Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions - European electronic communications regulation and markets 2006 (12th Report) {SEC(2007)403}
Date: 2007-03-29
Institutions: European Commission
Subjects: information technology, regulation of telecommunications, report, single market, telecommunications, telecommunications industry, transmission network

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 29.3.2007 
COM(2007) 155 final 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

EUROPEAN ELECTRONIC COMMUNICATIONS REGULATION AND MARKETS 
2006 (12th REPORT) 

{SEC(2007)403} 

EN 

   EN 

 
 
 
  
 
1. 

INTRODUCTION 

The Commission's overarching initiative for information society and media policies, 
i20101, confronts the challenge of rapid convergence and technological change with 
a  regulatory  framework  for  electronic  communications  that  promotes  competition, 
investment, innovation, the single market and consumer benefits. 

However,  in  order  to  realise  the  full  potential  of  the  internal  market,  more 
consistency  of  application  across  the  EU  and  a  strengthening  of  the  framework  in 
areas such as spectrum management are needed. The Commission is now reviewing 
the framework, and will come forward with proposals in mid-2007. 

This  Communication  examines  market,  regulatory  and  consumer  developments  in 
the sector in 2006, and complements the i2010 Annual Report2 and the forthcoming 
report on market reviews. It is based on a Commission services' working document 
adopted in parallel. 

The regulatory situation is that at 31 December 2006. Market data, unless otherwise 
indicated, cover the period up to 1 October 2006. 

2. 

MARKET DEVELOPMENTS 

Overview 

E-communications  services  continue  to  represent  the  largest  segment  of  the  overall 
ICT sector, accounting for about 44.5%3, around the same as the previous year. Of 
sector revenues of approximately €649 billion3 in 2006, €289 billion3 were derived 
from fixed telephony, mobile telephony, fixed data services and cable. 

Overall  revenue  growth  was  estimated  at  2.3%4  ,  lower  than  the  rate  for  2005  of 
between 3.8% and 4.7%; traffic volumes increased in all segments. 

The sector continues to be highly dynamic. New players such as internet companies 
are  entering  the  market  for  IP  telephony  and  are  leveraging  their  large  customer 
bases  to  gain  competitive  advantage.  They  thus  exert  pressure  on  traditional  fixed 
and mobile providers to develop new strategies, including investment in broadband 
and  next  generation  networks  to  create  new,  more  lucrative,  revenue  streams  from, 
for example, content services. 

1 
2 
3 
4 

COM(2005) 229 
i2010 – Annual Report on the Information Society 2007 
EITO, 2006 
EITO, 2006 and IDATE, 2006 

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Fixed voice telephony has continued to decline but still remains the most important 
source  of  revenue  in  the  fixed  market.  Intensifying  competition  and  substitution  by 
mobile services (and to a lesser degree VoIP) are the primary factors. The decrease in 
revenues from fixed services in 2006 is estimated at between 4.5%5 and 5.1%3. 

Broadband  is  the  fastest  growing  segment,  with  revenue  growth  estimated  at 
between 7.8%5 and 8.5%3 helping to offset the decline in voice revenues. More than 
20  million  broadband  lines  were  taken  up  in  2006,  an  increase  of  39%  on  2005. 
Infrastructure-based competition and effective regulation continue to be key drivers.  

Revenue  from  mobile  services  grew  at  4.6%3,  slower  than  in  2005.  While  take-up 
and use of mobile phones continued to increase, the mobile voice market is showing 
signs  of  maturing.  Prices  have  continued  to  fall  as  a  result  of  intensifying 
competition:  OECD  baskets  of  prices  of  domestic  mobile  services  for  typical 
consumption  patterns  show  EU-wide  decreases  of  up  to  13.9%  between  2005  and 
2006. 

Sector finance, investment 

In  2006,  investment  in  the  electronic  communications  sector,  measured  in  terms  of 
capital  expenditure,  is  estimated  to  have  risen  to  more  than  €47  billion,  5%  up  on 
2005.  This  was  the  fourth  consecutive  year  of  increased  year-on-year  investment 
levels since 20036. 

