the fixed network operators, 
if they do not adopt a strategy allowing them to evolve into personal 
communications services providers -and are allowed to do so. 
The challenge for the traditional fixed network operators during this time frame will 
be to ensure their active participation in the overall growth of the personal 
communications marki~t and in related markets, as they develop. 
4.5 Development of mobility in the fixed network: personal numbering in the 
intelligent network environment 
A range of services and equipment have been developed which assist mobility on 
the fixed network: 
22 Mercury Communications has also announced its intention to provide local access to its fixed network using 
radio teclmology. 
89 
• 'supplementary' services such as call forwarding and diversion have long been 
available in private networks. These are now becoming available on the 
PSTN/ISDN, however, the number of subscribers who have access to or use 
them is currently limited23; 
• cordless technology offers freedom of communication without physical 
connection to the network, within range of home; 
• services such as card-based rebilling and telepoint add convenience to making 
calls from different locations; 
• voice messaging services and terminal equipment such as answering and 
facsimile machines allow messages to be received whilst away from the normal 
-location; 
• a limited number of services employing the concept of a personal number also 
exist, but have to-date attracted few users. Such services are currently based on 
proprietary pre-intelligent network functionality deployed on a service-specific 
basis. 
The future prov1s1on of services under a full-scale. universal personal 
telecommunications (UPT) concept24 is generally seen to require full intelligent 
network (IN) functionality. IN will provide a cost-efficient platform for developing 
a range of advanced services. Its introduction will depend on rapid progress in the 
deployment of digitalization into the fixed network. 
Key aspects ofUPT are: 
• The personal number, for receiving calls at different fixed-network locations 
and for billing of calls made. Potentially, the personal number could be held by 
an individual for life; 
• The bringing together under a single umbrella of various other services linked 
to the 'personalisation' of telecommunications, e.g. flexible routing and billing 
services; 
23 The proposed directive on the application of ONP to voice-telephony foresees provision of a number of these 
functions. See Conunon Position of 1 July 1993. 
24 Universal Personal Teleconununication .(UPT) implies that a user can be identified regardless of location of 
equipment used, on the basis of a unique "Personal Number", allowing a subscriber to make and receive calls 
at any tenuinal. 
It therefore allows a user to access teleconununications services on any terminal connected to the fixed or other 
network(s) on the basis of a personal teleconununications identifier. The extent to which the network is able to 
provide those services is delineated in the user's service profile. In this sense, personal mobility is provided for 
in the network's capability to locate the terminal associated with the user for the purposes of addressing, 
routing, and charging of the user's calls, independent of the user's location. 
90 
• User control. It is intended that UPT subscribers should be able to select 
services and options to suit individual requirements, for_example, controlling 
the routing of calls by time of day and selectively accepting calls. 
UPT may turn out to be essential for the fixed network to attract users in response 
to the growing challenge from mobile communications. In basic form -combining a 
personal number with basic fixed telephone service -UPT could offer a low­
mobility, low-cost alternative to mobile telephony. Higher-value options could 
involve increasing the :range of features offered. 
At present, however, it is too early to say how the market will react to UPT. 
Currently, activity in this area is driven by suppliers, and the perceived need from 
users has still not developed. 
It is clear that the need to ensure user-friendliness will be critical. Future 
approaches for UPT are likely to be modelled on the use of SIM-cards as for GSM, 
whereby the user simply inserts the card with pre-configured service and 
identification details into a terminal and enters a PIN code. Much of the 
development for GSM could potentially be reused in the fixed network. 
4.6 The convergence of mobility in the fixed and mobile networks: personal 
communications as a :global service offering, and the role of service providers 
The rapid introduction of digital mobile systems and the development of the 
mobility concept in th1e fixed network will lead to the convergence of mobile and 
intelligent networks leading to personal communications services as a global service 
offering25. 
With regard to the voice telephony service, which will continue to be the main 
requirement of personal communications users of all types, suppliers in Europe are 
aiming at a range of solutions increasing consumer mobility across the different 
user environments: 
• Development of personal numbering services on the fixed network. This will, as 
its major benefit, :facilitate increased contactability at potentially any location 
where the user is likely to be stationed for any length of time. 
• Roll-out of micro-1;ellular networks coupled with marketing initiatives to target 
consumers. The cellular approach aims to produce a single solution to personal 
communications, allowing users to make or receive calls at most locations (e.g. 
via roaming), using a single personal communicator. 
• Introduction of cordless P ABXs, driven by manufacturers, which will facilitate 
mobility around business premises and is likely to generate requiremen~s for 
roaming between sites. 
25 See also "Review of the Requirements for the future hannonization of regulatory policy regarding mobile 
communications services", report by ECTRA Mobile Project Team, European Conunittce for 
Teleconununications Regulatory Affairs, October 1993. 
91 
This may stimulate the potentially large but currently unsatisfied European 
consumer market for low-cost cordless telephones. Home and office cordless 
use may stoke demand for telepoint-type services in key locations such as town 
centres and transport hubs. 
• Introduction of mobile systems (both terrestrial and satellite-based) to extend 
access to communications to aeroplanes, high speed trains, ships etc. 
• Promotion of small wireless personal communications devices for business and 
work applications, such as personal digital assistants and handheld personal 
terminals, permitting in particular wireless data transmission and remote 
database access. 
The emerging personal communicators will create radios new requirements, 
initially for electronic mail and facsimile but likely to develop with the 
broadband multimedia market. 
It is likely that some combination or convergence of services offered via these 
approaches may occur in order to exploit all the market opportunities which exist 
for personal communications: 
• At the level of service provision, an opportunity would exist to offer service and 
tariff packages based on the combined use of network- and facilities-based 
services from different suppliers, together with the necessary tem1inals, 
numbers, cards etc, providing sufficient flexibility is offered to service 
providers. 
In an increasingly complex networking environment, integrated service 
providers could have a valuable role advising on and tailoring packages to suit 
different requirements. 
• At the user level, possibilities to converge and simplify the use of personal 
communications across different platforms could include: 
The ability to employ the same personal number across different types 
of network and service (which is part of the full vision of UPT); 
A single smartcard, which could be inserted into different tenninals~ 
whether they be fixed, cordless or mobile, to access serv.ices offered 
over different systems in a uniform and simple way; 
Dual-or multi-mode 'personal communicators' which would support 
access to different networks. 
Examples of dual-mode terminals already exist, for exan1ple 
cordless/paging for telepoint applications and analogue/digital cellular 
terminals. Further possibilities are DECT/GSM, DECT/DCS1800, 
GSM/DCS 1800, GSM/satellite(LEO), DCS 1800/North American 
PCS. Such terminals are technically feasible, but would, at least 
initially, be likely to cost 10-40% more than single-mode tenninals for 
92 
either syst1em, and be of greater size and weight. The user would have 
to perceive clear overall benefits to offset these disadvantages. 
Requireme:nts to support very high traffic densities in areas such as 
office centres or airport terminals, which DECT is best placed to 
accommodate, may give rise to technological motives for dual-mode 
terminals. 
• Convergence will aJso occur at the network level. The boundaries between fixed 
and wireless networks are already being blurred by the provision of 'fixed' 
access via radio, and the use of cordless for office, home and telepoint 
applications. 
There are no technological reasons why current fixed and mobile networks 
could not in future support common types of access, capabilities and services, 
obviating technical or user distinction between them -once providers are 
allowed to combine the provision of services via the fixed and mobile networks. 
The ability to use a personal number and a single smartcard across different 
networks in fact implies that different networks should employ common 
intelligent capabilities. DECT in particular may offer possibilities as a standard 
means of access to a range of networks and systems (including those on 
aircraft, high speed trains, ships etc). 
UMTS portends comprehensive integration at the network level in order to 
provide support to the delivery of personal communications in most economic 
way. 
4. 7 The future personal communications environment, the role of the Universal 
Mobile Telecommunications System, satellite based systems and the intelligent 
network 
Movement towards the personal communications environment is being driven by a , 
combination of technological, market and regulatory factors: 
• The new opportunities made evident by technological advances, particularly in 
the mobile area and the resulting rapid price decreases for digital mobile 
equipment26; 
26 According to the studies carried out, it appears that the development towards mass-market use of mobile 
conununications and the evolution towards mass-distributed personal communication services will accelerate 
substantially once terminal handset prices fall below 250 ECUs. 
While recommended digital handset rietail prices_are still, in general, a factor of 2 to 3 times higher, rapid 
price decreases are already appare:nt and these will accelerate the development towards personal 
communications. 
In some instances, service providers even now offer price packages which seem to reach the above-mentioned 
critical price level. 
93 
,, 
• A number of basic socio-economic trends in the European economy and society 
require improved mobility. 
This concerns in particular, the globalization of companies and business 
activity ; growth towards full-service economies ; higher levels of education, 
job enrichment and growing complexity of the work environment requiring 
enhanced information exchange between people ; growing number of single 
person households and a decrease in the size of families leading to more social 
contact outside, and growing numbers of elderly people requiring easier access 
to communications27. 
These trends lead to predictions for a three to four-fold increase in the number 
of wireless terminals in use by the year 2000 compared to today. 
• The need for major players to reassess competitive strategies in the light of 
continuing liberalisation and greater competition both within and across the 
fixed and mobile areas, particularly in the light of the liberalization of public 
voice telephony by I st January 1998 according to Council Resolution 
93/C2 l 3/0 I 28. 
The number and range of players who appear likely to make the delivery of some 
form of personal communications services a central part of their future planning 
indicates that personal communications will be one. of the main investment drivers 
in telecommunications over the next 15 years. Projected cumulative investment in 
mobile communications infrastructure alone ranges from 27 to 45 billion ECU up to 
the year 2000, representing between 7 and 13 % of total telecommunications 
investment. 
Much of this investment will need to be directed to the building of a strong 
intelligent networking base necessary to provide mobility functions, personal 
numbering, billing, individual service tailoring and other enhanced services. 
27 See in particular EUTELIS "Scenario Mobile Conununications 2010 -Study on forecast developments and 
future trends in technical developments and conunercial provisions up to the year 2010, October 1993". 
28 With additional transition periods of up to five years for Spain, Ireland , Greece and Portugal and, where 
justifiied, two years for Luxembourg. 
94 
It is likely that the development of personal communications in Europe up to 2000 
or beyond will be characterised at the network level by a broad diversity of 
networks and systems supporting a range of service capabilities, including: 
• GSM, DCS 1800 (PCN) networks 
• Cordless, Telepoint (DECT, other CT) 
• Satellite personal communications systems (including LEOs) 
• Intelligent fixed networks 
• Fixed/wireless loop access 
• Paging (ERMES), 
• TFTS, 
• private mobile radio, such as TETRA 
Competition between operators of public networks and systems will be a key 
feature of the future environment. Today, this largely exists between operators of 
similar systems; functionally different systems tend to be aimed at different market 
segments, offering services which are distinct in application and cost. There will in 
future, however, be much closer competition across the above areas as system 
functionalities are expanded and costs reduce. 
An important question i;;onceming longer-term network development for personal 
communications relates to the linkage between strategies based on incremental 
development of current 2nd-generation technologies to support personal 
communications services (which is likely to produce partial integration of services· 
anri systems) and strategies for introduction of the 3rd-generation UMTS to support 
personal communications, fully integrated at the network and system level. 
The balance of these strategies will be determined in the main by commercial 
evakation and regulatory influences. Technical factors which could influence 
decisions are the ability of evolving 2nd generation systems to achieve the necessary 
radio capacities and transaction processing throughput to meet continuing demand. 
However, personal communications are likely to be, at least initially, more of a 
marketing concept, linked more . to the services that will be offered, than to a 
technical definition of networks and technologies. Significant effort must however 
be put into allowing service provision and combination of services to evolve freely 
to ensure success. 
As there is unlikely to be a single user profile against which suppliers can build 
personal communications products and services, it will be essential to adopt 
structures which provide the freedom of operation to identify and respond 
effectively to the servic1e needs of the different customer groupings -made up of 
both individuals and organisations -who will define the various personal 
communications market segments. 
Free ,entry into the provi[sion/retailing of mobile communications services, allowing 
service providers commercial autonomy to trade throughout the Union, would be an 
essential step in this direction. The earlier provision of benefits resulting from more 
rapid take-up of mobile services would be transferred across Europe, significantly 
95 
ass1stmg with pan-European servtce goals and wider economic and social 
development in Europe. Such service providers, independent or integrated into 
network operations, with the necessary safeguards, would, for example, be able to 
assist with roaming facilities for business and leisure travel abroad. 
A major consequence of an open environment for service provision both via mobile 
and fixed networks could be the emergence of new telecommunications players to 
exploit the opportunities of personal communications and synergies with activities 
in other sectors such as the media, travel and automotive industries. As a result, 
diverse methods of retailing and distribution of personal communications services 
and products could be expected to be introduced. 
The appearance of integrated service providers who could provide tailored service 
packages based on voice telephony offerings from both fixed and mobile network 
operators, would serve to a significant extent to bring about a convergence of 
personal communications services over the range of different networking platforms. 
Integrated service provision could be fully enabled ,from 1998 onwards, according 
to the schedule for liberalisation of public voice telephony service set out by the 
Council in July 1993. 
The full benefits of convergence are, however, only likely to ~e felt by users once 
they can conveniently access personal communications services offered over fixed 
and mobile networks, via both wireline and wireless access in both public and 
private domains. The ability to employ a single personal number and maintain a 
service profile across environments will be core aspects of this. In this respect, 
smartcards and multi-mode 'personal communicators' may well turn out to be key 
elements of future development. 
The availability of such capabilities will depend heavily on access to intelligent 
functionality and sharing of information across different networking environments. 
The development of shared intelligence therefore stands out as the major networking 
requirement of the integrated personal communications environment. 
96 
5. CONCLUSIONS 
A wide range of services and systems have been developed in response to different 
market requirements 
European industry has developed a wide range of leading digital mobile systems, 
such as in cellular, paging, PMR and dedicated mobile data systems aimed at 
different market segme:nts, offering advanced services and signifiGant market 
potential. 
In each of these areas, second-generation digital technology is now or will shortly 
be available representing a major advance on first-generation analogue systems, in 
terms of improved cost and performance as well as greater capacity and new 
functionality. 
Mobile growth rates are the highest across the telecommunications sector 
The new digital mobile systems -and particularly Europe's flagship, GSM, -offer 
still higher growth potential. Mobile communications is the fastest growing area of 
telecommunications. Tite total user base for the three most established mobile 
services, which are stilll based on analogue systems grew by over 20% in 1991. 
Cellular growth consistently exceeds expectations, and it now accounts for greater 
than 50% of the total mobile user base, wit.11 recent months producing record levels 
of new subscriptions. 
Currently, the European marketplace is still dominated by the installed base of 
analogue subscribers; however, following the widespread deployment of digital 
systems, new growth will be based on digital systems. 
With 95% of cellular mobile traffic currently to and from PSTN subscribers, the 
growth in mobile communications also generates substantial revenue and growth· for 
fixed network operators. 
Mobile has set the pace/or innovation 
A strong record of technological innovation is evidenced by European leadership in 
~e development of 2nd-generation European digital systems, in particular, the 
Global System for Mobile communications (GSM) and the development of micro­
cellular systems such as DCS-1800, as well as cordless and public access 
technologies such as DECT -all of them likely to be major components of the 
wireless part of future personal communications. The development of mobile hand­
held terminals continues to lead to substantial price decreases and is breaking new 
ground in light-weight dlesign. 
Innovation has also been a stro.ng feature of the marketing of mobile services: 
• traditional market structures have been adapted through the distinction of 
wholesale network supply and service/retail businesses and new methods of 
sales and distribution. This is opening the way for the development of a 
substantially more dynamic distribution structure. 
97 
• a high degree of market orientation is becoming a feature of strategies for 
targeting both business and consumer markets, leading to a range of 
differentiated tariff and service packages, with price decreases· rapidly 
approaching general consumer levels; 
• mobile is leading the way towards combined offering of services, for example 
telepoint plus paging and use of enhanced services such as voicemail and 
calling line identity; 
• mobile technologies are generating new possibilities for Europe-wide services, 
such as SIM-card based service provision. 
Mobile communications is playing a key role in enabling economic and social 
development 
Efficient communications are crucial to the well being of Europe's citizens. 
Wireless communications is playing an increasingly important role in supporting 
basic socio-economic trends in both the economy and society, which require 
improved mobility. 
This concerns in particular globalization of companies and business act1v1ty 
growth towards full-service economies ; higher levels of education, job enrichment 
and growing complexity of the work environment requiring enhanced infonnation 
exchange between people ; growing number of single person households and a 
decrease in the size of families leading to more social contact outside, and growing 
numbers of elderly people requiring easier access to communications. 
It is also playing an increasingly important role as a means of stimulating 
investment into public telecommunications services and in contributing to universal 
access in outlying and less developed areas. 
Introduction of pan-European mobile systems and services is progressing but major 
problems have been encountered. 
Development and introduction of pan-European mobile systems and services is 
progressing strongly, in particular with GSM as the leading technology. HO\:vcver 
there have been delays in availability due to a number of problems. 
Major problems have affected the implementation of pan-European type approval, 
implementation of pan-European roaming, and the implementation of pan-European 
service features. 
The timely availability of stable technical specifications and CTRs for type­
approval, and efficient and timely administrative mechanisms for coordinating 
frequencies and type approval are essential. 
The strategy with regard to introduction of DCS 1800 remains fragmented. 
DCS 1800 will become a major base technology for micro-cellular systems and 
therefore for the wireless part of personal communications services. 
98 
So far, decisions to implement DCS 1800 networks have been taken in only four 
Member States. At present, availability of frequencies for such services is not being 
effectively coordinated. The situation with regard to DCS 1800 is thus extremely 
fragmented and represents a major risk with regard to European market expansion 
in the base technology for personal communications. 
The major challenge now is to open development for combined service offerings across 
the range of different technologies and across the Community. 
Within the mobile area, a variety of networks and services are growing in an 
uncoordinated way. The structures introduced for development of mobile 
communications in Member States have promoted a separation of the supply of 
different mobile services, and this has tended to impede the exploitation of synergies 
between different services for those users who would benefit from their combined 
use -a major pre-condition for personal communications services. 
There is therefore a need to remove structural impediments within the mobile area 
in order to allow the full market opportunities for combined offering of services to 
be realised. · 
Furthennore, services an: beginning to be offered in similar ways on both fixed and 
mobile networks. The activities of mobile service providers shows similarities with 
calling card service providers in the fixed area; both are recruiting, managing and 
billing subscribers and are entering into wholesale/retail-type arrangements with 
network operators. 
Full freedom for convergence to occur at the service provision and user levels will 
provide for greater innovation, and will allow the full range of market opportunities 
for personal communications to be exploited. 
Flexibility of entry for both fixed and mobile operators required. 
Once the provision of public voice service via the fixed network is fully liberalized 
in line with the time schedule agreed by Council, it is essential that future-oriented 
policies do not maintain artificial barriers which might otherwise be broken down 
by market and technology developments. 
Flexibility of entry across the range of fixed and mobile operations is now required 
to fully realise the potential of personal communications. 
High mobility, low mobility and.fixed services are likely to play complementary roles. 
Different market needs can be served with different services at different costs. 
Market segmentation will be the key to folly exploiting the potential of personal 
communications, and therefore it is essential that freedom exists to adjust to the 
requirements of different customer groups who define the various market segments. 
99 
The overall challenge is the development towards the personal communications 
environment. 
Telecommunication users will increasingly require mobility and person-to-person 
calling instead of terminal-to-terminal calling, i.e. full scale personal 
conununications including personal numbering. Users will not be concerned with 
the supporting technology but with the services offered and parameters such as 
price, availability, reliability, quality and ease of use. In order to allow these 
requirements to be met, the right regulatory conditions must be established. These 
must be based on increasing flexibility, the freedom to optimize system and service 
operations, and must allow for market operations. 
100 
Towards the Personal Communications Environment: 
Green Paper on. a common approach in the field of 
mobile and personal communications in the European Union 
ANNEXB 
ANAl,YSIS OF THE 
ENVIRONMENT IN EUROPE 
FOR FUTURE 
DEVELOPMENT 
101 
TABLE OF CONTENTS 
1. CURRENT REGULA TORY STRUCTURE ............................................................... 104 
1. 1 Basic regulatory structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I 04 
I 
1.2 Relationships between market participants ............................................................ 106 
1.3 Public mobile communications ............................................................................. 107 
1. 4 Private mobile communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 0 
2. LICENCES AND TYPE APPROVAL ........................................................................ 110 
2 .1 Overview of licensing in the European Union . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . .. . . .. . .. .. .. . . . . . . . . .. I I 0 
2.2 The major criteria applied in existing licences ......................................................... 111 
2.3 Type approval, interim type approval and mui1.Ial recognition of type 
approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114 
2.4 Terminal and subscriber identification, and related databases and 
arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I 14 
3. INTERCONNECTION AND INTEROPERABILITY ............................................... 115 
3. 1 The basic role of interconnection................................................. . . . . . . . . . . . . . . . . . . . . . . . . . . I 15 
3 .2 Analysis of interface requirements between different operators ............................... 115 
3.3 Interoperability, inter-working and roaming ........................................................... 119 
3.4 Pan-European clearing mechanisms ....................................................................... 122 
3 .5 The vital interfaces: fixed network/mobile operator and mobile 
operator/service provider ...................................................................................... l 22 
4. STANDARDS ............................................................................................................... 123 
4.1 The role of the European Telecommunications Standards Institute (ETSI) ............. 123 
4.2 The Universal Mobile Telecommunications System (UMTS) -standards for 
third-generation systems ........................................................................................ 123 
5. FREQUENCIES ........... _ ................................................................................................ 124 
5. I The Fundamental role of Frequencies .................................................................... 124 
102 
5.2 The role of the ERC and ERO ............................................................................... 126 
5. 3 Future frequency allocations for terrestrial mobile and personal 
conununications, and satellite-based mobile and personal communications ............. 127 
5.4 Future co-ordination issues in Europe .................................................................... 129 
6. NUMBERING .............................................................................................................. 129 
6.1 The new requirements for numbering ..................................................................... 129 
6.2 The personal telephone number and universal personal telecommunications 
(UPT) ................................................................................................................... 130 
6. 3 The requirements for numbering coordination and the future role of ECTRA ......... 13 0 
7. PROTECTION OF PRIVACY AND DATA PROTECTION .................................... 131 
7 .1 The new requirements for protection of privacy ..................................................... 131 
7. 2 Current measures in the: Member States ................................................................. 13 2 
8. SAFETY AND ENVIRONMENTAL CONSIDERATIONS ...................................... 133 
8.1 The issue of electromagnetic compatibility and electromagnetic exposure ............... 133 
8 .2 The issue of access to siuitable sites and environmental aspects .............................. 134 
8. 3 Sharing of infrastructure....................................................................................... 13 4 
9. THE FUTURE PERSONAL COMMUNICATIONS ENVIRONMENT: 
MOBILITY IN THE FIXED AND WIRELESS NETWORKS ................................. 135 
9.1 Current fragmentation through separate licences .................................................... 135 
9.2 The pan-European dimension ................................................................................ 135 
9.3 The new environment set by the Telecommunications Review ................................ 136 
10. CONCLUSIONS .......................................................................................................... 137 
103 
ANALYSIS OF TllE ENVIRONMENT IN EUROPE FOR FUTURE 
DEVELOPMENT 
1. CURRENT REGULA TORY STRUCTURE 
1.1 Basic regulatory structure 
In most Member States, Telecommunication Organisations were during the 1980s 
given an automatic and mostly exclusive right to provide mobile services (paging 
and analogue cellular telephony). The introduction of new teclmologies, together 
with in some cases the limited success of the monopoly provision of services, has 
since led Member States to reassess their basic approach and to move towards 
substantial competitive provision 1. This reflects the general trend, pushed by a 
combination of technological advances, market demand and regulatory changes2, 
towards more liberalised telecommunications services on both a global and 
3 European level . 
Exhibit Bl summarises the situation regarding licences currently allocated or 
planned in the European Union for the main areas of mobile communications. 
Analogue mobile telephony services are competitively provided only in France and the United Kingdom. \\'hilst 
GSM, is generally emerging on the basis of a duopoly. 
2 The mobile field was specifically set aside by the Conunission's 1987 Green Paper on Tckcommunications, 
COM(87)290 final, 30.06.87 for special consideration. Member States have, however, inteqm.!kd the 
liberalisation trends set in the 1987 Green Paper in developing national policy for mobik conununications 
3 For details on the regulatory situation in the Conununity, see in particular "Licensing and declaration 
procedures for mobile conununications in Member States of the European Conununity'', Report to the 
Conunission of the European Conmmnities prepared by Stanbrook & Hooper and KPMG Peat Marwick, 
August 1993 
104 
..... 
~ Exhibit Bl : Licences allocated or planned for European mobile communications 
....... ,," ·llil1~1,~i~~lli'flt1ilill~i iiijlllrlil11iL1iltllll[i[lii1 li1tl! 
B 
DK 
D 
GR 
E 
F 
IRL 
L 
NL 
p _[ ____ ] -- -I I -1--I IMttHtkFkJ _,_ r·--==iir·- -·=i -l I -I I -I I --
I II II I I I W I 11Cu--=i11 l -.r--- I ._, I -I I --_,I -I I :.­_,_ --
I II- C llltJtiil@ttHll l 
I lll ---1 
uK 1c ---ic ___ -ir---11r-- -11c 11 111 111 1 
Key: - Single licence allocated to incumbent Teleconununications Organization (TO). 
Note: 
Source: Pff!l(l(J@d Single licence allocated, or planned, to organization other than the national TO. 
I I More than one liccncl! allocated, or planned. 
No licences allocntcd or infonm1tion not available. 
'llte table does not include licences awarded or planned for the digital paging 
system ERMES by a nwnber of Member States. 
CEC Studies 
A number vf current general characteristics of the Union's mobile markets can be 
identified: 
• Member States have traditionally taken a technology, rather than a service­
based approach, with each new technology being seen as a separate market and 
being subject to separate licensing procedures (paging, cellular etc.). Separate 
licensing often prevents operators from offering different mobile services, 
despite the economies of scale or scope that could be achieved. 
• In granting licences, preference has often been given to the existing TO, though 
in certain cases with a requirement for it to provide its services through a 
structurally separate subsidiary. 
• Only the provision of mobile terminal equipment, following the 1988 Terminal 
Equipment Directive4, is fully open to competitive provision in all Member 
States. 
• In many cases restrictions on mobile network operators still oblige them to lease 
fixed link infrastructure from TOs rather than allow them to self-provide 
infrastructure where this would be economically attractive. 
• Mobile services in the Community are provided on a regional or national basis. 
There are no pan-European mobile operators and hardly any pan-European 
servi-;e providers. 
• Where new technologies (e.g. GSM) permit pan-European roaming this occurs 
mostly on the basis of one stop shopping and billing service arrangements 
between existing national operators. Services are provided over national rather 
than pan-European infrastructure, with much of the call being routed over the 
fixed networks of the TOs. 
1.2 Relationships between market participants 
The reference model depicted in ·Exhibit B2 highlights the main commercial 
relationships between the organisations involved in providing mobile services. This 
model is generically applicable to all types of mobile market irrespective of 
variations in competitive structure between countries, or of differences between 
mobile services. 
Each link shows a commercial relationship between two players which might 
require physical interconnection of networks, the linking of other facilities (e.g. for 
transferring call records), or the supply of infrastructure or other services. 
Two or more of these roles may be integrated within a single organisation which, in 
some instances, also possesses fixed voice telephony and infrastructure rights. 
Fixed and mobile networks may be run by different business units in the same 
organisation, but this is not always the case. Similarly, the roles of mobile network 
operator and service provider (which recruits and manages the subscriber base) are 
often performed by the same organisation, which might be a business unit .within a 
TO, or an independent mobile operator. 
4 88/301/EEC, OJ L13 l, 27.05.88, p 73 
106 
Where one part of an integrated organisation operates under special or exclusive 
rights whilst providing network access or other services to another part of the same 
company which is facing competition from newly-licensed operators or service 
providers, these independent players may require the same range of access 
arrangements or services in order to be competitive. 
Requirements for open, efficient and fair access are therefore potentially applicable 
to any of the comme:rcial relationships shown in Exhibit B2 in which. competing 
organisations rely for all or part of their service on facilities provided by another 
market participant with special or exclusive rights or with a strong market position. 
1.3 Public mobile communications 
Analogue cellular 
There are competing analogue cellular telephony operators only in the United 
Kingdom and Franc~~-In the rest of the Community analogue cellular mobile 
services are provided by the existing TO, generally on the basis of their statutory 
monopolies with relatively few specific conditions imposed upon them. Formal 
licensing was not carried out. 
In the UK and France:, competition with the TO has been limited to a single private 
sector operator responding to a tendering procedure. In the UK BT was required to 
enter the mobile market only by means of an arms length subsidiary, Cellnet, which 
was established with a major private sector shareholder. 
In the United Kingdom, a wholesale/retail arrangement was introduced by expressly 
prohibiting analogue cellular network operators from selling services or equipment 
directly to users. Instead, mobile service providers were introduced who \:vould 
purchase airtime from the cellular network operators at wholesale rates for resale to 
individual subscribers. Restrictions on direct sales have subsequently been removed 
through licence modifications with effect from January 1994. 
GSM (Global System for Mobile communications) 
In contrast to analogue cellular, current planning for commercial development of 
cellular communications in 11 Member States supports two GSM operators (see 
Exhibit B 1). 
A public/private duopoly (with the private operator selected by tender) has been 
established or is foreseen in the majority of these Member States5, with a private­
private duopoly the chosen structure in Greece. 
DCS-1800 (PCN -Personal Communications Networks). 
DCS-1800/PCN sen1ices, at 1800 MHz, have· been licensed in the UK and 
Germany in competition to the existing GSM operators. Foreseeing that DCS-
1800/PCN micro-cellular architectures would lead to increased infrastructure costs, 
with the need for greater expenditure on leased line connections, the UK 
5 In the United Kingdom and France, the private sector GSM licence has been granted to the existing analogue 
raobik ope•ator;:;, wl10 were originaliy chosen by tender. 
107 
EXHIBIT Bl -Regulatory reference model of relationships between mobile 
functions 
USER 
TERMINAL 
PROVIDER 
SERVICE PROVIDER 
MOBILE NETWORK 
. OPERATOR 
MOBILE 
NETWORK 
INFRA­
STRUCTURE FIXED 
NETWORK 
OPERATOR OTHER MOBILE 
NETWORK . 
OPERATOR 
Two or more of these functions may be combined in one single organisation e.g. 
mobile radio infrastructure and, in a number of cases, transmitting infrastructure 
for linking radio base stations and switching centres. Mobile operators .also include 
in many cases, service provision (direct service provision). Service providers have 
a close relationship in many cases with terminal providers (retailers). 
108 
'" 
has permitted the PCN licensees to provide their own fixed links between base 
stations and local switches. An equivalent freedom was given to all cellular 
operators from January 1994. 
In the UK three licences were originally granted by public tender, however, two 
licence holders -Mercury PCN and Unitel have since merged their activities. 
Mercury's 'One to One' service was launched commercially in September 1993. 
Germany has licensed the EI network and services are expected to be launched in 
Berlin and Leipzig early in 1994. France has announced definite plans to licence 
DCS-1800 operation. Spain and the Netherlands are currently considering this. 
Telepoint services 
Pilot or commercial tellepoint public access services, based on CT2 technologies, 
have been authorised on a limited basis in a certain number of countries. Success 
has been limited, and commercial service is currently available only in France ('Bi­
bop') and the Netherlands ('GreenPoint'). 
France and the Netherlands have both recently decided to support expansion of 
telepoint. France has granted a licence to Compagnie Generale des Eaux for a trial 
DECT-based telepoint service. The Netherlands has decided on complete 
deregulation. 
Wide area paging 
Paging services remailn the most important non-voice mobile service market. 
Analogue paging is competitively provided in five Member States -France, 
Portugal, Spain, the UK and the Netherlands.' 
In Germany a number of TO-run systems are in operation, whilst in Belgium, 
Denmark, Greece, Italy and Luxembourg, there is a single TO run paging system. 
In Ireland, Telecom Eireann and Motorola provide services through a joint venture, 
Eirpage. 
Analogue services are generally provided on a national basis, though a number of 
operators have established standards allowing national paging to be extended to 
other Member States. 
The prospect of comprehensive pan-European paging is being realised by the 
' devefopment of digital paging systems based on the ERMES service standard. A 
number of Member States have either allocated or indicated an intention to allocate 
ERMES licences. 
6 For example, France has announced tht:: allocation of three operating licenses based on the ERMES standard to 
Onmicom, France Telecom and Cofira. 
109 
The lower profile of paging compared to mobile telephony is reflected in licensing 
being generally less politically sensitive, detailed or restrictive than for cellular 
telephony 7. 
Public Access Mobile Radio 
P AMR is a relatively new service in the European Union. The tendency so far is to 
grant licences to a single national operator8 and several regional operators. It is 
provided competitively at a regional level only in France, Germany, the Netherlands 
and the United Kingdom. Germany is expected to grant a further national licence in 
the near future. 
The two main barriers to the development of such services appear to be the general 
prohibition on interconnection to the fixed network and customer resistance to 
sharing a network. Closed user groups and corporate users prefer to retain control 
of their own PMR service. 
In 1992 the UK lifted restrictions previously placed on P AMR licensees preventing 
them from selling services directly to the public. 
1.4 Private mobile communications 
PMR is a developed and uncontroversial market in all Member States. Licences 
tend to be granted on a routine basis, with limitations on numbers imposed on the 
basis of spectrum availability. Services are generally of a local character. Licence 
restrictions generally relate to prohibition on the provision of services to third 
parties and prohibition on interconnection with the fixed public network. 
2. LICENCES AND TYPE APPROVAL 
2.1 Overview of licensing in the European Union 
According to the studies carried out9, there is considerable variation within the 
Community and between services in the procedures used for awarding licences, 
including: 
• automatic grant of a licence to the TO with no competitive provider, through 
national legislation reserving to it provision of mobile services. 
• the automatic grant of a licence to the TO, with complex tendering procedures 
for the second operator (e.g. GSM in Germany and Denmark) 
7 However, some problems have emerged with regard to licensing ofERMES-based systems in Germany and the 
UK, due tc; problems of freeing the foreseen frequencies or questions about frequency interference (see Annex 
A). 
8 In the United Kingdom two national licences were originally granted, but the licence-holders have 
subsequently merged their activities. 
9 See iii particular study by Stanbrook & Hooper and KPMG Peat Marwick, cited previously. 
110 
• less formal application procedures, leaving the initiative to the applicant in 
structuring its bid (e.g. DCS-1800/PCN in the UK) 
• pre-qualification i.e. exclusion of bids from existing operator (e.g. BT and 
cellular operators exc:luded from bidding for a DCS-1800/PCN licence in UK; 
BT could only bid for a cellular licence in a consortium; German GSM 
operators excluded from PCN tender). 
• the use of an auction for GSM in Greece 
• award on 'first come, first served' basis with few formal requirements (regional 
P AMR licences in Ge:rmany;) 
• routine declaration procedures for PMR in most Member States. 
A particular feature of th~ award process has been the tendency even when creating 
a competitive market stmcture to favour the TO over any new entrant. This 
manifests itself, for example, in the automatic grant of a licence to a TO without a 
tendering procedure or the ability to operate a mobile service without a formal 
licence, and so potentially without strict regulatory control. 
