Towards the Personal Communications Environment: GREEN PAPER on a common approach in the field of mobile and personal communications in the European Union
Date: 1994-04-27
Institutions: European Commission
Subjects: EU policy, communications policy, digital technology, mobile communication, mobile phone, protection of communications, satellite communications, technological change, telecommunications policy, trans-European network

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 
the  overall  use  of 
their 
telecommunications. 

traffic  volumes 

fixed  network, 

increasing 

thereby 

the 

to 

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 
It  should  be  seen  against  the 
now  needs  a  common  vision  as  a  matter  of utmost  urgency. 
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 

-l 

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 

"Scenano 
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. 
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 

6 

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. 
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 
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 . 

the  Global  System 

(GSM 

It also  concerns significant Council Resolutions 10  and  Resolutions  of the  European Parliamentll 
which  have  set  the  political  framework  for  the  Union's  telecommunications  policy  and  the 
L This 
development  of  a  common  market  in  telecommunications  services  and  equipment. 
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  1993 12 . 
It 
has  been  expanded  through  the  Council  Resolutions  setting  the  framework  for  coordination  in 
the  fields  of frequencies  and  numbering 13,  and  Resolutions  covering  related  fields,  such  as  the 
Council Resolution on satellite-based personal communications 14 . 

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 

8 

9 

10 

11 

12 

13 

14 

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). 
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). 
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). 
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). 
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. 
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). 
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) 
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 

in  particular, 

the  Directives  on  competition 

for 
This  concerns, 
telecommunications  services  and  for  terminal  equipment 15  which  set  the  basic  principles  for 
telecommunications  liberalisation  in  the  Union;  the  ONP  framework  and  specific  Directives 
the 
which  establish  a  framework  for  open  access,  interconnection  and  harmonisation 16  ~ 
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 . 

the  markets 

in 

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 
communications in the framework of its research programmes 19 . 

to  promote  advanced  mobile 

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 

16 

17 

18 

19 

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) 
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. 
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. 
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. 
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 

close 
With  all  of these  organisations,  the  Union  has  - or  is  in  ·the  process  of developing -
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. 

the  broadening  of  mobile  communications 

scale  personal 
With 
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. 

full 

to 

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 
so  called 
on  analogue  technology,  composed  of three  well  established  services  -
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  European  standardisation  system, 

The  development  of digital  mobile  systems  has  been  a  major  success  for  European 
the  European 
industry, 
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 
in  more  than  60 
systems.  GSM  has  been  adopted  - or  planned  to  be  adopted  -

in  particular, 

20 
21 

For definition and technical details see Glossary of Technical Terms 
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 

24 

25 

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 
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) 
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 
''Mobile  services are  then  likely  to  become 
development  of Intelligent  Networks. 
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 
telecommunications 
concept  of  full  mobility  will  create  a  completely  new 
environment. 

9 

to  be  carried  most 
Ultimately,  personal  communications  services  are 
economically via  a  single  integrated technology concept  - the  so-called  UMTS  (the 
Universal Mobile Telecommunications System). 

likely 

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 

27 

28 

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. 
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) 
See Annex C 

16 

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 

29 

30 

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. 
contribution to the further development of the mobile market. 

It  could  also  make  a  substantial 

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 

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, 

32 

For fm1her detail, see Annexes C and D,  Section 12 

19 

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. 
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 . 

therefore  cannot  undermine 

They 

33 

34 

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 . 

requirements  should  concern  m  particular  effective  use  of  the 
Essential 
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 

36 

37 
38 

39 

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) 
< '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. 
Sec Annex D,  Section 3 
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 
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 

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 
sharing  of 
flexibility 
infrastructure4o. 

in  use  of  own  or  third  party  infrastructure,  and 

in 

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 
in  particular,  the  proposed  ONP  Voice  Telephony 
Network  Provision  rules, 
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 

40 
41 
42 
43 

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 

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. 

implies 

in  particular 

This 
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. 

for  mobile  communications, 

that, 

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. 

45 

46 

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 

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 
the  removal  of  restrictions  on  the 
a  personal  communications  environment, 
combination  of multiple  mobile  technologies  or  services  through  a  single  service 
provider 
to  access  different  mobile 
communications systems and  services via hand  sets combining different  technologies 
such as DCS-1800, GSM,  and DECT. 