The  typical  fixed  incumbent  invested  around  13.3%  of  its  revenues,  whereas  the 
typical leading mobile player invested approximately 12.7% of its revenues. The five 
largest markets accounted for about 70% of total EU 25 investment7. 

Europe invests more in absolute terms than either the US or Japan. European growth 
was also more robust in 20068. 

5 
6 

7 
8 

IDATE, 2006 
Commission  estimates  based  on  data  from  Goldman  Sachs,  ETNO,  Cable  Europe  and  ECTA. 
Investment figures refer to capital expenditure only (maintenance and expansion) 
Goldman Sachs 
EU investment in absolute terms exceeded that of the US and Japan in 2005; EU growth estimates for 
2006 were also greater (source: Infonetics Research, November 2006)  

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Mergers  and  acquisition  activity  remained  important.  In  2006,  total  transactions  in 
the EU are however estimated to have fallen slightly short of last year's €70 billion9. 
Typical factors driving deals were the need to achieve pan-European scale, a shifting 
emphasis  from  voice  to  data  and  a  continued  inflow  of  speculative  capital  from 
private equity groups profiting from low interest rates. 

Cross-border activity 

On average, one third of revenues accrue from activity in a Member State other than 
the operator's home country. This development is changing the business orientation 
and policy views of the operators concerned. 

The major source of intra-EU geographical diversification is the mobile sector. The 
average  European  fixed  incumbent  in  2006  remained  predominantly  wedded  to  its 
home turf; the European businesses of the Swedish, Spanish and French incumbents 
were  most  diversified  by  this  measure  (approximately  41%  or  more  EU  activities 
abroad). 

Thus, although the European telecoms sector compares favourably with others, there 
is significant scope for strengthening the internal market in this respect. 

After a difficult year in 2005, the financial outlook for the major players in European 
electronic  communications  brightened  slightly  in  2006.  As  measured  by  the  Dow 
Jones  Euro  Stoxx  Telecoms  Index,  the  value  of  the  sector  in  2006  increased  by 
11.53%; over three years, the increase was 23.84%10. 

9 
10 

Commission estimate; Morgan Stanley; ING 
The  Dow  Jones  Euro  Stoxx  Telecommunications  Index  (SXKE)  increased  from  378.4  (end  2003)  to 
468.6  (end  2006)  points,  whereas  the  Dow  Jones  Euro  Stoxx  50  Index  increased  from  2760.66  to 
4119.94 points over the same period 

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Relative Sector Performance since 2003 

Chart 1: 

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60%

50%

40%

30%

20%

10%

0%

2003

2004

2005

2006

Dow Jones Euro Stoxx Telecoms (SXKE)

DJ Euro Stoxx 50

One reason for the volatile performance of the sector since 2003 may be uncertainty 
over  future  business  models.  EU  incumbent  operators  are  still  dependent  for 
approximately  60%  of  their  EBITDA11  on  their  traditional  voice  and  access 
businesses. 

In the mobile sector, meaningful revenue streams from next generation services are 
materialising only slowly. However, although in mid-2006 European operators' non-
voice  revenue  (mainly  SMS)  was  estimated  at  17.1%,  this  was  significantly  higher 
than the comparable figure for the US12. 

Convergence 

Most fixed and mobile operators are gradually upgrading existing infrastructures to 
enable higher data speeds and converged services.  

Next  generation  networks  will  allow  more  efficient  provision  of  multiple  services 
over the same infrastructure. Content is becoming a more important factor, with the 
development of services such as IP-TV and mobile TV, in allowing market players to 
differentiate offers. 

There is a clear trend  towards bundled products,  where operators  offer  a variety of 
services  for  a  single  flat  price.  An  EU  survey13  shows  that  19%  of  EU  households 
subscribe  to  at  least  one  bundled  service  and  that  the  most  frequently  purchased 
service package is a 'double play' offer of fixed voice and internet. 