Whilst the variety of procedures may according to the studies, be seen by some 
bidders as a deterrent to market entry, concern has focused on those elements of 
award procedures which reflect their discretionary nature: 
• a lack of openness in the bidding process 
• uncertain and unpublished assessment criteria 
• few rights of appeal 
The main areas of distortion flowing from the variety of licensing conditions can be 
summarised as follows: 
• more favourable terms for the TO 
• use of fixed infrastrui:;ture and interconnection terms 
• scope of licensed senrices 
• licence duration 
• terms for retail service provision 
2.2 The major criteria appliled in existing licences 
Whilst licensing regimes vary from Member State to Member State and from 
service to service, it is possible to find a range of elements which are conunonly 
addressed in the licensing of mobile services, and of cellular mobile telephony, in 
particular. 
111 
Geographical scope/quality conditions 
Most licences impose a variety of quality requirements, often linked to agreed 
industry or European standards, such as the recommendations on GSM. Other 
specific conditions may relate to service quality, such as call drop-out rates, or 
geographical coverage linked to a specified timetable. Such linkage will often form 
the basis of decisions to release further frequency allocations and fonn possible 
grounds for revocation of the licence in question. 
In practice, whilst roll out requirements might appear to place very significant 
burdens on mobile operators, such targets have often been reached ahead of 
schedule. This is particularly so, within competitive markets, where the extent of 
geographic coverage is often a key feature for the selection of one operator over 
another. 
Fixed infrastructure use and intercomwction with the PSTN 
The right to self-provide infrastructure and the terms of interconnection with the TO 
constitute two of the key determinants in the success of a mobile operation. 
Interconnection and leased line charges are estimated to account for between 30-
50% of mobile network operator revenues in competitive markets. 
Generally, Member States require mobile services to use TO leased line capacity in 
order to meet the majority of their infrastructure requirements, with microwave 
links or provision of own fixed infrastructure being possible only in a number of 
Member States and in limited cases, such as between base stations and mobile 
system controllers for GSM. (A similar possibility has been incorporated into the 
DCS-1800/PCN licences). 
Interconnection with the PSTN is usually prohibited or very limited in the case of 
paging, public access mobile radio and private mobile radio systems. In the case of 
cellular telephony, whilst interconnection is permitted, the mobile operator often has 
little choice as to where such interconnection is effected. 
Limitations are also normally applied to prevent interconnection of mobile operators 
to other mobile operators, or to prevent cross-border connections into the fixed 
network in another Member State. 
Interconnection is usually a matter for commercial agreement between the parties, 
subject to regulatory intervention in the event of the parties failing to reach 
agreement. 
Licence fees and frequency fees 
Fees vary considerably, reflecting in certain cases simply the administrative costs 
involved in processing an application, and in others the perceived market value of 
the service concerned. In general fees for paging systems and for P AMR and 
private mobile radio are substantially less than licences for national cellular 
telephony services. 
The impact of licence fees may vary between the public and private sector, with 
private sector operators subject to short term pressures for return on investment, 
which mean that high entry fees can represent a significant barrier to market entry. 
112 
However, to the extent that each Member State is selling off valuable frequency 
spectrum which is a finite national resource, it is arguable that placing a 
commercial value of th1e frequency available will lead to the use of frequencies for 
those purposes for which there is greatest user demand. It would also be consistent 
with environmental policy, particularly the concept of "the polluter pays"', not 
merely in placing a pri<;e on the environmental impact of new radio-based services, 
but also in establishing awareness that the frequency spectrum is a limited resource 
and promote its more efiicient use. 
Scope of/icences 
Member State approaches to the scope of mobile licences vary. An initial concern 
are potential variations between private and public sector mobile operators10, as to 
the services which each may offer. Additionally, restrictions have been placed in 
certain Member States on the scope of mobile operators' activities, motivated in 
part by a wish to ensure the emergence of strong competition at a service level, 
which however, have the effect of limiting the efficiency with which the mobile .d . . 11 operator can provi e its services. · 
Licence duration 
Licence duration varies: both from country to country and from service to service, as 
Member States have attempted to balance the need for a stable regulatory 
environment encouraging long-term investment, with the needs to meet user demand 
and promote effective service delivery and efficient use of the frequency spectrum. 
Many of the analogue mobile telephony systems were not subject to formal 
licensing procedures. GSM licences vary in duration from 5 years (renewable) in 
Denmark to 25 years in the United Kingdom. 
Analogue paging 1icences vary from a minimum of 10 years to a maximum of 30 
years (both found in Spain), 
P AMR licences vary depending on whether it is for a national or regional service. 
In the UK the national licence is valid for 25 years, whilst regional licences are 
generally for an initial 6 month period. In Spain licences vary between 10 and 30 
years, whilst in many other countries, PMR licences are granted. on a yearly 
renewable basis. 
An additional factor is that licences do not necessarily start at the same time, which 
allows the TO considerable lead time in which to establish itself in the market. 
10 In Gemmny, D2 is obliged to use the GSM standard, preventing it from adapting its service, for example, to 
incorporate the DECT interfaces, whilst DI does not face any similar restriction., making its GSM investment 
more profitable. · 
11 In the UK, analogue and GSM operators were initially prevented from providing service except through an 
am1's length subsidiary. The UK refrained from imposing a similar condition when licensing DCS-1800/PCN 
services, though conditions to ensure no discrimination vis-a-vis third party service providers were included in 
the licence conditions. The restriction on GSM operators was lift€?d from I January 1994, reflecting the 
relatively mature development of the Gellular market in the United Kingdom. In Germany D2 may not provide 
the full range of GSM services, as agreed in the Memorandum of Understanding establishing the GSM 
standard, (for example, D2 cannot provide short messaging services). 
113 
Changes in ownership 
Some licences contain restrictions on changes of ownership without the approval of 
the licensing authority (or at least make such changes grounds for the revocation of 
such licences). The limits are often linked to the acquisition of share holdings of 
25% or more, as that gives specific voting rights under the company law of most 
Member States. 
Such restrictions may limit the ability of mobile operators to attract outside capital 
and expertise, but also act as a brake on the creation of a ·market for mobile 
operating licenses. 
2.3 Type approval, interim type approval and mutual recognition of type approval 
Prior to the full application of Council Directive 9 l/236/EEC12 due to delays in 
establishing the required Common Technical Regulations (CTRs), an interim type 
approval (IT A) scheme was instigated in 1991 to avoid impacting GSM 
introduction. According to the terms of adoption of the CTRs, the confonnance of 
terminals approved according to the IT A scheme must be ensured before 1995. 
On 28 September 1993, the first two CTRs were adopted under the Directive, CTR 
05 and CTR 09, relating to type approval of terminals for the pan-European digital 
cellular system GSM. 
2.4 Terminal and subscriber identification, and related databases and 
arrangements 
When a subscriber logs on to a GSM network (by switching on a GSM tem1inal or 
inserting a SIM-card), both terminal and user are verif1ed by means of database 
lookup transactions. This allows yerification of whether the tem1iual is 'black­
listed', for example, if s·tolen, and whether the subscriber is entitled to recci vc 
service (particularly to check whether the roaming facility is enabled). 
An essential requirement for the effective working of such arrangements is the 
assignment of unique identifications throughout the area where a tem1inal or SIM­
card can be used. 
The infom1ation required for checking the terminal Equipment Identification 
Number (EIN) number and the subscriber profile are held in databases located 
within the user's 'home' network. Commercial agreements between operators 
support access to and use of such data by different operators. 
The conditions for access to and control of such databases are becoming more and 
more critical for the future development of the sector. 
12 Council Directive of 29 April 1991 on the approximation of the laws of the Member States concerning 
teleconununications tenninal equipment, including the mutual recognition of their confonnity ( 91 /263/EEC: OJ 
Ll28/l, 23.05.91) 
114 
3. INTERCONNECTION AND INTEROPERABILITY 
3.1 The basic role of interconnection 
Interconnection arrangements, which provide new market entrants with access to 
the subscriber base of <~stablished network operators, are one of the most crucial 
factors governing the growth of competitive services. 
Regulation of interconnection arrangements is a key tool for managing the 
introduction of compe:tition in telecommunications markets. . The extent of 
regulatory involvement varies significantly from country to country, reflecting the 
underlying attitude towards competition. Some countries have set interconnections 
terms a priori, others have preferred to act as 'referees', only becoming involved if 
the parties could not agrne among themselves. 
3.2 Analysis of interface requirements between different operators 
Requirements of public mobile telephony operators Fixed/mobile 
interconnection 
Mobile telephone network operators rely very heavily on the public fixed network 
infrastructure. In commercial terms, the fees paid by mobile operators for 
interconnection to the fixed network typically account for 30-50% of their total 
revenues. 
This arises from two main components: Typically 95% of calls on mobile networks 
originate or terminate on the fixed network in European countries with developed 
telecommunications infrastructures. The moOile operator has to pay an 
interconnection fee for the handling of this traffic and conveyance of calls to~from 
final destinations/origins of the calls via the fixed network. 
The second main component is the transmission infrastructure needed by the mobile 
network operator to connect base stations to mobile switching centres (MSCs) and 
for the interconnection of MSCs. In most Member States this takes the form of 
circuits leased from the fixed network operator. 
The key issues for a mobile network operator seeking interconnection to the public 
switched network are in the following areas: 
• Number and location of interface points. 
Where a mobile network operator has full territorial coverage, It IS in the 
interests of the mobile network operator to have fl,exibility in t~1e number and 
location of points of interconnection to other networks. This allows the-mobile 
operator to choose the optimum (i.e. most profitable) routing for outgoing 
traffic from his network. 
Normally a mobile network operator would choose to carry traffic on its own 
network as far as possible, handing it over to the fixed network at a point close 
to the destination customer. In this way, the mobile operator has the maximum 
control of its own costs. 
115 • 
• Technical interface characteristics. 
It is important for the efficient operation of the mobile system that the mobile 
network is connected at a 'trunk' level to the public switched network. Normally 
this means a non-standard interface specially engineered for the mobile 
operator. Relevant technical aspects of the interface include: 
interface specification for physical interconnection 
transmission and signalling standards to be supported 
circuit capacity between the networks 
advanced facilities to be supported (call forwarding, freephone, calling 
line identification etc.) 
The GSM standard raises some specific technical issues with regard, m 
particular, to signalling standards. 
• Management and administrative links. The mobile network operator needs 
access to the management and administrative systems of the fixed network 
operator for billing, maintenance, directory services etc. 
• Supply and usage conditions. Mutually agreed supply and usage conditions 
need to cover such matters as provisioning times for interconnect circuits; 
quality-of-service targets; contingency procedures; procedures for intenvorking; 
routing principles; duration of agreements; compensation claims; 
• Prices, normally include: 
a one off interconnect payment to cover engineering work 
recurrent interconnect charges based on the number of interconnect 
ports used 
traffic related charges (conveyance of calls), including volume 
discounts 
charges for advanced facilities (e.g. freephone or premium rate calls) 
and for shared facilities (e.g. operator, emergency and directory 
services) 
Clearly, the absolute level of these charges is of paramount importance for the 
mobile network operator. There is also a point of principle .. Where these 
charges.include a contribution towards the cosi of universal service obligations 
placed on the fixed network operator, such contributions should be transparent, 
bas~d p
3n objective criteria and be fairly shared· by' all participants in the 
market . 
13 This is an issue of general concern in the context of interconnection arrangements and access charges. It is to 
be reviewed by the Commission according to the Council Resolution of 7 February 1 994 on the maintenance 
and development of universal service in a competitive environment in preparation for the general adjustment or • 
116 
• Numbering. The mobile network operator needs a suitable allocation of number 
ranges, access code:s and service prefixes. 
Requirements of Private mobile operators 
Private mobile systems are either not connected to the public telecommunications 
system or else, where they are connected, use standard public network interfaces. 
In some cases, minor enhancement of a standard network interface may be 
desirable, in particular, to allow for the transfer of network management 
information. 
The issue of interconnection with the public fixed network will be become more and 
more a critical issue for the future development of Private Mobile Radio, in 
particular future PAMR systems. 
Requirements of mobile telephony operators -transmission infrastructure 
Mobile network operators need transmission links within the mobile network quite 
distinct from any interc(>nnection to the public switched network. These are point­
to-point links between base stations and mobile switching centres and between 
MS Cs. 
In the UK, Germany, the Netherlands and Greece14, mobile operators have the right 
to provide their own infrastructure links nationally. In other Member States, mobile 
operators must use lines leased from the fixed network operator. 
Requirements for mobile/mobile network interconnection 
Mobile/mobile interco1mection covers several different situations: 
• Inter-operator roaming between nationally based systems. 
Interconnection between national mobile networks allows users to roam at a 
national level between operators. The possible benefits for users are improved 
service, availability and coverage. For new entrants, this may provide a rapid 
means of becoming 1established in the market by taking advantage of an existing 
network. There is the further possibility of gains in spectrum efficiency through 
sharing of frequency channels 
• Direct connection of mobile networks 
Direct interconnection between mobile networks allows the operators to pass 
mobile-mobile traffic without the cost of interconnect fees for use of the fixed 
regulatory conditions for the full liberalisation of public voice service by I January 1998 (with additional 
transition periods of 5 years for Greiece, Spain, Portugal and Ireland and where justified 2 years for 
Luxembourg). Proposals concerning this adjustment are to be submitted by the Commission by I January 1996 
(see Council Resolution of7 February 1994 on universal service, to be published). 
14 France has allowed use of own infrastructure by its second public cellular operator from I January 1994 
onwards. 
117 
network. At present it is estimated that mobile to mobile calls do not exceed 
about 5 % of the ~otal traffic, but this. is bound-to grow. 
• Interconnection of dissimilar mobile networks 
The main motivation of this type of service is to improve service availability 
and to offer new facilities to users. Call diversion from a cellular terminal to a 
paging service is one example. 
Another reason would be to facilitate the migration of analogue subscribers to 
GSM. An operator of both analogue and GSM systems will want their two sets 
of subscribers to be able to communicate. 
Increasing user demand for service integration, and the technological convergence 
betWeen fixed and mobile services, point to a growing need for mobile to mobile 
interconnection. 
The current barriers are: 
• Regulatory. Some regulatory barriers preventing direct interconnection were 
put in place to allow new entrants to establish themselves in the . market. Once 
new entrants are established, these barriers should disappear. Others are there 
to protect the special and exclusive rights of the established fixed network 
operators. 
• Technical. Incompatibilities between, for example, the technologies of first 
generation analogue cellular systems make interconnection technically difficult. 
Technical difficulties are rarely insurmountable and can be overcome if 
regulation allows it. 
Requirements of mobile service 12.roviders 
A service provider in this context is the organisation responsible for some or all of 
the functions of managing the subscriber (including recruitment, registration, billing 
and accounting, customer support), airtime reselling, providing enhanced services, 
(both network embedded, for example, CLI -Calling Line Identification and 
peripheral, for example, voice mailbox), and terminal provision. 
The service provider function relies on support from the mobile operator, which 
could include: 
• provision of billing and call accounting information 
• provision of details of new services (launch dates, tariffs etc.) 
• allocation of number bloc~s 
• access to network management facilities to check network status in response to 
customer queries/complaints 
• provision of directory services 
• access to administrative systems for registration of new customers 
118 
• provision of details of defective terminals 
The relationship between a service provider and a mobile operator is one of the 
most important issues: for mobile communications, along with the relationship 
between the mobile network operator and the fixed network operator. 
Many of the issues are similar to those at the interface between the fixed and mobile 
network, and arise from the need to ensure fair competition when a mobile operator 
is also a service provider in competition with other service providers i.e. non 
discrimination, equality of access, supply and usage conditions. 
It should be noted however that this interface is in most cases an 
administrative/management interface; it may involve the computer systems of the 
service provider accessing the computer systems of the mobile operator over a 
physical link, but it does not generally involve the physical interconnection of 
networks. 
Requirements (Or other operators 
The key interfaces concerning telepoint are the air interface between the tem1inal 
and the Telepoint system, and the interface between the Telepoint system and the 
fixed public network. 
The main priority for paging services is a range of fixed network interfaces to allow 
users to input paging messages in the most convenient and cost effective way 
(PSTN, leased line, PSDS, mobile etc.). As paging is a unidirectional service, these 
are basic transmission and signalling interfaces and there is less requirement for 
links which support billing or network management functions. There is some 
demand for inter-system roaming, but the need for roaming interfaces is presently 
still not a priority for paging systems. 
3.3 Interoperability, inter·-working and roaming 
The twin forces of market demand and technological innovation are both pointing 
towards the same long-term goal -full mobility for the telecommunications user, 
who will make use of mobile and/or fixed networks as appropriate, and in most 
cases will be unaware of the underlying network technology. Achieving such 
interoperability at a European level will be a powerful cohesive influence within the 
Union. 
The European citizen will be able to travel throughout the EU, and by inserting his 
or her smart card in a fixed or portable telephone will be able to make and receive 
calls anywhere in the Union. 
Two essentials for the rapid deployment of Union-wide services are: 
• services providers offering services on a Union-wide basis, building their 
services upon the mobile networks provided in each Member State 
• removal of restrictions on mobile operators to interconnect their networks with 
each other or with the fixed networks in their own or other Member States 
Most mobile services, like their predecessors the fixed network services, gre\v up as 
nationally based services. Union-wide operation was either not considered or came 
119 
only as an afterthought. In the cellular area, for example, Europe has a variety of 
first generation analogue cellular systems introduced in the 1980s which are based 
on incompatible technical standards which prevent interoperability. 
Technical compatibility is a necessary but not sufficient condition to allow users to 
"roam" between networks15. Commercial agreements between operators are also 
required to ensure that users can log on to the service in a country they are visiting, 
and inter-operator billing system are needed to ensure that visitors are billed to their 
home account. To allow for transportability of terminal equipment, reciprocal type 
approval agreements are also necessary. 
The current situation regarding European inter-operator roaming agreements for 
GSM is shown in Exhibit BJ. This shows that full coverage for pan-European 
roaming remains to be achieved. 
GSM roaming employs a complex numbering and registration scheme which links 
location management, authentication and billing processes across two or more GS M 
networks. The roaming procedure includes registration and identification of visiting 
users~ normal calling to and from visiting users, and billing and settlement 
procedures. 
Roaming uses the signalling infrastructure provided by CCITT signalling system no 
7 (SS7) -specifically the mobile application part (MAP). MAP in tum requires the 
Transaction Capabilities Application Part (TCAP) which sits below the multi-layer 
protocol structure of SS7. If these elements are not provided, mobile signalling 
information cannot be sent, received or routed and roaming is not possible. Most 
installed digital switches still do not support TCAP. It is envisaged that TCAP will 
gradually be deployed across the main trunk and international exchanges of the 
PSTN/ISDN in Europe, but there are two constraining factors: 
• reluctance of TOs to encourage use of their signalling systems by others 
• possible charges for signalling traffic. 
It is important therefore that to support roaming, GSM operators are able in the 
short term. to· provide direct SS7 TCAP signalling links between their networks~ 
since the PSTN/ISDN will not support these transactions. This overlay SS7 
network will be needed for some time, and depending on the charges, if any, made 
by TOs for the use of signalling channels, may remain a permanent feature of GSM 
interconnection. 
GSM was conceived from the start as a pan-European system built to harmonised 
standards. GSM remruns a priority area for Community action in order to stimulate 
the market for truly tr~-European mobile systems. 
15 Roaming agreements between mobile communications networks, besides the prov1s1011 of tcdmical 
interconnection facilities and agreements on the exchange, for example, of control and billing data, imply 
basically a commercial arrangement of service provision via each other's network, or allowing independent 
service providers to provide for such commercial arrangements. 
120 
...... 
~ Exhibit 83 : European inter-operator roaming agreements for GSM services remain patchy (August 1993) 
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Tclcccl X X X ltf\' X X X X X X 
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Vodafone X X X X 1 X ill X X X X X X X 
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Telecom Finland SF X X I X X X X X X X Hi/ X X X X X 
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I A Comvik S X X X X X X X X X X X X X X X lt?:H X 
I Eu~opolita.n X X I X X X I X X X X X X. X lll :·:·:·:·:.:·:·: X 
Teha Mob1tcl X X X X X X X X X X X X , X ::::::::::::::: X 
PTT CH X X X X X X X X X X X X X X X X X Ji{ 
Notes: 
Source: X • Roaming agreement signed al August 1993 an<l subject lo change. 
Roaming agreements involving European and non-European operators are not shown. 
Central and eastern European GSM licences -e.g in Hungary and Russia -are not yet operational. 
'111is situation is subject to rapid change. Jnfonnation should he obtained directly from mobile 
telecommunications operators or service providers. 
Spain has indicated its intention to licence two GSM operators. 
GSM Moll Pennanent Secretarial. 
3.4 Pan-European clearii~g mechanisms 
Traditionally, telecommunications accounting has been handled bilaterally between 
operators, on the basis of accounting conventions drawn up by the ITU. 
The increasing number of players in European telecommunications, and the need for 
accurate billing of 'roaming' customers, will stretch bilateral arrangements to their 
limits. 
For example, a subscriber registered on a mobile service in country A may visit 
country B and from there may call a premium rate service in country C. 
Accounting information must be passed between the networks in counties A, B, and 
C to ensure that: 
• the premium rate service provider in country C receives aPJ~ropriate payment 
for the use of its service 
• the network operators in countries B and C receive payment for conveyance of 
the call over their networks 
• each of these components is included in the total sum billed to the customer by 
the network operator in country A, and that adequate details of the call are 
itemised in the customer's bill. 
For complex transactions of this type in a field with many participants, clearing 
house systems have been found to offer the best solution. Such mechanisms have 
already demonstrated their effectiveness in other sectors, such as banking. 
3.5 The vital interfaces: fixed network/mobile operator and mobile 
operator/service provider 
From the discussion above, two interfaces emerge as vital for the future 
development of mobile systems: 
• the interface between the fixed network and the mobile network 
• the interface between the mobile operator and the service provider. 
Regulatory principles for these interfaces are necessary for two reasons: 
• both are bottle-necks, as service providers will have limited choice of mobile 
operators from whom to take services, and mobile operators face a limited 
choice of infrastructure providers/fixed network operators. 
• vertical integration, allowing the same organisation to be a fixed network 
operator, a mobile network operator and a mobile service provider could distort 
competition unless regulatory safeguards are put in place. 
122 
4. STANDARDS 
4.1 The role of the Europe:an Telecommunications Standards Institute (ETSI) 
All the most significant European standards in the mobile arena have been produced 
by the European Telecommunications Standards Institute, ETSI16. 
The main ETSI committees concerned by radiocommunications services and 
equipment are TC-SMG (Technical Committee, Special Mobile Group), with 
special responsibility for GSM, DCS-1800 and the development of the future 
Universal Mobile Telc~communications System (UMTS); TC-RES (Technical 
Committee, Radiocommunications Equipment and Systems), with broad 
responsibilities in the field of equipment and systems; and TC-SCS (Technical 
Committee, Satellite Communications Systems), covering inter alia also mobile 
satellite communications. 
4.2 The Universal Mobile: Telecommunications System (UMTS) .-standards for 
third-generation systems 
The responsibility for the standardisation of UMTS within ETSI has been given to 
the Technical Committee SMG (Special Mobile Group). 
Within this technical committee SMG5 has been set up to study and define UMTS 
in liaison with the ITU Standardisation Sector studies on FPLMTS (Future Public 
Land Mobile Telecommunications Systems). 
The Community research and development effort in advanced telecommunications 
(the RACE program) is playing a central role in the development of UMTS and the 
necessary preparatory work for the elaboration of standards (see Annex A). 
The work in RACE is co-ordinated closely with the standardisation work in ETSI. 
16 ETSI, the European Telecommunications Standards Institute was established in 1988 following the 
Commission 1987 Green Paper on telecommunications. 
The ETSI Teclmical Assembly (TA) has final responsibility for the standardisation work. It decides on the 
standardisation work programmes, and the establislm1ent of Teclmical Conunittees (TCs) and Project Teams 
which progress the standards work. 
The Conunission has concluded a framework contract with ETSI and entnists sta1~dardisation mandates to 
ETSI in the framework of Community Telecommunications legislati_on, in particular Directive 91/263/EEC 
concerning mutual recognition of type approval of tefll}inal equipment and establislmlent of required European 
Teleconununications Standards (ETSs) ~d the related Common' Technical Regulations (CTRs), and Directive 
90/387 /EEC concerning implementation of Open Network Provision . 
A similar arrangement has been concluded with CEN/CENELEC. This arrangement allows the Conunission to 
entrust standardisation mandates for the establislmlent of European standards generally in the electrotechnical 
field, such as in the field of electromagnetic compatibility. 
123 
5. FREQUENCIES 
5.1 The Fundamental role of Frequencies 
All radio devices communicate through the transmission and reception of energy. 
This energy is transmitted within the radio-frequency part of the electromagnetic 
spectrum. 
The amount of spectrum available for mobile radio is limited .and requires careful 
management. The range suitable for most mobile applications lies between about 
100 MHz and 3 GHz. The limits of use are set by radio propagation factors and 
other technical criteria. Manufacturing difficulties limit the extent to which the 
higher frequencies can currently be used. 
Exhibit B4 gives an indicative overview of spectrum use for mobile 
communications in Europe. 
According to the studies carried out, in the range below 1000 MHz (lGHz) 
currently some 14% of radiofrequency spectrum are allocated to public mobile 
communications services. In accordance with the decisions taken at WARC 92 (see 
below), substantial additional frequency resources will be allocated in the range 
1 GHz to 3GHz for both terrestrial and satellite-based mobile communications 
services. This concerns primarily terrestrial digital mobile systems which will 
become available in the immediate future and which are central to future 
development of key technologies (DCS-1800; DECT; TFTS; see annex A for 
further detail), as well as radiofrequencies for UMTS. In the field of satellite 
mobile communications, this concerns the future satellite-based personal 
conununications services, including the Low Earth Orbiting Satellite systems 
(LEOs). 
In Europe, Council Directives relating to frequency designations for key pan­
European systems: GSM, DECT and ERMES have been adopted17. 
17 Council Directive of 25th June 1987 on the frequency b~ds to be reserved for the co-ordinated introductjon of 
public pan-European cellular digital land-based . mobile communications in the European Conununity 
(87/372/EEC; OJ Ll 96/85, 17.7.87) -the frequency designation for the GSM system; 
Council Directive of 9th October 1990 on the frequency bands designated for the co-ordinated introduction of 
pan-European land-based public radio paging in the European Community (90/544/EEC; OJ L310/28, 9.11.90) 
-the frequency designation for the ERMES system; 
Council Directive of 3rd June 1991 on the frequency bands to be designated for the co-ordinated introduction 
of digital European cordless ·telecommunications (DECT) into the Community (91/287/EEC; OJ Ll44/45, 
8.6.1991). 
124 
Exhibit B4: GENERAL OVERVIEW OF SPECTRUM USE BY DIFFERENT CIVIL LAND 
MOBil.E SERVICES IN EUROPE 
Mobile equipment in Europe can be generally (but not uniquely) found in the following frequency ranges. 
Note that these systems use only some slict;:S (sub-bands) within the indicated limits and that these sub­
bands may differ between countries, except those harmonised bands to be found listed below. For precise 
information, reference should be made to national frequency plans. 
Frequency Range Systems 
47 -88 w-Iz CT 1, Paging, PMR, MOBITEX 
138 -174 w-Iz first PLMN's 1 , RC2000, PMR, P AMR 
(MPT 1327), ERMES, Paging2 , MOBITEX 
3 80 -400 w-Iz TETRA3 
420 -470 w-Iz RC2000, NMT450, System C, RTMS, P.MR 
Paging 
862 -960 w-Iz T ACS, ET ACS, NMT 900, GSM, DSRR, 
CT2,PMR 
1670 -1900 MHz TFTS4, DCS 18001, DECT 
1885 -2200 MHz FPLMTS/UMTS(note 1.4) 
5795 -5815 MHz RTT 
63 -64 GHz RTT 
76 -77 GHz RTT 
Harmonised bands: 
1 
2 
3 
4 fo'r GSM 890-915 MHz and 935-960 .MHz {905-914 w-Iz and 950-959 MHz shall be the initial 
sub-bands) according to Council Directive 87/372/EEC; 
for DECT 1880-1900 1'.fHz according to Council Directive 91/287/EEC~ 
for ERMES 169,4-169.8 !\1Hz according to Council Dir~ctive 90/544/EEC; 
for TFTS 1670-1675 ~fHz and 1800-1805 MHz according to ERC Decision; 
for DSRR 888-890 MHz and 933--935 .MHz according to ERC Decision; 
for RTT 5. 795-5.805 GHz. 5.805··5.815 GHz, 63-6..i GHz and 76-77 GHz according to ERC 
Decision 
Recommendations of the CEPT-ERC (providing guidance without commitment), inter alia: 
For TETRA, a total of between 2 x 3 MHz to 2 x 5 MHz within the range 380 -400 ~ 
should be made a\·ailable according to ERC Recommendation T/R 02-02. 
DCS 1800 should be made available according to ERC Recommendation approved October 
1993 (Reference number not available at date of printing). 
most of them already de-activated or to be de-activated on short term 
mainly POCSAG . 
not yet approved and/or planned 
allocation by ITU/W ARC92 
125 
5.2 The role of the ERC and ERO. 
The new role of the CEPT /European Radiocommunications Committee (ERC) and 
the creation of the European Radiocommunications Office (ERO) represent the 
major reform of coordination of radiofrequencies in Europe. 
According to its new role, the European Radiocommunications Committee develops 
radiocommunications policies, prepares for ITU conferences, and plays a general 
co-ordinating role in frequency, regulatory and technical mattt(rs in the context of 
the European Conference of Postal and Telecommunications Administrations 
(CEPT). It establishes conditions for access to frequencies in consultation with 
operators, users, manufacturers, standards bodies and other interested parties, in 
close co-operation with the Commission. 
Linked to the ERC the European Radiocommunications Office (ERO) is a centre of 
expertise and acts as a focal point for consultations on spectrum planning and 
management. 
The ERO has started to carry out Detailed Spectrum Investigations (DSis) of radio 
spectrum usage in Europe. The overall objective is to support the development of a 
comrrion European Table of Frequency Allocations to be completed by 2008. 
The First Phase (range 3400 MHz to 105 GHz) was completed in March 1993. 
The Second Phase, covering the range 29. 7 MHz to 960 MHz was launched in 
March 1993 and is to be completed by January 1995. 
In carrying out this work, the ERO has co-opted assistance from the European 
Telecommunications and Professional Electro_nic Industry (ECTEL). There is now 
also. close co-operation between the ERC/ERO and ETSI, in particular with regard 
to the needs to avoid frequency interference problems for radiocommunications 
equipment. 
A Memorandum of Understanding between the ERC and the Commission and a 
framework contract are in preparation, similar to the approach chosen for the co­
operation of the Community with ETSI. ERC also intends to enter into Memoranda 
of Understanding with the European Free 'Trade Association (EFT A), as well as 
with ETSI. 
In 1992, the ERC created a new instrument for coordination of radiofrequencies 
and the provision of harmonised frequency bands, the so called ERC Decisions. 
Council Resolution 92/C3l8/01 has called for using ERC Decisions as the primary 
method for future coordination of radiofrequencies in Europe 18
.. In its 
Communication of 10 September 1993, the Commission has set forth the necessary 
conditions to ensure that the Union's interests are safeguarded in this context19 (see 
Annex D). 
18 Council Resolution of 19th November 1992 on the implementation in the Community of the European 
Radiocommunications Committee decisions (92/C 318/01~ OJ C318/l, 04.12.92) 
19 See "A new approach to the coordination of radiofrequencies in the Community", Conununication from the 
Commission concerning proposal for a Council Decision on the implementation by the Member States of 
126 
Since 1992, the ERC has adopted ERC Decisions concerning the designation of 
radiofrequencies for the Terrestrial Flight Telecommunications System (TFTS), 
Road Transport Telematics20 and Digital Short Range Radio (DSRR). 
5.3 Future frequency allocations for terrestrial mobile and personal 
communications, and satellite-based mobile and personal communications. 
A principal task of the ITU World Administrative Radio Conference held in 1992 at 
Torremolinos (WARC 92) was to extend allocated bands for mobile services, 
including the satellite mobile services. Exhibit BS shows the frequency allocations 
made at W ARC 92 relevant to the mobile communications area. 
Based on a range of design assumptions and estimates of penetration and traffic for 
dense use in large cities, CCIR calculated prior to W ARC '92 that 
UMTS/FPLMTS would need some 227 MHz of spectrum. At W ARC '92 a total 
of 230 MHz between 1 :&85 and 2200 MHz was designated for world-wide use, 
eventually in FPLMTS implementations. 
Within this, 2 x 30 MHz were identified for the satellite mobile services. However, 
this allocation is to take effect in Region 1 (including Europe) only by the year 
2005. In the United States of America, this will operate already from 1996 
onwards. 
The regulations established at W ARC '92 permit other systems and services to 
. share the FPLMTS bands and contain no directions concemmg priorities for 
satellite or terrestrial elements in the extension bands. 
A number of smaller allocations were also made to the MSS (Mobile Satellite 
Services) at around 2,500 MHz and 1626 MHz, at around 400 MHz and around 
140 MHz, amounting to a total satellite bandwidth of about 2 x 66 MHz. However, 
the conference· failed to make any specific provision for feeder link applications to 
thes·e satellite bands, generally because of the assumption that they will be carried 
by the Fixed Sat~llite Service. Proble~s, are likely to arise unless some effort is 
made to identify bands, expansion bands and appropriate measures to permit 
sharing of the feeder links. 
measures concerning radiofrequencies, COM(93)382, 10.9.93. See also Council Conclusions of7th December 
1993. 
20 These two ERC Decision have replaced the original proposals by the Commission for Council Directives 
designating frequencies for this system. 
127 
Exhibit BS: Additional frequency allocations relevant 
to mobile communications following WARC 1992 
(Jb.e•.•••1Q92·.••World····Achniriistative .. •·•Radio Confererice.>:(\\'f\R:G. :9:21•• allocated•• frequenci¢s·••••p#Hf •. 
<<\\'<?rlciwd~ andregional1 basis for< a range of currentfillp em~rgil1g radio services. Arii<>µtjfu~. 
surnfrtarY of allocations is reproduced below. · · 
Terrestrial mobile 
(inc. FLMTS). 
Satellite mobile2 
Low Earth Orbit 
Satellites 
Aeronautical 
Communications Worldwide 
Region 23 
Worldwide 
World\\ide 
Region 24 
World\\ide 
Worldwidc-3 
World\\idc-3 
World,\ide 
Worldwide .· · .... ·.· 
1885-2025 MHz; 2110-2200 MHz. 
1626.5-1660.5 MHz (u); 1525-1559 MHz (d); 
1930-1970 MHz (u); 2120-2160 MHz (d); 
1980-2010 MHz (u); 2170-2200 MHz (d); 
2670-2690 MHz (u); 2500-2520 MHz (d). 
1675-1710 MHz (u); 1492-1525 MHz (d); 
1610-1626.5 MHz (u); 2483.5-2500 MHz (d); 
1614-1627 MHz (bidirectional) 
148-150 MHz (u); 137-138 MHz (d); 
400-401 MHz ( d) 
1670-1675 MHz (u); 1800-1805 MHz (d); 
Canada/USA & 1670-1675 MHz (u); 1800-1805 MHz (d) 
Me,xico · 849-851 MHz (u); 894-896 (d); 
Note that these sU111ll1ruy allocations may be sl1pje¢f J<:)Jintitations ·and should. be ·read iri 
conjll.nction withthefull te:\.-t ofWARC 92 i:esoliitiOns·a.ri(iiecommendations 
4 Source: CEC 
For radio regulatory purposes, the m-.:..i\";.Jes the world into three regions. Region 1 consists of Europe, 
Africa, the fonner USSR and Mongob ... R~on 2 the Americas, and Region 3 the remainder of Asia and 
Oceania. 