This  will  allow  users 

required. 

is 

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 213/01 49,  namely  1st  January  1998,  with  additional 

47 

48 

49 

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 
It  will  also  be  subject  to  Community  competition 
financing  of such  obligations. 
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 

51 

52 
53 
54 

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) 

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. 

with the exception of satellite-based mobile equipment covered by Direcuve 93/97/EEC 
Common Technical Regulations (CTR) 
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  -
bidding,  auctioning,  lottery  -
non-discriminatory and transparent procedures. 

first  come/first  served,  comparative 
licence  award  procedures  must  be  based  on  open, 

55 
56 
57 

58 

For further discussion of the issue of type approvals, see Annex D,  Section 8 
For full  discussion of application of Community principles to licensing see Annex D, Sections 3 and  8 
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. 
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 

60 

supplier is the incumbent TO  Auct10ns also may promote the creation of anticompetitive groupings among potential  bidders 
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 

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). 

61 
62 
63 

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 

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. 

new 

coordination  mechanisms  m 

for 
The 
Telecommunications  Regulatory  Affairs 
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 

the  European  Committee 
its 

(ECTRA)  and 

64 

For further discussion of frequency coordination issues see Annex D,  Section 4. 

30 

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. 

48 

49 

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. 

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 
It  can  build  in  this  field  on  the  current  work  in  the 
communications  services. 
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. 

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. 

65 

66 

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 

53 

The Community should  continue to give  high  priority to  the development  of UMTS 
in its research programmes. 

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 
the  UMTS 
current 
technologies.  Account  must  also  be  taken  of the  specific  situations  in  Member 
States and the interests of existing licensees. 

technologies  for  Personal  Communications  Services 

to 

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 
The  Commission  has  proposed  guidelines 
development  of  such  networks. 
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  achieved68,  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 
69 

See discussion in Annex C and  m Annex D.  Section 12 
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 
interference 70 . 

to  electromagnetic  radiation  and  with  regard 

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 
It  should  also  involve  the  preparation  of a  work 
CEN-CENELEC  in  this  field. 
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 

72 

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 
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, 
In  order  to  fully  use  the  potential  and  allow 
and  from  niche  to  mass  market  player. 
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 
... :aotct.taffl.ers:td be·•ntted 

· 

:?1Jfj~y·~1ti9.4ltJ@O~µrE! frej~<>l'ri (>ft.ls~ incl pl°()vision .. <>f$efyi¢e~ ,,vhile ()p~ning•theway to.the 
·~,v~Jbpm~nt ()f)no~ile ~orri01Unicatioll$ t()Y/ards fu1rJ>erspnaft:ofl'lrl1llnicatiC>nst<>rthe 
• .;µ·r<>:r>~~o tmzen. · · 

... ·.·.: .. _::.::::;::::::::::::::::::::::::::::-·::-:.:-:-.::::::.:.·.:·· 

···:-:-:·.·.<·.·.·>>>>.<<<<·.·.· ... ·.·· ..  ···. 

..  .  . 

. ............ . 

]tjgy,.~ijpyJ4 pr()yi(f~ ctlQllg+ter'f"r.fp~J'Spe.ctiVefC>rthe>sectof'$ foclµstry  ~$well as· tO.·the 
: ..  ~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 
76 

77 

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) 
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) 
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 

4 

5 

6 

7 

8 

9 

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. 

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. 

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. 

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. 

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. 

Licence awards must be based on open, non-discriminatory, and transparent 
procedures. 

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 

79 

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) 
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 

1 

2 

3 

4 

5 

6 

7 

II  Service provision 

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. 

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. 

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. 

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. 

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. 

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. 

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 

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. 

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. 

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) 
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) 
See Annex D.6.1  and 6.2 

83 
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 

1 

2 

81 

82 

3 

4 

5 

6 

1 

2 

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. 

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. 

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. 

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 

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. 

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. 

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 

2 

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". 

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. 

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 

86 

87 

88 

89 

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 

7 

8 

1 

2 

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. 

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. 

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 

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. 

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. 

7 

8 

1 

2 

3 

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. 

· 

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. 

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 

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. 

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. 

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. 

5 

6 

7 

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. 

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. 

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. 

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 
93 

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) 
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 213/01 94 

- 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 

95 

96 
97 

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) 
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) 
as far as not covered by Directive 93/97 /EEC 
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 

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 COMMUNITY 1oo 

in  line  with  Council  Resolution  90/C  166/02  as  complemented  by  Council  Resolution 
92/C 318/01 101 , 
the  European 
a1mmg  at  promoting  close  cooperation  with 
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 18/02 102,  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. 

99 

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 

101 

102 

the implementation by the Member States of measures concerning radiofrequencies, COM(93)382.  10.9.93 
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. 
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 
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. 

in 

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. 