11 
12 
13 

Earnings before interest, taxes, depreciation and amortisation 
Merrill Lynch, 24 June 2006 
E-Communications Household Survey (March 2007), Special Eurobarometer, European Commission 

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EU Household Penetration of Bundled Offers

Internet+Fixed voice+TV+Mobile

Internet+Fixed voice+Mobile

Internet+Fixed voice+TV

Other

Internet+TV

TV+Fixed voice

Internet+Fixed voice

2Play

3Play

4Play

Chart 2: 

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16%
14%
12%
10%
8%
6%
4%
2%
0%

Mobile 

The  overall  value  of  the  mobile  services  market  in  the  EU  is  estimated  at  €133 
billion14. Penetration has now exceeded the notional 100% mark and stands at 103%, 
compared to 95% last year. There are now 478.4 million mobile users in the EU. 

14 

EITO, 2006 

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Chart 3: 

600

500

400

300

200

100

0

Mobile subscribers  penetration in EU (2G and 3G)

84.6%

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6
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6
8
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95.0%

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6
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6
3
4

103.2%

9
3
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8
7
4

120%

100%

80%

60%

40%

20%

0%

Oct. 2004

Oct. 2005

Oct. 2006

EU subscribers

EU penetration rate

Luxembourg  tops  the  list  with  171%  (including  commuters  from  neighbouring 
Member States), followed by Italy with 134% and Lithuania with 133%. Growth has 
however been less than in 2005, suggesting a maturing market.  

The  number  of  mobile  service  providers  (MVNOs,  enhanced  service  providers, 
simple resellers) has continued to increase, with the highest number in the UK (70) 
and the Netherlands (60). The total has increased over the year by 76, and now stands 
at 290.  

While there is scope for even greater progress, increased competition is driving lower 
prices. Simple average prices per month for a medium usage basket of national voice 
calls/SMSs15 show the following trend: 

15 

OECD methodology, two largest operators per Member State, monthly rental included 

EN 

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Chart 4: 

Mobile Medium Usage Basket (EUR) 
Average of All Mobile Operators Covered -EU25

T
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i

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45

40

35

30

25

20

36.64

32.84

29.01

2004

2005

2006

3G 

There are signs of increased 3G take-up: in Italy, for example, the regulator estimates 
there  are  around  12  million  3G  subscribers,  compared  to  2.6  million  at  the  end  of 
2004. Between 10 and 15% of European mobile subscribers have a 3G phone. 

Roaming 

Average  retail  prices  for  calls  made  while  roaming  continue  to  be  significantly 
higher  than  the  equivalent  prices  for  domestic  mobile  calls,  despite  initiatives  to 
increase  transparency  of  tariffs,  including  the  launch  of  a  consumer  website  by  the 
European Commission. These differences in price cannot be explained by differences 
in cost incurred by the operators. 

The  Commission  believes,  as  confirmed  by  the  conclusions  of  the  last  Spring 
European  Council,  that  the  benefits  that  would  accrue  to  consumers,  SMEs  and 
business  users  from  lower  roaming  prices  would  in  turn  benefit  the  whole  EU 
economy,  and  accordingly  proposed  in  July  2006  a  single  market  measure  in  the 
form  of  a  Regulation  on  roaming  within the  Community.  The  proposal  is  currently 
under discussion in the European Parliament and Council, and should be approved by 
summer 2007. 

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Fixed voice 

The overall value of fixed voice in the EU is estimated at €83 billion16.  

Competition in the fixed market has continued to intensify over the year, with prices 
for  national  and  international  calls  decreasing  further.  Fixed  number  portability 
continues to contribute to market competitiveness. 

Chart 5: 

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€

70

60

50

40

30

20

10

0

Local and National Fixed Call Charges 
3-minute-calls, EU25 Weighted Average

46.80

41.50

38.50

37.70

33.90

29.40

28.30

13.40

13.80

13.60

13.70

13.80

13.50

14.60

2000

2001

2002

2003

2004

2005

2006

National Calls

Local Calls

Incumbent  operators  continue  to  lose  market  share  in  their  home  markets,  while  a 
number of new players have started to offer services. However, in a number of cases 
the  most  significant  competition  is  provided  by  large  operators,  including  BT, 
Deutsche  Telekom,  France  Telecom,  Telefónica  and  Telecom  Italia,  continuing  to 
establish  and  increase  their  presence  in  Member  States  other  than  their  home 
markets. 