Allocations are paired, ''1th an uplink (c ! ali..."""\:ated for transmission from the Earth to satellite and a downlink 
(d) in the reverse direction. 
All or part of these frequency i:>ands are ~iOC31.ed on a secondary basis. 
Additional allocation. 
128 
5.4 Future co-ordination issues in Europe 
Given the outcomes of 'V ARC '92 there are major priorities for radiofrequency co­
ordination for mobile communications in Europe. To ensure that European radio 
communications administrations, service providers, operators, industry, 
broadcasters, and other users derive maximum benefit from the spectrum, decisions 
taken at W ARC '92 must be fully implemented in a co-ordinated way throughout 
the European Union. 
For systems intended for the general public, immediate priorities should be the 
establishment of binding ERC decisions concerning co-ordination of frequencies at 
the European level for the frequency bands designated at W ARC '92 for future use 
by terrestrial mobile communications and satellite based communications systems. 
This should, in particular, include the designation of common bands for DCS-1800 
'services, for the future: UMTS as well as frequency bands for satellite-based 
personal communications systems. 
For systems intended for private use or for the use of closed user groups an 
immediate priority shoulld be a decision on the designation of frequency bands, and 
the agreement of a time scale for their availability for systems operating according 
to TETRA, the European digital trunking standard. 
Refarming of spectrum mid uses is a matter which will continue to require careful 
and concerted actions. It will be important that co-ordinated positions are taken at 
future World Radiocommunications Conferences (WR Cs )21 with regard to future 
frequency allocations. 
6. NUMBERING 
6.1 The new requirements for numbering 
Numbering capacity is a finite and potentially scarce resource. Therefoie, in 
developing a future poliiey for mobile and personal communications in Europe, it is 
necessary to ensure that the development of the appropriate networks and services 
are not constrained by numbering capacity. This challenge can be addressed by 
careful management of the overall numbering schemes, both at the international and 
the national levels. 
In particular the overall management and allocation arrangements must address 
three general issues to ensure: 
• that there is sufficient capacity and flexibility within the overall numbering 
scheme for all operators and users 
• that where appropriate coherent numbering and dialling plans are introduced by 
all operators 
21 The next World Radioconununications Conferences (WRCs) will take place in 1995 and 1997. 
129 
• that numbering is placed on a level playing field for all operators, ahd in 
particular, that there are equitable allocation arrangements. In the specific case 
of mobile and personal network and service operators and service providers 
their needs with respect to numbering are 
-sufficient capacity within national numbering schemes with the appropriate 
access branding (identification) and appropriate tariffing 
-the ability to extend allocations 
• the freedom to develop services uninhibited by constraints caused by numbering 
For mobile and personal communications services, users may also require numbers 
which are transferable between operators (i.e. portable numbers) thereby allmving 
users to change operators without requiring a change of number. 
6.2 The personal telephone number and universal personal telecommunications 
(UPT) 
At present, users of mobile services are allocated numbers which are country, 
network and operator specific. However m the future, with increased globalisation, 
and increasing competition between operators and service types, users may wish to 
have numbers which are independent of network provider, service type, location and 
terminal equipment. In other words, users should have personal numbers which are 
allocated to each individual. 
Such personal numbers would not be limited in scope to mobile or wireless services 
but would be generally applicable across all mobile and wireless services and the 
fixed network (i.e. the PSTN/ISDN). This would allow for full personal mobility 
with the potential for standardised access arrangements. 
6.3 The requirements for numbering coordination and the future role of ECTRA 
At present, numbering arrangements are developed nationally within a framework 
set up by the International Telecommunications Union (ITU). 
Numbering policy within the EC to date has mainly concentrated on ham10nisation 
of certain numbering codes, through the creation of : 
22 • a common European emergency number ( 112) ; and 
• a common international access code (00)23 
In future, it is clear that with increasing service innovation and greater levels of 
competition, numbering will become a key issue. 
22 Council Decision of 29th July 1991 on the introduction of a single European emergency call numbl..!r 
(91/396/EEC; OJ L217/31, 6.8.91) 
23 Council Decision of 11th May 1992 on the introduction of a standard international telephone access code in thl..! 
Community (92/264/EEC; OJ L137/21, 20.5.92). 
130 
Future arrangements for numbering management must take into account dynamic 
market changes in order to allow in particular for growth, the introduction of new 
technology and new services, progressive regulatory changes and the gradual 
convergence of fixed and mobile services. 
This results in the need for a clear European wide policy for the development of 
numbering schemes in Europe, and greater independence of the management 
function than exists at present in many countries, are thus evident. 
Numbers for mobile and personal services are currently allocated from within 
national numbering plans. The only example outside this arrangement is the 
numbering allocation for Inmarsat where numbering is done by ocean region using 
Inmarsat specific numbers. In the future with an expected increase in regional and 
global mobile services, numbering for such services must be co-ordinated on a 
broader basis than purely national schemes. Numbers could for example be 
allocated from within the: proposed European numbering space. 
The initial framework for co-operation in this field is set out in Council Resolution 
92/C318/02of19 November 1992 on numbering24 (see Annex D). In response, the 
European Committee for Telecommunications Regulatory Affairs (ECTRA) has set 
up a project team, and is planning to integrate coordination of numbering and the 
creation of a European numbering space, as well as preparation of European 
positions for the discussions in the ITU in this field, into the main activities of its 
European Telecommunications Office (ETO), currently in the process of being set 
up. 
7. PROTECTION OF PRIVACY AND DATA PROTECTION 
7 .1 The new requirements for protection of privacy 
The evolution in the industrialised countries towards the creation of infonnation 
societies is closely connected to the increasing use, processing and exchange of 
personal data in all spheres of social and economic life. In the European Union 
these trends are reinforce:d by the establishment of the internal market, stimulating a 
·lapid growth in trans-border flows of personal data. The increasing importance of 
data processing and data exchange demand new measures to ensure the effective 
protection of personal data and privacy. 
In the telecommunications sector, the digitalisation of the networks has led to 
specific new requirements. 
On the one hand, fully-computer-based processing can offer a substantially higher 
degree of data security through, for example, the use of highly sophisticated 
encryption techniques. 
On the other hand, digital processing of both operational and call data within 
computerised exchanges~, may make it easier to record and monitor systematically 
specific call-related data, such as origin of specific calls or the location of the 
calling or called party. Such monitoring was only feasible in "non-intelligent" 
24 OJC318/2,4.12.92 
131 
analogue networks after substantial and costly adaptation of the network equipment 
and therefore was only implemented in very exceptional circumstances. 
At the same time, new intelligent telecommunications functions, such as calling-line 
identification and itemised billing, offer substantial additional service features to the 
subscriber which enhance both service quality and which can contribute to the level 
of consumer protection. 
The new possibilities and service features presented by digital technology requires 
specific new regulatory measures if the protection of privacy is to be guaranteed in 
the new environment, and the erection of barriers within the internal market based 
on national data processing rules is to be avoided. 
7.2 Current measures in the Member States 
Currently, ten Member States have already adopted legislation in the field of data 
protection. In the two other Member States draft data protection legislation is . 
currently under consideration. 
As there has been no uniform approach at a Union level, the solutions adopted vary 
from Member State to Member State. In most Member States the sector is covered 
by general data protection legislation, with significant variations in the extent to 
which this provides legislative or other mechanisms adapted to the specificities of 
digital networks and services. Germany has adopted specific legislation covering the 
provision of telecommunications services. 
The growing interest in the issue has also already led at international level to the 
consideration of the specific telecommunications-related data protection problems. 
The Council of Europe is currently considering a Recommendation on data 
protection in the context of telecommunications services. The International 
Conference of Data Protection Commissioners has adopted several resolutions 
concerning telecommunications and the issue is also being addressed within the 
OECD framework. 
The European Parliament as early as 1986 adopted a Resolution calling on the 
Commission to submit proposals in order to ensure a consistent level of data 
protection in the context of the evolving integrated services digital network 
(ISDN).25 
As part of the package, and alongside a proposal for a Directive on data protection 
in general26, the Commission submitted a "Proposal for a Council Directive 
concerning the protection of personal data and privacy in the context of public 
digital telecommunications networks, in particular the Integrated Services Digital 
Network (ISDN) and public digital mobile networks"27. This proposal, which is 
complementary to the general directive, aims at implementing further measures for 
the protection of personal data and privacy with regard to the specific requirements 
25 Resolution on Council Recommendation 86/659/EEC, OJ No C 7, 12 January 1987, p. 334 
26 COM (90) 314 final, 13.9.90 
27 OJ No C 277, 5.11.90, p. 12 
132 
of digital telecommunications networks in order to prevent divergent developments 
in the Union which could endanger the internal market for both telecommunications 
services and terminal equipment (see Annex D for further detail). 
8. SAFETY AND ENVIRONMl:NTAL CONSIDERATIONS, 
8.1 The issue of electromai~netic compatibility and electromagnetic exposure 
All radiocommunications devices involve the transmission and reception of energy. 
Transmission power levels can vary between a few thousandths of a Watt for 
wireless microphones, up to very high power in the case of radar equipment. High 
power levels may produce health risks, and most industrialised countries have some 
mies concerning public and/or occupational limits on exposure. Physical means, 
such as fences keep people away from danger areas in most cases. 
Two main types of effect are attributed to exposure to electromagnetic radiation -
thermal and athermal effects. 
As regards thermal effects, a number of organisations have endeavoured to assess 
the health risks of exposure to non ionising radiation. At an international level a 
review by the International Non Ionising Radiation Committee of the International 
Radiation Protection Association (IRP A/INIRC) led to the publication in 1988 of 
guidelines on the limits of exposure to radio frequencies. 
At a national level various national standards have been established (such as 
National Radiological Protection Board standards in the UK, VDE 0848 in 
Germany and the ANSI standards in the USA). There is however a relatively large 
range of standard values documented in these standards. and significant differences 
in the measurement and implementation parameters. In addition much of the 
evidence on which these standards have been based is statistically inconclusive, and 
some of the longer term effects are not well researched. 
In the case of athermall effects, so far as the possible harmful effects of use of 
mobile terminals is concerned, the experimental evidence amassed so far does not 
show that the level of radiation could be harmful to health, but on the other hand it 
does not prove conclusively that it is not. It is nevertheless at present generally 
accepted that the health risks associated with the normal use of mobile terminal 
equipment seem to be low. Given substantial public concern, it is, however, urgent 
that the Community continues to monitor the situation and support research to 
allow for additional evidence to be produced. 
A further factor is that the burgeoning growth in mobile communications has led to 
an increase in the occurrence of electromagnetic interference. This problem is 
already addressed in Directive 89/336 on electromagnetic compatibility28. 
However, the proliferation of electronic devices in road vehicles (such as anti-lock 
breaking (ABS) systems ); the use of mobile systems and handsets in close 
proximity to vehicle ele:ctronics; cable television; itself a growth industry in the 
28 Council Directive Of 3 May 1989 on the approximation of the laws of the Member States relating to 
electromagnetic compatibility (89/336/EEC~ OJ 1363/30, 13.12.89 as amended by Cow1cil Directive 
92/31/EEC of 28 April 1993~ OJ 1126111, 12.5.93 
133 
Member States or to hearing-aids and heart pace-makers, demands a careful 
exercise to monitor the effectiveness and applicability of existing European 
Community measures. Mechanisms to mandate CEN-CENELEC to establish 
appropriate Eurppean _standards for enhancing current protection continue to be 
justified. 
8.2 The issue of access to suitable sites and environmental aspects 
All wide-area mobile radio systems require externally mounted antennae at central 
base sites. These antennae are used for transmitting and receiving signals to and 
from the user terminals. 
In order to satisfy radio propagation requirements, antennae are generally mounted 
above and clear of local ground obstacles, buildings, people, trees, etc. In addition, 
since most mobile radio systems require near line-of sight between the central base 
sites and the user terminals, antennae have to be mounted on relatively tall towers 
and often on hill top sites. Such requirements can have a visually obtrusive impact. 
The distance between antenna sites will again vary depending upon the service, but 
in the worst case, for high density areas with small cell sites, antenna sites may be 
required to be no more than 2 km to 3 km apart. Where there are two or three 
operators in a region this can result antenna masts being only one kilometre apart. 
The overall result is that with a variety of mobile services, and with each service 
being provided potentially by multiple, competing operators, there is the potential 
for the emergence of a very large number of relatively closely spaced, visually 
obtrusive antenna sites. 
In some instances it has been possible to reduce the visual impact of individual 
antennas either by concealing them behind other installations (such as advertising 
hoardings) or by disguisiJig them as other more visually acceptable installations). 
However it is currently considered impractical and unecofl_omic to do this on a 
widespread basis. · 
8.3 Sharing of infrastructure 
In order to reduce environmental impact, two measures are possible. The first is to 
encourage operators to share sites wherever possible. While this may increase the 
number of antennas mounted on individual towers, it will reduce the overall number 
of towers. 
The second measure is to permit competing network operators to .share common 
radio infrastructure. This will have a marginal effect on the extent of competition 
between operators and reduce the overall number of individual base station 
antennae required within a given region. 
Consequently, site sharing between operators of telecommunications services, or 
between telecommunications and operators of non-telecommunications facilities, 
such as terrestrial broadcasting sites, should be allowed. Infrastructure sharing 
should be considered under defined circumstances, allowing two or more operators 
to share some range of common radio infrastructure. This may include antenna 
sites; masts, antennas, transceivers and other network equipment. 
134 
9. THE FUTURE PERSONAL COMMUNICATIONS ENVIRONMENT: MOBILITY 
IN THE FIXED AND WIRELESS NETWORKS 
9 .1 Current fragmentation through separate licences 
The current reality of a highly fragmented European network and service 
environment tends at present to undermine the vision of convenient, seamless 
personal communications services covering all user situations. 
Fragmentation occurs primarily as a consequence of nationally-based regulatory 
approaches and the influence of these on market structure: 
• National licensing has terided to produce varied licensing approaches and 
conditions on operators, meaning that many services are still available only on 
a national basis and terminal equipment cannot be used freely from one network 
to another; 
• Regulation has drawn distinct boundaries between the fixed, mobile and 
satellite areas, with separate licensing/authorisation in each area; 
• Within the mobile: area, further regulatory market boundaries have been 
introduced through separation of licensing along the lines of different mobile 
radio systems, for reasons of frequency management and the ability individually 
to control the numbers of entrants using each type of system. 
Aside from supply side inefficiencies that such approaches can bring, such as the 
loss of economies of scale and scope and distortions to competition, a highly 
important effect for many users in order to obtain a full range of 
teleconununications products and services, users must deal with a . variety of 
different suppliers, and work within the limitations of individual chosen solutions. 
9.2 The pan-European dimension 
Memoranda of Understanding (MoUs) agreed between national operators, for 
example, through the GSM and ERMES systems have been an important factor in 
assisting the coherent deployment and operation of pan-European services, in 
particular, the ability to 'roam' using a mobile terminal or SIM-card -even if full 
implementation of roaming (including, the case of GSM) is still some way off (see 
above). 
Such arrangements must remain at the centre of a common approach to pan­
European personal communications; however, in order to maximise their impact the 
development of further specific approaches for mobile and personal 
conununications services will be required. 
135 
9.3 The new environment set by the Telecommunications Review 
The 1992 Teleconununications Review, which formed the basis for the timetable 
established in Council Resolution 93/C213/02 of 22 July 1993 29, now provides the 
opportunity to define an appropriate environment for personal conununications. 
The goal of full liberalisation of public voice telephony service will present a 
number of highly significant opportunities for development of personal 
conununications, including the possibilities for operators to transport voice traffic 
between fixed (as well as mobile) network destinations, and freedom to combine and 
retail services offered on both fixed and mobile networks. This enviromnent is, 
inter alia, likely to spur development of shared network intelligence which is 
essential for the integration of personal communications across different user and 
network environments (see Annex D). 
29 Coimcil Resolution of 22nd July 1993 on the review of the situation in the teleconununications sector and the 
need for farther development in that market (93/C 213/01, OJ C213, 6.8.93). 
136 
10. CONCLUSIONS 
Member states have in general interpreted the liberalisation trend set in the 1987 Green 
Paper. 
Most Member States have issued licences to more than one operator (e.g. GSM), on 
the intention to promote a more competitive environment. 
Competition has resulted in greater benefits to both the users and the providers of 
mobile services. 
An open, competitive market has stimulated the growth and development of mobile 
services promoting a rapid take up of better and cheaper services, in particular, in 
relation to GSM. 
Market structure is being regulated along the lines of different mobile technologies. 
National Regulatory Authorities in the Union and elsewhere have adopted policies 
which structure the market along the lines of different existing mobile radio 
systems. 
This may limit the ability of the sector to meet market requirements, if it is not 
balanced by greater fle:xibility in service provision, and the ability to offer a 
combination of services. 
Absolute barriers to entry remain in a number of Member States. 
A number of Member States still maintain exclusive and special rights in the sector. 
These barriers must be eliminated if the mobile market is to develop fully. 
Licence award systems differ substantially. 
Mobile operators are awarded licences on the basis of national procedures and 
nationally focused evaluation criteria. Selection procedures are not uniform and in 
many cases lack transparency. Member States often retain considerable discretion 
due to the fact that neither the invitations to tender nor the evaluation procedures 
give a clear indication of the relative weight of the assessment criteria. 
Distortions are caused by differing licence conditions. 
There are major distortions to competition and market structure both within and 
_between technologies, rnsulting from differences in licensing procedures and the 
basic licence terms suc:h as those covering for interconnection and the use of 
infrastructure. 
Presently, Member States follow significantly different regulatory approaches. The 
duration of licence terms and the conditions placed on mobile operators differ from 
country to country and from operator to operator. This in many cases is causing or 
has the potential to cause significant distortion of competition. 
137 
Efficiency of spectrum use will become more and more vital 
The spectrum scarcity in mobile communications calls for the adoption of frequency 
efficient technologies. However, reliance on the most efficient technologies does not 
dispense the need to accurately plan the use of radiofrequencies inside specific 
frequency bands and between ·these and neighbouring I contiguous bands. An 
acceptable approach must be ensured in the assignment of frequencies between new 
and previous technologies in order to minimise mutual interference and maximise 
frequency re utilisation. 
Numbering is of special significance to the provision of mobile services 
Numbering raises significant new issues and requirements. Among these will be the 
need for personal numbers to facilitate personal mobility across all networks and 
environments. 
Safety and environmental conditions will gain prominence/i.nfrastructure sharing will 
become an important issue. 
Substantial public concern exists ·about possible health hazards resulting from 
electromagnetic exposure, and problems of electromagnetic interference with regard 
to other sensitive equipment, such as hearing aids, heart pacemakers and Anti-lock 
Braking Systems. 
Radio towers and other radio installations may also raise environmental concerns' 
and issues in town planning. The promotion of infrastructure sharing seems to be a 
way forward. 
The agreement on full liberalisation of public voice telephony services in 1998 presents 
an opportunity to define concepts for full user mobility on radiocommunications and 
fix,ed networks. 
Full liberalisation of public voice will allow the combination of services via mobile 
and fixed networks and therefore facilitate full end-to-end service in a personal 
communications environment. Based on the convergence of intelligent networks 
and digital mobile communications networks, this will promote more efficient and 
effective network and service operation and will offer full mobility services to the 
user. 
138 
Towards the Personal Communications Environment: 
Green Paper on a common approach in the field of 
mobile and personal c:ommunications in the European Union 
ALNNEXC 
REVIEW C>F WORLD-WIDE 
DEVl:LOPMENTS 
139 
TABLE OF CONTENTS 
1 DEVELOPMENTS IN THE UNITED STATES .................................................. 142 
1.1 Technology and market trends........................................................................ . . . . . . . 14 2 
1.2 Licensing and selection procedures ......................................................................... 143 
1. 3 Current approach to personal communications services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144 
1.4 Role of satellite-based personal communications .................................................... 145 
2. DEVELOPMENTS IN JAPAN .................................................................................... 146 
2.1 Technology and market trends ............................................................................... 146 
2. 2 Licensing and selection procedures............................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 7 
2. 3 Current approach to personal communications services . . . . . . . . . .. . .. . .. . . . .. . . .. . .. . . .. .. .. .. .. 14 7 
3. DEVELOPMENTS IN THE PACIFIC AREA AND ASIA OTHER THAN 
JAPAN .......................................................................................................................... 148 
4. DEVELOPMENTS IN THE MEDITERRANEAN AREA, NEAR EAST, 
AFRICA, LATIN AMERICA ...................................................................................... 149 
4.1 Mediterranean area and Near East ......................................................................... 149 
4.2 Africa .................................................................................. · ................................. 149 
4.3 Latin America ....................................................................................................... 150 
5. CENTRAL AND EASTERN EUROPE ....................................................................... 150 
5 .1 The special potential of mobile communications for Central and Eastern 
Europe ................................................................................................................. 150 
5. 2 Market and technology developments ............................... : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 I 
5. 3 Co-operation mechanisms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 3 
6. THE WORLD-WIDE POSITION OF EUROPE IN DIGITAL MOBILE 
TECHNOLOGIES ....................................................................................................... 154 
6 .1 Adoption of GSM by operators ........................................................................ ·.· ... 154 
140 
6.2 GSM has the potential for becoming a world staiidard for digital mobile 
communications .................................................................................................... 155 
6.3 The world market potential of other European digital mobile technologies: 
DECT, TFTS and others ...............................................•.... , .. °' ............................... 157 
6 .4 The position of the European mobile equipment manufacturing industry ................ 15 7 
7. GLOBAL SATELLITE-BASED PERSONAL COMMUNICATIONS 
SYSTEMS ...................................................................................................................... 158 
(-----
7 .1 Current projects .......................................................................................... :......... 15 8 
7.2. Major issues involved ................................ _ ...... ~ ..................................................... 159 
7.3. The issue of US dominance in the sector ................................................................ 159 
8. CO-ORDINATION IN THE INTERNATIONAL 
TELECOMMUNICATIONS UNION (ITU) .............•................•...... -.......................... 160 
8 .1 Recent reform of radio communicatiQns co-ordination in the ITU ........................... 160 
8.2 World Radiocommunications Conferences (WRCs) and European 
representation ....................................... ·~ ................................. : ...... ." ..................... 161 
9. ACCESS TO THIRD MARKETS .............................•................................................. 161 
9 .1 Position of third country manufacturers in the European market ............................ 161 
9.2 Position ofthird country operators ip. European mobile communications ................ 162 
9 .3 Issues of access to third country markets; ownership restrictions in the 
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162 
9. 4 The multilateral framework: the impact of the GA TT Agreement ........................... 163 
10. CONCLUSIONS .......................................................................................................... 165 
141 
1 DEVELOPMENTS IN THE UNITED STATES 
2 1.1 Technology and market trends 
Commercial cellular mobile services began in the United States in 1983 using the 
analogue AMPS (Advanced Mobile Phone Service) standard. At mid-1993 there 
were over 13 million subscribers in total -about 5 per cent of the population. 
Subscriber numbers are growing by more than 30 per cent per. year and 40 to 50 
per cent of new subscribers are non-business users attracted by flexible tariff 
packages. Average subscriber revenues are in excess of$70 per month and the total 
US service market is worth approximately $9 billion annually. 
The shift to digital cellular services in the US has been delayed by two factors. 
Firstly, the present analogue operations are cost effective and, because of technical 
improvements in the existing analogue technology1, excess capacity is available 
using current spectrum allocations. Also, uncertainty·over the choice of American 
second generation digital technology has prevented the emergence of a clear 
upgrade path. Two competing digital cellular standards are being promoted: 
• 
• a time division multiple access (TDMA) technique has the support of 
the United States Cellular Telecommunications Industry Association 
and large cellular equipment manufacturing organisations, and 
a code division multiple access (CDMA). technique is supported by 
Qualcomm Incorporated, a US defence contractor. 
There has been concern in the US2 that delays in introducing digital technology are 
allowing the GSM standard an opportunity to dominate non-European markets 
which adopted AMPS as their analogue service standard, thereby undermining US 
technological leadership. On the other hand, the Federal Communications 
Commission's (FCC) decision to refrain from action to promote on a single second 
generation system standard has led to a considerable increase in the rate of 
experimentation and this may lead to rapid roll-out of innovative new mobile 
services in the US. 
Migration to new, digital standards will be voluntary and its timing will depend on 
the cost and spectrum efficiency of digital operations, relative to current analogue 
services. The transition can be expected to take place first in areas where cellular 
penetration is greatest. US equipment manufacturers have also suggested the 
possibility of producing dual analogue/digital mode handsets and the availability of 
these might lead to an extended period of analogue/digital coexistence. The cellular 
operators expect 40% of analogue mobile technology to be converted to digital 
systems before 2000. 
Notably Narrowband AMPS (N-AMPS) which only requires 10 KHz for one voice channel so is more spectmrn 
efficient than the original AMPS. 
See "Global Competitiveness of US Advanced-Technology Industries: Cellular Conununications", US 
International Trade Conunission 1993. 
142 
4 ~· 
T}l.e FCC has announced the frequency allocation for US Personal Communications 
Services. In Septemb<~r 1993 the FCC allocated a total of 160 MHz for PCS 
services with 120 MHz for public (i.e. licensed) services and the remainder for low 
power PCS devices which do not require licences.· 
Commercial mobile data. services have been available in the United States for more 
than seven years and now cover about 97% of US metropolitan areas. Such 
services primarily meet the needs of corporate users and closed user groups. 
The US continues to play an important role in the supply of mobile systems, 
equipment and handsets throughout the world, with AT&T, Northern Telecom and 
Motorola winning 37% of the non-US market for analogue systems in 1991 and 
40% of the non-US market for digital systems. Motorola continues to be the largest 
supplier of handsets with a 23 % share of the 1990 world market3· 
1.2 Licensing and selection procedures 
The United States was one of the first countries to licence mobile services. 
Analogue paging servicies arrived on the market in the 1960s and analogue mobile 
telephony licences were first granted in 1981. For analogue mobile telephony, the 
FCC decided to create regional duopolies by dividing the United States into 306 
Metropolitan Statistical Areas and 428 Rural Statistical Areas. Two types of 
licences were issued for each area: 'A Block' licences were given to the local fixed 
network operator, generally the local Regional Bell Operating Company (RBOC) 
and 'B Block' licences were awarded to unrelated competitors. While artificially 
limiting market structure, the FCC believed that local duopolies would promote 
technological advance, broaden the service choice and introduce price competition4. 
The FCC declined to licence a single national mobile operator, despite the economic 
efficiencies which might have been achieved by doing so. However, there were no 
restrictions on the number of 'B Block' licences which could be held by competitive 
mobile operators, allowing companies to build up coverage in contiguous mobile 
areas. Consequently, McCaw and GTE now jointly cover 70% of US subscribers. 
At the same time, regulatory restrictions placed on the RBOCs as a result of the 
divestiture of AT&T in 1982 may have placed them at a competitive disadvantage 
compared with 'B block' licence holders. The Modified Final Judgement (MFJ), 
which enacted such divestiture, prevents the RBOCs from providing long-distance 
(inter-LAT A5) services. Hence, mobile calls requiring transmission to a different 
LAT A must be handed over to a long distance operator. This restriction creates 
difficulties for the RBOCs' mobile service provision as mobile licence coverage is 
different to the LATA i:;overage in more than 1,300 locations. This imposes an 
Global Competitiveness of US Advanced-Technology Industries: Cellular Communications, US International 
Trade Commission 1993. 
Federal Conununications Commission Reports, Cellular Communications Systems, 86 FCC 2d ( 1986 ). 
Local Access Transport Area. 
143 
6 
7 
9 additional hand-on cost on the RBOCs which is not imposed on competitive mobile 
operators6· 
The means of selecting the second licensee in each area varied. Licences for the 
largest 90 MSAs were awarded through comparative hearings. Remaining licences 
were granted through lotteries, with successful applicants enjoying the right to sell 
their licences. The lottery process accelerated the deployment of mobile services, 
allowed smaller firms to enter the market and larger operators to consolidate their 
position by purchasing licences7. However, it also encouraged speculative 
applications for lotteries from organisations with limited interest in providing 
cellular services. 
Existing analogue operators will migrate to digital technology to better use the 
. allocated spectrum. As mentioned above, the FCC has not introduced a 
requirement in the US for a specific digital technology8 to be introduced by a 
specified date comparable to that found in the European Union for the introduction 
of GSM technology. 
There are no direct foreign mobile service providers in the US. At the time of the 
award of the original analogue licences there were few non-US players able to 
compete for such licences. Additionally, Section 310 of the 1934 Federal 
Communications Act limits foreign ownership of a cellular licence to a maximum of 
25%. BT has divested itself of its 22% holding in McCaw through a sale to 
AT&T. This was previously the largest foreign holding in a US mobile operator. 
1.3 Current approach to personal communications services 
Reflecting the approach taken with analogue cellular, the FCC has allocated 
spectrum for PCS based on a division of the United States into 51 Major Trading 
Areas (MTAs) and 492 Basic Trading Areas (BTAs)9. Instead of automatically 
allocating spectrum to incumbents or using a lottery system, spectrum will be 
auctioned during 1994. Existing cellular operators can bid for licences outside 
their existing areas, or where existing cellular services serve no more than 10% of 
the population of the PCS service area. They can also bid for up to 10 MHz of 
spectrum inside their existing service areas. PCS licensees will be allowed to 
Applications can be made by the RBOCs for waivers in individual cases of the prohibition on inter-LATA 
carriage. However, such applications are cumbersome and take an average of 19 months to process. See 
Global Competitiveness of US Advanced-Technology Industries: Cellular Communications, US International 
Trade Commission 1993. 
Global Competitiveness of US Advanced-Technology Industries: Cellular Communications, US International 
Trade Conunission 1993 .. 
This can be contrasted for the mandatory use of the AMPS analogue technology required by the FCC, when 
first licensing mobile systems. 
Each Major Trading Area will have two licence allocations of 30 MHz. Each Basic Trading Area will have 
one 20 MHz and four 10 MHz licence allocations. There will be over 2,500 licence allocations in total. MTAs 
and BTAs, originally defined by Rand McNally, are not identical to Metropolitan and Rural Statistical Areas 
as defined for the analogue cellular service, however, MfAs generally cover urban areas and BTAs rural ones. 
144 
aggregate their allocat(~ spectrum, but not to hold more than 40 MHz of spectrum 
in any particular area. 
PCS licensees are free to choose the standards that they will operate to. As with the 
existing cellular operators, the industry is divided between supporters of TD MA 
techniques and those supporting CDMA. It is likely that examples of both 
technologies will emerge, including DCS 1800 derived from the GSM standard. 
1.4 Role of satellite-based personal communications 
• f 
The development of satellite personal communications in the US must be seen in the 
general context of mobile satellite services and the absence of a US-wide terrestrial 
network. When compared to Europe or Japan there are many more areas of the US 
where the number of subscribers is insufficient to justify the deployment of a 
terrestrial system and where a satellite mobile system is the only suitable mobile 
technology. 
The main developments in the US have been the award of a monopoly license in the 
mid-eighties for a geostationary system, and, recently, the various initiatives with 
regard to low-earth orbit satellites (LEOs). In the mid-eighties, the FCC concluded 
that the US market was not big enough to support more than one licensee for 
. geostationary mobile satellite services. It ruled that all applicants should form a 
cqnsortium (AMSC10) and that no other systems should operate within the US for 
land mobile and aeronautical applications. In other words, Inmarsat was barred 
from providing domestic services on the US market. AMSC began a data­
messaging service in 1992, ~d will launch its first satellite in 1994. 
Renewed• attention on the satellite-based personal communications market was 
generated by new proposals for non-geostationary orbits. Applications are expected 
to be for both voice ("big LEOs") and non-voice ("little LEOs") systems. These are 
being promoted by US manufacturing industry, which is looking for new markets, 
now that demand for military applications is decreasing. The US government has 
negotiated through 1he 1992 World Administrative Radiocommunications 
Conferences, notably W ARC 92, (see Annex B for further detail) world-wide 
frequencies for these mobile satellite services. After securing such agreement, a 
process of negotiated rule-making started, under the auspices of the FCC, that 
eventually will result in the awarding of one or more licensees to exploit these 
services. 
There are more than 5. applicants for "big LEOs", and 3 for "little LEOs". 
Proposals for the provision of global services include projects like Motorola's 
Iridium, Loral's Global star and Odyssey. It remains uncertain, however, how 
many systems the market and available spectrum can support. 
The US policy of retaining a domestic monopoly for satellite-based mobile services 
appears to rest on a presumed scarcity of frequencies and a modest market 
potential. It would se:em to be at odds with the recently started procedures for 
licensing arrangements for satellite PCSs on the domestic market. The US 
IO AMSC: American Mobile Satellite Corporation. The major stockholders are Hughes Communications, Inc., 
McCaw Celiular Communications, Inc:., and Mobile Telecommunications Teclmologies Corp. Together they 
own approximately 90% of the shares. 
145 
approach seems to seek effective control of global mobile satellite ventures, while 
closing the vital domestic market to foreign competitors. 
2. DEVELOPMENTS IN JAPAN 
2.1 Technology and market trends 
Japan was the first country to license an analogue cellular service. Nippon 
Telegraph and Telephone Corporation (NTT) the monopoly domestic carrier began 
its service in 1979. Subscriber growth was modest during the early and mid-1980s, 
but accelerated following regulatory changes embodied in the Japanese 
Telecommunications Business Law of 1985. This permitted market entry by new 
common carriers . in fixed-wire, mobile cellular and paging operations. A large 
number of new, though often commercially linked, carriers entered the market. 
NTT remains the largest mobile communications services supplier. There were l . 7 
million cellular mobile telephony subscribers at mid-1993 and some 40% of this 
market is held by new carriers. A similar pattern can be seen in the paging market. 
In September 1992 there were 6.3 million paging subscribers in Japan. In all 47 
prefectures there were at least two competing paging operators with 36% of the 
market held by new carriers. 
Three mobile communications groups dominate the Japanese market: NTT, IDO 
and DOI. They use two analogue cellular standards (N-MATS and JT ACS) which 
operate in the 800 and 900 MHz frequency bands. 
• 
• 
• NTT's mobile communications subsidiary, NTT DoCoMo, is licensed 
in 9 specific regions in Japan giving it the commercial advantage of de· 
facto nationwide coverage. It operates an N-MATS system, provided 
by Motorola, which has extended the capacity ofNTT's earlier system. 
Eight regional mobile operators owned by DOI (Daini Denden Inc.) 
compete with NTT in regions other than Tokyo and Chubu using 
JT ACS systems. 
Regional mobile operators owned by IDO {Nippon Idou Tsushin 
Corporation) compete in the Tokyo and Chubu areas with both N­
MATS and JTACS systems. 
IDO and DOI signed a roaming agreement for their JT ACS systems in 1991, but 
their tariff structure means that subscribers requiring national coverage are likely to 
use NTT. Direct interconnection of these networks is to be pem1itted from 1993. 
This should reduce their interconnection costs and allow tariff reductions. 
Japan accounts for some 40% of the cellular installed base in the Asia/Pacific 
region, but subscriber numbers are currently growing more slowly than in other 
national markets. However, two additional consortia -Tu-Ka and Digital Phone -
have been licensed to provide regional cellular networks using digital technology. 
This will intensify competition in the market with consequent subscriber growth. 
As well as the growth in the number of operators and subscribers, competition in 
146 
II Japan has dramatically reduced mobile service prices, stimulated the introduction of 
new services and products, and increased the level _of investment in the sector11. 