Radiocommunications 

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 
European 
Committee 
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. 

(ERC) 

and 

the 

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/EEC 105,  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) 
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) 

105 

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 
It  is  also  the  basis  of the 
condition  for  realisation  of the  market's  full  potential. 
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/EEC 108  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 

109 

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) 
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 
:MHz  range. 
the  1885  - 2025  and  2110  - 2200 
(FPLMTS) 

In 

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 
title  Future  Public  Land  Mobile 
the 
Telecommunications System (FPLMTS) ; 

this  area  under 

~ 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 
COMMUNICATIONS 
ENVIRONMENT ............................................................................................................. 87 

PERSONAL 

TOW ARDS 

A 

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 

4. 7 

The  convergence  of mobility  in  the  fixed  and  mobile  networks:  personal 
communications  as  a  global  service  offering,  and  the  role  of  service 
providers .. , ............................................................................................................. 91 

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 

communications 

Mobile 
the 
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. 

fastest  growing 

sector  within 

currently 

is 

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  Europe 1 •••••••••••••••••••••••  15,800,000 

on public networks2  •....................................................•.•••..........•.•••....•••••.•••••••••• 70o/o 
and on private networks3 ..............................................•..•..•................•.•••••••••.•••••• 30°/o 

operating on analogue systems4 
and on digital systems5 

..............•...••.•......••.••.••••••••••••.•••••••••••.•••••••••••••••••• 91 % 
..................................................•.......................••...•.•.•....•.•• 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 

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 investment 11  ..•..•.••.••••••••••••.••••••••••••• 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·. 

· 

4 

6 

9 

10 

11 

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 

7 

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. 

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 . 
Understanding (MOU) in which all European Community operators are members. 

Its  implementation  was  supported  by  the  GSM  Memorandum  of 

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 -

Belocom 
TeleDarunark 

B 

Deutsche Telekom  D 
E 
Telefonica 

E 
u 

IT Radiocom 2000 
SFR 
Eircell 
SIP 

P&T 
PTT Telecom 

TMN 
Cellnet 
Vodafone 
PTV 

IRL 

L 
NL 

p 
UK 

A 

Telecom Finland 

SF 

E 
F 
T 
A 

Telemobil 

Comvik 
Telia Mobltel 

N 

s 

NMT 450 
NMT 450 
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 
NMT 450 
NMT 900 
NMT 450 
NMT 450 
NMT900 
Natel C 

66.000 
47.000 
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 
159.000 
162.000 
21.000 
257.000 
452.000 
241.000 

14% 
-6% 
23% 
9% 
-11% 
82% 
1% 
23% 
25% 
-33% 
39% 
0% 
4% 
33% 
30% 
23% 
19% 
-7% 
49% 
6% 
33% 
5% 
38% 
00/o 
3% 
21% 
17% 

PTT 
-:-:·:::::::::::::::::;:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::  :::::::::::::::::::;:::::::::::::::::::::::::·::::;::::·:·:·  .. ·.·.;.·.·.·.:·:·:·:·:·:·:-:-:-:-:-:-····:·:-:·:·:·:·:·:·:·:·:·:·:·:·:·:·:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-
Ei!fonMtftt?ttfti~:::~:tft: nttt:t~:::::::tt?/:::· ·.  ,/::j:j:::«$4~§sq::::=:j}}:j~m:tj®.?.4tltifj 
~ource: uperators·puoushed marKet research 

CH 

... 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 
F  T elemobil 
T  ~etCom 
A  C-Omvik 

E.uropolitan 
Telia Mobitel 
PTT 

DK 

GSM 

6.000 

Mar-92 

D 

F 

p 

UK 
GR 

IRL 
L 
A 
SF 

N 

S 

SZ 

GS~f 

GS~f 

GS~f 

GS~f 

GS~l 
GSM 

GS~1 

GS~I 

GS~I 

GS~I 

GS~f 

GS~1 

GS~I 
GSM 

GS~f 

GS~l 
GS!\f 
GSM 

GS~1 

GS~i 
GS!\1 
GSM 

•15,000 
190.000 
260.000 
15.000 
7.000 
1 .000 
16.500 
21.000 
l .Ol'lO 
..3.0<.)() 
.. 3.000 

··~ 
•3_~ 

0 
5.000 
6.000 
1.000 
•2.._COO 
5.500 
2.000 
3.500 
2.000 

Jul-92 
Jul-92 
Jun-92 
Jul-92 

Jul-92 
Oct-92 
Oct-92 
Oct-92 
Dec-91 
Jul-93 
Jul-93 
Jul-93 
Jul-93 
Oct-93 
Jun-92 
Dec-91 
May-93 
Sep-93 
Sep-92 
Sep-92 
Nov-92 
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-card 10 

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  1991 12. 