16 

EITO, 2006 and IDATE, 2006 

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Chart 6: 

80%

75%

70%

65%

60%

55%

EU Incumbents' Average Market Share on the Voice Telephony Market 
(revenues)

75.8%

70.6%

68.8%

62.9%

73.2%

69.2%

65.1%

58.7%

71.8%

67.0%

62.2%

56.7%

Dec. 2003

Dec. 2004

Dec. 2005

Local calls

Long-distance calls

Calls to mobile

International calls

Source: Commission services based on NRA data. 

Broadband 

The  overall  value  of  the  fixed  data  market  in  the  EU  is  €58.5  billion17.  Broadband 
take-up  continues  to  grow  strongly,  with  more  than  20  million  lines  added  from 
October 2005 to October 2006. 

Take-up has reached 15.7% of the EU population (almost 73 million lines), up from 
11.4% last year. 

17 

EITO, 2006 

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10 

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Chart 7: 

EU Broadband penetration rate, 1 October 2006 

October 06

%
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EL SK PL CY HU LT

LV CZ

IE MT

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ES EU25 AT DE EE FR LU UK BE SE

FI DK NL

Data for Austria as of July 2006. The estimate for the Austrian NRA for October 2006 is 16.42%

However, the gap between the best-performing Member States and those performing 
less  well  continues  to  increase  as  the  Member  States  with  higher  penetration  rates 
grow more rapidly. Eight have penetration lower than 10%. 

International comparison 

The  best-performing  EU  countries  are  world  leaders:  in  six  Member  States  take-up 
exceeds  20%  of  the  population,  and  is  growing  faster  than  in  other  places  such  as 
Japan and South Korea. 

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Chart 8: 

International Broadband Penetration Rates  
(EU - 1 October 2006, 3rd countries - 30 June 2006)

%
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Data for Austria as of July 2006. The estimate for the Austrian NRA for October 2006 is 16.42%. 

Broadband transmission speeds vary across the EU, which on average still lag behind 
the  US,  Japan  and  Korea18.  To  some  extent  this  can  be  explained  by  the  high 
population density in South Korea and Japan, and the presence of more high capacity 
cable  networks  in  the  US  compared  to  several  major  EU  countries.  This  gap  could 
close  as  increased  competitive  pressure  in  the  EU  drives  investment  in  high  speed 
networks. 

Factors affecting roll-out 

On average, new entrants now have 52% of the market, up from 49.8% last year (if 
resale products are excluded, new entrants have market share of 40.7%). There is a 
general consensus that competition is a major driver of broadband take-up. Member 
States  such  as  the  Netherlands  and  Denmark,  where  there  are  competing 
infrastructures,  appear  to  be  the  best  performers.  Effective  market  regulation 
permitting  access  to  the  incumbent's  infrastructure  also  stimulates  competition,  and 
decisive  regulatory  action  in  France  and  the  United  Kingdom,  for  example,  has 
clearly been important. 

18 

The predominant speed in the US is 2.5 Mbps - 10 Mbps, but 512 kbps - 2 Mbps in the EU (sources: 
IDATE, FCC) 

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Apart  from  improving  market  conditions,  good  regulation  enables  alternative 
operators to move gradually from service-based to infrastructure-based competition. 
In  contrast,  performance  gaps  can  be  observed  in  Member  States  where  poor 
regulatory policy is combined with the absence of competing infrastructure. 

Price  levels  for  both  fully  unbundled  and  shared  access  continue  to  decrease  EU-
wide,  although  the  drop  is  less  pronounced  for  fully  unbundled  access.  Whilst  it  is 
true  that  growth  in  broadband  resale  arrangements  was  particularly  pronounced  in 
2006  (up  by  124%),  alternative  providers  continued  to  climb  the  ladder  of 
investment, with more than 4.1 million new fully unbundled local loops (up by 79%) 
bringing several billion euros of investment into new infrastructure. 

Auctions for WiMAX, CDMA, UMTS, HSDPA and LMDS licences were held in a 
number  of  Member  States  in  2006.  This  will  reinforce  broadband  take-up  and 
accelerate  the  catching-up  process  in  remote  or  sparsely  populated  areas  and  new 
Member States. 

3. 

