Opinion of the Economic and Social Committee on the 'Proposal for a European Parliament and Council Decision on the coordinated introduction of mobile and wireless communications (UMTS) in the Community` (98/C 214/25)

On 24 March 1998, the Council decided to consult the Economic and Social Committee, under Article 198 of the Treaty establishing the European Community, on the above-mentioned proposal.

The Section for Transport and Communications was instructed to prepare the Committee's work on the subject; it set up a study group and appointed Mr Mobbs as rapporteur.

At its 354th plenary session (meeting of 29 April 1998), the Economic and Social Committee appointed Mr Mobbs as rapporteur-general and adopted the following opinion by 65 votes with 1 vote against.

1. Introduction

1.1. Such is the speed of technological developments and the pressure from the mobile telephone market for a Community UMTS policy that the Commission has submitted three papers within the space of less than a year on the third generation of mobile phones UMTS ().

1.2. The first Commission communication () was a report on the further development of mobile communications. The second Commission communication () was a synthesis of comments and contributions of all those who had responded to the first communication. The Committee adopted one opinion on both communications in December 1997 (). Generally, consensus emerged from all consultations that Commission proposals would help create favourable conditions for the development of UMTS and thus help to serve the needs of European consumers and to preserve the competitiveness of European industry.

1.3. The first generation of mobile phones (analogue) is being supplemented by the second generation (digital) where the European GSM () which has become the widely accepted standard for mobile communications with over 200 operators (in over 110 countries) running or building a network, the majority of them outside Europe.

1.4. In its December 1997 opinion, the Committee noted that Europe's success in launching and establishing the GSM system could be ascribed to the timely and adequate coordination and cooperation between industry and the EU public authorities. The Committee urged the adoption of an equivalent approach to the issues attached to the transition to UMTS. This is important when considering that the EU market for cellular mobile services including UMTS is expected to reach by 2005 over ECU 100 billion annual revenues (according to the Commission and the UMTS Forum).

1.5. UMTS is the European concept for the third generation of mobile communications. It will offer users a wireless access to the Internet and other multi-media services in addition to the mobile telephony and messaging services available today. The inclusion of satellite capabilities will be of particular importance not only in advanced societies but also in sparsely populated regions and developing countries.

1.6. Against this background the Commission proposes a Decision to be adopted on the coordinated introduction of mobile and wireless communications (UMTS). Whilst there is broad recognition that development must be market-led in order to facilitate investment and innovation, it is necessary to create, within the existing regulatory framework, legal certainty that licenses will be awarded and spectrum made available in good time.

2. Commission proposal

2.1. The explanatory memorandum to the Commission proposal provides a very clear and concise introduction to the overall proposal. The following summarizes some of the key points.

2.1.1. A strong home market in Europe will provide the best conditions for European industry to compete on the global market and consolidate the leading position which it holds with GSM.

2.1.2. Adoption of the proposed decision will prove the political determination to make UMTS a success and will provide for the requisite legal certainty to industry. Member States and their regulatory authorities will have to ensure the harmonization of national licensing procedures and the granting of licenses and authorizations for UMTS. The proposed decision establishes a procedure to foster the licensing process building on cooperation with CEPT/ERC (), CEPT/ECTRA () and ETSI ().

2.1.3. The need for a common, open and internationally competitive standard for the UMTS radio interface has been stressed by all Community institutions. The industry/ETSI consensus of 29 January 1998 also reflected this need. The technical specifications will now need to be defined, in view of ETSI's adoption of the final UMTS standards. This agreement should position UMTS as a key element of the International Mobile Telecommunications (IMT 2000) family of standards which is currently in preparation at the ITU () for implementation in the year 2000.

2.1.4. Action is required to clarify without delay the conditions of application of existing legislation, in particular the Licensing Directive (97/13/EC).

2.1.5. Action is also required to ensure the harmonization and rapid introduction of compatible UMTS services to secure Europe-wide roaming of Community-wide and pan-European services. 1 January 2000 is proposed as the date for the establishment by Member States of authorization procedures which are necessary for the introduction of UMTS. The provision of UMTS services in Member States should be allowed as from 1 January 2002. The proposed decision establishes rights and obligations on commercial players to negotiate international roaming.

2.1.6. Whilst the components of UMTS have still to be defined, the characteristics contained in Annex I reflect the common understanding on UMTS by all actors consulted.

2.1.7. The timely availability of frequency spectrum is a prerequisite for the introduction of UMTS services in the Community. The timetable (Annex II) highlights this for spectrum allocations identified by the CEPT.

3. General comments

3.1. The Committee congratulates the Commission on the speed of its actions in connection with UMTS where the need to capitalize on Europe's success of GSM is paramount. A clear and stable regulatory framework is needed to enable development to proceed which will advance European mobile and wireless technologies.