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  th 1e 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  1990 15 . 
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  out 19
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 
standardisation conceming wireless local loop technologies. 

technical  report  and  recommendations  for 

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 
into  personal 
communications services providers - and are allowed to do so. 

to  evolve 

them 

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. 

future  prov1s1on  of  services  under  a 

The 
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 
for 

report  by  ECTRA  Mobile  Project  Team,  European  Conunittce 

communications 
Teleconununications Regulatory Affairs, October 1993. 

services", 

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. 

increasingly  complex  networking  environment, 

In  an 
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. 

terminals  already  exist, 

Examples  of  dual-mode 
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 
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. 

technologies 

to 

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 
all  of them  likely  to  be  major  components  of the 
technologies  such as  DECT  -
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. 

instead  of 

terminal-to-terminal  calling, 

Telecommunication  users  will  increasingly  require  mobility  and  person-to-person 
calling 
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. 

full 

i.e. 

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 

1.2  Relationships between market participants ............................................................  106 

I 

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 

2.4 

Type  approval,  interim  type  approval  and  mui1.Ial  recognition  of  type 
approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114 

Terminal  and  subscriber 
arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I 14 

related  databases  and 

identification,  and 

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 
operator/service provider ......................................................................................  l 22 

fixed  network/mobile  operator  and  mobile 

interfaces: 

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 
conununications, and satellite-based mobile and personal communications .............  127 

terrestrial  mobile  and  personal 

allocations 

frequency 

for 

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 
DEVELOPMENT 

IN  EUROPE  FOR  FUTURE 

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. 

2 

3 

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. 

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 

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 

B 

DK 

D 

GR 

E 

F 

_[ ___ _  ] 
....... ,," ·llil1~1,~i~~lli'flt1ilill~i iiijlllrlil11iL1iltllll[i[lii1 li1tl! 
-
-
-I  IMttHtkFkJ  _ ,_  r·--==iir·- -·=i 
- I   I  -1-
-
:. _,_ 
-

I 
l 
- I   I 
II 
II 
I 
-.r---

-

I  I I - C 
I 

- I   I --_,I 
-I  I 

1c  - --ic ___  - ir---11r-- - 11c 

11 

111 

111 

1 

I 
-
I W 

11Cu--=i11 

llltJtiil@ttHll 

lll  - --1 

I 
I  I 

._ ,  

-
I 

l 

l 

-

I 
I 

L 

NL 

p 

IRL 

uK 

Key: 

Note: 

Source: 

CEC  Studies 

-
Single licence allocated to  incumbent Teleconununications Organization (TO). 
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. 

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 
,  is  fully  open  to  competitive  provision  in  all  Member 

Equipment  Directive4
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 

OTHER MOBILE 
NETWORK 
OPERATOR 

. 

MOBILE 
NETWORK 
INFRA 
STRUCTURE 

FIXED 
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  operators 10
,  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 
operator can provi  e its services. 

.d  . 

11 

· 

. 

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 

11 

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. 

· 

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/EEC 12  due  to  delays  in 
establishing the  required  Common  Technical  Regulations  (CTRs),  an  interim  type 
instigated  in  1991 
to  avoid  impacting  GSM 
approval  (IT A)  scheme  was 
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 
arrangements 

subscriber 

identification, 

and 

related  databases 

and 

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 
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. 

in 

3.2 

Analysis of interface requirements between different operators 

Requirements  of  public  mobile 
interconnection 

telephony  operators 

Fixed/mobile 

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 
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. 

infrastructures.  The  moOile  operator  has 

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), 
discounts 

including  volume 

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
n  objective  criteria  and  be  fairly  shared· by'  all  participants  in  the 
3
. 
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 
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. 

interface 

that 

this 

is 

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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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. 

Source: 

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 
operator/service provider 

interfaces: 

fixed 

network/mobile 

operator 

and  mobile 

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, ETSI 16

. 

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. 

It decides  on  the 
The  ETSI  Teclmical  Assembly  (TA)  has  final  responsibility  for  the  standardisation  work. 
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 
communications in Europe. 

indicative  overview  of  spectrum  use 

for  mobile 

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 
In  the  field  of satellite 
further  detail),  as  well  as  radiofrequencies  for  UMTS. 
mobile  communications, 
future  satellite-based  personal 
conununications  services,  including  the  Low  Earth  Orbiting  Satellite  systems 
(LEOs). 

this  concerns 

the 

In  Europe,  Council  Directives  relating  to  frequency  designations  for  key  pan 
European systems:  GSM, DECT and ERMES have been adopted 17

. 