REGULATORY ENVIRONMENT 

National legislation 

Transposition  of  the  regulatory  framework  into  the  national  law  of  the  25  Member 
States  was  completed  in  2006  with  the  adoption  of  primary  legislation  by  Greece. 
The two new Member States have also notified primary legislation, which in the case 
of Romania relates to the entire framework and in the case of Bulgaria covers a part. 

Improvements  to  national  legislation  have  also  been  made,  notably  in  Denmark 
(appeal  procedures),  the  Netherlands  (rights  of  way),  and  France  and  Spain 
(consumer protection). 

The Commission is concerned on the other hand that the amendment of the German 
Telecommunications Act will exempt new markets from regulation under conditions 
less onerous than those set out under Community law. 

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Deregulation 

In some countries, voluntary commitments by dominant players have been accepted 
by the regulator as an alternative to full regulation (United Kingdom), or legislation 
adopted to enable the enforcement of such commitments (Italy). Flexibility has also 
been  the  aim  of  the  functional  separation  of  the  fixed  incumbent's  access  network 
from  its  retail  and  other  business,  such  as  that  in  the  United  Kingdom  or  under 
consideration in other Member States. 

While  reviews  of  many  relevant  markets  have,  as  might  be  expected  in  the  first 
round,  resulted  in  the  imposition  of  obligations  on  dominant  players,  a  core  of 
markets can be identified where deregulation has been possible. 

This has been the case in several Member States where obligations were removed as 
a  result  of  a  finding  that  the  mobile  access  and  international  calls  markets  were 
competitive.  In  some  cases  the  regulatory  burden  has  been  reduced  in  the  light  of 
market conditions, for example in Belgium, Spain, France and the Netherlands in the 
residential fixed telephony market. 

NRAs  

Independence 

In  general  the  NRAs  have  consolidated  their  authority  and  independence.  Doubts 
have  been  expressed,  however,  in  the  case  of  Slovakia  regarding  separation  of 
regulatory  functions  and  control  of  State  ownership  of  market  players.  A  fresh 
concern regarding the independence and impartiality of the new NRA has arisen in 
Poland, moreover, in the light of the abolition of its predecessor and the scope of the 
government's powers of dismissal. The extent of political influence over day-to-day 
regulatory  decisions  in  some  Member  States  is  an  issue  calling  for  further 
examination.  New  entry  and  cross-border  investment  will  only  reach  their  full 
potential where the independence and  impartiality  of the  regulator  can be  relied on 
by the market. 

Market reviews 

The  process  of  notification  and  consultation  of  the  Commission  and  other  NRAs 
under  Article  7  of  the  Framework  Directive  is  a  key  tool  for  ensuring  that  the 
benefits of consistent regulatory policy feed through to all European users. 

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Most NRAs have now completed the first round of market analysis and notified the 
results  to  the  Commission  and  other  NRAs.  There  are  however  delays  in 
implementing  remedies  in  a  number  of  Member  States,  for  reasons  ranging  from 
procedural considerations such as appeals, to the fact that in some cases remedies are 
imposed only some time after a finding of significant market power (for example in 
Germany),  or  are  not  sufficiently  detailed  to  produce  an  immediate  effect  in  the 
market place. 

Furthermore,  a  number  of  inconsistencies  have  emerged  between  the  remedies 
imposed  in  a  given  market  situation  by  different  NRAs.  For  example  bitstream 
access  offers  are  not  yet  available  on  a  consistent  basis  across  the  EU,  and  call 
termination  rates  continue  to  diverge.  Given  the  fact  that  market  players  generate 
around  one  third  of  their  revenues  in  Member  States  other  than  their  own,  further 
cross-border growth would be enhanced if greater consistency were achieved.  

The  Commission  will  address  each  of  the  issues  arising  here  in  relation  to 
independence,  procedure  and  consistency  of  regulation  in  the  review  of  the  current 
framework. 

Appeals 

The  right  of  appeal  against  NRA  decisions  is  a  fundamental  principle  of  the 
framework.  However,  the  length  of  the  appeal  process  is  an  issue  in  a  number  of 
Member States, for example Italy and Portugal, where proceedings can last from four 
to  six  years,  and  Greece,  where  the  highest  administrative  court  has  not  yet  issued 
decisions despite the fact that some cases have been pending since 2001. 

