WRITTEN QUESTION E-3816/02

by Isidoro Sánchez García (ELDR) to the Commission

(9 January 2003)

Subject: Abolition of international telephone rates for calls between EU Member States

The EU is currently undergoing major changes, with an Intergovernmental Conference planned for 2004 whose main purpose will be the reform of the Treaties and their adaptation to the new circumstances of an enlarged Union. The aim underlying all the EU's actions since the Laeken summit has been, apparently, to bring about deepening and to strengthen the sense of belonging to the EU.

This strategy, which is fully endorsed by the author of the present question, should logically also encompass, on a proactive basis, measures aimed at having maximum impact on the sense of European citizenship.

In this connection and in the context of consumer protection, it appears desirable to re-examine the existence of international telephone rates for calls between Member States. Such rates no longer seem justified in a borderless single market, one of whose essential pillars is the free movement of persons, services and capital.

Does the Commission believe that the indefinite continuation of international telephone rates for calls between Member States is compatible with the single market?

Can the Commission explain the reasons for the non-abolition of such rates and specify the procedure required for achievement of the goal of abolition?

Answer given by Mr Liikanen on behalf of the Commission

(24 February 2003)

The liberalisation process of the telecommunications market was seen since the beginning as a fundamental element in the construction of the single market.

Since 1 January 1998, the telecommunications market is liberalised in most of the Union, combining competition with a higher degree of harmonisation in order to enjoy to a maximum extent the opportunities offered by a single market.

The existing legislative framework was primarily designed to manage the transition from monopoly to competition and was, therefore, focused on the creation of a competitive market and the rights of new entrants.

As regards international tariffs, this process has brought a 40 % reduction in tariffs charged by the traditional operator in the 1998-2002 period. Moreover, data provided by the last report on the Implementation of the Telecommunications Regulatory Package(1) show that the number of operators using carrier selection and preselection for international calls is 412 and 272 respectively. In some cases, according to the implementation report, alternative operators offer discounts of up to 65 % ad compared to incumbents' tariffs.

The new regulatory framework aims at bringing a higher level of competition in the sector at the benefit of consumers in terms of tariffs and quality. The new Regulation will enable national regulatory authorities to analyse and assess the market and to impose appropriate regulation where the market is found not to be competitive.

Only where there is an absence of effective competition will there be any regulatory obligations. Where there are existing regulatory obligations they must be withdrawn unless the market is found not to be competitive.

Regarding this, the difference between local and long-distance calls has already blurred in some Member States. Likewise, current legislation does not prevent operators from deciding to offer a single tariff for calls to other Member States, provided that it respects the conditions for a free competition market. However, there are economic reasons why international and national rates differ from each other, in particular the difference in the underlying costs and the problems related to tariff unbalances. Even in integrated economies such as the American telephone operators charge different prices depending on where the call originates and on the State it terminates. This does not seem to have an impact on the sense of citizenship, while it ensures that telephone operators are not forced to make losses permanently.

Consequently, the legal framework for the development of a truly single market for telephone calls between Member States is already in place and it will progressively develop full effects through the mechanisms provided by the new regime applicable to the telecommunications markets as described above.

(1) COM(2002) 695 final.