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 

47 - 88 w-Iz 

138 - 174 w-Iz 

3 80 - 400 w-Iz 

420 - 470 w-Iz 

862 - 960 w-Iz 

1670 - 1900 MHz 

1885 - 2200 MHz 

5795 - 5815 MHz 

63  -64 GHz 

76  - 77  GHz 

Harmonised bands: 

Systems 

CT 1, Paging, PMR, MOBITEX 

first PLMN's 1 , RC2000, PMR, P AMR 
(MPT 1327), ERMES, Paging2 , MOBITEX 

TETRA3 

RC2000, NMT450, System C,  RTMS, P.MR 
Paging 

T ACS, ET ACS, NMT 900, GSM,  DSRR, 
CT2,PMR 

TFTS4, DCS  18001, DECT 

FPLMTS/UMTS(note 1.4) 

RTT 

RTT 

RTT 

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). 

1 

2 

3 

4 

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 
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  context 19  (see 
Annex D). 

in  Europe 18
.. 

In 

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 
for 
communications, and satellite-based mobile and personal communications. 

terrestrial  mobile 

allocations 

frequency 

and 

personal 

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. 

in 

Based on a range of design assumptions and estimates of penetration and traffic for 
dense  use 
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. 

large  cities,  CCIR  calculated  prior 

to  W ARC 

'92 

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 
In  the  United  States  of America,  this  will  operate  already  from  1996 
2005. 
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 

.· 

· . . . .   ·.· 

1885-2025 MHz;  2110-2200 MHz. 

Worldwide 
Region 23 
Worldwide 
World\\ide 
Region 24 

World\\ide 
Worldwidc-3 
World\\idc-3 
World,\ide 

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) 

Worldwide 

1670-1675 MHz (u);  1800-1805 MHz (d); 

Canada/USA & 
Me,xico · 

1670-1675 MHz (u);  1800-1805 MHz (d) 
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 

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. 

4 

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 
industry, 
service 
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. 

administrations, 

operators, 

providers, 

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 : 

• 

• 

a common European emergency number ( 112) 

; and 

22 

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 
It  is  nevertheless  at  present  generally 
does  not  prove  conclusively  that  it  is  not. 
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 
in  Directive  89/336  on  electromagnetic  compatibility28
already  addressed 
. 
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 
television;  itself a  growth  industry  in  the 
proximity  to  vehicle  ele:ctronics;  cable 

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 
range  of 
teleconununications  products  and  services,  users  must  deal  with  a  . variety  of 
different suppliers, and work within the limitations of individual chosen solutions. 

for  many  users 

to  obtain  a 

in  order 

full 

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 
and  personal 
conununications services will be required. 

specific  approaches 

for  mobile 

further 

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 

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  US 2  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. 

2 

See  "Global  Competitiveness  of  US  Advanced-Technology  Industries:  Cellular  Conununications",  US 
International Trade Conunission 1993. 

142 

~· 

T}l.e  FCC has announced the frequency allocation for  US  Personal Communications 
In  Septemb<~r  1993  the  FCC  allocated  a  total  of  160  MHz  for  PCS 
Services. 
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. 

4 

Federal Conununications Commission Reports, Cellular Communications Systems, 86 FCC 2d ( 1986 ). 

Local Access Transport Area. 

143 

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 
Instead  of automatically 
Areas  (MTAs)  and  492  Basic  Trading  Areas  (BTAs)9. 
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 

6 

7 

9 

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 (AMSC 10)  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 
through  1he  1992  World  Administrative  Radiocommunications 
negotiated 
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 
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. 

regulatory  changes  embodied 

following 

in 

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 

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. 

II 

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 Council1 3  (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 
local 
the 
telecommunications operator and are more likely to be subject to competition. 

joint  ventures  do  not  necessarily 

include 

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 CIS 14

• 

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 variants 15 .  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 
inter-
relationship. 

impact  and 

· 

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 

Exhibit Cl: Adoption of GSM technology world-wide - 108 licences 
already allocated or planned in  62 countries at end 1993. 

Countries allocating one lice1fre 

Countries aJlocati11gtw6>licerices 

Countries allocating rriore than two licerices 

EU 

Luxembourg 

Belgium,  Denmark,  Frnnce,  Germnny, 
G rccn·,  I rclnnd,  ltnly,  Nethcrlnnds, 
Portugal,  Spain,  United  Kingdom. 