In  some  jurisdictions  (Belgium,  Cyprus,  Estonia,  Hungary,  the  Netherlands, 
Slovakia, Sweden), market review decisions are appealed systematically, and action 
may be necessary to incentivise a more reasonable approach by market players. 

Spectrum issues 

The  total  value  of  e-communications  services  dependent  on  the  use  of  spectrum  is 
estimated  to  exceed  €200  billion,  making  efficient  spectrum  management  a  critical 
factor  for  the  success  of  the  EU  economy.  Recent  research  shows  that  effective 
spectrum management across all Member States could generate up to 0.1% of GDP 
growth19. 

19 

Benchmarking  Impacts  of  EU  Policy  -  Options  for  Economically  Efficient  Management  of  Radio 
Spectrum, SCF Associates, December 2006, not yet public 

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15 

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More  flexible  and  liberal  management  of  radio  spectrum  has  been  undertaken  by  a 
number  of  Member  States  in  relation  to  technology-  and  service-neutral  use, 
auctioning,  shared  use  and  general  authorisation.  Secondary  trading  has  been 
introduced in others. However, diverging approaches between Member States remain 
on each of these issues. 

Furthermore,  implementation  of  several  Commission  spectrum  harmonisation 
decisions,  for  example  on  short-range  car  radar  equipment  and  on  wireless  access 
systems, remains to be completed. 

The  Commission  is  examining  these  shortcomings  in  the  context  of  the  review,  in 
order to increase the potential of the internal market. 

Broadcasting 

Terrestrial  networks  remain  the  main  delivery  mechanism  for  receiving  television 
content  (over  50%  of  households  in  the  EU)  in  the  majority  of  Member  States, 
followed  by  cable  and  satellite.  IP-TV,  still  a  niche  market,  grew  in  a  number  of 
countries in 2006.  

The switchover from analogue to digital terrestrial transmission has now been set in 
most Member States within the time limit recommended by the Commission (2012), 
although some continue to experience difficulties in doing so. 

Remedies imposed by NRAs often target terrestrial broadcasting, except for highly-
cabled  countries.  The  analysis  of  broadcasting  transmission  services  markets,  less 
familiar to many NRAs, is still not complete. 

Numbering for VoIP 

The  numbering  schemes  available  for  VoIP  services  vary  greatly.  Several  Member 
States  (Germany,  Greece,  Spain,  Ireland,  Lithuania,  Portugal,  Slovenia,  Sweden, 
Finland, United Kingdom) allow VoIP providers to offer both geographic and non-
geographic  numbers.  Others  limit  the  availability  of  geographic  numbers  to  certain 
types of VoIP services.  

These shortcomings limit the ability of market players to offer Europe-wide services, 
and the Commission will be seeking ways of addressing these and other numbering 
issues in the review of the regulatory framework. 

Monitoring and enforcement 

During  2006  the  Commission  opened  proceedings  focussing  mainly  on  the  non-
availability of caller location information to emergency authorities for calls to 112, 
and the failure of some NRAs to ensure timely completion of market reviews. 

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At the same time the Commission was able to close proceedings following action by 
Member  States  relating  inter  alia  to  NRA  independence,  implementation  of  the 
market  review  procedures,  suspensory  effect  of  appeals  and  the  designation 
mechanism for the universal service provider, and consumer issues such as directory 
services, number portability and caller location in certain cases. 

4. 

CONSUMER DEVELOPMENTS 

Universal service 

Several  Member  States  designated  universal  service  providers  in  2006.  The  Czech 
Republic,  Estonia  and  Poland  have  used  open  tender  procedures,  with  Ireland  and 
Slovakia  opting  for  a  public  consultation  process.  Both  approaches  appear  to 
promote transparency and non-discrimination. 

While  incumbents  continue  as  the  most  commonly-designated  undertakings,  the 
tender  process  in Estonia  has  resulted  in the designation of a new entrant, while in 
Belgium  and  the  Czech  Republic  elements  of  the  service  are  provided  by  entrants 
alongside the incumbent. 

Special social needs 

Given that the current framework leaves wide discretion to the Member States with 
regard to the needs of the disabled and those with low incomes, the Commission has 
focussed on encouraging best practice in the Member States. 