3.2. The Committee welcomes the proposed decision and endorses the Commission's objective of facilitating the rapid introduction of UMTS. UMTS will be developed taking into account the existing GSM platform. The GSM systems will not become redundant and the currently proposed developments for GSM will last for years.

3.3. The Committee is particularly pleased to read in the explanatory memorandum that the Commission expects that 'UMTS should lead to the creation of tens of thousands of new jobs in the Community`. However, the Committee would like to see evidence to substantiate this welcomed forecast.

3.4. The date for full liberalization of telephony (subject to some derogations) on 1 January 1998 has passed. Whilst the Commission achieved its objective of having in place all the rules and regulations for liberalization by the required dates, their implementation by all Member States is far from complete. The Commission's 'Third report on the implementation of the telecommunications regulatory package` () highlights a number of areas where progress is far from satisfactory, in fact legal proceedings are being undertaken in a number of instances.

3.4.1. Some of the unsatisfactory areas relate to mobile telephony. This indicates that progress on telephony (fixed or mobile) liberalization varies from one Member State to another. This could be a problem as there may well be difficulties in implementing to schedule and to the same extent and time, the various actions contained in the Commission's proposed decision.

4. Specific comments

4.1. Article 2 - Definition - characteristics of UMTS

The Committee agrees that UMTS should be defined with reference to the capabilities of the system, which need to be distinguished from the services that may be provided. In particular, the definition should be market-led and its components should be determined by the market, in the light of developments in technology and consumer needs. By including in Annex I a list of the essential components of UMTS, there is a risk that the characteristics of UMTS contained in the Commission's proposal may prove either not to be required by consumers or, alternatively, insufficient. The Committee recognizes the need to list the elements of UMTS but it should be made clear that what UMTS will comprise will be decided by the market. Annex I should contain a minimum set of characteristics of UMTS for its initial stage of introduction.

4.2. Article 3 - Coordinated authorization

4.2.1. The Committee recognizes the need to have a date for the completion of the harmonization of national licensing procedures to create certainty about the introduction of UMTS. This should not restrain those Member States which may be able or simply want to proceed with the introduction of UMTS earlier than others.

4.2.2. The timetable set out in Annex II concerns the harmonization of the frequency spectrum which is necessary for UMTS. This timetable should be respected. Authorizations for UMTS new entrants should take into account the need to achieve compatibility of UMTS systems at a European level.

4.3. Article 4 - Roaming rights and obligations

There is also reference to roaming in Article 3 - 'Member States shall ensure that licenses support roaming throughout the Community`. However, Article 3 does not make clear whether the Commission intends that only cross-border roaming should be negotiated between UMTS operators or that the same rights and obligations should apply to roaming within a Member State. The Commission's intention should be made clear.

4.4. Article 5 - Cooperation with CEPT

CEPT harmonization of UMTS frequency spectrum use and conditions is essential for Europe's success in establishing UMTS as the world leading standard. Accordingly, the Committee considers that there should be the possibility, at national level, to proceed at a faster pace towards regulating the use of frequencies and the conditions of authorizations without compromising the CEPT harmonization work. The successful introduction of UMTS depends on addressing the requirements of the market and administrative procedures should be adjusted to achieve this objective. The Commission should ensure, as soon as possible, that all necessary steps are taken at a Community level in cooperation with the relevant international fora (CEPT/ECTRA, CEPT/ERC, ETSI) to achieve the timely allocation of sufficient frequency spectrum for UMTS services.

4.5. Article 6 - Cooperation with ETSI

The Committee is pleased to learn of the progress achieved recently at ETSI regarding the adoption of a common and open air interface standard for UMTS, which is known as UTRA (). All institutions involved should make all necessary efforts to maintain the momentum for the introduction of a common standard. This will enhance the opportunities for the widest possible acceptance of UMTS.

4.6. Article 13 - Report

The Committee requests that it is sent a copy of the report.

Brussels, 29 April 1998.

The President of the Economic and Social Committee

Tom JENKINS

() Universal Mobile Telecommunications System (UMTS).

() Communication to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions on the further development of mobile and wireless communications - Challenges and choices for the European Union - COM(97) 217 final, 29.5.1997.

() Communication from the Commission to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions - strategy and policy orientations with regard to the further development of mobile and wireless communications - Outcome of the public consultation and proposals for creating a favourable environment - COM(97) 513 final, 15.10.1997.

() OJ C 73, 9.3.1998, p. 109.

() Global System for Mobile (GSM).

() European Conference of Postal and Telecommunications Administrations (CEPT); European Radiocommunications Committee (ERC).

() European Conference of Postal and Telecommunications Administrations (CEPT); Committee of European Telecommunications Regulatory Authorities (ECTRA).

() European Telecommunications Standardization Institute (ETSI).

() International Telecommunications Union (ITU)

() COM(98) 80 final.

() UMTS Terrestrial Radio Access (UTRA).