Other 
Europe 

Andorrn,  Austrin,  Crontin,  Czech  Republic,  I  Finland,  1 lungnry,  Norw;1y. 
Estonia,  Iceland,  Latvia,  Romania, 
Slovakia,  Slovenia,  Switzerland,  Ukraine . 

Sweden,  Russ-in. 

..... 
~ 

Other 
countries 

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. 

Australia,  Hong Kong,  India. 

35 licences and countries 

•r•.•.•••"M"-"""""-'''"· " "  •m•.-,~••~1 .. ~,,.~_.,,._...~~-•M~--~ .... ,. 

44  licences in  22  countries 

29 licences in 5 countries 

Source: CEC  studies, regulator/operator infonnation 

6.3 
technologies: DECT, TFfS and others 

The  world  market  potential  of  other  European  digital  mobile 

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. 
is  now  developing  a  satellite  personal 
communications service,  Inmarsat-P, possibly combining Geostationary (GEO)  and 
Medium Earth (MEO) Orbits. 

In  addition 

lnmarsat 

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. 
Commission emphasised the importance of a pan-European strategy with  regard  to 
satellite PCSs.  The Resolution was adopted by Council on  7 December  1993 18  and 
represents  the  starting  point  for  a  consistent  policy  in  this  area,  both  within  the 
European Union and at an international level. 

In  the  Communication  the  · 

17 

18 

See  the  Commission Communication of 27 April  1993  and  the proposal  for  a  Council  Resolution  on  Satellite 
Personal Conununications, COM(93) 171 

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 
its 
telecommunications ... " 

right  of  each  State 

sovereign 

regulate 

to 

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  reform 19,  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 
In  particular  North  American  infrastructure  suppliers  and 
other  GSM  markets. 
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. 

in 

the  countries  of  central  and  eastern  Europe,  where 

Some  operators  have  entered  the  market  by  concentrating  on  setting  up  _10111t 
ventures 
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 
Pacific  T cl es is  has 
owned  by  the  national  telecommunications  organisation: 
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 

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  technologies 21  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. 

21 

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) 

b) 

c) 

The rules on the free movement of services .......... : . .. .. . .. .. .. .. . . .. . .. . .. .. .. .. . . I 7 .:" 

The competition rules ............................................... . 

................ I 7h 

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) 

b) 

General  principles ...........................................................  . 

l7S 

Justifiable restrictions in  national  licenses ........ . 

3 .2 

Essential  requirements ........................................................... . 

3.3 

Public service requirements  in the fonn of trade regulations ...... 

I SO 

. .. 181 

3.4  Duration ................................................................................................... . 

IX  I 

3 .5 

Other conditions imposed on Mobile Operators .................................... . 

. ..  181 

a) 

b) 

c) 

Protection of reserved services ..................... .. 

License fees ......................................................  . 

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........................................................... 

a) 

Service provision not to be  subject to  licensing ........... . 

IX.' 

.. 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) 

b) 

c) 

d) 

Interoperability .......................................................................................  192 

Interconnection .......................................................................................  192 

Provisions of the ONP Leased Lines Directive ........................................ 193 

Provisions of ONP Voice Telephony Directive ........................................ 193 

6.2 

The future  role of ONP in mobile systems and interfaces .......................................  194 

a) 

b) 

c) 

The fixed/mobile  interface ......................................................................  I 94 

The mobile/mobile interface ....................................................................  I 9 5 

The mobile operator/service provider interface ........................................ 196 

6. 3  Access to intelligent network features ....................................................................  l 96 

a) 

b) 

Access to the IN functions  of the fixed network ....................................... 197 

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) 

b) 

Distortion of market structure resulting from  current restrictions ............. 206 

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 

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. 

2 

·' 

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 
interconnection through Open Network Provision (ONP) 

interworking  · and 

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  1991 5,  as  well  as  subsequent  Conmmnications 
and proposals for legislation. 