2.2 Licensing and selection procedures 
As in other industrialised countries Japan faces a shortage of radio frequencies 
which is constraining the expansion of existing networks. The Ministry of Posts 
and Telecommunications (MPT) is responding by encouraging operators to shift to 
fully digital technologies. The present analogue cellular operators have indicated 
that they will upgrade their networks for digital operations. MPT has allocated 
additional channels for the digital services of these operators from the unused 
regions of the 800 MHz band. New licences have been awarded to the Tu-Ka 
group (mainly owned by DDI and Nissan) and to the Digital Phone Group (led by 
Japan Telecom, together with foreign participation) to offer digital services in the 
1.5 GHz band. NTT launched its 800 MHz digital service in 1993. Competitors 
will begin operations in 1994. 
To date the licensing n:gime for new entrants has been restricted to regional 
operations only. Wider coverage has been provided through alliances which has 
worked to the advantage ofNTT. As the market matures this constraint is likely to 
be lift~d so enhancing nationwide mobility. 
2.3 Current approach to personal communications services 
With its large internal market and ·considerable technological expertise Japan has 
made the political decisioltl to develop a dedicated national digital cellular standard. 
Development work is now underway on three types of new, digital system in Japan. 
These are: 
• 
• 
• the Personal Digital Cellular (PDC) system; 
the Personal Handy Phone (PHP) system; and 
the N-star mobile satellite system, scheduled for full service in 1995 . 
An initial PDC specification was developed by the Technical Group of the Japanese 
mobile carriers in 1991. After various amendments these standards were due to be 
finally approved in November 1993 and will be adopted by all five operators. The 
system will use two frequiency bands: 800 MHz and 1.5 GHz and is designed to co­
exist with the existing analogue system. It remains under development in tern1s of 
capacity and services: a half-rate codec algorithm is in preparation and integration 
with national plans for personal numbering is being considered. 
The Japanese approach to personal communications is based on the Personal Handy 
Phone (PHP) system standard. These systems should be considerably cheaper than 
PDC-based cellular services, and have more in common with a two-way telepoint 
concept. They will use low power base stations and handsets and will not provide 
uninterrupted handover. Licenses will be awarded in the 1. 9 GHz band. The 
service will offer a genuine, wireless alternative to the current local loop and is of 
considerable interest to NTT's regional domestic fixed-wire competitors. 
See, for example, "Communications in Japan 1993" -White Paper by the Japanese Ministry of Posts and 
T eleconununications. 
147 
3. DEVELOPMENTS IN THE PACIFIC AREA AND ASIA OTHER THAN JAPAN 
Like Europe and the US, the Asia/Pacific region is undergoing a mobile service 
boom, brought about by general economic performance and by the emergence of the 
mobile telephone as a symbol of personal economic success. At the start of 1993 
there were some 2.4 million cellular subscribers in the region -a 67% increase on 
1992. Demand for cellular telephony is driven by relatively wealthy users based in 
urban centres. In countries with undeveloped fixed networks cellular telephony 
provides an efficient overlay network linking concentrated trading communities and 
offers reliable international access. 
Increases in cellular communications use have been paralleled by growth in paging 
systems. Paging is an enormous success in the Asia-Pacific region. There is a 
broad acceptance of the technology in Asian-Pacific markets where paging is used 
widely by consumers as well as for business purposes. Operators and 
manufacturers have responded by marketing an extremely broad range of pager 
styles and functionality's. Value added services and suppliers have proliferated, 
further fuelling market growth. 
Telepoint has been a success in Hong Kong and Singapore where high population 
densities allow virtually 100% coverage at relatively low cost. Low prices and 
cultural factors have played an important rote. High pager penetration encourages 
acceptance of telepoint technology offering outgoing calls only. A public 
transport/pedestrian orientation means adoption is not constrained by the lack of a 
"hand-off' capability. 
Countries in the Asia/Pacific region have historically imported technologies from 
abroad to fulfil their mobile communications needs. For the next generation of 
systems many Asia-Pacific countries have adopted, or are now considering 
adopting, digital cellular technology. As the region is presently less economically 
cohesive than North America or Europe there is no "top-down" push for the 
creation of a uniform standard for the region. 
Operators are presented with three competing digital cellular teclmologies: Europe's 
GSM, North America's USDC and PDC from Japan. While, in certain countries a 
single standard has been selected, some governments have preferred a dual 
approach, adopting GSM in the 900 MHz band and USDC in the 800 MHz band. 
At present GSM is the most popular choice for new systems. 
The region demonstrates a wide range of regulatory structures from vigorous 
competition in Hong Kong to continued monopoly provision in Taiwan. Markets 
too, are heterogeneous in character, ranging from the highly developed economies 
Australia and Hong Kong to the newly emerging markets of China and Vietnam. 
Australia is presently the largest cellular market in the region with over half a 
million subscribers. Market growth has been driven by the willingness of the highly 
urbanised, car-oriented population to embrace mobile communications technology. 
There are three licensed operators: Telecom Australia, Optus and Vodafone Pty. 
All will adopt GSM technology and this "tripoly" will continue until 1997. At that 
time the Government has suggested that it will fully open up the mobile market. 
The Korean Government has committed itself to the US CDMA standard in 
partnership with Qualcomm of the United States. The present monopoly mobile 
148 
/ operator Korea Mobile Telephone will implement a CDMA system in 1994. The 
planned second operator should be licensed in mid-1994. 
Taiwan is the second largest regional market and, along with that of Singapore, has 
a single monopoly operator. The national cellular network was launched by the 
Directorate General of Telecommunications (DGT) in 1989 using the AMPS 
standard. At the start of 1993 the existing network was within 3 % of its ultimate 
sub.scriber capacity and the need to move towards a digital network is recognised. 
The Government has decided to implement both USDC and GSM systems. USDC 
to provide an upgrade path for the present AMPS network while a GSM system 
will facilitate roaming with mainland China. 
China can be identified as the key regional market in the longer term because of its 
size and rapid economic growth. At the start of 1993 there were 160,000 mobile 
subscribers to the networks operated by Chinese local telephone companies on 
behalf of the Ministry of Posts and Telecommunications (MPT). MPT is carrying 
out trials of GSM11. Leading equipment suppliers have set up joint ventures ·in 
China. 
4. DEVELOPMENTS IN THE MEDITERRANEAN AREA, NEAR EAST, AF'RICA, 
LATIN AMERICA 
4.1 Mediterranean area and Near East 
In late 1991 telecommunications organisations from the countries of the Gulf Co­
operation Council13 (GCC) agreed to adopt a regional network of mobile and paging 
systems using common standards. GSM was selected as the common standard for 
the pan-GCC mobile network and to date Qatar and the UAE have awarded 
·contracts for the construction of GSM systems. Other GCC countries will 
introduce GSM systems by 1995. 
A numb.er of other countries in the Middle East have either decided on a GSM 
. system or are considering its adoption. These include: Egypt, where a service was 
scheduled to be offered by late 1993; Iran; Jordan; and Lebanon. 
4.2 Africa 
As in central and eastern Europe, African governments view cellular as a rapid way 
of fulfilling unsatisfied demand for telecommunications in urban centres and of 
generating additional telecommunications revenue. Cellular services are also being 
promoted as a solution to deficiencies in fixed network deployment. Several North 
African countries are considering implementing GSM once this is implemented in 
Southern Europe. The Algerian, Moroccan and Tunisian PTTs currently offer 
NMT 450 services which will be upgraded, subject to available finance. 
12 China is emerging as one of the fastest growing cellular markets in the world. It shows the greatest potential 
for GSM technologies outside Europe. The MPT is carrying out GSM trials in three provinces. 
13 GCC countries are Bahrain, Kuwait, Oman, Quatar, Saudi Arabia and the United Arab Emirates (UAE) 
149 
Other countries in Africa are considering the introduction of analogue or digital 
mobile telephone networks where none presently exist. However, financing 
difficulties, political instability and uncertainty over demand have delayed moves 
towards cellular systems. Cameroon recently became the first African nation to 
launch a digital GSM cellular system. 
In South Africa the present analogue mobile system is running out of capacity and 
the government has introduced competition by issuing two licences. for digital 
mobile systems. Both operators will introduce services based on GSM technology. 
As current deficiencies in fixed network deployment and penetration reflect earlier 
politically-driven investment priorities, the issue of cellular deployment is also 
politically charged. Currently main line penetration per 100 inhabitants is ten times 
greater among the white population than amongst the much larger non-white 
population. 
4.3 Latin America 
During the 1980s and early 1990s Latin American governments adopted a strategy 
of privatisation of state-owned telephone operators through the direct sale of 
majority interests to consortia of foreign and domestic investors. New owners have 
been allocated continuing monopoly rights, including over the provision of mobile 
services, and must meet strict performance and investment targets. While direct 
Government control over the sector has been reduced, penetration rates and 
investment volumes have increased dramatically. 
Chile was the first country to privatise its operator (in 1987) and has been followed 
by Argentina, Mexico and Venezuela. Eight other Latin American countries are 
now considering privatisation. Privatisation of the basic services operator has also 
led to vigorous growth in the mobile sector. Governments are less prone to accept 
arguments against competition once they have sold their interests, and this is a 
powerful incentive to increase investment in cellular services. · 
In Latin America the prospects for GSM to date are limited. Traditionally, this has 
been a market for AMPS and it is likely that most existing cellular operators will 
choose to migrate to USDC. Where this pattern may not hold will be in those 
countries where early licensing of a second operator takes place. Two countries 
believed to be considering the adoption of GSM are Columbia and Argentina. 
5. CENTRAL AND EASTERN EUROPE 
5.1 The special potential of mobile communications for Central and Eastern 
Europe 
Countries of the former Soviet Bloc have inherited an extremely poor level of 
infrastructure development and the need to improve rapidly both the quantity and 
quality of telecommunications infrastructure has been widely documented. 
Symptoms of poor infrastructure development include: low numbers of telephone 
main-lines per 100 inhabitants, long waiting times for connection and poor call 
completion rates. 
150 
Mobile conununications technologies and systems have a special potential in these 
countries. This is based on two key factors: 
• 
• speed of deployment and the flexibility of mobile service provision, and 
the cost structures of mobile conununications systems which will, in 
certain circumstances and increasingly over time, allow cheaper 
deployment of radio-based systems than of fixed-wire systems 
Radio-based systems allow swift provision of telephone connections in urban areas. 
These services are particularly attractive to business users whose efforts are vital in 
the transition to a market economy and who are willing to pay a premium price for 
a combination of speed of provision and service reliability, with mobility an 
additional benefit. 
Once mobile networks are in place, a proportion of the additional revenue generated 
becomes available for re-investment in the teleconununications sector. This can be 
used to support the extension of the mobile network from urban to rural areas or for 
the development of the fixed network. In addition, in some countries, mobile 
licenses are being sold to foreign operators to generate hard currency. 
Beyond the inunediate fulfilment of the service requirements of business users, 
radio-based conununications technology also has the potential to provide cheaper 
com1ection to the public netWork than may be possible with existing fixed-wire 
technology. Teleconununications operators in central and eastern Europe may use 
radio to serve greenfield sites or regions where wired access is relatively expensive. 
5.2 Market and technology developments 
The deployment of analogue cellular technologies in central and eastern Europe 
began in November 1990 with the deployment of the "Westel" network in major 
urban centres of Hungary. Beginning with a service in Budapest it has expanded to 
other major cities, to tourist areas and along main arterial road routes. These areas 
of high demand for mobile services are crucial in the development of the 
teleconununications-intensive service sector and this pattern of deployment is being 
repeated in other countries of the region. 
Implementation of mobile teleconununications networks in central and eastern 
Europe and the CIS is typically through joint ventures between domestic and 
foreign companies. Domestic participation is dominated by national PTTs which 
bring local labour, switching and base station sites, and which are familiar with 
local circumstances. Foreign operators offer capital, and specialised technical and 
marketing expertise. North American teleconununications operators, in particular, 
the Regional Bell Holding Companies, continue to be active participants in mobile 
network development. 
Paging systems have also developed within the framework of joint ventures. Unlike 
cellular, paging joint ventures do not necessarily include the local 
telecommunications operator and are more likely to be subject to competition. 
Systems using the Scandinavian analogue NMT 450 standard were the preferred 
technology for mobile networks entering service during the early-l 990s. These 
frequencies are relatively free of other users in the region. However, most countries 
have declared their intention to licence digital cellular systems in the near future. In 
151 
particular, spectrum constraints in the 450 MHz band mean that available capacity 
may be fully utilised in these networks during 1994. These implementations will 
use GSM technology. Again Hungary has led the way by offering GSM licences to 
two consortia: Westel 900 led by US West; and Pannon GSM involving TOs from 
the Netherlands, Denmark, Sweden and Finland. 
By adopting GSM and the .other mobile standa;ds being implemented in the rest of 
Europe, these countries have the potential to participate in the spread of seamless 
and cost effective pan-European mobile services. This will increase the level of 
economic cohesion between the European Union and central and eastern Europe and 
will offer additional revenue generating possibilities in these countries through 
"roaming" of high volume foreign users. 
While decisions favouring the licensing of GSM systems have been made in 
principle this is subject to a number of constraints in practice. The focus of most 
operators is on rolling-out existing networks and not on the implementation of new, 
digital technologies. While this could be compensated for by the allocation of 
additional licences, this may conflict with existing licence conditions. For Russia 
and other CIS countries, restrictions on the export of sensitive technologies continue 
to be a major barrier to GSM implementation. While licences may have been 
allocated the actual date of GSM introduction remains unclear in these cases. 
Development of widespread personal communications use in central and eastern 
Europe depends primarily on overall economic growth. Until a general economic 
upturn in these countries, the market will remain dominated by a small number of 
"hard-currency" users able to pay the premium tariffs which are high even by 
Western European standards. The introduction of greater levels of competition -in 
fixed or mobile services -will provide incentives for the operators to extend their 
customer base to customers with a lower revenue-earning potential. 
For cellular operators (other than those using NMT 450 technology) there remain 
difficulties with military and emergency service use of the necessary frequencies. 
Unless spectrum allocation problems are addressed these countries will not be able 
· to benefit from European and world-wide co-ordination initiatives. It is possible 
that licence fees will be used to fund the necessary frequency reallocation. 
Opportunities also exist for radio-based local loop implementations to overcome 
poor levels of fixed infrastructure deployment. Deutsche Telecom has implemented 
temporary systems based on NMT 900 technology in advance of fixed network roll­
out in Germany's eastern Lander. The Hungarian Telecommunications Company is 
pursuing a similar approach. It has experimented with CT2 technology and will 
participate in a DECT trial supported by the Commission in 1994. 
In January 1993 Russia licensed GSM systems to serve 12 c1t1es and their 
surrounding areas. For most of these US West will be the lead contractor/operator 
in partnership with two Russian ·organisations. Russian industry groups were 
. awarded a number of the licences and the Moscow licence was allocated to a joint 
venture between the Moscow City Telephone Network and Bell Canada. Licence 
conditions stipulate that a specific percentage of fixed installations must be covered 
by the operators. Following these initial licences the Russian Govenum~nt has 
announced that an additional 20 .regional licences will be offered for GSM services 
and over 40 licences for NMT 450 services. 
152 
5.3 Co-operation mechanisms 
Mobile telecommunications development in central and eastern Europe is receiving 
finance from four types of source: 
• 
• 
• 
• joint venture capital of foreign firms; 
loans to these joint ventures by commercial banks; 
the self-financing capability of existing operators and of mobile joint 
ventures; and 
loans from international financing institutions (IF Is) . 
The three main IFis are the European Investment Bank (EJB), the European Bank 
for Reconstruction and Development (EBRD) and the International Bank for 
Reconstruction and Development (World Bank). In recent years these organisations 
have committed 1220 Million ECU for telecommunications development in central 
and eastern Europe and the CIS14• 
Over 90% of the funding has gone to telecommunications organisations. However 
joint venture cellular networks in Poland, Hungary and the Czech and Slovak 
Republics have all received some funding from the EBRD. 
The EBRD has placed particular emphasis on supporting network and service 
development to serve the business market, hence its involvement in cellular 
networks. The broader strategy of the international financing institutions has been 
to take on infrastructure projects at an early stage to contribute to investor 
confidence. At the same time they have emphasised the roles of regulatory and 
sectoral reform in the establishment of a viable telecommunications services sector, 
and of tariff reform as a vital aspect in ensuring the required level of self-financing. 
The European Community has assisted in the telecommunications reform process in 
central and eastern Europe through the PHARE Programme which has provided 
assistance through technical consultancy to operators and regulatory agencies in 
Poland, Hungary, Bulgaria the Czech and Slovak Republics and in Slovenia. In 
addition, it has funded rural telecommunications network development in Poland. 
The European Community has also instituted a parallel programme to PHARE, 
called TACIS, to provide technical assistance to countries in the CIS. 
14 Commitments for telecommunications development represents approximately 18% of their total funding to the 
region (although it is 40% of the EBRD's total) and have mainly been allocated to support fixed network 
development. Funding has been directed towards projects with high commercial viability with business 
customers as the main target group. Projects are typically for overlay networks providing better international 
and trunk access to major urban centres. 
153 
6. THE WORLD-WIDE POSITION OF EUROPE IN DIGITAL MOBILE 
TECHNOLOGIES 
While the mobile world market like the European market, is still dominated by 
analogue cellular technology, Europe is now gaining a major advantage, with the 
world-wide implementation of the GSM standard (the Global System for Mobile 
communications). 
6.1 Adoption of GSM by operators 
In the past, analogue cellular technology has become a considerable world-wide 
success. It has repeatedly outperformed its predicted growth and at mid-1993 there 
were an estimated 27.3 million subscribers. The United States accounted for 48% 
of the market, Europe 25% and the Asia/Pacific region 15%. Nine different 
analogue standards are in operation, but three of these dominate the world installed 
analogue base: AMPS, NMT and TACS. . 
• The US Advanced Mobile Phone Standard (AMPS) dominates the 
United States market and is used by 60% of analogue cellular installed 
base. 
• The European Nordic Mobile Telephony Standards (NMT 450 and 
NMT 900) are the longest established standards with 13% of the 
installed base. . 
~ The European Total Access System (TACS) variants have 16% of the 
installed base. 
For cellular operators attention is now focused on ways to ensure continued market 
growth. They must improve their technological base so that many more customers 
can be served, to a higher standard, within the· limitations of available frequencies. 
Operators are again ch~sing from three standards, each using digital technology: 
• GSM,_ conceived as a global digital mobile standard, with its origin in 
Europe; 
• , The American USDC, the successor to the Advanced Mobile Phone 
Standard, which is developing in two, variants using TDMA and 
CDMA technology; 
• The Japanese PDC standard. 
As the first digital cellular standard to reach the market GSM has moved into 
position ahead of its two competitors. Originally developed for European markets 
the GSM standard has been adopted by a large number of countries outside Europe. 
It has become the preferred digital· technology in Asia/Pacific (either as a unique 
standard or jointly with USDC) central and eastern Europe and the CIS and in the 
Middle East (see Exhibit Cl). On the other hand all North American and Latin 
American countries are expected to adopt one or other of the USDC variants15. To 
15 · However, a nwnber of trials in PCS in the United States will be based on the GSM standard and this may lead 
to a change in the situation. 
154 
date the Japanese digital standard has not been accepted by earners m the 
Asia/Pacific outside Japan. 
6.2 GSM has the potential for becoming a world standard for digital mobile 
communications 
Notwithstanding the support of the United States and Japan for competing 
standards, GSM has the opportunity to become a de facto World standard for 
digital mobile communications in the 1990s. This potential will be realised if 
sufficient countries outside North and South America and Japan adopt the standard, 
increasing the installed base and enabling near-World roaming. Adoption depends 
firstly on GSM's availability, technical qualities and cost. Secondly, it will reflect 
the position of the proponents of different technologies and potential users and their 
broader international economic; geographical and social impact and inter-
relationship. · 
GSM as the first digital cellular system· to reach the market is well placed in 
availability terms. Relative costs-will depend on the achievement of a sufficient 
market size to realise economies of scale, and on the efficiency of the manufacturers 
of the products. 
However, GSM must overcome a number of problems for it to become a successful 
world-wide standard. These are: 
• the resolution of current intellectual property rights disputes, being 
addressed within the forum of ETSI; 
• ensuring that the adoption of differe~t encryption algorithms does not 
hinder GSM's chances of becoming a world-wide technology. A 
common technology, conforming to the same standard, which can be 
used on a global basis will be the key to GSM's world-wide success; 
• the production of a wide range of hand portables -at present the hand 
portable market is still constrained by supply problems. 
155 
..... 
~ EU 
Other 
Europe 
Other 
countries Exhibit Cl: Adoption of GSM technology world-wide -108 licences 
already allocated or planned in 62 countries at end 1993. 
Countries allocating one lice1fre 
Luxembourg Countries aJlocati11gtw6>licerices 
Belgium, Denmark, Frnnce, Germnny, 
G rccn·, I rclnnd, ltnly, Nethcrlnnds, 
Portugal, Spain, United Kingdom. 
Andorrn, Austrin, Crontin, Czech Republic, I Finland, 1 lungnry, Norw;1y. 
Estonia, Iceland, Latvia, Romania, 
Slovakia, Slovenia, Switzerland, Ukraine . 
Bahrain, Brunei Darussalam, Cameroon, 
Cyprus, Egypt, Fiji, Iran, Israel, Kuwait, 
Lebanon, Morocco, Nigeria, Oman, 
Pakistan, Qatar, Saudi Arabia, Singapore, 
Sri Lanka, Syria, Taiwan, United Arab 
Emirates, Viet Nam. China, Indonesia, Malaysia, New Zealand, 
Philippines, South Africa, Thailand, 
Turkey. 
•r•.•.•••"M"-"""""-'''"· "" •m•.-,~••~1 .. ~,,.~_.,,._...~~-•M~--~ .... ,. 35 licences and countries 44 licences in 22 countries Countries allocating rriore than two licerices 
Sweden, Russ-in. 
Australia, Hong Kong, India. 
29 licences in 5 countries 
Source: CEC studies, regulator/operator infonnation 
6.3 The world market potential of other European digital mobile 
technologies: DECT, TFfS and others 
A 'major lesson from the international acceptance of GSM is that there is 
considerable world-wide potential for suitable standards which have been adopted 
throughout Europ". Other European digital mobile technologies can achieve similar 
acceptance if these conditions are met. 
In principle suitability depends on the extent to which technologies specified for the 
European market find equivalent conditions outside Europe, or the ease with which 
they can subsequently be adapted to the conditions which apply in other markets. 
Furthermore, unequivocal acceptance of technologies in Europe is vital so that 
manufacturers can be sure of a large European market. Technology which 
achieves this acceptance increases the likelihood that they it be chosen by operators 
outside Europe. There will be a broad base of competing manufacturers and, as a 
consequence, infrastructure and terminal costs will be reduced in comparison to 
other technology choices. 
DCS-1800 based on GSM should be able to build on the world-wide success of 
GSM. A major· precondition for exploiting this 'potential will be wide-spread 
implementation of DCS-1800 based systems in Europe, as required evidence of its 
commercial and technical viability. 
The Digital European Cordless Telephone standard (DECT) has been specified by 
ETSI to ·be suitable in a wide variety of situations and to offer a broad range of ' 
functions. This flexibility ·will encourage international use. Three types of 
applications are foreseen: 
• business communications, including the provision of cordless private 
branch exchanges and cordless local area networks; 
• small. business and residential use where one or more handsets would 
use a common base station located on or near the premises; and 
• public access -a telepoint type system in a neighbourhood or other 
public location. 
The European TFTS (the Terrestrial Flight Telecommunications System) is the first 
digital terrestrial based telephone system for aeroplane passengers which will 
provide a cost effective alternative to satellite systems in the Europe continent. As 
it is based on a terrestrial network it should provide lower tariffs once deployed. 
The quality of the service· will also be higher and will avoid current satellite-based 
time lags. 
6.4 The position of the European mobile equipment manufacturing industry 
The rapidly expanding World market for mobile communications can be expected 
to lead to. changes in the competitive position of players in the telecommunications 
equipment . industry. Suppliers with strengths in digital mobile switching, base 
station, and mobile terminal supply will gain compared to suppliers focused on 
"traditional" non-mobile telecommunications equipment. 
157 
With the establishment of GSM as a European and World standard there will be 
significant, new opportunities for European equipment manufacturers which chose 
to invest heavily in the development of GSM products in the late 1980s. With a 
buoyant home market in Europe and strong GSM growth in the Asia/Pacific region 
these manufacturers are well placed to benefit from World mobile communications 
growth. 
The GSM system's non-proprietary nature is a key element in its acceptance. by 
operators. The consequence for equipment vendors is that competition in GSM 
equipment supply wi.11 be keener than with other cellular technologies. Some 
manufacturers will enjoy success, while those unable to innovate and to control 
production costs may fail to benefit. 
There are three identifiable segments in . the equipment supply industry and 
successful vendors must be clear as to their strategies in addressing each, or a 
combination, of these. On the network side a combination of mobile switching 
technology and radio base station technology must be offered to win orders from 
operators. This can be provided from within the same vendor's organisation or 
through the formation of appropriate strategic or tactical alliances. 
On the other hand, mobile terminals can be expected to move from being viewed as 
telecommunications equipment to mass-market consumer electronic products, 
whose consumer appeal and design will become increasingly important. They will 
often be integrated with other consumer goods, such as personal digital organisers. 
European companies wishing to compete successfully in this market must reach 
levels of efficiency in production achieved by Asian manufacturers of high-volume 
consumer goods. The associated dynamics of manufacturing design and marketing 
of products with short life-cycles must also be mastered. 
7. GLOBAL SATELLITE-BASED PERSONAL COMMUNICATIONS SYSTEMS 
7.1 Current projects 
Most satellite PCS proposals (including those for Low-Earth-Orbit satellite systems 
(LEOs)) that have now been publicly put forward are largely but not exclusively 
American16. Non-US led projects include those in the former Soviet Union and 
European projects, such as the European Space Agency's project, EMS and 
Archimedes. In addition lnmarsat is now developing a satellite personal 
communications service, Inmarsat-P, possibly combining Geostationary (GEO) and 
Medium Earth (MEO) Orbits. 
16 In August 1993, the investors in Iridium Inc. included Motorola, Lockheed, Raytheon and Sprint Corp. from 
the US, Nippon Iridium from Japan (a DDI led consortium), Mawarid from Saudi Arabia, Krunichev from the 
fon11er Soviet Union, STET from Italy, Muidiri from Venezuela, United Communications Industry Corp. from 
Thailand and China Great Wall Industry Corp. from China. 
In Globalstar, Loral is co-operating with the European space alliance: Alcatel (France), Aerospatiale (France), 
Alenia (Italy) and DASA (Gennany). In Odyssee, Matra Marconi Space from France is working together with 
TRW. 
158 
7.2. . Major issues involved 
Any policy with regard to satellite-based personal communications systems must 
take into account the interests of users (these systems may offer a valuable addition 
to terrestrial based services), the inierests of the manufacturing industry, and of 
service providers (satellite and other). In this context the Commission17 has raised a 
number of issues in the satellite PCN area, relating to: 
• regulation 
• competition policy 
• standardisation and intellectual property rights 
• economic and industrial considerations 
• multilateral framework and geo-political relations; and 
• third generation mobile communications policy . 
Policy in this area cannot limit itself to regulatory questions within the European 
Union, but must also address the wider trade issues and issues related to the 
competitiveness of European industry. 
7.3. · The issue of US dominance in the sector 
Discussion of LEOs in Europe accelerated after W ARC 92, in which the United 
States supported a major effort to allocate frequencies for thes~ systems. 
Immediately after W ARC the Commission initiated a discussion with Member 
States on the outcome of WARC 92 with regard to LEOs. The Commission 
subsequently met US officials in the United States and organised a hearing on 
LEOs in November 1992. 
This initial exploratory action resulted in Spring 1993 in the publication by the 
Commission of its Communication on Satellite Personal Communications Systems, 
together with a proposal for a Council Resolution. In the Communication the · 
Commission emphasised the importance of a pan-European strategy with regard to 
satellite PCSs. The Resolution was adopted by Council on 7 December 199318 and 
represents the starting point for a consistent policy in this area, both within the 
European Union and at an international level. 
17 See the Commission Communication of 27 April 1993 and the proposal for a Council Resolution on Satellite 
Personal Conununications, COM(93) 171 
18 93/C339/0l; OJ C339/1, 16.12.93 
159 
8. CO-ORDINATION IN THE INTERNATIONAL TELECOMMUNICATIONS 
UNION (ITU) 
8.1 Recent reform of radio communications co-ordination in the ITU 
National spectrum management tak@s place within a complex framework of 
international conventions, treaties and regulations which are the responsibility of the 
ITU. The basic instrument of the ITU is the International Telecommunication 
Convention which has international treaty status. Regulations and plans for 
spectrum allocation and usage, known as ITU Radio Regulations, are agreed 
through regular World Administrative Radio Conferences (WAR Cs). Ratification 
by individual countries is voluntary, acknowledged in the ITU Constitution by the 
recognition of "the sovereign right of each State to regulate its 
telecommunications ... " 
ITU activities fall into three main areas: 
• 
• 
• radio spectrum management 
provision of a forum for consultation between administrations, 
telecommunications organisations, including the definition of world­
wide technical standards for equipment; and as 
a focus for technical assistance to developing countries . 
For radio spectrum management, the WAR Cs have provided a forum in which to 
also agree spectrum allocation to services and frequency plans. 
Since its recent reform19, the ITU has created a Radiocommunication Sector 
integrating former CCIR activities (relating to the management of radio spectrum), 
with activities of the former International Frequency Registration Board (examining 
and registering notices for orbital positions of geostationary satellites and carrying 
out the calculations needed to ensure interference-free transmissions). The previous 
cycle of W ARCs, which convened infrequently, have been replaced by World 
Radiocommunications Conferences (WRCs) held at two yearly intervals. 
Available radio frequency spectrum is divided into bands allocated to several 
de.fined classes of services. At each W ARC adjustments are made to the ITU Table 
of Allocations. New classes of "service" are defined and appropriate technical 
constraints upon services are a~reed. ITU Radio Regulations define: 
• 
• 38 categories of service (for example, broadcast service, fixed service, 
mobile service and several satellite services); and 
degrees of priority: 
Primary services have first choice of frequencies and 
may claim protection against harmful interference 
from secondary services; 
19 In 1989 the ITU set up a High Level Committee to consider its future in the light of general evolution in the 
telec01mnunications sector. Subsequently, a major organisational reform of ITU activities was initiated 
160 
·) 
Secondary services ·cannot claim protection against a 
primary or permitted service to which a frequency 
band is also allocated; 
Permitted services have equal rights to a primary 
service except that, in the preparation of frequency 
plans, the primary service has prior choice of 
frequencies. 
The allocation of frequencies may be uniform world-wide or may vary according to 
ITU region. For radio regulatory purposes, the ITU divides the world into three 
regions. Region 1 consists of Europe, Africa, the former USSR and Mongolia, 
Region 2 consists of the Americas and Region 3 consists of the remainder of Asia 
and Oceania. 
By allocating frequencies to different services on an equal primary basis,. providing 
differing allocations across regions and allowing the possibility of national 
allocations (through footnotes to the Table of Allocations) there is flexibility -but 
also potential for divergence -in frequency usage within national borders. 
8.2 World Radiocommunications Conferences (WR Cs) and European 
representation 
There have been considerable changes to the European representation at W ARCs, 
now the WRCs. 
Since the W ARC 92 in Torremolinos, the Commission is closely associated with the 
Member States and CEPT's European Radiocommunications Committee (ERC)2° in 
preparing European positions for the Conferences. Co-ordination is proceeding on 
the basis of European Common Positions (ECPs) prepared by Ad hoc preparatory 
groups set up by the ERC, in which the Commission can participate. Community 
institutions will continue to play a role in the preparation of EPCs with a view to 
their submission to the WRCs, taking account of Union interests. Member States 
present ~t the Conferences, on ~e basis of agreed ECPs, a co-ordinated position. 
The Commission attends the Conferences with observer status. 
The decisions taken at W ARC 92 will have a substantial impact on the future 
environment for the de"\lelopment of mobile and personal communications in the 
European Union. (See Annex B for further detail). 
9. ACCESS TO THIRD MARKETS 
9 .1 Position of third country manufacturers in the European market 
A number of third country equipment manufacturers are active in the European and 
other GSM markets. In particular North American infrastructure suppliers and 
North American and Japanese terminal equipment manufacturers have established a 
presence in these markets. 
20 See A1mex B 
161 
Motorola is the fourth largest supplier of GSM infrastructure. It has sold base 
station equipment to operators in Germany, Norway, Portugal, Sweden and the UK. 
Northern Telecom has combined its expertise in switching with the base station and 
radio expertise of Matra Communications to form Nortel Matra Cellular which has 
made sales in Austria. 
Motorola is the leading world-wide manufacturer of cellular handsets with 23% of 
the total world market. In the European GSM market it enjoys a similar position 
(and has assumed the role of price leader). Other non-European manufacturers 
with a significant share of the cellular handset market are NEC, Panasonic and 
Mitsubishi. 
9.2 Position of third country operators in European mobile communications 
At present there are a number of third country operators (mostly from the United 
States) which are active as mobile operators in the European market. These 
participate principally through the formation of joint ventures. A number of 
different strategies are being used and these depend on the specific national market 
addressed and the approach of the entrant company. 
Some operators have entered the market by concentrating on setting up _10111t 
ventures in the countries of central and eastern Europe, where levels of 
infrastructure deployment and service quality have been low. US West has 
employed this approach successfully in Hungary, the Czech and Slovak Republics 
and Russia. 
Others have chosen to participate in consortia bidding for second national GS!'vt 
licence or other new licences issued by European Union Member States or EFT A 
countries. Successful licence consortium members include: Hutchison Whampoa 
which owns 65% of Hutchison Telecommunications, a UK DCS-1800/PCN licence 
holder; US West which owns 50% of Mercury Personal Conununications, the other 
UK DCS-1800 operator; Pacific Telesis which ovms 26% of Mannesman 
Mobilfunk in Germany and 23% of Telecel in Portugal; and Nynex which owns 
20% of the Hellas GSM operator in Greece. 
A final strategy which has emerged is the share participation in the mobile operator 
owned by the national telecommunications organisation: Pacific T cl es is has 
acquired 25% of the Belgian mobile operator through this approach. 
9.3 Issues of access to third country markets; ownership restrictions in the United 
States 
While there is a significant non-European presence in the European mobile sector. 
as described above, European participation in a number of third country markets 
remains restricted. This is particularly the case in the United States which is to 
embark on a series of spectrum allocations (through auctions during l 994) for 
personal conununications services in which European involvement \Yill be limited 
by US regulations. 
Section 310 of the Conmmnications Act significantly inhibits the operation of 
mobile and satellite services and the provision of telecommunications and broadcast 
services by imposing limits on foreign ownership. As a result the FCC docs not 
grant licences to operators O\\'ned by foreign governments or their "representatiws" 
(a category into which most European Telecommunications Organisations fall) nor 
162 
to suppliers of broadcast, common carrier or aeronautical services in cases where 
the foreign ownership exceeds 20% (or 25% indirectly). 
In addition foreign firms may face obstacles to the provision of common carrier 
services as a result of FCC authorisation procedure under Section 214 of the 
Communications Act of 1934. This requires the FCC to attach such conditions to 
the authorisation as it thinks are in the public interest, without there being any 
definition of this concept. The FCC has used the concept to delay -or impose 
conditions on -authorisations for foreign firms. 
Obstacles are also created to international services through the FCC's "Dominant 
Carrier" rule. This rule -although recently amended so that carriers with a foreign 
ownership of 15% or more are no longer automatically classified as "dominant'' -
classifies carriers affiliated with a monopoly foreign· carrier in the destination 
market being presumed dominant for the route involved. This subjects them to 
additional regulatory requirements only placed AT&T in the US. 
From the history of treatment of common carrier telecommunications service 
providers these will only avoid discrimination if radio communications is not 
involved. 