In  Ireland  the  regulator  has  established  a  forum  to  promote  the  needs  of  disabled 
users.  In  Sweden  the  NRA,  in  addition  to  encouraging  market  players  to  offer 
services tailored to users with special needs, provides eight specific services for such 
users, including sign language translation based on 3G video calls. 

Emergency services - 112 

Three Member States (Sweden, Denmark, the Netherlands) have now designated 112 
as their sole emergency number. 

However,  the  provision  of  caller  location  information  remains  a  problem,  and  the 
Commission opened proceedings against 13 Member States during 2006. 

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Member States have used a range of methods for making citizens aware of 112 and 
its  use,  including  references  in  payphones,  directories,  bills,  police  notices  and 
newspapers, together with dedicated campaigns, websites, radio commercials and TV 
clips. In Sweden, 112 information is provided on milk packages, and in Latvia and 
the Czech Republic, TV programmes bring 112 to a wide audience. 

While the availability and quality of the basic service now appear to be ensured quite 
widely,  the  Commission's  powers  in  this  regard  are  limited  under  the  current 
framework.  Any improvement  will  depend on strong support in  particular from  the 
co-legislators in the regulatory review process. 

Tariff transparency 

Several  Member  States  have  begun  taking  a  more  proactive  approach  to  tariff 
transparency.  Web-based  price  comparisons  or  listings  are  available  in  Denmark, 
Estonia,  Portugal  and  Sweden,  for  example,  and  a  price  simulator  is  under 
construction by the Belgian regulator. The Irish, Hungarian and Slovenian regulators 
have  all  extended  the  scope  of  their  price  comparisons  to  cover  fixed,  mobile  and 
broadband services. These public services are supplemented in some Member States 
by market players' own transparency offerings. 

On the other hand, there are complaints regarding price transparency in a number of 
Member  States,  including  Germany,  Austria  and  Lithuania,  and  widespread 
dissatisfaction on the part of consumers regarding roaming tariffs. 

e-Privacy/security 

The  e-Privacy  Directive  has  now  been  transposed  by  all  Member  States.  In  2006  a 
separate Directive on traffic data retention for law enforcement purposes was agreed, 
for transposition by Member States in 2007. 

Network  and  information  security,  including  protection  against  spyware  and  other 
malicious  software  (malware)  is  gaining  in  importance.  As  spam  and  malware  are 
increasingly used in combination for criminal profit, enforcement action in these two 
fields  is  becoming  linked.  More  effort  is  needed,  including  increased  user 
awareness20, given the significant social and economic impact of illicit activities in 
this area. 

20 

See Commission Communication on fighting spam, spyware and malicious software, COM(2006)688 

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Number portability 

Member  States  report  increased  use  of  number  portability  by  subscribers,  and  in 
Denmark, Spain, Sweden and Finland mobile ported numbers were over 20% of the 
total  subscriber  base.  Significant  growth  in  mobile  ports  has  been  reported  in 
Estonia, Greece, France, Ireland, Lithuania and Luxembourg, and in fixed in France, 
Sweden and the Netherlands. Number portability continues to be a key element for 
competition in all Member States. 

5. 

CONCLUSIONS 

The  implementation  of  the  regulatory  framework  is  working  overall  to  bring 
competition  to  e-communications  markets,  with  resulting  benefits  to  consumers  in 
terms  of  prices  and  innovative  converged  services.  Examples  of  best  practice  are 
available from every Member State across the range of regulatory and market issues. 

However,  a  number  of  areas  remain  where  a  single  market  for  e-communications 
services  is  not  attainable  under  the  current  framework.  The  full  range  of  tools  for 
ensuring consistent regulation across the single market is not currently available, and 
the  Commission  will  examine  institutional,  numbering  and  spectrum  issues  in 
particular in its proposals for a revised framework. As regards roaming prices in the 
Community, the Commission has already proposed an amendment to the framework. 

More detailed adjustments will also be considered where issues remain in connection 
with,  for  example,  the  enforcement  of  NRA  decisions,  appeals  procedures,  privacy 
and  security,  the  single  European  emergency  number  112  and  the  provision  of 
services to special social groups. 

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