2 

EXCLUSIVE AND SPECIAL RIGHTS 

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 

4 

5 

6 

7 

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 
communications 

in  mobile 

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 
In  the  case  of  analogue  cellular  services,  for  example, 
technologies. 
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 
the  competitive  concerns  arc 
case  of  radio-based  communications, 
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 

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 
in  mobile  services  has  not 
outside  shows  that  the  rapid  growth 
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: 

9 

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  1990 11  (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 
tekco111mumc,1t1011s  services through  the  implementation of open  network  pnn·ision. ( ),!  I.  J lJ2/ I.  2-1  ...,  'h l 

thl.!  1.!stablishment  ot'  tli~ 

111t~rn;il  111;1rkct 

!"111 

178 

The  requirement  of  non-discrimination  means 
licence 
conditions  should  in  principle  apply to  publicly  and  privately  owned  mobile 
At  the  same  time  differential  licensing  conditions  may  be 
operators. 
appropriate  between  operators  facing  different  market  conditions  (for 
example, a significant difference in the date on which each is  allowed to enter 
the market). 

the  same 

that 

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 

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\\. 

15 

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 
l lJlJ2 
electromagnetic  compatibility  (89/336/EEC,  OJ  Ll39/19,  23.5.89)  and  Council  Directive  or  28  April 
to 
amending  Directive  89/336/EEC  on  the  approximation  of  the  laws  of  the  Member  States  reluting 
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  Kl 1MCT  Stmlv  identities  variations  within  analogue  cellular networks  of between  10  to  25  years  with  many 
In  one  case  a  private  operator  was  grnnkd  ii  I 0  )'C<tr  licence 
\lpcrato! ~;  enjoying  an  indefinite  licence  period. 
''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: 

limitations  which  those  mobile  operating  licences  currently  impose  on 
the 
combined  offerings·  of  service~  provided  under  different 
thereby 
preventing existing operators from  satisfying demand for  such combined offerings: 
and 

licences, 

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. 

the  number  of  distributors  appointed  unless  justified  under 

Competition  policy  in  the  area  of  selective  distribution  nonnally  precludes  any 
the 
limitation  on 
competition  rules.  This means that mobile network  operators  should,  in  line  with  their 
obligation 
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). 

to  provide  open, 

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 
communications services 

to  Service  Providers  and 

the  provision  of  mobile 

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 
inclll(.k 
commitments in  relation to the qualifications and training of staff 

terminals.  The  Code  of  Conduct  ma' 

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 
the 
regulatory 
and 
Telecommunications Services Directive and the  1987 Green Paper. 

established 

act1v1t1es, 

by 

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 
In  particular,  it  would  delay  the  dissemination  of new  and  advanced 
the  Treaty. 
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. 
the  European 
Radiocommunications  Coinritittee,' and  its  European  Radiocommunications  Office 
(ERC), as the basic forum for such
~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 

identify 

These 

0

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 

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 
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. 

the  establishment  of  decisions,  and 

include 

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). 

28 

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: 

• 
frequencies  will  be decided according to  defined criteria; 

As a  first  step, a decision as to  whether Community action  is required in  particular areas or radio-

• 
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 
specific 
operation  of 
Telecommunications  Directive.  This  framework  should  develop,  in  particular.  in 
relation to: 

the  General  Data  Protection  Directive 

and 

the 

• 

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) 

J 4  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  Telcphony3 6  (the 
Voice  Telephony  Directive)  and  Council  Directive  92/44/EEC3 7  (the  Leased  Lines 
Directive)3 8. 

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 
In  the  context  of the  implementation  of Council  Resolution 
operators  enjoying  exclusive  or  special  rights. 
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 

regulatory  policy  places  no 

Community 
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. 

line-of-business 

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: 

shall 

ensure 

regulatory 

"national 
that 
authorities 
telecommunications organisations adhere to  the principle of non 
discrimination  when 
public 
they  make 
telecommunications  network for providing services  which  are  or 
When 
may  be  provided  by  other  service  providers. 
telecommunications  organisatior.s  use 
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)) 

leased  lines  for 

use  of 

the 

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 

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. 

42 

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 
It also  acts  as  an  incentive  to  use  spectrum  as  efficiently  as  possible  in 
resources. 
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 
for  mobile 
of  artificial 
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. 

restrictions  on  qualification  for 

licensing  procedures 

lottcri..:s  qm;viousl;.1  us..:d  in  lauw.:hing  analogul.!  mobik  sl.!rvic..:s  in  tho.:  lJSJ\) 
f,.l'f)/w1<I  and bite/is. 