Furthermore, uncertainties about the extent to which federal regulation of major US 
conm1on carriers may be reduced ("streamlined") and about possible involvement of 
sub-federal authorities in regulating "enhanced" (value-added) services, have led to 
concerns that foreign value added service providers may face new barriers to 
market entry or be insufficiently protected from predatory behaviour from US 
network operators. As the linking of mobile service provision with value added 
services (such as voice mail and electronic messaging) is vital to the personal 
communications strategy of any operator this is a serious concern. 
9.4 The multilateral framework: the impact of the GATT Agreement 
Many aspects of the European market for telecommunications are being influenced, 
directly or indirectly, by the issues discussed in the context of the GATT Uruguay 
Round. European Community positions within the Uruguay Round were expressed 
in confonnity with Community's competence over trade set out in Article 113 of the 
EC Treaty. 
For personal and mobile teleconmmnications services (as with other aspects of trade 
in goods and services) the Commupity's position in the negotiations covering basic 
teleconununications services, following on from the successful conclusion of the 
Uruguay Round, will remain closely linked to developments in the European 
Union's internal regulatory framework and the need for consistency between its 
internal and external positions . 
. Within the overall scope of the GA TT, it is the negotiations on trade in servicGs 
which are of most relevance to questions relating to this market. These ha vc 
focused on the elaboration of a framework of principles applicable to trade in all 
services. This framework has been modified or complemented by sectorial 
annotations or annexes in order to take into account the specific aspects of different 
sectors. 
For telecommunications the annex covers, in particular, appropriate conditions for 
access to and use of the network. The principles established in Directive 
163 
21 90/387/EEC on Open Network Provision (ONP) and Directive 90/388/EEC on 
competition on Telecommunications Services form the basis for the Community's 
position. 
The European Community has bound a range of telecommunications services in its 
negotiating schedule and preparations are also underway for further negotiations on 
the liberalisation of "basic" telecommunications services, extending beyond the end 
of the Uruguay Round. After a period of public consult,ation following the 
publication of the Mobile Green Paper, those approaches which receive appropriate 
support will be incorporated into Union's regulatory framework. This will help to 
shape the Community's negotiating position. 
Trade in mobile and personal communications services and equipment with third 
countries should be handled on the basis of common procedures by .all Member 
States, based on the principles of the GA TT framework. Other issues with a direct 
impact on trade and Union exports should also be subject to co-ordinated positions. 
notably as regards issues of the export of sensitive technologies21 and of the 
measures necessary to obtain equivalent access to the markets of third countries. 
The new GA TT agreement should provide a mechanism for extending liberalisation 
of trade in teleconununications services, focusing on access to and use of networks 
in third countries in a balanced way. 
In this context exportation of GSM encryption technology is a major issue. 
164 
10. CONCLUSIONS 
The provision of cellular mobile radio telecommunications services is expanding rapid(l' 
1-Vorld-wide .. 
This expansion is· driven principally by the demands of business users for premium, 
mobile communications. However, the target base of subscribers is now widening 
in ii1dustrialised markets as service providers encourage the growth of personal 
mobile communications. Personal mobile communications will become a 
significant competitive mass market throughout the world before the end of the 
century. 
111e United States remains the largest single market for cellular mobile services. 
Although the US transition to digital technology has been delayed by contention 
over which of two competing technologies to adopt, the FCC is acting to establish a 
flexible, market-led environment for the development of personal communications 
services. Competition between existing and new licence holders in services. 
availability and technology could lead to rapid roll-out of innovative new mobile 
services in the US. US interest in satellite-based systems is also intense and, with 
one exception, the consortia offering low-earth orbit (LEO) systems are US-led. 
GSM is emerging as the World reference technology for digital mobile systems. 
GSM teclmology is how being adopted in Europe, Asia, the Middle East, in Central 
and Eastern Europe and in the CIS, having been the first system to reach the 
market. The effects of scale economies and additional international roaming 
possibilities which GSM offers will cement its position as the World reference 
technology. US backing threatens to lead to the adoption of US teclmology in Latin 
America where the American analogue standard is widely implemented. High costs 
are· hindering adoption of the Japanese digital standard outside Japan. 
With the establishment of GSM as a European and World standard there will he 
significant, new opportunities for European equipment manufacturers. 
Given a buoyant home market in Europe and strong GSM growth in the 
Asia/Pacific region, European manufacturers who chose to invest heavily in the 
dcvelopmerit of GSM products in the late 1980s are well placed to benefit from 
World mobile conlffiuni~ations growth. Of the six major GSM infrastructure 
supplie~s five are European (Ericsson, Alcatel, Siemens, Philips and Nokia) and 
only one (Motorola) comes from outside Europe. 
111e eventual success of GSM on a World-wide basis will depend on long run relative 
prices.for infrastructure and terminals. 
·· Although interi1ational economic, geographic and social inter-relationships remain 
imp.ortant ih the choice of a particular standard; relative availability, tcclmical 
qualities. and, especially, the cost of GSM in comparison to other digital systems 
will detennine its final potential. ETSI's harmonised teclmical specifications should 
result in greater freedom for multi-vendor equipment procurement and economies of 
scale, so driving irrfrastru.cture prices down. The influence of Japanese and Asian 
tenni11al equipment manufacturers will place further downward pressure on handset 
prices. and will represent a major challenge for European equipment manufacturers. 
. . ' ' . 
165 
For Central and Eastern Europe and the CJS, GSM will become the digital mobile 
technology of choice 
Provided that the necessary frequencies in the 900 MHz spectrum can be cleared 
rapidly, GSM will be adopted widely in these countries as the preferred mobile 
standard. 
For the European Union there will be a need to strengthen co-ordination of policy in 
the International Telecommunications Union 
In particular work on Third Generation mobile systems \vill need major· policy 
attention. W ARC 92 has opened major world-wide frequency bands but has split 
off the American market from the rest of the World. For the European· Union 
Community it will be important that co-ordinated positions are taken with regard to 
future frequency allocations so that Europe's service and equipment industries can 
benefit. 
166 
Towards the Personal Communications Environment: 
Green Paper on a common approach in the field of 
mobile and personal communications in the European Union 
ANNEXD 
EXTENSION OF THE 
PRINCIPLES OF EUROPEAN 
UNION 
TELECOMMUNICATIONS 
POLICY TO THE MOBILE 
SECTOR 
167 
TABLE OF CONTENTSP 
INTRODUCTION .................................................................................................................. 172 
GENERAL PRINCIPLES ............................................................................................... 173 
1.1 The provisions of the EC Treaty ............................................................................ I 7 3 
1.2 Application of the provisions of the Treaty to the teleconmmnications sector....... . IT:. 
2 EXCLUSIVE AND SPECIAL RIGHTS ......................................................................... I 7 4 
2 .1 The treatment of special and exclusive rights in the teleconmmnications sector ....... I 7 4 
2.2 The application of the Treaty to exclusive and special rights in mobile 
conmmnications .................................................................................................... I 7 .:" 
a) The rules on the free movement of services .......... : . .. .. . .. .. .. .. . . .. . .. . .. .. .. .. . . I 7 .:" 
b) The competition rules ............................................... . ................ I 7h 
c) Possible derogations from the Treaty rules ............................... .. I 7h 
3 LICENSING CONDITIONS APPLICABLE TO THE OPERATION OF MOBILE 
COMMUNICATIONS SYSTEMS ................................................................................. I 78 
3. l Basic Union principles .............................................................................. . .178 
a) General principles ........................................................... . l7S 
b) Justifiable restrictions in national licenses ........ . 
3 .2 Essential requirements ........................................................... . I SO 
3.3 Public service requirements in the fonn of trade regulations ...... . .. 181 
3.4 Duration ................................................................................................... . IX I 
3 .5 Other conditions imposed on Mobile Operators .................................... . . .. 181 
a) Protection of reserved services ..................... .. 
b) License fees ...................................................... . 
c) Changes of ownership ..................................... . 
3 .6 Promotion of competitive service provision : obligations on Mobile Operators ....... I 83 
3.7 Conditions applying to Service Providers and the provision of mobile 
communications services........................................................... IX.' 
a) Service provision not to be subject to licensing ........... . .. I S-t 
168 
b) Ensuring compliance with essential requirements and public service 
requirements in the form of trade regulations ........................................... I 84 
4. FREQUENCIES ...................................................................... ; ...................................... 185 
4. l Application of Union policy to radiofrequencies ..................................................... l 85 
4. 2 Community initiatives in the field of frequencies .................................................... 18 5 
4. 3 Conununity approach to frequency planning and coordination at a European . 
level. ............... : ..................................................................................................... 186 
4. 4 Priorities in the field of frequency co-ordination............. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I 8 7 
4. 5 Conununity approach to frequency planning and coordination at an 
international level........................................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I 8 8 
5. DATA PROTECTION AND PROTECTION OF PRIVACY .......................................... 188 
6 INTERCONNECTION AND INTERFACES ................................................................. 190 
6.1 The basic principles for interconnection in the Union ............................................. 191 
a) Interoperability ....................................................................................... 192 
b) Interconnection ....................................................................................... 192 
c) Provisions of the ONP Leased Lines Directive ........................................ 193 
d) Provisions of ONP Voice Telephony Directive ........................................ 193 
6.2 The future role of ONP in mobile systems and interfaces ....................................... 194 
a) The fixed/mobile interface ...................................................................... I 94 
b) The mobile/mobile interface .................................................................... I 9 5 
c) The mobile operator/service provider interface ........................................ 196 
6. 3 Access to intelligent network features .................................................................... l 96 
a) Access to the IN functions of the fixed network ....................................... 197 
b) Access to the IN functions of mobile networks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I 9 7 
6.4 The role of standards in interconnection ................................................................ 197 
7. THE LICENCE APPLICATION/ADJUDICATION PROCESS ..................................... 197 
7. l Limiting the number of operators to allocate limited resources ............................... 197 
7.2 Principles for licensing award procedures .............................................................. 198 
7 .3 Choice of licensing procedures .............................................................................. 199 
169 
7.4 Automatic exclusion or inclusion of certain operators from licensing award 
procedures ........................................................................................................... 200 
8. UNION-WIDE OPERATION ......................................................................................... 20 I 
8.1 Union-wide provision of services ........................................................................... 201 
8.2 Mutual recognition of mobile operating licences .................................................... 20 I 
8.3 Mutual Recognition for licences awarded on the basis of first come I first 
serve ..................................................................................................................... 202 
8.4 Open procedures where licence numbers are limited ............................................... 202 
8. 5 Co-ordinated Community licensing ........................................................................ 2 0 3 
8.6 Mutual recognition of type approval .................................. :····················· .............. 203 
9 NUMBERING ........................................................................................ : ....................... 204 
9. 1 Community policy to date ..................................................................................... 2 04 
9 .2 Principles for the allocation of mobile service numbers ........................................... 204 
9.3 Co-ordination of mobile service numbering at a Community level .......................... 205 
9.4 Development of a European numbering space ............................................ : ........... 206 
9.5 Personal and portable numbers .............................................................................. 206 
10 OWN INFRASTRUCTURE AND SHARING OF INFRASTRUCTURE ....................... 206 
10.1 Use of own infrastructure for mobile services ........................................................ 206 
a) Distortion of market structure resulting from current restrictions ............. 206 
b) Community principles concemiHg i:he use of infrastructure ...................... 2 08 
10.2 Access to sites and sharing of sites and infrastructure ............................................ 208 
11 COMBINED OFFERING OF SERVICES VIA FIXED AND WIRELESS 
NETWORKS .................................................................................................................. 209 
11 . 1 The requirements of personal communications ....................................................... 2 09 
11.2 The Telecommunications Review schedule ............................................................ 209 
1 1 . 3 Combined fixed/mobile service provision ............................................................... 2 I 0 
11.4 Allowing mobile operators or independent service providers to resell or switch 
traffic on the fixed network after 1998 ................................................................... 2 I 0 
11.5 Allowing fixed network operators to provide wireless services ............................... 210 
170 
11. 6 Union pnont1es in the area of licensing to prepare for the personal 
conmmnications environment ................................................................................ 211 
12 ACCESS TO THIRD COUNTRIES ............................................................................... 211 
13 SATELLITE-BASED PERSONAL COMMUNICATIONS ............................................ 2 12 
14 PROMOTING THE UNIVERSAL MOBILE TELECOMMUNICATIONS 
SYSTEM (UMTS) ......................................................................................................... 213 
15 CONCLUSIONS ........................................................................................................... 215 
171 
EXTENSION OF THE PRINCIPLES OF EUROPEAN UNION'S 
TELECOMMUNICATIONS POLICY TO THE MOBILE SECTOR 
INTRODUCTION 
On 22 July 1993 the Council of Ministers adopted Resolution 93/C2l3/01 setting out an 
overall timetable for the future development of telecommunications up to the end of the 
decade. 
The Council Resolution also identified "the development of a future Community policy in the 
field of mobile and personal conununications" I as a major goal of Community 
Telecommunications policy in the short tenn. 
In extending the principles of Union telecommunications policy to mobile and personal 
conununications, the provisions of the European Conununity Treaty and the consensus 
achieved around the positions proposed both in the 1987 Green Paper on the development of 
the Common Market for Teleconununications Services· and Equipment2 and the 1992 
Tclcconununications Review3 on which Resolution 93/C2 l 3/0 l was based, form a valid basis 
on which to proceed. 
The Council Resolution established the schedule for full liberalisation for public voice telephony services, 
namely l January 1998, with additional transitional periods of up to 5 years for Spain, Ireland, Greece and 
Portugal and if justified, of up to two years for Luxembourg. See Council Resolution 93/C2 I 3/0 I or 22 .July 1993 
on the review of the situation in the teleconmmnications services sector and the need for further <levdopmen l in 
that market, O.J. C213, 6.8.93 
2 Commission Communication of 30 June 1987, COM(87) 290 final. 
·' Commission Communication of 28 April 1993 on the Consultation on the 1992 Review or the Situation in the 
Telccommu111cat10ns Services Sector, COM(93) 159. 
172 
1 GENERAL PRINCIPLES 
Building on the general consensus achieved on the future development of teleconununications, 
Union policy towards mobile and personal communications can draw on a number of basic 
principles, which have been successfully applied to fixed network teleconmmnications and 
satellite communications. 
1.1 The provisions of the EC Treaty 
These principles have been derived from the prov1s1ons of the EC Treaty ("the 
Treaty"), in particular: 
Article 3(c) requiring the creation of an internal market characterised by the 
abolition, as between Member States, of the obstacles to the free movement of 
goods, persons, services and capital; 
Article 3(g) requiring the institution of a system ensuring that competition in the 
internal market is not distorted; 
Article 3(1) strengthening the competitiveness of Conmmnity industry; 
Article 3(n) encouraging the establishment and development of trans-European 
networks; 
Article 5 under which the Member States are bound to fulfil their obligations 
under the Treaty; 
Articles 30 to 37 concerning the free movement of goods; 
Articles 52 to 66 concerning the freedom to provide services and the freedom of 
establishment; 
Articles 85, 86 and 90 setting out the Community competition rules: 
Articles 110 to 115 concerning the conunon conm1ercial policy; 
Article JOO(a) concerning the adoption of directives for the approximation of 
provisions laid down by law, regulation or administrative action in the Member 
States as directly affect establishment or functioning of tl~e internal market. 
Articles 129b concerning the establishment and development of creation of Trans­
European Networks. 
1.2 Application of the provisions of the Treaty to the telecommunications sector 
The 1987 Green Paper led the European Conununity to establish the basic approach to 
what is now the European Union's teleconmmnications policy through: 
• the liberalisation of the supply and provision of tenninal and network equipment 
• the liberalisation of teleconmmnications services 
• the separation of regulatory and operational functions 
173 
• 
• 
• ensuring open access conditions to networks, as well as interworking · and 
interconnection through Open Network Provision (ONP) 
promotion of European standardisation, through the creation of the Eu ropcan 
Teleconununications Standards Institute (ETSI) 
the full application of the Conununity Competition rules to the undertakings 
concerned 
Beyond the Treaty Articles and the principles of the 1_987 Green Paper, the 
Commission has issued Guidelines on the application of competition rules to the 
teleconununications sector4, as well as subsequent Conununications of the Commission 
and proposals for legislation and draft Commission directives. 
Community policy in the field of satellite communications was set out in a Green Paper 
on a conunon approach in the field of satellite conununications and the subsequent 
Council Resolution of 19 December 19915, as well as subsequent Conmmnications 
and proposals for legislation. 
2 EXCLUSIVE AND SPECIAL RIGHTS 
4 
5 
6 
7 A key element of the consensus over Conununity teleconununications policy has been 
the elimination of monopoly rights over tenninal and network equipment and over the 
prov1s1on of teleconmmnications services, where these are incompatible with the 
Treaty. 
2.1 The treatment of special and exclusive rights in the telecommunications sector 
In relation to the manufacture and supply of teleconununications tenninal equipment, 
exclusive and special rights were required to be abolished as a result of the adoption by 
the Conunission of Directive 88/301/EEC6 ("the Tem1inal Equipment Directive"). The 
scope of application of that directive extended to restrictions on the manufacture, 
supply, importation, connection, bringing into service and maintenance of both 
tenninal and network equipment. No distinction was made between equipment for use 
on the wired network and equipment used in or with a wireless network. 
The provision of mobile tenninal and network equipment has consequently been open 
to com.\}etition siu.ce th.e end ct l 9&&. 
The provision of mobile conmmnications services was expressly excluded from the 
scope of the Conunission's Directive of 28 June 1990 on competition in the market for 
teleconmmnications services, ("the Services Directive")'.Z.. This Directive liberalised all 
OJ C233, 6.9.91. 
Towards Europe-wide systems and services -Green Paper on a common approach in the iidd or satellite 
communications, COM(90) 490 final, 20.11. 90 and Council Resolution 91/C8/0 I of 19 December 1991 011 the 
development of the common market for satellite conununications and services., OJ C8, 14. I. 92 
Commission Directive 301/88 of 16 May 1988 on competition in the markets for telecommunications tenninal 
equipment, OJ Ll31, 27.5.88 
Commission Directive 90/388 of 28 June 1990 on Competition in the Markets for Teleconununications Servicl!s, 
OJ LI 92, 24.7.90. 
174 
teleconununications services other than basic voice telephony services and the 
provision of the physical network infrastructure. This allowed for the competitive 
provision of value added data services and some voice services from the end of l 990 
and data communications services from 1 January 1993. 
The Services Directive effectively identified those exclusive and special rights and the 
regulatory safeguards (particularly, the licensing conditions) which Member States 
could at that time maintain in conformity with Community law and, in particular, the 
competition rules. 
Liberalised services could be subject to licensing conditions, providing such schemes 
were transparent, based on non-economic criteria, and non-discriminatory. Restrictions 
in such licences should be limited to the "essential requirements" i.e. network security 
and integrity, and, in justified cases, interoperability and data protection. In the case of 
data services for the general public, other regulatory safeguards could be imposed in 
the form of public service requirements under the form of trade regulations or in order 
to guarantee that the provision of basic voice telephony for the general public \vmild 
not be undennined. 
The objective of the Services Directive was to clarify the application of the Treaty 
rules to State measures relating to undertakings within the scope of Article 90 in the 
teleconununications sector, in so far as these measures regulate the provision of 
teleconununications services between fixed network termination points of the public 
network. 
The exclusion of mobile communications from the Services Directive does not prevent 
the application of the EC Treaty to the mobile sector. The Treaty's competition rules, 
as well as the rules relating to the free movement of goods and services, can and ha vc 
been applied to the provision of mobile communications services and equi pment8. 
2.2 The application of the Treaty to exclusive and special rights in mobile 
communications 
The full application of the Treaty rules to the mobile sector implies the absence or 
abolition of existing exclusive and special rights in the mobile teleconmmnications 
sector. Moreover, mobile and personal conmmnications must be viewed in the context 
of the overall objectives of the Treaty and the new enviromncnt resulting from the 
agreement on the abolition of the remaining exclusive and special rights over the 
provision of voice telephony services by 1 January 1998. The relevant rules arc, in 
particular, Article 59, 85, 86 and 90. 
a) The rules on the free movement of services 
Article 59 of the Treaty requires the abolition of all restnct10ns on the 
freedom to provide services within the Conununity. The grant of exclusive 
and special rights over the operation of mobile networks and over the 
provision of mobile conmmnications services may prevent the development of 
pan-European mobile operators and service providers, as well as potentially 
preventing the entry of experienced mobile operators and service providers 
from one Member State into other national markets. 
8 l'.'irpoge, Conunission Decision 91/562/EEC, OJ L306/22. 
175 
b) The competition rules 
While subject to the specific situation in each market segment, the existence 
of exclusive rights in the mobile sector may result in a significant limitation 
in the supply of mobile communications services. It may also have the effect 
of slowing down the introduction of new, advanced services and competing 
technologies. In the case of analogue cellular services, for example, 
exclusive rights in certain Member States, have led to very uneven service 
development, with problems arising such as network saturati<;m. Such 
problems have been compounded in those Member States which have also 
sought to maintain exclusive rights in relation to GSM. 
In particular, the cumulative effect of the grant of a series of exclusive or 
special rights to a single operator, without appropriate safeguards, extend 
dominance in one market segment into a neighbouring market segment in 
contravention of Article 86 EC and may mean that the operator has little 
incentive to encourage a shift from one technology to another, in contrast to a 
competitive supplier who might see subscribers to the older technology as a 
key target in its marketing strategies. 
The existence of a single network operator, or of a limited number chosen in 
a discretionary manner or enjoying a particular advantage, in each Member 
State may restrict competition by obliging both end users and service 
providers to obtain both network access and service provision from a single 
or limited source, without there being necessarily any technical justification 
for such a tie. This restriction on customer choice can be aggravated by 
regulatory restrictions on competition at the level of service provision. In the 
case of radio-based communications, the competitive concerns arc 
heightened by the bottleneck created by limited spectrum availability. 
Exclusive rights such as these which result in such restrictive effects arc 
incompatible with the competition rules and in particular Article 90 in 
conjunction with Article 86. 
The use of a discretionary licensing award procedure, (i.e. one not based on 
objective, transparent, non-discriminatory criteria, respecting the principle of 
proportionality), aggravates the restrictive effects of exclusive and special 
rights; slows down technical innovation and prevents all market participants 
enjoying an equal opportunity to access scarce frequency resources. 
c) Possible derogations from the Treaty rules 
Under Article 90(2) the non-application of the Treaty provisions can only be 
justified in cases, where their application to undertakings enjoying special 
and exclusive rights "would obstruct in law or in fact the pe1:form{(nce l~f {/ 
task of general economic interest". As an exception to the general 
philosophy of the Treaty removing barriers to the creation of the internal 
market and promoting a system of fair competition, the scope of this Article 
is interpreted narrowly. 
In the Services Directive, the continuation of the· voice monopoly was 
justified under Article 90(2) because of the universal service mission at that 
time assigned to public operators in all Member States. Specifically, the 
voice telephony monopoly would ensure that operators retained a sufficient 
revenue base for the provision of universal service. 
176 
9 On the other hand, the broad public consultation during 1992 lead to the 
conclusion that the monopoly would no longer be required after the necessary 
period of adaptation. This conclusion was shared by the Council. 
Council Resolution 93/C2 l 3/02 confirms, as a result of the · 1992 Telecoms 
Review that the basic voice monopoly will no longer be justified from 1 
January 1998 onwards (with the exception of additional transitional periods 
of up to 5 years for Spain, Ireland, Greece and Portugal and where justified 2 
years for Luxembourg) even to guarantee the provision of voice telephony for 
the general public via the fixed network. 
Pending full liberalisation as agreed by Council, the scope of the voice 
telephony reservation as an exception to the general rule of competition must 
be narrowly interpreted. The definition of the voice telephony derogation 
does not extend to cover analogue and digital cellular telephony services. 
• The scope of the definition in the Services Directive limits voice9 
telephony to the direct transport and switching of speech over the public 
telecommunications network between two network tennination points. 
Mobile services are provided between one network tennination point and 
a mobile base station rather than another network tennination on the 
public network. Additionally, the use of mobile networks to interconnect 
with leased lines, for example, to deliver traffic within corporate 
networks or closed user groups, would also fall outside the definition of 
voice telephony for the same reason. 
Mobile services do not therefore fall within the definition of "voice 
telephony" in Directive 90/388/EEC. 
Moreover, on the basis of such agreement in Council, the maintenance of 
exclusive or special rights in the mobile sector could not extend after the 
dates agreed in Council in order to protect the reserved voice services . 
• The provision of a universal public voice service and network is unlikely 
to be undermined by further liberalisation in the mobile sector before the 
1 January 1998. 95% of mobile traffic originates or tem1inates on the 
PSTN, thereby providing the fixed network operator with a substantial 
revenue flow. Mobile services as presently supplied are therefore a 
complementary source of revenue for the TOs rather than a means of by­
passing their networks and services. 
• Finally, experience in competitive mobile markets both in the Union and 
outside shows that the rapid growth in mobile services has not 
undermined the provision of universal service. Indeed, mobile services 
can make an important contribution to the achievement of the universal 
service goal, for example, by providing cost effective access in remote 
regions, or by providing access to emergency services when away from a 
fixed network connection. 
There is a need to create an environment favourable to the rapid growth of mobile 
services and the evolution towards a personal communications environment. Exclusiv1: 
Voice telephony is defined in Conunission Directive 90/388/EEC (Services Directive) as the commercial 
. provision for the public of the direct transport and switching of speech in real time between public switched 
network tennination points, enabling any user to use equipment connected to such a network tennination point in 
order to communicate with another tennination point 
177 
and special rights in the mobile sector is creat!_ng a situation which is incompatible 
with the Treaty and in particular the objectives of the internal market and the Treaty 
competition rules. Moreover, these exclusive and special rights do not respond to the 
current need to create an environment favourable to the rapid growth of mobile 
services and the evolution towards a personal communications environment. Action is 
therefore needed to tackle the pattern of exclusive and special rights within the mobile 
sector. While action must take into account the specific characteristics of each market 
segment, the general principles of a Union approach should include : 
• 
• 
• the abolition of exclusive and special rights in the mobile communications sector : 
to the extent that Member States continue to take a teclmology-based approach to 
the licensing of mobile conununications, as a general principle at least two 
operators in the same geographic market for each mobile technology shou Id be 
licensed on the basis of objective, non-discriminatory and transparent licensing 
procedures, which are in accordance with the principle of proportionality : and 
ensuring that market forces play a key role in determining the future numbers of 
market participants at both the operator and service provider level. subject to the 
overall application of the EC Treaty. 
3 LICENSING CONDITIONS APPLICABLE TO THE OPERATION OF MOBILE 
COMMUNICATIONS SYSTEMS 
3.1 Basic Union principles 
Conmmnity law requires the abolition of restrictions on the freedom to pro\'ide of 
services within the European CommunitylO, as well as establishing the general goal set 
out in Article 7A of the Treaty of the creation of the internal market. \Vithm tlh.' 
framework of the Treaty and the caselaw of the Court of Justice. certain restrictions on 
that freedom are nevertheless pennittcd if they fall within the exceptions on non 
economic grounds provided in Article 55 and 56 of the Treaty or if they fulfil essential 
requirements in the general interest and are applied without discrimination and in 
proportion to the objective sought. 
This approach has been carried through into the telecommunications field. ,,·here 
Conmmnity law according to Directive 90/388/EEC and Directive 90/387/EEC of ~O 
June 199011 (the ONP Framework Directive), allows Member States to impose a 
limited number of conditions, which usually take the fonn of licensing conditions for 
the provision of specific services or systems. Such licensing conditions must bl' 
justified" proportionate to the objective sought, transparent and non-discriminator> 
o) General principles 
The requirement of transparency means that licences should be published. 
1 O See Commission interpretive conununication 93/C334/03 concerning the free movement of sen·icL'S •1cruss 
frontiers, OJ C33--l, 9.12.93 
I I Council J)iredive 90/387/EEC of 28 .lunl.! 1990 on thl.! 1.!stablishment ot' tli~ 111t~rn;il 111;1rkct !"111 
tekco111mumc,1t1011s services through the implementation of open network pnn·ision. ( ),! I. J lJ2/ I. 2-1 ..., 'h l 
178 
The requirement of non-discrimination means that the same licence 
conditions should in principle apply to publicly and privately owned mobile 
operators. At the same time differential licensing conditions may be 
appropriate between operators facing different market conditions (for 
example, a significant difference in the date on which each is allowed to enter 
the market). 
Furthermore, the principle of non-dicrimination on grounds of nationality 
established in Articles 7 and 59 of the Treaty, requires that licences must not 
impose restrictions on ownership by nationals of Member States or 
undertakings controlled by nationals of Member States I 2. 
Mobile systems not intended for use by the general public (for example, 
private mobile radio systems used by closed user groups) should not be 
subject to more stringent restrictions than other non public systems using 
fixed network infrastructure. 
b) Justifiable restrictions in national licenses 
The Services Directive, the ONP measures and the two Directives ensuring 
the mutual recognition of type approvals for tenninal equipment 13 have 
identified the limited range of restrictions which may be imposed within 
national authorisations for services or equipment intended for use by the 
general public. These restrictions are limited to those justified by: 
• essential requirements (namely, network security, network integrity, 
prevention of frequency interference, the effective use of the frequency 
spectrum and, in justified cases, interoperability of services and data 
protection, and in the case of terminal equipment, user safety and the safety 
of the employees of the Operator). 
• public service requirements in the form of trade regulations (concerning 
conditions to ensure the availability, pennanence and quality of the service)14 
• the need to safeguard reserved monopoly services. where mointoined in 
accordance with Community Law 
In the absence of harmonised licence conditions at a Conununity level for the 
operation and provision of mobile communications, national licensing 
conditions for mobile systems intended for the general public should also be 
limited to these categories. 
I 2 /\rlicks 4 and 36 of the Treaty establishing the European Economic Area from 1 January l 994 extends those 
principles to prevent restrictions being imposed on ownership by nationals of EEA States or undertakings 
controlled by nationals of EEA States (the EEA includes the Member States and Austria. Finland, Iceland. 
Liechtenstein, Norway and Sweden) 
13 Council Directive 911263/EEC of 29 April 1991 on the approximation of the laws of Member States concerning. 
tdecommunications tenninal equipment including the mutual recognition of their confonnity; OJ L 128/ 1, 
23.5. 91, as modi lied by Council Directive of 29 October 1993 supplementing Directive 91/263/EEC in res1x!ct or 
satellite earth station equipment (93/97/EEC; OJ L290/l, 24.11.93. 
1-1 The Services J)irective, limited the imposition of trade regulations to basic data services, namely the provision l)r 
packet and circuit-switched data services for the public, subject to verification by the Commission or their 
compatibility with Treaty. The provision of such basic services were seen as fonning a particular task entrusted 
b~· the Member States to teleconununications organisations. 
179 
15 Studies carried out for the Commission 15 confinn that the majority of curn:nt 
national mobile licensing conditions are consistent with one or more of these 
three categories. Where this is not the case, such restrictions should be 
removed. 
3.2 Essential requirements 
As discussed in 3 .1 above, restrictions imposed by National Regulatory Authorities in 
the licences of mobile systems intended for the general public must not restrict access 
to public mobile networks or services, except on the basis of the essential requirements 
in the general interest established in Community law. 
Restrictions linked to network security, integrity and interoperability l?f services arc 
likely to apply, in particular, to interconnection with other networks and services. 
The prevention of frequency interference and the effective Ztse l?f)i·eqZtency spec/mm 
are specific concerns for all radio-based conmmnications. 
It is essential that the proliferation of mobile conmmnications, and accompanying base 
stations, antennae and handsets does not lead to unacceptable interference with other 
satellite or radio conmmnications systems, or electromagnetic devices, such as hearing 
aids or vehicle electronics, in accordance with Directive 89/336/EEC 1 Ci concerning 
electromagnetic interference, and in accordance with coordination procedures agreed at 
a European and international level (See section 4 below). Restrictions may go beyond 
the equipment itself and extend to the qualifications and training of those installing and 
maintaining mobile networks and equipment 
Conditions in licences should seek to put both direct and indirect pressure on mobile 
operators to use less congested parts of the spectrum and employ technology or 
network configurations which maximize spectrum efficiency. This could be combined 
with requirements to ensure gradual migration from less efficient to more efficient 
teclmologies as these emerge. 
Dora protection and privacy issues arc of general application. but the radio-based 
nature of mobile conununications raises specific problems of interception of messages 
and the need within mobile networks to constantly track each subscriber's location. 
Mobile services should be subject to the same rules as those proposed for fixed and 
satellite networks and servicesl7_ The issue is considered further at section 5 bclO\\. 
See S11u~v on rhe application of ONP to mobile telephony, mobile da!a networks and pugi11g seJT/c('S. P1\ 
Consulting , December 1992 and Licensing and Declaration procedures for mobile c·m11nw11ico1io11s in.\ fr111her 
S1a1es c~(llie l:'C, KPMG ?eat Marwick Stanbrook and Hooper, August 1993 
1 () Council Directive of 3 May 1989 on the approximation of the laws of the Member States relating to 
electromagnetic compatibility (89/336/EEC, OJ Ll39/19, 23.5.89) and Council Directive or 28 April l lJlJ2 
amending Directive 89/336/EEC on the approximation of the laws of the Member States reluting to 
electromagnetic compatibility (92/31/EEC; OJ Ll26/1l,12.5.92) 
17 Sec, in particular, the forthcoming amended proposal for a Council Directive covering the protection of persmd 
data and privacy in the context of public digital teleconununications and in particular the Integrated Services 
Digital Network (ISDN) and Public Digital Mobile Networks, -to be published. 
180 
3.3 Public service requirements in the form of trade regulations 
The terms upon which mobile services are offered is, primarily a contractual issue 
between operators, service providers and customers. Nevertheless according to the 
Article 3 of the Services Directive in the case of data communications services, certain 
additional licence conditions referred to as public service requirements in the fonn of 
trade regulations, designed to ensure the permanence, availability and quality of a 
service may, subject to verification of compatibility with the Treaty, be imposed on 
the operation of services intended for the general publicl8. The same range of 
conditions should be considered for mobile systems intended for use by the general 
public where the number of licences which can be granted is limited on the basis of the 
essential requirements. 
Such conditions are commonly applied in national licences 19, and relate, inter alia, to 
price levels, minimum service quality, geographi~al coverage, access to ~mergency 
services, provision of facilities for the customers wi~h special needs, billing, and 
conditions ensuring the financial standing and technical cqmpetence of the licensee. 
In contrast, the imposition of conditions in a licence which reflect a Member State's 
economic assessment of the capacity of a specific market or which would limit licences 
to specific operators, cannot normally be justified under Conununity law even if the 
objectiw sought may be legitimate (e.g. pennanence, of service), where other more 
proportionate means of achieving that objective could be used. 
In order to avoid a disproportionate regulatory burden restricting the free provision of 
services or distorting competition in the Union, mobile systems not intended for the 
general public should not be subject to public service requirements in the form of trade 
regulations. 
3.4 Duration 
Variations20 in the length of licences in different Member States for similar services 
can lead to considerable market distortions, both between services and between 
operators thus creating significant barriers, to the development of internal market. The 
presence of an established operator or teclmology can act as a significant barrier to 
new market entry, ·whilst very long licence terms can restrict the dissemination of new 
technologies and services and may foreclose the introduction of systems making more 
efficient use of the frequency spectrum and therefore may contravene the competition 
rules. Moreover, the existing patchwork of licences makes the short-term creation of 
pan-European mobile communications market more difficult. 
1 ~ Commission Uin.:ctive 90/388/EEC (Services Directive) already foresees such conditions t()r the provision or 
packet or cin.:uit switched data services for the general public (Article 3), subject to verification by the 
Commission or their compatibility with the Treaty, 
I 'J Sec KJ>MG Stud\· Chapters 5 and 8 
.:w The Kl1MCT Stmlv identities variations within analogue cellular networks of between 10 to 25 years with many 
\lpcrato! ~; enjoying an indefinite licence period. In one case a private operator was grnnkd ii I 0 )'C<tr licence 
''hilst its public competitor had an indefinite tem1. In GSM licence periods range from 5 years (rcnc\\'ablc) tn 
.2) \cars. Sec chapter 5 
181 
In accordance with the principle of subsidiarity, the duration of licences should remain 
an issue for national rather than Community determination. In general, however. in 
accordance with the Community competition rules and the rules on the free ·movement 
of services, Member States in setting licence terms should take full account of market 
forces and the need to avoid restricting the introduction of new technologies and 
services. 
In order to ensure no unfair restrictions on competition or undue limitation of ne\\' 
technologies and s~rvices, initial licence terms and 'standstills' on further licences 
should be based on the period required to ensure a sufficient start up period and/or a 
conunercial return on the investment made in the service or network concerned. 
3.5 Other conditions imposed on Mobile Operators 
a) Protection of reserved services. 
In relation to fixed network services, the Services Directive envisaged the 
possibility for additional restrictions which might be required to ensure the 
performance of the task of general economic interest assigned to the TO. This 
was specified in the case of data services (which have now been liberalised) 
and implicit in relation to the provision of voice telephony, and in particular. 
the provision and exploitation of a universal service. 
Until voice telephony is fully liberalised in 199821, immmum regulatory 
safeguards may be envisaged to ensure that the public voice monopoly via 
the fixed network is not substantially undern1ined. However, this would not 
normally justify either, as discussed at section 2 above, the maintenance of 
exclusive or special rights in the mobile sector, or the imposition of other 
conditions in the absence of evidence of substantial network by-pass actually 
occurring. The same is true for restrictions on the use of mobile networks to 
provide services which are already open to competition, for example, sen·ices 
to closed user groups or corporate networks. 
b) License fees. 
The levying of excessive fees on operators in the fonn of licence or frequency 
fees can potentially create barriers incompatible with the internal market and 
raise important competition issues, where the practical effect is to deter 
market entry or deny users a fair share of the benefits which lower fees might 
be expected to produce. They can also, if in the form of a percentage of 
profits or of turnover, place considerable burdens on new operators during 
the launch phase of their services. 
One-off and annual fees levied on mobile operators should comply with the 
principles established within ONP of non-discrimination, transparency and 
proportionality. 
In assessing whether fees ·charged are proportional, account must be taken of 
the balance between coverage of administrative costs involved in licence and 
frequency management and the real commercial value of the resource being 
allocated. Fees should not be levied in a discriminatory fashion. 
21 With additional transition periods of up to 5 years for Spain, Ireland, Greece and Portugal and where justiJieu 2 
years for Luxembourg 
0 
182 
c) Changes o_f ownership. 
Provisions restricting changes in the ownership of the licensee must be 
justifiable in tem1s of the needs to ensure continuing compliance with the 
essential requirements or public service requirements in the fom1 of trade 
regulations imposed in licences. 
3.6 Promotion of competitive service provision : obligations on Mobile Operators 
The role of mobile network operators in controlling a bottleneck resource creates a 
difficult problem for Union policy. On the one hand, Union telecommunications policy 
is seeking to promote competition, and, in particular, innovative combined service 
offerings in order to meet market demand and to take the first steps towards a personal 
communication environment. On the other hand, the commercial autonomy of mobile 
system operators should be respected as far as possible, with regard to their basic 
freedom to choose with whom they contract. 
In vie\\' of: 
• the relatively rigid market structure that is likely to exist in the Community market 
because of the length of current licences granted for analogue and digital mobile 
technologies: 
• the limitations which those mobile operating licences currently impose on 
combined offerings· of service~ provided under different licences, thereby 
preventing existing operators from satisfying demand for such combined offerings: 
and 
• the fact that many mobile network operators not only control the bottleneck facility 
on which competing service providers rely, but also provide mobile services 
themselves and are therefore likely to favour their 0\\'11 services ; 
it appears that action is required to promote the development of effective competition 
through third party provision of mobile conununications services. 
Competition policy in the area of selective distribution nonnally precludes any 
limitation on the number of distributors appointed unless justified under the 
competition rules. This means that mobile network operators should, in line with their 
obligation to provide open, transparent and non-discriminatory conditions for 
interconnection (Sec section 6 below) be obliged to accept all reasonable requests b! 
Service Providers to deal, within the limits of nonnal commercial practice and the 
Treaty competition rules (including requests from service providers integrated into 
other mobile network operations). 
In addition to the remedies provided by the competition rules, it should be possible to 
bring any refusal to deal to the attention of the National Regulatory Authorities or 
other competent body. 
3. 7 Conditions applying to Service Providers and the provision of mobile 
communications services 
Jn contrast to the operation of mobile systems, where the use of a scarce physical 
resource -the frequency spectrum -provides the basic justification for licensing and 
183 
other regulatory safeguards being imposed on m?bile network operators, the provision 
of mobile and personal communications services should not be subject to licensing. 
a) Service provision not to be subject to licensing 
Service providers, whether independent or forming part of or integrated into mobile 
network operations, should not be subject to any licensing procedures and may be 
required only to make a declaration or notification of their activities to the National 
Regulatory Authority(ies) of the Member State(s) where they choose to operate. 
In order to promote the maximum level of competition in the provision of mobile 
services, given the relatively rigid current licensing structure for mobile systems. 
restrictions should not be imposed which oblige or prevent service provision via 
independent service providers or via an integrated part of a mobile operator's business. 
Existing restrictions of this type should be abolished. 
Further, subject to the application of the Treaty competition mles, Service Providers 
should not be restricted from offering im1ovative combinations of different mobile 
services, such as voice and paging services, or from providing mobile conununications 
services throughout the European Union. 
b) Ensuring compliance with essential requirements and public service 
requirements in the form of trade regulations 
The imposition of regulatory controls and licence conditions on service prondcrs. 
whether independent or integrated into or fonning part of mobile network operations. 
would be disproportionate to the objectives sought at the level of service provision. 
In practice, compliance with the essential requirements and public service requirements 
in the fom1 of trade regulations will be secured through the obligations placed on the 
mobile operators whose services are being provided. The imposition of additional 
safeguards on service providers would add to their administrative overheads. 
potentially restrict technical and service innovation, and limit competition both '' ithin 
and between different mobile technologies. 
Regulatory safeguards currently imposed on service providers should be replaced b~ 
an agreed voluntary Code of Conduct. This code should, in pa11icular, identit~· 011 the 
basis of voluntary participation by Service Providers, measures and standard busi111:ss 
practices, designed to safeguard the essential requirements. 
It should also embody standards with regard to pem1anence, availability and quality of 
service, as well as guidelines concerning teclmical, financial and commercial practices. 
In relation to commercial practices, the Code should promote commercial beha,·iour 
which is entirely consistent with the Conmmnity competition rules, in particular. to 
avoid market sharing or anti-competitive pricing arrangements bet,veen operators or 
between service providers, and/or resale price maintenance bet\vecn operators ~UH.I 
service providers as well as preventing anti-competitive cross-subsidies bct\\1.'1.'n 
service revenues and mobile terminals. The Code of Conduct ma' inclll(.k 
commitments in relation to the qualifications and training of staff 
The Code should also seek to ensure a high level of consuma protection. in particular 
by encouraging transparency in tenns of pricing of services and customer contracts. 
184 
and where appropriate should provide mechanisms for dispute resolution and 
remedies22. 
Any national declaration procedure for Service Providers may also require them to 
indicate whether they participate in the Code of Conduct. 
4. FREQUENCIES 
4.1 Application of Union policy to radiofrequencies 
The basic principles of Union policy with regard to access to radiofrequencies are 
found in the ONP Framework Directive, and in general principles, such as the 
separation of operational and regulatory act1v1t1es, established by the 
Telecommunications Services Directive and the 1987 Green Paper. 
Article 2( 10) of the ONP Framework Directive provides for ONP conditions relating to 
usage "including access to frequencies where required'1
• To the extent that such 
conditions exist in the Member States, they must be objective, non-discriminatory, 
transparent and proportional to the objective sought. 
4.2 Community initiatives in the field of frequencies 
At the same time, in a series of measures linked to the creation of the internal market 
for telecommunications, the Council has adopted technology-specific measures to 
promote the coordinated introduction of pan-European services. These specific 
measures were related to GSM (Global System for Mobile conununications), DECT 
(Digital European cordless telephone) and ERMES (European Radio Message System) 
paging services23. A coordinated Community response was needed in each case to 
prevent national barriers in the fom1 of frequency allocation or the manner of 
frequency assignment preventing the emergence of such pan-European services, as well 
as ensuring that competition is not distorted by national frequency policy. The 
Conunission, reinforcing action undertaken within the European Conference of Post 
22 The concept of a consumer is defined in Article 2 of Directive 93/13/EEC of 5 April 1993 on Unfair Tenns in 
Consumer Contracts, OJ L95/29, 21.4.93 as "any natural person who is acting for purposes which are outside his 
trade, business or profession". 
, .. 
--1 Sec Council Rcconunendation 87/371/EEC of 25 June 1987 on the coordinated introduction of public pan-
Europcan cellular digital land-based mobile Conununications in the European Conununity OJ Ll 96/81, 17. 7.87; 
Council Directive 87/372/EEC on the frequency bands to be reserved for the coordinated introduction of public 
pan-European cellular digital land-based mobile Communications in the European Conununity OJ L 196/85, 
17.7.87~ Council Recommendation 90/543/EEC of 9 October 1990 on the coordinated introduction of pan­
Furopcan land-based public radio paging in the Community, OJ L310/23, 9.11. 90; Council Directive 90/544 of 9 
October 1993 on the frequency bands designated for the coordinated introduction of pan-European land-based 
public radio paging in the Conummity, OJ L310/28, 9.11.90; Council Resolution of 14 December 1990 on the 
lliwl stage of the coordinated introduction of pan-European land based public digital mobile cellular 
communications in the Conununity (GSM), 90/263/EEC, OJ C263/9, 31.12.90; Council Directive 91/287/EEC of 
7 .lune 1991 on the frequency bands to be designated for the coordinated introduction of digital European 
cordless teleconununications (DECT) into the Conununity, OJ L 144/45, 8.6.91; and Council Recommendation 
91/288/EEC of 3 June 1991 on the coordinated introduction of digital European cordless telecommunications 
(UECT) into the Community, OJ Ll44/47, 8.6.91. 
185 
and Telecommunications Administrations (CEPT)24 has also played a significant role 
in recent initiatives relating to the introduction of Digital Short Range Radio, 
Terrestrial Flight Telephone Systems and Road Transport Telematic Systems 
4.3 Community approach to frequency planning and coordination at a European level 
The basic approach to frequency planning, allocation, and co-ordination has been set 
out in Council Resolution 90/C 166/0225, which requires, inter alia, that the co­
ordination of radiofrequencies must respect the principle of separation of regulatory 
and operational duties, while opinions from service providers, industry, users and 
standards bodies in researching the frequencies best suited to future applications 
should be sought. 
Resolution 90/C 166/2 calls for the promotion of the most efficient use of frequency 
spectrum, taking timely account of service provider and user requirements in the light 
of new standards and technologies. 
Radiofrequency use must take place in accordance with the radioregulations of the 
International Telecommunications Union (ITU). Within this environment, work should 
proceed towards the timely allocation of sufficient frequency . resources for the 
emerging mobile and satellite applications. 
A further objective of efficient frequency planning should be to teclmically maximise 
the number of pot~ntial mobile operators, which implies there may be the teclmical 
potential for more than 2 operators of a given servic~ . 
. Failure to promote mechanisms for the most efficient use of the spectrum or to ensure 
migration to new efficient teclmologies would undermine the competition principles in 
the Treaty. In particular, it would delay the dissemination of new and advanced 
teclmologies, and reinforce the competitive advantage of existing inefficient operators. 
A coo~dinated approach to frequency allocation is also vital to minimise the possibility 
of frequency interference, in particular, in border areas. 
The framework for frequency coordination in Europe has been defined in Council 
Resolution 90/C 166/02, Council Resolution 92/C3 l 8/l, and the Conclusions of the 
Council on 7 December 1993, in rt!sponse to the Commissions Communication on the 
New Approach to Frequency Coordination26. These identify the European 
Radiocommunications Coinritittee,' and its European Radiocommunications Office 
(ERC), as the basic forum for such0
~ordination27. Given the importance attached to 
this forum by the Community, the Commission intends to develop, as soon as the 
appropriate legal framework is in place and in a manner consistent with Treaty 
24 For more detailed consideration of CEPT's role in the frequency field, see Annex B. 
25 Council Resolution 90/166/02 of 28 June 1990 on the strengthening of the Europe-wide cooperation on radio 
frequencies, in particular with regard to services with a pan-European dimension, OJ C 166, 7.7.90 
26 A new approach to the coordination of radiofrequencies in the Community, conununication from the Commission 
concerning the proposal for a Council Decision on the implementation by the Member States of measures 
concerning Radiofrequencies, COM(93) 382,10.9.93. 
27 For more detailed consideration of the ERC and ERO, see Annex B. 
186 
28 obligations, a relationship with these two bodies similar to that which it has developed 
with the European Telecommunications Standardisation Institute28. 
This will advance priority work areas in the frequency field and ensure that Union 
interests are safeguarded. Once again, a key concern will be to ensure efficient, 
transparent procedures at a Community level which prevent the creation of barriers to 
the internal market. This will involve monitoring not only of the decisions taken by 
these bodies, but also the speed and extent to which ERC Decisions arc actually 
implemented by the Member States. 
4.4 Priorities in the field of frequency co-ordination 
A number of immediate priorities for radiofrequency co-ordination for mobile 
conununications in Europe result from the requirement to implement in the Union 
decisions taken at the World Administrative Radio Conference -W ARC 92. These 
reflect the general worldwide trend discussed in Annexes A, B and C towards personal 
conununications services. 
As regards radiofrequencies for systems intended for the general public, short term 
priorities should include the establishment of decisions, and their practical 
implementation by the Member States, designating European and Community 
frequencies within the bands agreed at WARC for future use by terrestrial mobile 
communications and satellite-based communications systems. 
In particular, this should include a firm commitment to conunon bands for DCS-l 800 
services, for future Universal Mobile Teleconmrnnications Services (UMTS), and for 
frequency bands for satellite-based personal conununications systems (including Low 
Earth Orbiting (LEO) Systems). 
Sec, A 11ew approach to the coordination of radiofrequencies in the Community, Communication from the 
Commission, COM(93)382, 10.9.93. The main elements of the new approach envisaged by the C01.1111issio11 in 
the Communication of 10 September 1993 are as follows: 
• As a first step, a decision as to whether Community action is required in particular areas or radio-
frequencies will be decided according to defined criteria; 
• The Council based on a Commission proposal, will adopt an annual work progranune relating to 
work in the frequency field, including Work Requirements to the ERO to carry out the necessary technical work 
aiming at identifying appropriate frequency ranges. 
• If binding measures are needed, Conununity legislation would not be proposed in a given area if 
the measures proposed by these teclmical bodies are in confonnity with Conununity interests; all Member States 
implement the measures within a reasonable time scale and all measures arc transposed into national law as 
follows: 
* 
* 
* all measures are implemented in confonnity with the requirements set out for the appropriate transposition 
or Community Directives in national law, 
Member States transmit to the Commission within a reasonable period, the text of the laws, regulations and 
administrative provisions necessary to comply with each ERC Decision, 
the Conunission will publish in the Official Journal references to the implementing texts, in on.lcr to achie\"c 
adequate transparency. 
if any or the above conditions are not met, the Conunission will propose 3 Conummity instrument for adoption. 
187 
Decisions should also firmly identify standards to be used, either ex1stmg or m 
development, as well as firm schedules for the progressive availability of the 
frequencies concerned leading to full implementation by the Member States. 
As regards systems intended for own use or for the use of closed user groups (private 
mobile radio and mobile data services), an immediate priority should be a decision 
designating frequency bands, (including a time schedule for their availability), for 
systems using the European digital trunking standard (TETRA). This will be of 
particular importance, in the context of the increasing co-operation between police 
forces and between public authorities within the framework of the Treaty on European 
Union and the Schengen Agreement29. 
4.5 Community approach to frequency planning and coordination at an international 
level 
Council Resolution 90/C 166/02 also calls for developing conunon European positions 
in relation to the use and harn1onisation of the frequency spectrum at an international 
level. While NRAs take individual national decisions· on the assigm11ent of frequencies 
and reach certain collective decisions within the forum of the CEPT, the scope of such 
decisions is limited by agreements at the international level within the ITU, in 
particular those taken at W ARC 92. Those agreements have the force of a treaty. It 
should be recalled that, Member States are required to ensure that international 
conunitments, entered into after the date of entry into force of the EC Treaty arc 
applied in a mam1er consistent with Community law and policy. It is therefore usual 
practice that the Member States enter into the minutes of such conferences that they 
will apply the results of the conference in accordance with Conununity lavv. 
A conunon European position was followed at W ARC 92, where important decisions 
were taken concerning mobile and other, more specific allocations at both lower and 
higher frequencies. These changes, will in time, pennit wider use of the band l -3 GHz 
for mobile services, both terrestrial and satellite based30. 
The Commission intends to follow such an approach at future WRCs. so that the 
global Conununity priorities are integrated into worldwide planning as a means of 
boosting the competitive position of industry in the European Union. Community 
priorities in relation to regional frequency coordination should be reflected in. the 
Conmmnity's approach to WRC '95 and WRC '97. 
5. DAT A PROTECTION AND PROTECTION OF PRIVACY 
In the absence of a co-ordinated Conmmnity approach towards both data protection 
and data privacy issues, ten Member States have adopted their own laws placing 
restrictions on teleconununications services and data processing designed to ensure 
adequate data protection. The level of protection varies considerably from Member 
State to Member State creating significant distortions for the internal market. Most of 
these laws target general data protection and privacy issues, rather than being 
29 Other areas to he addressed should include wireless Local Area Networks and Wireless Local Loop and 
comnnmications for use in transport systems, for example, systems allowing conummications whilst travelling b~· 
train. 
30 1:or more detailed considerations of the results ofWARC 92, see Annex C, section 9. 
188 
specifically targeted at either the fixed or mobile networks or the most modem digital 
technologies. 
Concerns about such barriers and the issue of data protection in general were raised in 
the 1987 Green Paper, where data protection and privacy was identified as a major 
sectoral goal. In 1990 the Commission tabled a package of proposals (including t\vo 
draft directives) concerning personal data and information security, as a central 
element in the Single Market programme3 I. 
The general data protection Directive establishes principles which will apply 
horizontally to all aspects of data protection within the internal market. A specific 
telecommunications data protection Directive, adapts these as far as is necessary to the 
data protection and privacy issues inherent in digital telecommunications teclmology. 
When adopted, this specific telecommunications Directive will: 
• Limit the period of storage of sensitive billing data which would allow a subscriber 
to be identified; 
• Require per line or per call elimination at the caller's request of Calling Line 
Identification ; 
• Limit call forwarding to a third party number only with the consent of the third 
party; and 
• Provide a right not to receive unsolicited calls 
Further development of this framework may be needed to address the issues raised by 
mobile communications. Whilst the move from analogue to digital technologies will in 
general substantially reduce the possibilities for unauthorised interception of mobile 
communications through the use of highly sophisticated encryption teclmiques, it also 
adds urgency to the need for a clear framework for effective data security, storage, 
processing and privacy. This will require a precise monitoring of the effective 
operation of the General Data Protection Directive and the specific 
Telecommunications Directive. This framework should develop, in particular. in 
relation to: 
• 
• The protection of personal details concerning subscribers (for example, there is a 
need to ensure use by service providers is restricted to registration and billing 
purposes only; the need to ensure that d~ta relating to credit-worthiness and billing 
information is not communicated to third parties l 
Security of the call 
31 Amended proposal for a Cm.~ncil Directive on the protection of individuals with regard to the processing or 
personal data and on the free movement of such data, COM (92) 422, 15.12.92 ("the general data protection 
directive") and the forthcoming Modified proposal for a Council Directive concerning the protection of personal 
data and privacy in the context of public digital telecommunications network, in particular the Integrated 
Services Digital Network and digital mobile networks (not yet published) 
189 
• The confidentiality of the subscriber's movements (Need to ensure that a caller or 
third party is not aware of called party's location32; need to limit disclosure of 
called party's location to roaming partners and I or service providers strictly for 
billing purposes only). 
At the same time, access to and storage of operationaJ and call data processed in the 
context of mobile telecommunications networks, is a vital component of effective 
service provision. Access must therefore be subject to ,the Conmrnnity competition 
rules, within the limits of data privacy established above. 
With regard to the future approach towards personal communications, consideration 
should be given to appropriate solutions, providing, for example, the necessary degree 
of flexibility in relation to caller identification for the different market pa1ticipants and 
different services, This should take into account of experience in other areas, in 
particular, in i·elation to caller identification in digital fixed networks and experience in 
relation to videotex services. 
Security of information systems has been addressed 'in a more general context in the 
framework of the European Communities action plan on this issue, established by 
Council Decision 92/242/EEC33. With regard to mobile and personal communication 
systems, major issues are raised by authentication, prevention of fraud, protection of 
network management, databases and service providers34. 
6 INTERCONNECTION AND INTERFACES 
Assuring adequate interconnection of networks and services, and the related conm1ercial and 
technical interfaces, has been a fundamental concern of Conm1Unity regulatory and 
competition policy. 
From the review of the environment for the future development of the mobile sector in Annex 
B, two sets of interfaces emerge as vital for the future development of mobile systems: 
• 
• the interface between the fixed network and the mobile network, and between 
mobile networks 
the interfaces between the mobile operator and the service provider . 
With the exception of the interface provided from the TO to Mobile Opcrators35, these 
interfaces are not subject to specific regulations within the Community framework. 
Regulatory principles for these interfaces are necessary because : 
• both interfaces are potential bottle-necks : for a mobile operator, the limited number of 
infrastructure providers/fixed network operators represents a bottle-neck. particularly. if 
:n Within GSM, tariff principles have been agreed to bill the called subscriber for additional charges incum.xl when 
his or her tenninal is roaming or where a call forwarding facility is being used, precisely in order to prevent a 
caller knowing that the person is at a different location or roaming outside his or her subscription tenitory. 
:n Council Decision of 31 March 1992 in the field of security infommtion systems (92/242/EEC~O.I Ll23/19,8.5.92) 
J4 Sec also the forthcoming Green Paper on the Security of Infonnation Systems. 
:;5 Proposal for a Council Directive on the application of Open Network Provision (ONP) to Voice Telephon~.-. 
190 
there is an obligation only to connect to other mobile systems, within a Member State or 
on a trans-border basis, through the existing fixed networks; and for a service provider, 
the limited number of mobile operators represents a bottle-neck. 
• the issue of vertical integration arises : allowing the same organisation to operate fixed 
and mobile networks and to provide services raises competition issues, which also require 
regulatory safeguards to be put in place. 
In addition, the fixed public network constitutes not only a physical bottleneck for other 
mobile systems and services, but also a technological one. The varying progress made 
throughout the European Union in the introduction of advanced signalling systems and the 
delays experienced has the potential to severely hamper inter-system roaming for GSM and 
other mobile technologies. For this reason, regulatory restrictions on direct interconnection 
between mobile operators in different Member States, and the provision of own or third party 
infrastructure must be addressed. {The issue of infrastructure provision is returned to in 
section 9 below). 
Access to intelligent network functions, both within mobile and fixed networks intended for 
use by the general public, will also be a key feature in the evolution towards a personal 
communications environment. 
At the same time, these concerns must be balanced with the need to reduce regulatory 
safeguards to a minimum in an increasingly competitive market. Therefore, subject to the 
application of the general ONP principles discussed below, the tern1s and conditions on which 
interco1mection is granted should be a matter for conunercial and teclmical agreement between 
the parties concerned 
6.1 The basic principles for interconnection in the Union 
The basic principles for the interconnection of mobile conununications networks with 
the public fixed network should be in accordance with the competition rules and with 
the principles set in the ONP Framework Directive and the proposal for a Council 
Directive on the application of Open Network Provision to Voice Telcphony36 (the 
Voice Telephony Directive) and Council Directive 92/44/EEC37 (the Leased Lines 
Directive)38. 
These measures require that interc01mection conditions between the fixed and mobile 
networks and between mobile networks and service providers must be based on 
36 Proposal for a Council Directive on the application of Open Network Provision (ONP) to Voice Tdcphony, 
COM(92)247, 17.8.92. Conunon position adopted 1July1993 
37 Council Directive 92/44/EEC of 5 June 1992 on the application of Open Network Provision to Leased Lines, OJ 
Ll65/27, 9.6.92 
38 The application of the ONP Framework in strictly legal tenns is currently still linked i.n general to nd\\ork 
operators enjoying exclusive or special rights. In the context of the implementation of Council Resolution 
93/C213/0l of 22 July 1993 on the review of the situation in the teleconununication sector and the Council 
Resolution of 7 December 1993 on Universal Service, the Conunission has declared at the Council or 7 
December 1993 that within the review of the Open Network Provision Framework foreseen \\'ithin the regulator>· 
adjustments required by these resolutions by 1 January 1996, it is likely that the application of Open Net\\ ork 
Provision will be based on market position and no longer on exclusive and special rights. 
The discussion of ONP Principles in the sector should be read with this Declaration in mind. 
191 
objective criteria, be transparent and non-discriminatory, and be compatible with the 
principle of proportionality39. They must also respect the essential requirements. 
Interconnection and other related charges must be cost-orientated, fully justified and 
approved by the National Regulatory Authority (NRA). 
The principle of transparency requires that NRAs have full access to interco1mection 
agreements and that such information be made available to the Commission on request. 
These ONP measures address four key areas for the development of mobile 
communications networks and services, namely: 
• interoperability 
• interconnection 
• access to leased lines, and 
• access to voice telephony services (i.e. the fixed public network). 
a) Interoperability 
Interoperability in this context is equivalent to the term 'interworking' and 
refers to the end-to-end interaction between similar systems. At a 
Community level, it has been agreed that end-to:..end interoperability of 
terminal equipment is a requirement for the public voice telephony service, 
and appropriate provisions are included in the relevant Conunon Technical 
Regulations drawn up in accordance with Directive 9 l/263/EEC40. In the 
tenns of this Directive, Voice telephony is known as a 'justified case'. 
The implications of voice telephony being a justified case are that, in a multi­
network environment when calls may be routed over several linked public 
networks, steps should be taken to ensure that the end-to-end quality of the 
call is not unduly impaired. This implies 'rules' (which may be voluntary or 
mandatory) governing both the quality of individual networks and the routing 
of individual calls. 
Up to now, ITU recommendations have proved adequate to secure end-to-end 
quality for international calls. However, the traditional architecture of the 
international telephone network is challenged by the introduction of mobile 
systems, and new 'rules' must be formulated. 
In a strongly competitive market, this type of voluntary recommendations 
established in an international context may prove inadequate, so that 
additional action may be required in order to ensure the quality of services. 
b) Interconnection 
Principles for interconnection are contained within the various Directives and 
recommendations drawn up within ONP. ONP was developed among other 
reasons, to ensure competitive equality when services were liberalised. 
l'J When.: an operator has both a fixed and a mobile network there needs to be adequate separation. in particubr 
concerning their accounting practices. 
40 Directive 91/263/EEC of 29 April 1991 on 'The approximation of the laws of the Mcmher States 1.:om:crning 
telecommunications tenninal equipment, including the mutual recognition of their confonnity', 0.1 L 128. 23 ) (J l 
192 
Community regulatory policy places no line-of-business restnctions 
preventing fixed network operators from offering competitive services over 
their ov..11 networks, but does require that there is fair competition for all 
competitive service providers at the interface to the fixed network. 
The interconnection of mobile communications must be consistent with 
certain basic principles of transparency, non discrimination and equality of 
access to the fixed network. ONP conditions concern technical interfaces, 
tariffs,, and .supply and usage conditions. 
c) Provisions of the ONP Leased Lines Directive 
Whilst the ONP Leased Lines Directive does not single out mobile services 
specifically, it provides important foundations which benefit mobile services 
of all types to the extent that they rely on leased line capacity41 
An important safeguard is the requirement that: 
"national regulatory authorities shall ensure that 
telecommunications organisations adhere to the principle of non­
discrimination when they make use of the public 
telecommunications network for providing services which are or 
may be provided by other service providers. When 
telecommunications organisatior.s use leased lines for the 
provision of services not covered by special and/or exclusive 
rights, the same type of leased line must be provided to other 
users on request and under equal conditions. "(Article 8(2)) 
In the mobile environn1ent, this means that where a fixed network operator 
also offers a mobile service, the leased line facilities made available to its 
integrated mobile business must be provided on equal conditions to t!1e leased 
lines offered to other third party mobile service providers. Tile important 
elements of cost, delivery time and types of teclmical interface arc all 
included in this requirement. 
The Directive alsc sets up a new type of conciliation procedure, so that users 
complaining of actual or potential injury cau~ed by an infringement of the 
provisions of this Directive, particularly regarding intra-Conmmnity leased 
lines, have the right of appeal to their national regulat0ry authority and also 
to the Commission. 
d) Provisions of ONP Voice Telephony Directive 
The Common Position of ONP Voice Telephony Directive, which is expected 
to come into force in early 1995, places obligations on the operators of fixed 
41 Council Directive 92/44/EEC requires, inter alia: 
abolition of technical restrictions on the intercom1ection of leased lines with each other or with the public 
switched network 
publication or infonnation about leased line offerings 
tariffs which are cost-oriented and independent of the type of application for which the lines will be used. 
hannoniscd provision throughout the Community of a minimum set of leased lines, including c.maloguc lines, 
digital 64 kbit/s and 2Mbit/s lines 
193 
42 networks to provide access to mobile network operators42. The Directive 
makes no distinction between interconiiecting circuits used for the exchange 
of traffic and interconnecting circuits used for the exchange of signalling 
information; both are covered by the provisions. 
6.2 The future role of ONP in mobile systems and interfaces 
a) The fixed/mobile interface 
The Common Position on the Voice Telephony Directive sets out a 
framework for interconnection of mobile and fixed networks. 
The essence of this framework is that interconnection is a matter of 
commercial agreement between operators, in accordance with Community 
law, subject to general supervision by the NRA (which may involve setting a 
priori requirements). The NRA also has a role in dispt.Je resolution. 
The Conunon Position by Cow1cil of 1.7.1993 provides that: 
• Fixed network operators must accept all reasonable requests for interc01mection from mobile network 
operators in the same Member State. 
• Member States may decide that certain mobile network operators have the right to request interconnection 
with fixed networks in other Member States. Names to be notified to the Conunission for publication in the 
Official Journal. 
• Notified Mobile network operators may request interconnection to the fixed networks in other Member 
States, but in this case there is, currently, no obligation to meet such reasonable requests. 
• Fixed network operators, however, cannot refuse a request for interc01mection from a mobik 111.:t\\'ork 
operator in either the same or another Member State, without prior agreement of his national regulator: 
authority. 
• Right of the NRA to intervene to set conditions, which ensure that interc01mection conditions arc non­
discriminatory, fair and reasonable; offer the greatest benefit to all users; provide for dispute resolution~ and <ilso 
set conditions c0ncerning standards, essential requirements and/or quality. 
• Non discrimination: TOs must not discriminate when they make use of the fixed network for providing other 
services which are or may be supplied by other services providers. 
According to the Common Position, Member States currently decide which fixed network operntors in their 
territory are subject to the Directive, and notify the nan1es to the Conunission for publication in the Onicial 
Journal. 
Mobile-to-mobile interc01mection is currently not included in this framework. 
According to Cow1cil Resolution (94/C 48/01) of 7th February 1994 on universal service principks in the 
teleconununications sector, the Commission should investigate "where under universal service obligatilllls a 
basic voice telephony service can only be provided at a loss or provided under cost conditions falling outside 
nonnal conunercial standards" and "draw up common access charge principles, in close consultation with the 
high-level conm1ittee of the national regulatory authorities". 
The conunon position on the Voice Telephony Directive states that "if interco1mection agreements include 
specific compensation provisions for the telecommw1ications organisation in situations where differ1.:nt operating 
conditions, e.g. price controls or w1iversal service obligations, are imposed upon tht! respective partil.!s, such 
compensation provisions shall be cost oriented, non-discriminatory and fully justified, und shall only bl! applil!u 
with the approval of the national regulatory authority acting in accordance with Conununity law". 
194 
Three enhancements to this framework need to be considered in order to meet 
the needs identified for mobile communications: 
• 
• 
• To ensure fair competition, the scope of application of ONP 
principles as laid down in the Framework Directive, and the 
specific provisions of the Voice Telephony Directive dealing 
with interconnection and tariffs must be reviewed. · 
To stimulate Union-wide mobile networks and services, Member 
States should remove regulatory barriers to the interco1mcction 
of mobile services across frontiers 
To encourage roaming, the rights of access by mobile network 
operators to the signalling systems of the fixed network should 
be clarified. 
b) The mobile/mobile interface 
Mobile -mobile interconnection is outside the scope of the proposed Voice 
Telephony Directive, and is currently only subject to national licensing 
arrangements. 
Once exclusive and special rights for the provision of mobile networks arc 
removed, it seems inappropriate to impose comprehensive ONP conditions on 
the interconnection between mobile operators. Only the general provision 
and principles of the ONP Framework Directive (Directive 90/387/EEC) 
should apply. At this stage, it is not considered necessary to establish further 
specific Directives at Community level, concerning these interfaces and 
related interconnection conditions, provided these are subject to strict 
supervision by National Regulatory Authorities to ensure full application of 
those principles and the establislunent of suitable dispute resolution and 
control procedures. 
Mobile network operators should have the right to directly connect with other 
mobile operators both within Member States and between Member States for 
the provision of all services within the scope of their operating licenses. 
Bilateral negotiations on commercial and teclmical issues are the most 
appropriate mechanism for dealing with mobile-mobile interconnection, 
subject to NRA oversight in the event that agreement ca1mot be reached. The 
NRA should have a power to intervene to set conditions in accordance with 
the principles indicated above. 
In the case of mobile systems, such as P AMR and mobile data networks. 
licensed only for own use or use by closed user groups, (Private Mobile 
Radio), there should be no restrictions on interconnection with the public 
fixed network, other than those pem1itted by Community law namely. 
restrictions based on the essential requirements: network security, integrity 
and interoperability of services, the prevention of frequency interference and 
the effective use of frequency spectrum, and data protection and privacy. 
The general principles of ONP outlined above with regard to access to the 
fixed public network should apply. 
The activities which may be carried on via such interco1mcctions must be all 
those pennitted under the licence authorising that private network. ln 
principle, any conditions applied should not be more onerous than those 
applying to other closed user groups operating over the public fixed network. 
195 
c) The mobile operator/service provider interface 
The ONP principles of non-discrimination, transparency and equality of 
access should apply to the Mobile Operator -Service Provider interface. The 
relationship will also be subject to the application of the Community 
competition rules. 
One difference to the mobile-fixed interface is, however, that this is in most 
cases essentially an administrative/management interface rather than a 
technical one. While the principles of the ONP framework should apply. 
application of more detailed ONP requirements will not normally be 
necessary. 