~..:c  f..P\ fl i  .\'1t1d1·.  < 'ou;'""'  ,\ 

--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 

licence  conditions  at  a  Union 

safeguards on the provision of pan-European services46 .  This avoids, in the absence of 
harmonised 
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. 

level,  further 

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. 

introduction  of  satellite-based  personal  communications 

In  particular,  and  in  accordance  with  the  Council  Resolution  of 7  December  1993  on 
the 
the  European 
Conmmnity,  licences  for  such  future  satellite  based  personal  conmmnication  systems 
should be awarded on this basis. 

in 

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). 

standard(s)  based  on 

In  practice, if CTRs exist,  they  are mandatory.  Where  CTRs have  not  yet  been  agreed 
and  where  one  or  more  harmonised 
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 
reconunendations  on  number  structure. 
Responsibility for  number allocation currently lies  either with NRAs or the  incumbent 
Tcleconmmnications Organisation. 

length  and 

Numbering  policy  within 
ham1onisation 50: 

the  Union  has 

so 

far  concentrated  on 

limited 

• 

• 

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 
It  also  recognises  the  need  for  a 
based  on  wide  consultation  of interested  parties. 
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. 

to 

restrictions 

are  difficult 

justify  under 

current  Union 
Such 
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, 
It  would 
specifically  excluded  mobile  radiocommunications  from  its  scope. 
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, 
discrimination  and equality of access,  as  well  as  being  fully  consistent  with 
the Community competition rules. 

transparency,  non- · 

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 
(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 1J1 l '   1 1,'  k 
published). 

;1 

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 

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  19936 1.  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  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. 

the  proposed  directive  on  competition 

in 

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. 

58 

59 

.  60 

61 

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 

similar 

requirement 

for  national 

A 
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 
the  most  economic  and  efficient  delivery  of  personal 
technology  base 
conummications services. 

for 

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 
S \'stems 
(UMTS/FPLMTS)). 

Teleconummication 

(Universal 

systems 

Mobile 

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. 

.. \1afe~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 
third  generation  system 
the  area, 
(UMTS/FPLMTS) and satellite-based personal  conmmnications  (including  Low  Ea11h 
Orbit Satellites. (LEOs). 

field  of  the  future 

in  particular 

the 

in 

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. 
cellular systems were developed on the basis of analogue 
transmission techniques (see Analogue Cellular .\)·stem).  but 

Initial!~. 

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 

Comparative Bidding 

CT2 

CT Rs 

/JCS 1800 

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) 

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. 

Cordless telephony equipment standard based on an ETSI 
interim standard.  Current use  primarily with  Telepoint 
Applications. 

Common  Technical Regulations for type approval of terminal 
equipment according to the procedures of Directive 
91/263/EEC. 

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 

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. 

/TA  (Interim  1)'jJe Approval) 

Provisional approval for terminal equipment, established inter 
alia  for  GSM terminals. 

IP Rs 

Intellectual Property Rights 

222 

International Telecommunications 
Union  (ITU) 

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. 

Low Earth  Orbiting satellite (LEOs) 
, 

Non-geostationary satellites in low-earth orbits.  LEO 
concepts play a particular role in current proposals for 
satellite-based Personal Communications services. 

Lottery 

Licence award procedure on the basis of lotteries, which has 
been used particularly in the United States. 

Memorandum of Understanding (MOU) 

Micro Cellular Networks 

Mobile Data 

Mobile Nehvork Operator 

NMT 

NRA 

ONP 

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 

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. 

Personal Communications Networks 
(PCN!)) 

see DCS-1800 systems. 

PIN (Personal Identification Number) 

Private Mobile Radio (PMR) 

Public Access Mobile Radio (PAMR) 

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 

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. 

Radiocom 2000 

Analogue Cellular System standard 

RES (Radio Equipment and Systems) 
Committee 

Roaming 

RTT (Road Transport  Telematics) 

Satellite-based Personal 
Communications Services 

Second Generation Mobile Systems 

Service Providers 

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. 
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. 

The role of service 

225 

SES (Satellite Earth Station) 
Committee 

ETSI Technical Committe (TC), covering inter alia  mobile 
satellite communications equipment.. 

Signalling System  7 (SS7) 

Major digital protocol/ signalling system for managing and 
transmitting control and routing information in networks. 

SMG (Special Mobile Group) 

ETSI Technical Committee (TC), with special responsibility 
for GSM, DCS 1800, and the development of UMTS. 

Special Rights 

Subscriber Identification Module 
. 
(SIM) 

TACS 

Time Division Multiple Access 
(TDMA) 

1992 Telecoms Review 

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) 

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. 

Third Generation Systems 

See entry on UMTS. 

TO (Telecommunications 
Organisation) 

Trans European  Trunked Radio 
(TETRA) 

Universal Mobile Telecommunications 
System (UMTS) 

Universal Personal 
Telecommunications (UPT) 

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 

ISBN 92-77-67896-8 

Office for Official Publications of the European Communities 
L-2985 Luxembourg