There should be no requirement for structural separation, beyond any 
requirement for arms length dealing applied as a normal compct1t1011 
principle, between the functions of mobile network operation and service 
prov1s1on. However, the application of ONP principles would imply the 
following when a mobile network operator also offers services directly and 
therefore also act as a service provider: 
• 
• 
• 
• 
• clear accounting rules for cost allocation bet\veen nct\\ork 
operation and service provision 
equality of access to the mobile network for all service prO\ iders 
non-discrimination in interconnection conditions for all sen·icc 
providers 
transparency of interco1mection requirements 
minimum set of mobile network operator offerings to facilitate 
pan-European service provision 
The NRA should have the pmver to enforce these principles \\·here rcquir1.:d. 
6.3 Access to intelligent network features 
Annex A highlights the trend towards personal mobility, personal communications 
systems and the convergence towards combined offerings of services provided via a 
mobile network and those provided over fixed networks. 
The necessary condition for achieving such mobility is access to the intelligent nct\vork 
(IN) functionality (interfaces I software codes I signalling systems ) already located in 
mobile networks and, increasingly being implemented in the fixed network. 
In principle, access arrangements to these functionalities should be subject to 
conm1crcial and technical agreement between the mobile and fixed nct\rnrk operators. 
subject to the application of the general principles of the ONP framework and Treat~ 
competition rules. 
In particular cases, where mobile and fixed networks are owned and opernted by the 
same organisation, the application of the ONP principles of non-discrimination and 
equality of access needs to be safeguarded particularly to prevent discrimination 
against other network operators. 
196 
· a) Access to the IN fanctions of the fixed network 
When a mobile network operator owned in full or in part by a fixed network 
operator with a dominant position in the supply of voice telephony services is 
given access to the IN functions of the fixed network, the same types of 
access should be given to all other mobile operators. 
b) Access to the IN fanctions of mobile networks 
Fixed network operators should also have rights to negotiate access to the IN 
functions of a mobile operator. Since the proposed Voice Telephony 
Directive does not impose obligations on mobile operators, the basic 
principles of the ONP Framework such as transparency, non discrimination 
and the justification of refusals to supply lines should apply. 
6.4 The role of standards in interconnection 
A major objective of the Community has been the promotion of European standards, in 
order to ensure interconnection. 
At the same time the principle of proportionality requires that voluntary application of 
standards should be given preference and that recourse to mandatory as opposed to 
voluntary standards should be strictly limited to those interfaces and situations, where 
mandatory standards are absolutely necessary to ensure interoperability. 
These concerns have been reflected in the approach followed in the ONP framework 
with regard to encouraging the standardisation process, whilst at the same time 
restricting to a minimum the transformation of European standards into mandatory 
standards. 
In order to facilitate interconnection of mobile networks and services, the establishment 
of teclmical standards concerning the interfaces discussed above should be promoted 
and resulting standards published, where required, in accordance with the provisions of 
Article 5(1) of the ONP Framework Directive. 
In accordance with Article 5( 1) of the ONP Framework Directive, the principle of the 
voluntary application of standards should apply. Only in cases where it is strictly 
necessary to ensure basic interoperability and freedom of choice for users and subject 
to the principle of proportionality, should references to standards be made binding 
under the provision of Article 5(3) of the ONP Framework Directive. 
7. THE LICENCE APPLICATION/ADJUDICATION PROCESS 
7 .1 Limiting the number of operators to allocate limited resources 
Whilst efficient frequency planning will maximise the number of potential operators, 
the teclmical limitations which the frequency spectrum imposes on the number of 
mobile networks means that in most cases Member States currently have to set up 
procedures in order to determine to whom frequency spectrum will be allocated. This 
involves a choice both of individual operators for a particular service, but also a more 
general choice between technologies as to how much spectrum each teclmolog~r should 
be allocated. 
197 
Whilst it is accepted that frequency considerations will continue to limit competition 
between mobile networks, the removal of exclusive and special rights in the mobile 
sector requires the application of existing Union principles to the· licensing award 
procedures. This will overcome the barriers to gi:eater competition and to the 
development of the internal market which result from current discretionary and 
nationally-focused award procedures for licences and frequencies. 
Licence awards must respect the competition rules and must be based on open, non­
discriminatory, and transparent procedures. Where this is not the case, or where there 
are arbitrary restrictions on the range of undertakings from whom applications can be 
received, the award procedure can have a detrimental impact on the market structure in 
that Member State and in the European Union. 
In particular, the automatic grant of licences to certain public operators or restrictions 
on licence applications from operators active in other telecommunications sectors or in 
other Member States may distort competition. 
Unless such restrictions are justified, for example, in order to prevent the extension of 
market do~nance on one market to a neighbouring market or service, inappropriate 
restrictions should not be applied. Such restrictions on the range of applicants can 
reduce efficiency and limit consumer benefits, which would nom1ally be derived from 
the resulting economies of scope and scale, as well as commercial experience in other 
markets. 
Where the· number of operators is limited by a Member State, this limit is a potential 
restriction on the freedom to provide services and must be justified under European 
law. In particular, any limitation on numbers must nom1ally be justified on the basis 
of either the essential requirements, such as the efficient use of frequency spectrum, 
and/or public service requirements in the form of trade regulations, and must be 
consistent with the Community competition rules. 
Any limitation should respect the principle of proportionality, by imposing the solution 
which is least limiting and must give priority to competitive provision. 
7 .2 Principles for licensing award procedures 
Licensing procedures must respect the principle of the separation of regulatory and 
operational functions established in Union telecommunications policy. 
In order to guarantee that licensing procedures are open, non-discriminatory and 
transparent43, Member States should ensure that : 
• all applicants are subject to the same assessment procedures, unless there 1s an 
objective reason for differentiation; 
43 The Studies carried out for the Conunission indicated that current licence award procedures were in a number or 
cases a major barrier to the development of mobile conununications. A particular concern was the tendency in 
specific market segments towards automatic licensing of the Teleconununications Organisation and separate 
tender procedures for other licences, which has the effect of strengthening the dominance of the TO in a manner 
which could be inconsistent with Article 86. See KPMG, Chapter 5.2 where the lack of ope1mess in award 
procedures, uncertain adjudicating methods, no time limits and few rights of appeal were identified as key 
industry concerns. 
198 
• all assessment criteria are known to the applicants in advance~ 
• reasonable time limits are set and applied for each mvard procedure ~ and 
• effective and rapid appeal procedures arc established for unsuccessful applicants . 
Furthem10re, the criteria used in any award procedure must also be consistent with 
Conmmnity law, and, in particular, should ensure compliance with the essential 
requirements and public service requirements in the fom1 of trade regulations. Without 
such a framework, it will be difficult to verify that licences were not being granted on 
the basis of non-objective criteria, effectively leading to the continuation of special 
rights. 
It should be recalled that according to EC case law and to both the Services Directive 
and the ONP Framework Directive, the essential requirements are non-economic 
reasons in the general interest which may cause a Member State to restrict access to 
networks and services. Public service requirements in the form of trade regulations 
should be limited to pem1anence, availability and quality of the service. 
In both cases, these limitations must be objective, non-discriminatory and transparent. 
Licence numbers may not therefore be restricted on the basis of a subjective economic 
assessment of the awarding body of the number of operators a specific market can 
hold. 
Whilst such assessments may be relevant to considering the technical or financial 
capability of applicants to provide a service of sufficient quality over the licence 
period, a general economic assessment can only be accepted if consistent with any 
public service requirements in the fonn of trade regulations which might be imposed in 
the licences granted. 
In generaL market forces, rather than regulatory authorities at a national or 
Community level, should decide future market structures, subject always to the 
application of the Community competition rules and the overall safeguards found in the 
TreatY. 
7 .3 Choice of licensing procedures 
What ever method of allocation used -first come I first served, comparative bidding, 
auctioning or lottery, or any other method which may emerge, -it must be chosen and 
implemented in a way that ensures that the final selection offers the maximum 
guarantees for full respect of the essential requirements and the achievement of the 
goals laid down in any public service req_uirements in the form of trade regulations. In 
particular, the method chosen should ensure that users enjoy a fair share of any 
benefits. especially in terms of lower pricing levels. 
Within the framework set out above, Member States shall remam generally free to 
decide what specific award procedures they wish to adopt44. 
-l·l Thl~ stud1,~s c<.uTicd out for the Commission show considerable divergence in the approach to mobile licensing in 
tlic Co111111unity and throughout the world. Approaches include the use of 'tirst-come, rirst-Sl'J"\\:d' (used ti.n 
t111qi11lrn\·ers1al and snwll scale licensing., e.g. private mobile radio), comparative bidding ("beaut\ pm<.1des. 
\\ llkh used throughout the Community"), auctions (used outside the Community and for USM in ()reecc) :i11LI. 
199 
The allocation of licences on the basis of 'jirst-c,,ome, first-served" effectively removes 
all discretion from the Member State, beyond ensuring compliance with certain 
minimum technical and financial criteria. Such an approach is consistent with the 
open market philosophy of the internal market, but is perceived as being mainly suited 
to use with systems having smaller scale, such as PMR. 
Comparative bidding or 'the beauty parade' is the most conm1only used method for the 
allocation of mobile conmmnications licences in the Union. At its best it meets many 
goals of Union policy by allowing Member States to select those potential operators 
who can most success.fully meet the objective of the essential requirements such as 
efficient frequency use, and any public service requirements in the form of trade 
regulations such as quality of service and availability, meet consumer needs. and 
provide an affordable service to customers. 
Auctioning licences and the accompanying frequency spectrum arguably allo\vs the 
market to choose which services and technologies obtain valuable and scarce frequency 
resources. It also acts as an incentive to use spectrum as efficiently as possible in 
order to maximise the return on the investment \Vhich the up front auction kc 
represents. Finally, auctioning removes Member State discretion and often meets 
national policy objectives in tenns of maximizing revenues. 
However, the studies carried out for the Conm1ission and other conunents express 
considerable doubt concerning reliance on auctions. It is argued that auctions can lead 
to excessive transfers to the public budget or for other purposes to the detriment of 
10\ver tariffs for the user, and that they may favour publicly O\v11ed operators \vho may 
benefit from cheaper credit, and may be subject to less stringent rate of return le\ eb 
than privately-0\vned competitors. 
Furthennore, competitive safeguards may be needed, in order to ensure that the highest 
bidder is genuinely conunitted to the provision of mobile communications. 
The Conunission does not at this stage take a view on the merits of one of tlh.'SL' 
systems over another, but submits the issue to consultation. However. in the case of 
lotteries, -a method which has not been widely used in the Union -the Commission 
does not believe they can offer effective guarantees as to efficient spectrum use. 
teclmical competence and financial standing of the successful party. 
7.4 Automatic exclusion or inclusion of certain operators from licensing award 
procedures 
The fundamental objective of the internal market. as \\ell as the pmmtlL'S ul 
Community competition policy, require the removal of unjustified b~uriers tG thL' 
development of mobile communications services. A key clement in this is the n.:moval 
of artificial restrictions on qualification for licensing procedures for mobile 
communications licences, either, for example, by the automatic disqualification of bids 
from the existing fixed or mobile network operators or the automatic grant of at le~1st 
one licence to the public operator for each mobile technology \\'ithout any adjudicat1lm 
procedure45. 
lottcri..:s qm;viousl;.1 us..:d in lauw.:hing analogul.! mobik sl.!rvic..:s in tho.: lJSJ\) ~..:c f..P\ fl i .\'1t1d1·. < 'ou;'""' ,\ 
f,.l'f)/w1<I and bite/is. 
--t5 Si.!!..! KPl\KL Chapter 5.2. 
200 
Subject to the Community compet1t1on rules and conditions relating to technical 
competence and financial standing, licensing procedures should be open to all nationals 
of Member States of the Union and enterprises controlled by nationals of the Member 
States or of the European Economic Area (EEA). 
The automatic grant by a Member State of one or more licences to a specific operator 
would be inconsistent with the concept of open, non-discriminatory and transparent 
licensing procedures. 
8. UNION-WIDE OPERATION 
Despite the Community initiatives to date, mobile communications in the European Union is 
still structured around a series of parallel, separate national networks. There are no genuine 
trans-European mobile operators or mobile service providers under current licensing and 
regulatory structures in the Union 
8.1 Union-wide provision of services 
The GSM network represents the first digital pan-European infrastructure and is 
supported by a number of commercial and technical roaming agreements which are to 
pem1it subscribers to obtain GSM services, via other GSM networks outside their 
country of subscription. 
Whilst Union policy strongly supports industry-led initiatives to promote cross-border 
roaming, the bottleneck imposed by current national licensing of ·mobile networks 
could be overcome by the removal of restrictions on mobile service providers. Mobile 
Service Providers established in one Member State should be able to establish 
themselves and/or offer services throughout the Union. 
To achieve this, and consistent with the provisions of Article 59 of the Treaty, any 
national declaration required made by the Service Provider in its home State should be 
subject to full mutual recognition in all Member States. Additionally, conm1ercial 
relationships entered into by Service Providers and mobile network operators in one 
State should be fully recognised in all other Member States, covered by those 
agreements, and should not be used as a ground to restrict the activities. 
In particular, the provision of services on the basis of roaming agreements should not 
be subject to any restriction or to any surcharge or equivalent measures unrelated to 
the actual cost of providing the roaming facility itself; whether imposed as a result of 
regulatory activity or other action. 
8.2 Mutual recognition of mobile operating licences 
The principle of mutual recognition, established on the basis of Article 5 9 of the 
Treaty should apply, in the absence of harmonised licence conditions at a Union level, 
wherever practicable. On the basis of the freedom to provide services in the 
Community, a general principle of mutual recognition of licences and other regulatory 
measures under which services are provided in one Member State has been established 
through the case law of the Court of Justice, as a means of reducing restrictions to a 
minimum and, in particular, removing the unnecessary duplication of regulatory 
201 
safeguards on the provision of pan-European services46. This avoids, in the absence of 
harmonised licence conditions at a Union level, further licences and other 
administrative measures being r~ired in other Member States. The only exception is 
where such licences can be justified on the basis of non discriminatory requirements in 
the public interest and such interests are not already ptotected by the rules in the 
operator's home Member State. Such an approach is consistent with the removal of 
special rights in the sector, as it limits Member State discretion with regard to 
operators already licensed in other Member States. 
Nevertheless, where legitimate technical grounds as set out, limit the number 'of 
licences allocated, the principle of full mutual recognition can no longer be fully 
applied. 
The Commission has proposed two directives for the mutual r~tion of licences 
and national authorisations in the field of telecommunications and in particular in the 
field of satellite communications. This proposed scheme currently excludes mobile 
communications (except for satellite based mobile communications), and in any event, 
makes mutual recognition subject to availability of frequencies. 
8.3 Mutual Recognition for licences awarded on the basis of first come I first serve 
The principle of mutual recognition of national licences concerns, in particular, those 
cases where licences are awarded on a first come I first seryed basis, subject to the 
availability of the required frequency resources. 
This should concern, in particular, satellite-based mobile communications services, as 
put forward in the proposal for a Directive on the mutual recognition of satellite 
service licences47. 
It could also apply to local or regional systems, usually P AMR and PMR systems, 
covering, for example, border regions where the systems operated by taxi businesses or 
haulage companies could then be used on both sides of the frontier. 
Additionally, the scope of such a system ·of mutual r~tion should be broa~ enough 
to ensure that where 'private' fixed links, provided either by the operator or by a third 
party on its behalf, form the backbone of such P AMR or PMR systems, a similar right 
to establish fixed links isalso extended to other Member States. 
8.4 Open procedures where licence numbers are limited 
Where, however, because of spectrum availability, Member States rely on award 
procedures based, for example, on comparative bidding, the principle of mutual 
recognition cannot be fully applied. In such cases, national award procedures should 
nevertheless ensure that licence applications by nationals or companies controlled by 
nationals of Member States or of the EEA are possible on a non-discriminatory basis .. 
46 See Commission interpretive conummi.cation 93/C334/03 concerning the free movement of services across 
frontiers, OJ C334/03, 9.12.93 
47 Proposal for a European Parliament and CoWlcil Directive on a policy for the mutual recognition of licences and 
other national authorisations for the provision of network satellite services and/or satellite conununications 
services, COM(93) 652, 4.1.94 • to be published. The proposed directive will also apply to mobile satellite 
services. 
202 
8.5 Co-ordinated Community licensing 
Articles 3(n) and 128(b) of the EC Treaty recognise as a goal of the Conununity the 
encouragement of the establishment of trans-European networks. This objective, 
introduced as a result of the Treaty on European Union is wholly consistent with the 
Community's policy dating back to the 1987 Green Paper of promoting pan-European 
networks and services. 
In order to consolidate the advantages which mobile communications currently enjoys, 
and to foster the development of a pan-European focus in the evolution towards a 
personal communications environment, a new approach should be developed at a 
Community level. This approach should allow, in particular cases, for future 
technologies and services to evolve on the basis of a single 'experimental operating 
licences' covering both network operation and frequency allocation, issued in a 
coordinated manner between Member States and/or at a Community level. Any such 
experimental licensing system should take due account of the interests of the Member 
States and of existing licensed operators. 
In particular, and in accordance with the Council Resolution of 7 December 1993 on 
the introduction of satellite-based personal communications in the European 
Conmmnity, licences for such future satellite based personal conmmnication systems 
should be awarded on this basis. 
Another case should be the licensing of future 3rd Generation UMTS systems. 
Allocating such systems on a Europe-wide basis would substantially reinforce 
European momentum towards the development of such systems. 
8.6 Mutual recognition of type approval 
The principle of mutual recognition of type approvals for mobile tenninal equipment is 
already incorporated into Community law, within the framework of Directive 
9 l/263/EEC48, which established the mechanism for the mutual recognition of 
tenninal equipment type approvals based on Conm1on Teclmical Regulations (CTRs). 
In practice, if CTRs exist, they are mandatory. Where CTRs have not yet been agreed 
and where one or more harmonised standard(s) based on a European 
Teleconmmnications Standard (ETS) or one or more ETS could be identified (on an 
interim basis pending adoption of a CTR), which covers at least the essential 
requirements set out in Article 4 of Directive 91/263/EEC, such ETS could be used to 
perform the evaluation of conformity against the essential requirements. However this 
evaluation (type-approval) must be perfonned following one of the routes established 
in that Directive (for example, EC-type examination and Declaration of conformity by 
a manufacturer). ' 
To facilitate the removal of obstacles to the free circulation of terminal and nct,,·ork 
equipment in the absence of CTRs, the establislm1ent of interim type approval 
procedures on a temporary basis in the context of the European Radiocommunications 
Conm1ittee (ERC) taking account of the obligations flowing from Article 30 of the 
48 Council Directive 91/263/EEC of 29 April 1991 on the approximation of the laws of the Member States 
concerning telecommunications tenninal equipment including the mutual recognition of their confonnity, 0.1 
Ll28/l, 23.05.91 as amended by Council Directive 93/97/EEC of29 October 1993 supplementing directive 
93/263/EEC in respect of satellite earth station equipment, OJ L290/1, 24.11. 93. 
203 
Treaty should be examined in order to facilitate full mutual recognition on the basis of 
confinnity with the essential requirements. This should be done in accordance with the 
procedures foreseen in the Directive and the principles of the Council Resolution on the 
new approach to technical harmonisation and standards and the conununication on a 
global approach to certification and testing49. 
9 NUMBERING 
In addition to radio frequencies, access to and allocation of numbers is a second essential 
resource for mobile network operators, service providers and for customers. The importance 
of this resource and its potential to restrict or distort competition in a mam1er contrary to the 
Treaty competition rules will grow as demand for numbering becomes more acute and as 
services evolve towards the personal communications environment. It is vital that fair access 
to numbers is achieved and that where teclmically feasible, customers can take numbers with 
them, as they switch between operators or service providers. 
9.1 Community policy to date 
At present, numbering arrangements remain the responsibility of the Member States 
within the overall framework of the international standards and the regional and 
country code allocations established within the ITU. Such standards cover, for 
example, overall number length and reconunendations on number structure. 
Responsibility for number allocation currently lies either with NRAs or the incumbent 
Tcleconmmnications Organisation. 
Numbering policy within the Union has so far concentrated on limited 
ham1onisation 50: 
• 
• a conu11on European emergency number -112 m parallel to existing national 
numbers, and 
a conunon international access code -00 
9.2 Principles for the allocation of mobile service numbers 
The Conmmnity framework for access to and the administration of numbering schemes 
for all voice telephony services has been set out in the proposed Voice Telephony 
directive. The approach, building on the general principles of ONP is analogous to 
that taken in the sphere of radiofrequencies5 l. 
49 Council Resolution 85/C 136/01 of 7 May 1985, OJ C 136/1,4.6.85 and communication of the Commission 011 a 
Global Approach to Certification and Testing of 15 June 1989, COM(89)209, OJ C267/3,l 9. I0.89. 
50 
51 Council Decision 91/396/EEC of 29 July 1991 on the introduction of a singk emergency call number, OJ 
C2 I 7 /3 l, 6. 8. 91 and Council Decision 92/264/EEC of 11 May 1992 on the introduction or a standard 
international telephone access code in the Community, OJ Ll65/27 
/\.new approach to the coordination of radiofrequencies in the Conununity, conununication from the Commission 
concerning the proposal for a Council Decision on the implementation by the Member States or measures 
concerning Radiofrequencies, COM(93) 382,10.9.93. 
204 
This implies that numbers are allocated on the basis of objective criteria and 
transparent procedures, must guarantee equality of access to number resources and be 
non-discriminatory. 
Additionally, Member States shall ensure that the control of national numbering plans 
is the responsibility of the NRAs. NRAs shall ensure that national numbering plans, 
and all changes to them, are published, subject only to limitations justified on the basis 
of the Treaty or compliance with essential requirements, in particular, privacy or data 
protection. 
9 .3 Co-ordination of mobile service numbering at a Community level 
The basic approach to numbering plans, allocation and coordination of numbering has 
been set out in Council Resolution 92/C3 l 8/0252, which requires respect for the 
principle of separation of operational and regulatory activities and decisions to be 
based on wide consultation of interested parties. It also recognises the need for a 
coordinated and efficient approach to numbering at a European level. It identifies 
Europe-wide mobile services as a high priority area for developing coordinated 
management and allocation within a European numbering space. 
The Resolution establishes a policy framework similar to that proposed in the field of 
frequencies, involving the wider European forum provided by CEPT, and in particular, 
ECTRA and the linked future European Telecommunications Office (ETO) and the 
European Numbering Office (ENO) within it. 
ENO's tasks would be: 
• 
• 
• 
• research to support long term development of numbering plans taking into account 
the needs of national regulators, operators, service providers, users and other 
interested parties; 
coordination of the development of national numbering plans within and between 
the CEPT member countries; 
developing common approaches for the future management and allocation of 
numbers both nationally and internationally; and 
development of a common European position with respect to ITU activities and 
development of the links between numbering and standards. 
In a similar approach to that taken in relation to frequencies, the Commission intends 
to develop, as soon as the appropriate legal framework is in place, a stable relationship 
with these two bodies in order to advance co-ordination in the numbering field and 
ensure that Union interests are safeguarded. A key concern will be ensuring efficient, 
transparent procedures at a Community level which prevent the creation of barriers to 
the development of the internal market based on an analysis to be made thereupon and 
to ensure the full practical implementation by Member States of decisions concerning 
numbering. 
52 Council Resolution 92/C3 l 8/02 of 19 November 1992 on the promotion of Europe-wide cooperation on 
numbering of telecommunications services, OJ C3 l 8/2, 4.12. 92 
205 
Common positions must also be developed at a Community level towards numbering 
issues within international bodies, such as the ITU numbering fora, in order to 
safeguard Union interests. 
9.4 Development of a European numbering space 
At present, each country has its own unique country code within which it establishes a 
national numbering plan. Council Resolution 92/C3 l 8/08 also supported in addition 
to the existing national allocations, that Europe should introduce a European 
Numbering Space (ENS) i.e. a common numbering space which is not aligned to any 
individual country. 
One of the key potential primary uses of a future ENS is mobile and personal 
conununications services, in particular, where these provide pan-European or roaming 
capabilities. 
In order to facilitate this possibility, suitable branded allocations for these services 
should be made available from within the ENS. 
9.5 Personal and portable numbers 
Within the framework of European coordination, pnonty should be given to the 
creation of a European Numbering Space, and within that, to the reforn1 of national 
numbering schemes to ensure equality of treatment between mobile numbering and 
fixed network numbering schemes; to the issue of number portability across similar 
mobile services where this is technically feasible, and to the evolution towards personal 
numbering. 
In this context, special attention should be given to harmonisation of access codes for 
mobile systems, directory services and for services of general interest, such as the 
emergency services. 
In the future evolution towards personal communications, priority should be given to 
personal, portable numbers, independent of the network provider, the individual service 
type, the location (nationally or internationally) and the individual tem1inal equipment. 
At this stage it will however be necessary to ensure that current and future numbering 
plans are sufficiently flexible to accommodate allocation of such numbers from either 
national numbering plans or from the European Numbering Space. 
10 OWN INFRASTRUCTURE AND SHARING OF INFRASTRUCTURE 
10.1 Use of own infrastructure for mobile services 
As evidenced elsewhere (see Annex B), current regulatory restrictions on the self­
provision of infrastructure are common to most mobile communications licences and 
raise maJor concerns. 
a) Distortion of market structure resulting from current restrictions 
• The requirement on most mobile operators to use the TO's leased line 
capacity for both internal network connections (for example, base station 
to mobile control centre) and the routing of long distance portion of calls 
206 
ties the mobile operator to the use of TO infrastructure without there 
necessarily being any technical justification for such a restriction. 
• As interconnection charges and leased line rental represents 30% to 
50%53 of mobile operator's revenue base, the TO supplying these 
com1ections, usually on a monopoly basis, has considerable influence 
over the commercial viability and cost structure of mobile operators, who 
may or may not be its direct competitor. This concern is aggravated to 
the extent that leased line tariffs are not yet generally cost-orientated and 
in line with the Leased Line Directive54. 
• Restrictions on interconnection with other mobile networks, and 
particularly, networks located in other Member States, act as barriers to 
the provision of pan-European mobile services and trans-European 
networks. 
• Finally, restrictions on self-provision of infrastructure constrain technical 
progress, notably, because effective pan-European roaming for GSM 
relies on the widespread availability of System 7 signalling -a technology 
which has not yet been universally deployed by TO's within the European 
um on. 
Such restrictions are difficult to justify under current Union 
telecommunications and competition rules, notably Article 90(2) EC. In 
particular, the Services Directive, whilst allowing monopolies over the 
physical telecommunications network and the basic voice service to continue, 
specifically excluded mobile radiocommunications from its scope. It would 
seem inconsistent with a narrow interpretation of the reserved services in that 
directive to extend the scope of this monopoly to the provision of internal 
infrastructure links for mobile radiocommunications systems and services. 
Equally, the concern that international traffic would be diverted onto mobile 
networks and ·away from the fixed network, removing the source of transfers 
to uneconomic customers for the provision of universal service in the Union, 
appears to be unfounded on the basis of current usage patterns and 
experience in markets where such restrictions have been relaxed. 
Under the Community competition rules Article 90 in combination with 
Article 86 of the Treaty is infringed in situations where national regulation 
prevents competitive provision of services, in circumstances, where the 
monopoly provider of the same or a similar service is unable itself to meet 
market demand for that service, or in doing so is inevitably led to favour its 
ovvn offerings above those of its competitor55. In many Member States, 
restrictions on the use of own or third party infrastructure is slowing down 
the development of mobile services. It often also leads to the TO giving 
preference to its own mobile operations in ten11S of location of access to the 
public fixed network and in the availability of the links themselves. 
53 Studies show in competitive mobile markets in the Community interconnection costs as a percentage or overall 
revenue ranged from 30% to 50%. 
54 Council Directive of 5 .lune 1992, OJ Ll65/27, 16.6.92 
55 See Case.C-41/90, Hoffner & Elsner v. Macrotron, [1991] ECR 1-1979 and Case C-260/89, ERT v. Dimotiki 
[ 19911 ECR 1-2925 
207 
Finally, a number of Member States have already given the right to use own 
infrastructure to mobile operators. This has not produced a visible negative 
impact on the incumbent operator. 
b) Community principles concerning the use of infrastructure 
Mobile Network Operators should have full freedom to operate and develop 
their network to carry out licensed or authorised activities. This includes the 
freedom to choose over which facilities such services are offered. 
The provision of facilities and the use of infrastructure fanning part of the 
public fixed network must be subject to the general principles established 
within the ONP Framework Directive, the Leased Lines Directive and the 
proposed Voice Telephony Directive, namely, transparency, non-· 
discrimination and equality of access, as well as being fully consistent with 
the Community competition rules. 
In addition, mobile network operators should have full rights to establish and 
use their own infrastructure or that owned or operated by thin:l parties for the 
activities allowed by their licences. 
Mobile network operators should have the right to directly interconnect with 
other mobile operators either within the same Member State or in another 
Member State. Direct connections should be permitted via the public fixed 
network, own infrastructure or via infrastructure owned or operated by a 
third party. 
Where own infrastructure requires the availability of radio resources such as 
links based on microwave transmission, Member States should make 
available suitable radiofrequencies. 
10.2 Access to sites and sharing of sites and infrastructure 
The environmental priorities established in the EC Treaty suggest that the proliferation 
of mobile communications services, as well as of technologies dependent on ever 
smaller cells, should not be accompanied by an unnecessary proliferation of base 
stations or radio masts. 
Specific planning rules, the grant of rights of way and compulsory site purchase will 
continue to be issues for national regulation. 
Procedures to obtain access to sites should, however, be subject to the basic principles 
of transparency, non-discrimination, and proportionality, and be based on objective 
criteria. 
At the same time, in order to minimise the environmental impact of the growth in 
mobile conmmnications, regulatory restrictions which prevent the sharing of sites and 
other infrastructure by mobile operators with each other and with fixed network 
operators should be removed. 
Mobile network operators should be allowed to share infrastructure, other facilities and 
sites. subject to the application of the general principles of the ONP Framework 
Directive. Site and infrastrncture sharing agreements must be transparent non­
discriminatory, and ensure respect for the essential requirements. 
208 
Not only will the removal of such restnct1ons be consistent with respect for the 
environment, but it will also promote more efficient use of mobile infrastructure. This 
is particularly the case in areas of low population density, which might otherwise not 
be served by the mobile network. 
Member States may also require Mobile Network Operators to enter into agreements 
to share infrastructure or sites, where there are overriding grounds based on 
environmental priorities or public safety. 
Such obligations must respect the principle of proportionality, must not substantially 
impede the licensed activities and must be consistent with the Community competition 
rules. 
11 COMBINED OFFERING OF SERVICES VIA FIXED AND WIRELESS 
NETWORKS 
11.1 The requirements of personal communications 
Personal communications services will ultimately allow personal calling to individuals 
on the basis of a unique number, independent of their location, of the tenninal used, the 
means of transmission (wired or wireless), or the choice of technology (see Annex A). 
To meet these challenges, account must be taken of the need to create sufficient 
commercial freedom for the market to respond to demand for integrated supply of 
personal communications services, whilst accepting the likely continuation of existing 
licences for specific technologies for the foreseeable future. 
The schedule set by the Council Resolution 93/C2l3/01 for full liberalisation of public 
voice service by 1 January 199856 now provides the opportunity to develop a 
consistent environment for personal communication services. 
11.2 The Telecommunications Review schedule 
The timetable established by the 1992 Telecommunications Review initiates many of 
the steps which are required in order to prepare the public fixed .network and, in 
particular, the voice telephony service for the personal communications environment. 
In particular, it includes : 
• 
• Full liberalisation of public voice telephony services by 1 January 1998, 
induding preparation of the necessary amendments to the Conmmnity 
regulatory framework by 1 January 1996. This will facilitate combined 
offering of services via fixed and wireless networks once full liberalisation 
has been achieved; 
Full application of, and where necessary adaptation, in the light of further 
liberalisation, of ONP principles. This will focus on interconnection and 
a framework for access charges57; 
56 With additional transition periods of up to 5 years for Spain, Ireland, Greece and Portugal and where justified 2 
years for Luxembourg. 
209 
• Implementation of the principle of ll}Utual recognition of national licences 
and authorisations. 
11.3 Combined fixed/mobile service provision 
The basic conditions to launch the evolution towards personal conununications arc the 
removal (as identified in section 3.6 above) of restrictions on the combined offering by 
a single service provider of different mobile services, provided under different licences. 
and on the basis of different technologies/ standards. 
Subsequently, in line with the timetable established for the full liberalisation of fixed 
network services, all restrictions on the free combination of services provided via the 
fixed and mobile networks should be removed. 
In order to prevent the erection of new barriers to the internal market for personal 
conununications, Member States should no longer include restrictions of this type in 
any new mobile conununications licences issued. 
11.4 Allowing mobile operators or independent service providers to resell or switch 
traffic on the fixed network after 1998 
The agreement of liberalisation of public voice telephony service requires that mobik 
operators should be allowed to transport voice traffic between any combination of 
fixed and mobile destinations in the Union from 1998, an activity currently resend to 
telcconmmnications organisations. 
Consequently, mobile network operators and independent service providers should also 
be allowed from that date to bid for licences for the provision of fixed nct,vork public 
voice services, when such licences are made available and according to the conditions 
of such licenses. 
11.5 Allowing fixed network operators to provide wireless services 
The basic principles of Union Teleconununications policy. m particular. the 
requirement for non-discrimination, should also apply to fixed !1Ctwork operators. 
Such operators should be able to provide personal communication~ s .. rvices. in paralkl 
to mobile operators. 
The removal of the barriers between operation of fixed and mobile nct,rnrks. implied 
by the 1992 Telecoms Review schedule, also requires that currrnt fixed net\\ ork 
operators should be allowed to fully participate in the mobile area. both in the llSL' l)f 
mobile technologies within the fixed network and as mobile players in their 0\\ n right. 
Such market participation by existing fixed nct\vorks operators should be subject to thL' 
Community policies relating to licensing and frequency allocation. as "ell as lk'ing 
subject to the· application of the Conmmnity competition rules. From I Januar~ l l)l)X 
at the latest~ fixed network operators should no longer be prohibited ab initio frurn 
57 In this context, the Commission has also published a Communication on devl'loping uni\'ersal SL'f"\"l(L' 111 ;1 
(ompetitive environment. (Sec Communication of the Conunission of 15 November I l)t>J. C( )i\'1( 1>3) :'-I' 1. In 
response. the Council adopted a Resolution on universal service at its meeting of 7 I k(L'mber I 1J1l' 1 1,' k 
published). 
210 
participating directly or indirectly in licence award procedures for the operation and 
provision of mobile or personal communications services. 
11.6 Union priorities in the area of licensing to prepare for the personal 
communications environment 
In addition, to the priority areas for action in the frequency field needed to promote the 
evolution towards the personal communications environment, (identified at 4.4 above), 
Member States in allocating licences should place particular emphasis on those 
technologies most suited to providing the wireless parts of personal communications 
services. The following priorities should be set for licensing: 
• Member States should allocate licences for operating mobile systems according to 
the DCS-1800 standard and allow for the development of micro-cellular extensions 
of the current mobile systems licensed according to the GSM standard in the 900 
MHz bands. 
• Member States should plan towards allocation of frequencies and licensing of 
satellite-based personal communication systems (including so called Low Earth 
Orbit (LEO) systems) and of future third generation services based on the future 
Universal Mobile Telecommunication System (UMTS). 
12 ACCESS TO THIRD COUNTRIES 
Union telecommunications policy has consistently supported the establislm1ent of a fair 
international environment for both telecommunications services and equipment. This 
was reaffirn1ed in Council Resolution 93/C2 l 3/0 I on the I 992 Telecoms Review. 
which recognised "the establishment of a fair international trade enviro1m1ent allowing 
access to third country telecommunications markets comparable to that existing in the 
Community", as a key factor in the development of the future regulatory policy. 
In this context account must be taken of the substantial participation in existing mobile 
consortia within the European Union, of operators, from Third Countries, as well as 
the strong position of Third Country manufacturers on the Union's mobile equipment 
market (see Annex C). 
At the same time, the current regulatory environment in overseas markets is 
handicapping operators in the European Union from entering certain mobile markets 
abroad. One example, is the provision in US legislation concerning the radio spectrum 
restricting foreign ownership of more than 20% (directly) and 25% (indirectly) of a 
US mobile operator. 
Where such asynunetric market access currently exists, Community policy must 
actively pursue the on-going multilateral negotiations on basic teleconununications 
within the General Agreement on Trade in Services in order to open up foreign market 
access. 
Within the limits of its international commitments and Conmmnity law, the Union must 
assess whether the current inequalities can be redressed within the framework of 
211 
Community legislation, for example, with regard to non-EU participation m mobik 
licences58. 
13 SATELLITE-BASED PERSONAL COMMUNICATIONS 
58 
59 
. 60 
61 Union policy has started to address the issues raised by Satellite-based Personal 
Communications Services (see Annex A, Band C). 
The general principles of Union policy have already been set out in its 1990 Green 
Paper on Satellite Communications and the subsequent Council Resolution of J l) 
December 199159. These principles, based on the Union's global policy tO\\ards 
teleconununications, have been developed in relation to Personal Communication 
Services by a Communication of 27 April 1993 and the subsequent Council Resolution 
of 7 December 1993 60. · 
In addition, a Directive extending the terminal equipment type approval regune to 
mobile satellite equipment was adopted on 30 October 199361. The package of 
measures implementing the Council Resolution of 19 December 1991 is completed b~ 
the proposed directive on a policy for the mutual recognition of satellite service 
licences62; the proposed directive on competition in the market for satcllik 
conmmnications services and equipment, which when finally adopted \Yill extend th1..' 
scope of the Services Directive to the satellite field63, and by a forthcoming 
Conmmnication on access to space segment. 
A key outstanding issue will remain, however, with regard to pan-European licensing. 
As indicated in Am1exes A and B, satellite services impact by their nature a \\ 1dc 
number of European countries and regulatory regimes, both in countries of uplink and 
in the country(ies) of downlinking. The industry suffers significant costs from the need 
to obtain regulatory clearance and/or licences from all Member States concerned. In 
the proposal for a Council Directive on the mutual recognition of satellite sen ice 
licenses a procedure has been elaborated allowing for mutual recognition of nalional 
licenses, where tl}e common conditions of licences for a specific service have been 
agreed at a Community level. 
Such an approach has been foreseen in the draft proposal for a directive on a policy for the mutual recognition ur 
licences and national authorisations for satellite communications services 
Towards Europe-wide systems and services -Green Paper on a conunon approach in the lield of satellite 
communications, COM(90) 490 final, 20.11. 90 and Council Resolution 9l/C8/01 of 19 December l 99 l 011 the 
development of the conunon market for satellite communications and services., OJ C8, 14. l.92 
COM(93) 171 and Council Resolution of 7 December 1993 on the introduction l)f satellite pcrso1wl 
communications services in the European Community(93/C 339/01; OJ C 339/1, 16.12.93). 
Council Directive 93/97/EEC of 29 October 1993 supplementing directive 93/263/EEC in respect of satellite 
earth station equipment, OJ L290/l, 24.11.93 
62 Proposal for a European Parliament and Council Directive on a policy for the mutual recognition of licences und 
other national authorisations for the provision of network satellite services and/or satellite nm1mu11i..:~1t1,)th 
services, COM(93) 652, 4.1.94 -to be published. 
63 Proposal for a Commission Directive amending Directives 88/301/EEC on competition in the market t(x 
telecommunications equipment and 90/388/EEC on competition in the market for telecommunications :.;eni~·es~ 
not yet published. 
212 
A similar requirement for national licensing of satellite-based Personal 
Conmmnications Services could severely hamper their development. Licences for 
satellite personal communications services should develop from the start in the Union 
on the basis of single operating licences issued in a co-ordinated manner by the 
Member States and/or at a Community level. 
In addition, a co-ordinated European approach to licensing such services would be 
more effective in preserving European regulatory interests with regard to global mobile 
satellite systems. 
It is therefore proposed that licenses for future satellite-based personal conmmnications 
should be awarded ab initio in a coordinated manner and/or at Conmmnity level. 
Such systems could also be given priority, in the field of mobile and personal 
conununications, within the context provided by the Treaty for the establishment of 
trans-European networks. 
14 PROMOTING THE UNIVERSAL MOBILE TELECOMMUNICATIONS SYSTEM 
(UMTS) 
The future third generation UMTS system will ultimately provide an integrated 
technology base for the most economic and efficient delivery of personal 
conummications services. 
Work within the European Union is advancing both within the frame\\'Ork of 
Community research progranm1es, in particular, RACE and also within ETSI: whilst 
outside the Union work within the ITU has focused on this field under the Future 
Public Land Mobile Teleconmmnications Systems (FPLMTS) project (sec Annexes A 
and C). 
Within this future environment a smooth transition from second to third generation 
technologies should be assisted by the fact that the future regulatory structures 
proposed for the second generation technologies, such as GSM, DCS-1800 and DECT 
and ERMES are designed to prepare the service environment in the Union for personal 
communications. 
If this approach were not be taken, it would not only undermine the twin goals of the 
achievement of the internal market and the promotion of trans-European networks and 
services, but also decisively restrict the potential of the Conununity's research 
programmes and of the European standardisation work in the field of third generation 
mobile systems, at a time when critical decisions are made at a global level on future 
positions on UMTS/FPLMTS. 
In order to maximise the potential of European initiatives in the field of Universal 
Mobik Teleconmmnications Systems, a concentrated effort to support the evolution 
towards the universal mobile teleconmmnication system is needed. This should include 
as set out the development of coordinated licensing and award procedures between 
Member States and/or at Community level. 
213 
Such licensing would have to take specific national situations into account, as \n~ll as 
providing for a smooth transition from second to third generation services. The 
eventual transition to third generation systems should be taken into account by the 
Member States in the current licensing of second generation systems in order to ensure 
that provision of personal communications services can continue on the basis of the 
most efficient technologies. 
At the same time, the European Radiocommunications Committee should be requested 
to define, as a matter of urgency, in its follow-up and implementation of the decisions 
taken at WARC 92, the firm allocation and scheduling of availability of U l\ffS 
frequencies. 
214 
15 CONCLUSIONS 
Extension of Union's Telecommunications Policy to the Mobile sector is possible and 
provides a consistent framework for the future development of the sector and its evolution 
towards a personal communications environment. 
The application of these principles implies a number of major changes in the sector: 
Aholishing remaining exclusive and special rights in the sector, subject where re<1uired to 
tire establishment of appropriate licensing conditions. 
Current approaches to licensing mobile services on the basis of exclusive and special 
rights has had in many cases serious effects on the speed of development and 
pc'netration of mobile communciations services. It also potentially limits the ability of 
· operators with specific experience in Member States' and other markets to tender on 
equal tcnns for mobile operating licences. 
Remoral of all restrictions on the provision of mobile services both by independent 
Sen·ice Providers and by direct service provision by mobile network operators. 
This should include the freedom to offer a combination of services provided under 
different mobile licences: as \vell as the ability to provide services in different Member 
States. and the lifting of existing restrictions. 
Fullfi·eedomfor mobile network operators to operate and develop their network" for the 
purpose <~{the activities provided/or in their licence or authorisation. 
This should include the right to self-provide infrastructure for use in carrying out these 
activities or to use third party infrastructure for that purpose, as well as the right to 
share infrastmcturc. 
Infrastructure and interco1mection costs currently represent between 30 and 50(1;> of 
total revenues of mobile network operators, making much of their cost structure 
dependent on the Tclcconununication Organisations, with whom they directly or 
indirectly compete. Furthermore, the requirement to route traffic via the fixed net\\ ork 
and prohibitions on din.:ct interconnection of mobile networks leads to less efficient 
operation and may hamper innovative services, for example, where insufficient 
signalling functionalities arc available in a particular fixed network. 
In order to remove this dependence and to promote innovation, mobile systems should 
be permitted to make use of own or third party infrastructure, and should be able to 
connect directly to other mobile networks both within and between Member States. 
Unrestricted combined offering of services via the fixed and mobile networks within tire 
mwall time schedule set by Council Resolution 93/C219/0J of 22 .lu(JJ 1993 for the fit/I 
liberalisation of public voice telephony services via the fixed network. 
This would imply the right for mobile operators or independent Service Providers to 
bid for resale licenses on the fixed network, as well as for the lifting of all existing 
entry restrictions for fixed network operators in mobile markets, subject only to full 
application of the Treaty competition rules, in particular_ Council Regulation 
89/4064/EEC on the control of concentrations and the provisions of the Treaty 
competition rules concerning abuse of dominant positions. 
215 
The principles developed in the Union's approach to mutual recognition and licensing 
shou Id be extended to the sector, where possible. ' 
The application of these principles must take account of the specific features of the 
sector. They should also in future promote a more European orientation. including the 
creation of mechanisms for coordination and licensing procedures at a Community 
level where appropriate in order to promote trans-European networks and services. 
This should concern in particular satellite-based personal conununication services 
(including Low Earth Orbit Satellite (LEOs) systems and the licensing of third 
generation systems (Universal Mobile Teleconummication S \'stems 
(UMTS/FPLMTS)). 
Mutual recognition of type approval of mobile terminal equipment is critical and must he 
accelerated. 
This includes the extension of Directive 91/263/EEC to cover mobile terminal 
equipment not capable of connection to the public network, which is currently outside 
its scope. 
Accelerated application must include more rapid adoption of Common TechnicJI 
Regulations (CTRs), in particular, for terminal equipment using new digitJl mobile 
technologies. Accelerated application of Directive 91/263/EEC and 93/97/EEC should 
also allow for mutual recognition of terminal equipment on the basis of fulfillment of 
the essential requirements for those types of equipment for which CTRs hJvc still not 
been adopted. Establishment of interim-tupe approval procedures in the context of the 
European Radiocommunication Committee (ERC) should be encourJged in on.kr to 
assist the achievement of the objectives of the Directives in this case. 
A coordinated Union approach to frequencies and numbering must he intens(fied on the 
basis of the existing European framework. 
This framework is linked to the European Radioconununications Con11nittcc (ERC) 
and its associated European Radiocommunications Office (ERO) in the field of 
radiofrequencies, and the European Committee for Regulatory Affairs (ECTRA) and 
its future European Teleconununications Office (ETO) in the field of numbering. 
following the principles of the respective Council Resolutions Jnd the Commission's 
Conm1unication on a new approach to the co-ordination of rJdiofrcqucncics in th1..' 
Conununity. 
Memoranda of Understanding and framework contracts on cooperJtion shou Id be 
concluded by the Conununity with these bodies, once a firm legal basis for such 
cooperation has been created. 
Clear priority areas for future work should be established. tJking account of bJsic 
Union interests and need for full implementation in the Member States of agreements 
rcJched within these bodies. 
216 
111e interconnection principles developed in Union Telecommunications Policy can be 
extended to the mobile sector. 
These should, however, be adjusted in the context of the overall adjustment of the 
Conmmnity's regulatory framework up to 1 January 1996, in line with Council 
Resolution 93/C2 l 3/08 of 22 July 1993 setting the schedule for full liberalisation of 
public voice service. 
This should be achieved within the context of the global review of the Open Network 
Provision Framework. 
.. \1
afe~r, protection of privacy and environmental concerns should receive special attention 
Safeguarding the public interest within the sector is of fundamental importance for 
European citizens, as well as a requirement of creating a stable conunercial 
enviromnent. 
This addresses in particular the concerns over user safety, as well as protection of 
·privacy and personal data within the new digital networks and systems. Priority must 
also be given to tackling the enviromnental issues raised by a proliferation of mobile 
systems which is important to ensure public acceptance of the future developments in 
the sector and avoid the creation of new barriers within the internal market. 
Any approach towards mobile and personal communications must be linked to the global 
po/i91 goals of the European Union. 
This concerns, in particular, the development of trans-European networks, promotion 
of cohesion with the peripheral and less favoured regions, access to third country 
markets and the policy of the European Union towards the countries of central and 
Eastern Europe and at the international level. 
Special attention should be given in this context to creating an envirom11ent conducive 
to the achievement of the Conununity's research and technology development goals in 
the area, in particular in the field of the future third generation system 
(UMTS/FPLMTS) and satellite-based personal conmmnications (including Low Ea11h 
Orbit Satellites. (LEOs). 
217 
ACTE (Approvals Committee for 
Terminal Equipment) 
Allocation (of a frequency band) 
AMPS 
Analogue Cellular System 
APC (Aeronautical Public 
Correspondence services) 
Assignment (of a frequency band) 
Auctioning 
Avoidance of frequenc:v 
interference 
Cellular !1,:vstems GLOSSARY 
created by Directive 91/263/EEC, and, inter alia, responsible 
for the adoption of the Common Technical Regulations 
(CTRs) on which EU harmonised type approval procedures 
are based. 
Entry in the Table of Frequency Allocations of a given 
frequency band allowing the use of that band by one or more 
radiocommunications services under specified conditions. 
(see International Radio Regulations of the ITU; see also 
Assignment) 
Advanced Mobile Phone System (AMPS), US Analogue 
Cellular System standard 
Cellular system using analogue transmission techniques. 
Standards used in Europe are inter alia NMT. TACS, 
Radiocom 2000, and C-Net. 
Generic term for radiocommunications based services. 
allowing airline passengers to communicate from a plane 
whilst in flight. Systems are being developed on the basis or 
both satellite and terrestrial systems. Within Europe, the 
Terrestrial Flight Telecommunications !1,:vstem (TF1~\). is 
now entering into service with a number of airlines 
of a radio frequency or a radio channel: authorisation given by 
an administration for use of a particular radio frequency or 
radio frequency channel, subject to specific conditions. Sec 
Article 1 of the Radio Regulations. 
Licence or frequency award procedures, where allocation is to 
the highest bidder. This method has been used in a number or 
countries outside the European Union and has been used for 
GSM in Greece. 
Measures undertaken to ensure that the use of a transmitting 
device does not disturb receiving equipment to an extent 
which would cause significant loss of information intended for 
that receiver. 
Mobile Radiocommunications networks, usually covering a 
large area, in which the area of service is divided into a 
number of smaller "cells" each having its own 
transmitter/receiver equipment (base station). The use or cells 
allows for the same frequency to be re-used in different cells. 
thereby substantially increasing the maximum number of 
subscribers within a given network. As subscribers moYe 
from one cell to another, the cellular system automatically 
reroutes the call or "hands on" to the base station in the next 
cell, in order to enable continuous communications. Initial!~. 
cellular systems were developed on the basis of analogue 
transmission techniques (see Analogue Cellular .\)·stem). but 
218 
CEN/CENELEC 
CEPT are increasingly swi-tchil}_g to digital transmission techniques 
(see Digital Cellular System). 
European Committee for Standardisation and European 
Committee for Electrotechnical Standardisation, major 
European standarization organisations. Responsible- inter alia 
for the preparation of standards relating to electro-magnetic 
compatibility under Directives 89/336/EEC and 92/31/EEC. 
European Conference of Postal and Telecommunications 
Administrations. Following recent reforms, membership of 
CEPT is now confined to National Regulatory Authorities. 
and encompasses the twelve EU Member States, and most 
other European countries, including the countries of Central 
and Eastern Europe. 
Following these recent reforms, CEPT's activities are no\\ 
divided between ECTRA (the European Committee for 
Telecommunications Regulatory Affairs)~ the ERC (the 
European Radiocommunications. Committee) and CERP (the 
European Committee for Postal Regulation) dealirig with 
postal affairs (see also ECTRA and ERC). 
C-Net Analogue cellular system standard. 
Code Division Multiple Access (CDMA) Special coding technique for digital radio transmission 
whereby information in digital form is combined with a 
second coded digital stream to "smear" the information 
simultaneously across a wide radio frequency band width. By 
using a known coded signal at both transmitter and rcceiveL 
the original information can be recovered at the receiver. 
Currently used in some Digital Cellular Systems on an 
experimental basis (see also TDMA) 
Comparative Bidding Licence award procedure based on the review and com~arison 
of the quality of the projects against defined criteria. This 
method is widely used throughout the European Union. 
CT2 Cordless telephony equipment standard based on an ETSI 
interim standard. Current use primarily with Telepoint 
Applications. 
CT Rs Common Technical Regulations for type approval of terminal 
equipment according to the procedures of Directive 
91/263/EEC. 
/JCS 1800 Standard for micro cellular communications systems 
developed by ETSI, building on the GSM standard. also 
referred to as PCN system standard. Such systems operate 
with very small cells, varying in size between a few hundred 
metres and a few kilometres. 
Digital Cellular .. \)•stem Cellular Systems, utilising digital (bit-based) transmission 
techniques. 
219 
Digital European Cordless 
Telecommunications (DEC1) 
Digital Short Range Radio 
(DSRR) 
DSI 
El'TRA 
Electromagnetic Compatibili(l' 
(EMC) 
Electromagnetic exposure 
ENO -European Numbering Office 
ERC -European 
Radiocommu 11 ications Committee New digital cordless standard developed by ETSI, supported 
by Directive 91/288/EEC establishing harmonised frequency 
bands for DECT and a Council Recommendation on its co­
ordinated introduction. 
New digital standard developed by ETSI in the Private 
Mobile Radio (PMR) communications field, to be used over 
short distances. 
Detailed Spectrum Investigations of radio usage, one of the 
key tasks given the European Radiocommunications Office. 
aiming at the development of a common European Table of 
Frequency Allocations. 
The European Committee for Telecommunications Regulatmy 
Affairs (ECTRA), created as one of the three committees under 
the new CEPT structure. It currently includes three project 
teams covering licensing, numbering and testing. 
Council Resolution 92/C3 l 8/EEC of 19 November 1992 on 
the promotion of co-operation on Europe-wide numbering. 
identified several tasks for ECTRA in numbering co­
ordination, including the creation of a European numbering 
space and the preparation of European positions for discussion 
within ITU. ECTRA is setting up a European 
Telecommunications Office .(ETO). 
The ability of a device, unit or system to function satisfactorily 
in its electromagnetic environment without introducing 
unacceptable electromagnetic disturbances to anything in that 
environment. 
Exposure to electromagnetic radiation and its possible effects 
on human bodies. Effects are classified according to thermal 
effects (heating of body tissue) and athermal effects (any 
other possible effects). 
The European Numbering Office called for in the Council 
Resolution 92/C318/02 of 19 November 1992 on the 
promotion of Europe-wide co-operation on numbering of 
telecommunications services will be located in Copenhagen. 
as part of the European Telecommunications Office (see also 
ECTRA). 
The European Radiocormnunications Committee (!:RC') is one 
of the three committees created under the new strncturc of 
CEPT. The ERC develops radiocommunications policies. 
assists ITU conferences and plays a general co-ordinating role 
in frequency matters. It has established the European 
Radiocommunications Office (ERO) 
220 
ERMES (European Radio Messaging 
... \)stem) 
ERO -European 
Radiocommunications Office 
Essential Requirements 
ETO -European 
Telecommunications Office 
ETS 
European Telecommunications 
Standards Institute (ETSI) 
Eutelsat 
Exclusive Rights 
First Come/First Served licensing New digital paging standard developed by ETSI, supported by 
Directive 90/544/EEC establishing harmonised frequency 
bands for ERMES and a Council Recommendation on its co­
ordinated introduction. ERMES will permit the reception of 
tones and/or numeric or alphanumeric messages. 
The European Radiocommunications Office (ERO) called for 
in the Council Resolution of 28 June 1990 90/C166/02 on the 
strengthening of the Europe-wide co-operation on radio 
frequencies, in particular with regard to services with a pan­
European dimension was created by the ERC and started 
operations in Copenhagen in May 1991. 
Essential requirements are non-economic reasons in the 
general interest which may cause a Member State to restrict 
access to the public telecommunications networks or public 
telecommunications services. 
The European Telecommunications Office (ETO) is an office 
which is being established under the umbrella of ECTRA. 
European Telecommunications Standard. Standards 
established according to the procedures of the European 
Telecommunications Standards Institute (ETSI). 
The European standards organisation in the 
Telecommunications field, having the task of producing 
European Telecommunications Standards (ETS), having 
European-wide application and acceptance, in the area of 
telecommunications. 
European Telecommunications Satellite Organisation, created 
by the Eutelsat Convention and the related Operating 
Agreement. 
An exclusive right exists where the operation of a mobile 
network or the provision of a mobile service within a given 
area is reserved by a Member State to a single public or 
private operator. (See draft Commission Directive of l 
December 1993 amending Directives 88/30 I/EEC and 
90/388/EEC with regard to satellite communications). 
Licence award procedure, where licences are awarded in order 
of application, normally within the limits of the frequencies 
available. This method is used extensively for private mobile 
radio systems and satellite services. 
221 
Frequency Division Multiple Access 
(FDMA) 
Future Public Land Mobile 
Telecommunications System 
(FPLMTS) 
GPS 
Global ~:vstemfor Mobile 
communications (GSM) 
Green Paper(s) 
Hertz 
Inmarsat 
Intelligent Networks (IN) 
INTEL..\.'A T 
/TA (Interim 1)'jJe Approval) 
IP Rs Special coding technique used for both digital and analogue 
radio transmission in which individual calls are connected by 
the assignment of a specific communications channel. The 
channel selected is maintained only for the duration of the call 
and is taken from a basket of many channels, which together 
make up the bandwidth of the radio frequency (-ies) set aside 
for that service. 
See UMTS (Universal Mobile Telecommunications ~)1ste111.'i) 
Global Positioning System. Satellite system used, inter alia. 
for maritime, air and terrestrial navigation providing 
extremely accurate location and positioning information for 
ships, planes, vehicles or individuals throughout the world 
that carry a GPS receiver. 
The central standard, developed by ETSI, for digital (2nd 
generation) mobile systems, using TDMA (Time Division 
Multiple Access) techniques. GSM has been supported by 
Directive 87/372/EEC establishing harmonised frequency 
bands for GSM and a Council Recommendation and 
Resolution on its co-ordinated introduction. The system 
supports Roaming, and a broad range of features. 
Green Papers, in the European Union context, are European 
Commission consultative documents setting out basic policy 
goals for public debate. Key Green Papers issued in the 
telecommunications sector, are the 1987 Green Paper on the 
development of a common market for teleco111111unications 
services and equipment (COM (87) 290) and the 1990 Green 
Paper on satellite communications (COM (90) 490). 
1 cycle/second, measurement unit for radio frequencies. l kH1. 
corresponds to 1000 Hz~ 1 MHz corresponds to 1 million Hz~ 
1 GHz corresponds to 1 billion Hz (1000 MHz). 
The International Maritime Satellite Organisation. 
established by the INMARSA T Convention and the related 
operating agreement. 
Advanced network concept allowing the provision of services 
such as call forwarding, calling line identification and other 
advanced functions such as flexible routing. IN functional it~ 
will be a vital component in the evolution of Universal 
Personal Telecommunications (UPT). 
The International Satellite Organisation, established by the 
INTELSAT Convention and the related Operating 
Agreement. 
Provisional approval for terminal equipment, established inter 
alia for GSM terminals. 
Intellectual Property Rights 
222 
International Telecommunications 
Union (ITU) 
Low Earth Orbiting satellite (LEOs) , 
Lottery 
Memorandum of Understanding (MOU) 
Micro Cellular Networks 
Mobile Data 
Mobile Nehvork Operator 
NMT 
NRA 
ONP International Telecommunications Union (ITU), the United 
Nations specialised agency for telecommunications. 
The structure of the ITU has recently been reviewed to adapt it 
to the changing information and telecommunications 
environment. Formal changes were agreed at an Additional 
Plenipotentiary Conference in December 1992 and came into 
operation in March 1993. These have separated the ITU into 
three sectors: Standardisation, Radiocommunications and 
Development. 
Non-geostationary satellites in low-earth orbits. LEO 
concepts play a particular role in current proposals for 
satellite-based Personal Communications services. 
Licence award procedure on the basis of lotteries, which has 
been used particularly in the United States. 
MoUs in the telecommunications field in Europe have been 
entered into between operators and/or equipment 
manufacturers or other market participants for the roll out of 
new products and services. Within the mobile sector. MoUs 
have been entered inter alia for GSM, ERMES, TFTS and 
Telepoint. 
Cellular Systems where normal-sized cells in the cellular 
mobile radio network are split into very small geographical 
areas of between a few hundred metres up to a few killometrcs 
("micro-cells"). This technique confers higher network 
capacities, lower power transmitters, higher frequency 
efficiency through greater frequency re-use and longer air­
time (or lighter handsets) for a given battery technology. 
Specific radio-based communications services for numeric and 
alphanumeric data transmission. Such services are currently 
used primarily for closed user group applications, through for 
example, remote datebase access or data/ E-mail transfer 
between portable computers and a home network. 
Operator of mobile network infrastructure, supporting the 
transmission and provision of radio-communications services. 
The activities of Mobile Network Operators in most cases also 
integrate mobile Service Provider functions (direct service 
provision to end-users) within their overall business. 
Nordic Mobile Telephone, Analogue Cellular System 
standard. 
National Regulatory Authority. Directive 88/30 l and 90/188 
both require Member States to ensure the separation of 
regulatory activities from the operation and provision of 
services by Telecommunications Organisations. 
The Open Network Provision concept defined in Council 
Directive 90/387 /EEC. . 
223 
Paging 
PCS -Personal Communications 
Services 
PDAs (Personal Digital Assistants) 
PDC 
Personal and portable numbers 
Personal Communications Networks 
(PCN!)) 
PIN (Personal Identification Number) 
Private Mobile Radio (PMR) 
Public Access Mobile Radio (PAMR) Radiocommunications based service involving non-speech. 
one-way, personal selective calling with a tone, vibration or 
visual alert. The system may either simply inform the user 
that somebody is trying to contact him or her or may also 
carry a numeric or alphanumeric message. 
Personal Communications Services (PCS) is used as a generic 
term for services which provide person-to-person calling, 
independent of location, terminal used, the means of 
transmission (wired or wireless) and/or the choice of 
technology. 
Portable computer-based and often hand-held devices 
combining a wide range of functions, such as diary, address 
book, word processor, calculator, etc. and which may support 
radio-based links for data transmission and/or to Local Arca 
Networks. 
Personal Digital Cellular, Japanese mobile digital standard. 
which has been developed in parallel with the Personal 
Handy Phone (PHP) standard (similar to a two-way Telepoint 
Application) and the N-Star Mobile Satellite s:vstem. 
Personal and portable numbers are numbers which are to be 
independent of network, service provider, location and 
terminal used, in contrast to current numbering which is 
country, network and operator specific. 
Such personal numbers would be of general application (and 
therefore portable) across mobile and fixed network services. 
providing full personal mobility and therefore a key clement 
in Universal Personal Telecommunications (UP1J. 
see DCS-1800 systems. 
used in GSM and other subscriber card-based systems to 
ascertain identity of subscribers and check authorization of 
access. 
Private radio communications system, usually operating on a 
local or regional basis from a single base station and using a 
single or small number of radio channels. Users normally 
have to wait until a channel is clear before they can use it, as 
the base station can only communicate with individual 
mobiles. Larger users may manage many mobiles from a 
single base station (for example, taxi firms). Communication 
is generally limited to a single (closed user) group. 
PAMR provides shared use of a common radio 
communications system for activities similar to Private 
Mobile Radio. By providing for shared use, PAMR can 
make more efficient use of the frequencies available by 
allocating conversations to free channels within a group or 
channels available. (See also TETRA) 
224 
Public Service Requirements in the 
form of Trade Regulations 
RAC'E-R&JJ programme in 
advanced communications 
technologies for Europe 
Radiocom 2000 
RES (Radio Equipment and Systems) 
Committee 
Roaming 
RTT (Road Transport Telematics) 
Satellite-based Personal 
Communications Services 
Second Generation Mobile Systems 
Service Providers Category of licensing conditions aimed at ensuring 
permanence, availability ~nd quality of services. 
The current phase of the RACE programme is defined in 
Council Decision 91/352/EEC of 7 June 1991 adopting a 
specific research and technological development programme 
in the field of telecommunications technologies ( 1990 to 
1994) . Within the Mobile and Personal Communications 
line, a number of projects participate in the work towards 
third generation mobile systems (UMTS & MBS). These 
include MONET, ATDMA, CODIT, MBS, SAINT, 
TSUNAMI and PLATON. 
A number of other R&D projects in the RACE framework also 
contribute towards the definition of UMT/MBS namely. 
MA VT, MOBILE, MODAL and MOEBIUS. 
Analogue Cellular System standard 
ETSI Technical Committee (TC), with broad responsibilities 
in the field of radiocommunications equipment and systems 
Facility, supported by commercial arrangements between 
operators and/or service providers, which enables a subscriber 
to use his/her radio telephone equipment on any other network 
which has entered into a roaming agreement in the same or 
another country for both outgoing and incoming calls. 
A range of programmes, aimed at developing the radio-based 
technology to provide road users with up to date information 
(traffic conditions, route guidance, etc.) and to support traffic 
management and control.. Particular, examples of these 
projects are the EU-programme DRIVE -Dedicated Road 
Infrastructure for Vehicle Safety in Europe, and within the 
EUREKA programme -PROMETHEUS. 
Radiocommunications-based services, where there is a direct 
communication from hand held equipment to satellites. 
though potentially routed through terrestrial-based 
infrastructure for a portion of specific connections. 
These new services will be based on new technologies. whose 
frequency allocations were agreed at W ARC 92 (for example. 
Low Earth Orbiting Satellite systems). 
A generic term encompassing digital mobile nel\vorks and 
technology currently being deployed. It includes, inter alia. 
GSM, DCS 1800, ERMES, DECT, TETRA, TFTS, DSRR. 
Service providers offer services to end users involving the use 
of mobile networks and services. The role of service 
providers may vary between that of airtime reseller to the 
provision of sophisticated value added services. Service 
providers may be independent or form part of a mobile 
network operation. 
225 
SES (Satellite Earth Station) 
Committee 
Signalling System 7 (SS7) 
SMG (Special Mobile Group) 
Special Rights 
Subscriber Identification Module 
(SIM) . 
TACS 
Time Division Multiple Access 
(TDMA) 
1992 Telecoms Review ETSI Technical Committe (TC), covering inter alia mobile 
satellite communications equipment.. 
Major digital protocol/ signalling system for managing and 
transmitting control and routing information in networks. 
ETSI Technical Committee (TC), with special responsibility 
for GSM, DCS 1800, and the development of UMTS. 
A special right exists where a Member State wjthin a given 
area designates, other than according to objective, 
proportional, transparent and non-discriminatory criteria, 
several competing undertakings or limits the number other 
than according to such criteria or grants one or more of these 
undertakings a lasting particular advantage other than those 
advantages referred to in Article 92 of the EEC Treaty. 
(See draft Commission Directive of 1 December 1993 
amending Directives 88/301/EEC and 90/388/EEC with 
regard to sat~llite communications -see also Exclusive 
Rights) 
A plastic card containing a microprocessor and memory 
issued for use with GSM and DCS 1800 networks. The card 
contains details of the subscriber: the subscribers services 
(those to which he is entitled) and personal telephone 
directories. Only through the use of a legitimate card, can a 
user enable a piece of equipment for use on the network. 
Total Access Communications, an Analogue Cellular System 
standard 
Special coding technique for digital radio transmission 
whereby information in digital form is packaged and 
transmitted during pre-arranged time periods, the total 
number of active users having one time slot for each "frame" 
or repetition period. The packaged information is rearranged 
so that speech and data appears continuous. TDMA is the 
transmission technique used inter alia for the GSM system. 
A review and wide public consultation during 1992 and early 
1993 led to the adoption by the EU Council of Ministers of 
Resolution C93/213/01of22 July 1993, providing for the 
liberalisation, of the provision of public voice telephony 
services by 1 January 1998, subject to additional transitional 
periods of up to 5 years for Greece, Ireland, Portugal and 
Spain, and a possible delay of up to 2000 for Luxembourg. 
The Resolution also requested the publication of a Green 
Paper on mobile and personal communications, and the 
production of a Green Paper on telecommunications 
infrastructures and cable TV by 1 January 1995. The Council 
also requested that the necessary regulatory framework for the 
1998 liberalisation deadline be prepared by 1 January 1996. 
226 
Telepoint Applications 
Terminal Identification (The EIN -
Equipment Identification Number) 
The Terrestrial Flight Telephone 
System (TFTS) 
Third Generation Systems 
TO (Telecommunications 
Organisation) 
Trans European Trunked Radio 
(TETRA) 
Universal Mobile Telecommunications 
System (UMTS) 
Universal Personal 
Telecommunications (UPT) Generic tenn for applications allowing subscribers over a 
wireless link between a handset or other radiocommunications 
device to place calls via the public network infrastructure, but 
not generally to receive calls. 
Standards currently used for these applications include in 
particular CT2 and, in future, DECT. 
Each piece of GSM mobile or transportable equipment (the 
terminal) has certain information programmed during 
manufacture which can be used to uniquely identify the unit 
and which the network uses to track stolen equipment and to 
disable in the event of certain malfunctions. 
A digital APC standard developed by ETSI and now entering 
into service with a number of airlines. The system comprises 
airborne equipment and a series of ground stations through 
which telephone calls can be initiated by users whilst in flight. 
See entry on UMTS. 
Telecommunications Organisations as defined in Directive 
90/3 88/EEC means public or private bodies to which Member 
States grant special or exclusive rights for the provision of a 
public telecommunications network and, when applicable, 
service 
Digital trunked mobile PAMR standard being developed by 
ETSL TETRA is a mobile communications system to be used 
for applications on a shared basis, such as by closed user 
groups. 
A technology and standard for third generation mobile digital 
systems, currently under development within ETSI and by the 
RACE programme. UMTS should support full personal 
communications services, delivered over a combination of 
fixed and mobile networks. 
Work in the framework of the ITU in this field is carried out 
under Future Public Land Mobile Telecommunications 
System (FPLMTS). 
Concept which should allow person-to-person calling across 
multiple networks at any terminal, fixed or mobile and 
irrespective of geographical location, based on personal and 
portable numbers. Essential concept for implementing full 
personal mobility in a communications environment. 
227 
Wireless Local Area Networks and 
Wireless PBX's 
·Wireless Local Loop 
World Administrative Radio 
Conferences -WARC' 92 Private mobile communications system providing local area 
networking; where cabled connections between or within sites 
are replaced by radio links; a HiperLan system specified by 
ETSI refers to radiocommunications sub-systems intended to 
provide high speed, short distance links between computer 
systems. 
Wireless Public Branch exchanges (PBXs) are telephone 
switching systems typically in customer premises providing 
radio-based links between subscriber equipment, private 
mobile communications systems and/or the public network. 
The addition of a radio link to a fixed network in order to 
provide a wireless connection for part or all of the local loop 
(for example, between the curb and the home). (See also 
DEC1) 
The World (Administrative) Radio Conferences (WARCs) are 
global meetings within the framework of the ITU. Following 
the recent changes in ITU, these meetings are now referred to 
as World Radio Conferences (WRCs). 
W ARC '92 produced a number of agreements concerning 
mobile and other, more specific allocations at both lower and 
higher frequencies. These changes, will in time, permit wider 
use of the band 1-3 GHz for mobile services, both terrestrial 
and satellite based . 
. · ·?-1 
ISSN 0254-1475 
COM(94) 145 final 
DOCUMENTS 
EN 15 
Catalogue number : CB-C0-94-179-EN-C 
Office for Official Publications of the European Communities 
L-2985 Luxembourg ISBN 92-77-67896-8